Comments on the consultation paper “Destruction of Waste Ozone
Depleting Substances and Synthetic Greenhouse Gas Program:
produced by the Department of Sustainability, Environment, Water,
Population and Communities, December 2012.
Introduction
An effective program to collect and safely destroy surplus or contaminated
fluorocarbon refrigerants is the cornerstone of an effective direct emissions
reduction policy for the airconditioning and refrigeration industry.
Almost two decades ago, the industry responded to this by founding
Refrigerant Reclaim Australia (RRA), which has operated since that time, at
no expense to the taxpayer, successfully collecting and destroying CFCs,
HCFCs and HFCs.
In that time, RRA has amassed unique and detailed experience on the nature
of the Australian refrigerant bank, behaviours within the industry, and the
successful operation of a world-class recovery and destruction program.
Given the contiguous nature of the membership of RA and RRA, this
submission does not seek to duplicate the detailed material contained in the
RRA submission, which is based on the day-to-day experience of almost
twenty years.
Rather this submission would provide a broad overview, reflecting the views
of Refrigerants Australia’s members
Stakeholder feedback
3. Reclamation
The application of the carbon tax to refrigerants can be expected to have
some effect on behaviours in the industry, although we are unaware of any
reliable work that has been undertaken in Australia to estimate this. It is
reprehensible that such work was undertaken prior to the introduction of this
policy. An increase in reclamation rates could be expected, although the
extent and effective costs of this are uncertain.
The proposed incentives based on GWP could result in cherry-picking by
marketplace operatives, with decreasing effort put into the reclamation of low
GWP refrigerants.
4. Additional abatement
Extending the effectiveness of existing reclamation efforts via increased
incentives is a problematic area.
Our comments relate only to the airconditioning and refrigeration industry.
It has been illegal to allow preventable emissions of these substances for
many years, but there is very little effective enforcement of these controls.
The lack of resourcing of the Australian Refrigeration Council, both from a
financial and legislative perspective will continue to hamper increasing
abatement levels, despite any reasonable incentive offered across the various
product families in the industry.
5. Impact on destruction incentives from the phase-out of HCFCs
The discussion paper notes that the HCFC phase-out is nearing its
completion - an excellent example of an intelligently purpose-designed
program that will achieve its goal with very little disruption, and at very little
cost to consumers, government or industry.
Sources indicate there is an installed bank of HCFCs sufficient to meet future
service needs, and alternatives exist for many applications.
Experience with CFCs was that while progressive shortages induced massive
price rises - this was only true in the short-term, the industry rapidly adjusted,
with increasing amounts of CFCs returned for destruction. Indeed, RRA still
destroys these substances.
One of the reasons for the success of the RRA program has been the
demonstrated long-term commitment.
Some parts of industry are sceptical about the Government’s ability to make
an effective long-term commitment to such programs, based on recent
experience with the Equipment Energy Efficiency Program.
7. Destruction of waste ODS and SGG program design considerations:
Requirements of an accredited destruction provider./Should destruction
providers have broad coverage or should they be able to provide
targeted services?/What requirements should an accredited destruction
facility meet?
These considerations have been covered in detail in RRA’s submission. RA
supports these comments.
Is it feasible to identify the species of gases presented to accredited
destruction facilities before incentive payments are made?
This is currently RRA practice and has been for many years.
Who should be able to claim incentive payments from destruction providers
and what conditions should they be required to meet?
The suggestion that only handling licence holders be able to claim incentive
payments has merit and needs to be further explored. The only additional
consideration, albeit a substantial one, is that the rights of equipment owners,
who may not directly hold handling licences, would need to be protected. If
this consideration can be accommodated than this approach would work well
with the existing system, rather than delivering an additional layer of controls.
What is the quantity of high GWP SGGs that will be likely to be sent for
destruction?
This is difficult to estimate unless other parameters of the program are better
defined. However, anecdotal evidence indicates that, due to the very high
costs of these gases, they will be re-used rather than destroyed - destruction
will be the last option.
RA members with international experience of SF6 take-back programs report
that they have never received SF6 that was not capable of rehabilitation and
re-use - in their experience, no SF6 has been sufficiently contaminated that it
has had to be destroyed.
Should high GWP gases be included in the program?
Even though the amount returned for destruction is likely to be small, their
environmental impact vis-à-vis other SGGs would make their inclusion
essential if the program is to make any claim to a comprehensive approach.
If high GWP gases are to be included in the program, what incentive should
they receive and should there be restrictions on who can claim incentives?
This issue is more appropriately addressed by importers and users of SF6
8. Destruction Incentive Options
Option One
Would a flat rate incentive payment provide a workable program for industry?
In a word - yes. When RRA was established, detailed consideration was given
to a payment system based on ODP. This was discarded as impractical, given
the associated administrative costs. The flat-rate system operated by RRA
has proved very effective and administratively robust.
If a GWP-based flat rate was implemented, which calculation would industry
prefer- the average of the gas species and volume of ODS and SGG sent for
destruction over the past year?
This approach has the potential to produce distortions due to the fact that the
average GWP of returned refrigerant would be lower than that of the bank.
-the gas species and the volume in the Australian bank of equipment?
This option, due to its link to the installed bank, has the potential to best
reflect the contingent liability the program, and would provide the most
acceptable approach.
-the gas species and the volume imported into Australia in the previous year?
Such a measure would change over time, but have no direct linkage with the
size and composition of the bank.
Are there any other ways to calculate a flat incentive payment?
The simplest way to provide a flat incentive payment is to use the current
approach, which is to pay on weight rather than attempt to finesse outcomes
by including GWP.
Option Two
To what extent would it be practical and cost-effective for destruction
providers to measure the composition of gases surrendered to them?
This is current practice, and should continue.
What technology options are available and what is the cost?
Current best technology is gas chromatography. Costs will vary according to
volume, type of equipment and commercial considerations and if outsourced
to an accredited laboratory. RRA may be able to supply, on a commercial-inconfidence basis, more information on this question.
Where gas composition measurement is practical and cost-effective would the
benefits of GWP-based rebates flow through the supply chain and to whom?
This will essentially be a matter for commercial arrangements.
Where gas composition measurement is not practical, how would the
destruction providers structure the incentives paid to the supply chain? For
example would they be based on average GWP or a lower flat rate?
This would vary between destruction providers, according to
place/segment in the marketplace.
their
How would industry manage the flexible prices of a GWP-based model after
2015?
With some difficulty.
The move to a twice-yearly adjusted price, essentially set by the EU, will
provide a range of challenges that are difficult to predict in any detail.
Would the hybrid model be a workable program for industry?
It must be said that industry already has a workable program, which operates
independently of taxpayer funding.
Nevertheless, there is scope for the hybrid model to work, albeit at
considerable cost to the taxpayer.
Refrigerants Australia Limited ABN 11 089 445 723
PO Box 3961 Manuka ACT 2603 · Telephone: (02) 6239 5658 · Facsimile: (02) 6239 5653
· Email: [email protected]