The illegal importation of HFCs into the European Union – which could represent 20% of the F-gas Regulation quota – gives rise to concern from the refrigeration industry.
The EU F-gas regulation, which was implemented on January 1, 2015, put in place an HFC phase-down from 2015 to 2030 by means of a quota system and sectorial bans on high GWP refrigerants.
However, it led to huge price increases and some product scarcity last year, and encouraged a considerable black market in refrigerants. Much of this product is being imported outside of the quota system with a large proportion of it in illegal disposable cylinders.
Numerous air conditioning and refrigeration industry stakeholders expressed concerns, alleging that “substantial amounts” of HFCs were being imported illegally into the EU, jeopardising the European F-gas phase down’s environmental integrity and hindering fair competition.1
For example, the Polish industry group PROZON recently reported that the illegal activity amounted to 40% of the country’s entire F-gas demand, and was costing the Polish exchequer an estimated €7m in lost revenue. The Greek contractors group Hellas Union Fgas claimed that illegal imports were equal to an incredible 80% of its total F-gas requirement.1
Figures produced by Chemours claim that in 2018 around 22.5MtCO2e were illegally imported into the EU – mainly the high GWP refrigerants R134a, R404A and R410A. Official figures for 2018 have not yet been released, but it is thought that the European market again stayed within its official quota, despite the large phase down cut to 115.29MtCO2e. Chemours estimates, if correct, suggest that this was only possible thanks to a substantial unchecked illegal trade.2
While the Commission insists that the extent of the problem can only be assessed after 31 March 2019, when undertakings have reported their imports for 2018, it says it is monitoring the situation “very closely”.1
The Commission says it is currently building an IT system, which will allow for real-time debiting of quotas and authorisations. This would help companies to keep track of their remaining amounts, and allow for the tracking of all related shipments coming in, in the Commission’s database. This IT system is expected to become operational in 2020.3
The refrigerant producers group EFCTC has established a confidential online reporting service to better track illegal refrigerant imports across Europe.4 The EQS “Integrity Line”5 service is intended to ensure that suspicious activity can be reported with greater ease, in confidence and anonymously, if desired. The Integrity Line is seeking information regarding incidents relating to smuggling, mislabelling, counterfeiting of F-gas products, and the use of illegal disposable cylinders or other breaches of the F-gas quota system.