Daily report for 15 July 2016

The resumed session of OEWG 37 opened on Friday, 15 July 2016, in Vienna, Austria. In the morning, delegates heard opening statements. Plenary convened for a stocktaking session that discussed progress in the contact group, addressed organizational matters, and held a moment of silence for recent deaths of members of the “ozone family” and victims of the recent terrorist attacks in Nice, France.

The HFC Management Contact Group then convened to continue its work, including building on discussions held at OEWG 37 in Geneva, Switzerland, in April 2016. Informal discussions on funding, the relationship of HFCs with HCFCs, and exemptions not related to HAT took place for the remainder of the day.

The contact group reconvened in the evening for a report back from the afternoon’s informal discussions, and to discuss the way forward. Following plenary, informal discussions on funding resumed and continued into the night.

OPENING SESSION

OEWG 37 Co-Chair Paul Krajnik (Austria) opened the resumed session by noting recent research suggesting that the ozone layer is starting to heal, stating that this finding indicates that the Montreal Protocol is achieving its original objectives. He said parties now faced “a historic chance” to contribute to climate change mitigation through a Montreal Protocol amendment on HFCs.

Tina Birmpili, Executive Secretary, Ozone Secretariat, noted that 2016 is the year of implementation for the Dubai Pathway on HFCs, meaning that delegates have three months until the Kigali MOP to resolve challenges, find solutions and amend the Protocol to include HFCs. She said three months is enough time to reach an agreement if parties are determined to do so. She urged delegates to finish identifying challenges and solutions during the OEWG, and not wait until the ExMOP, so that Ministers can give negotiators directions on the political issues of amendment negotiations. She called for solving the funding challenge as a matter of priority, suggesting that once this challenge is fully addressed, other issues will be more easily resolved. Noting the lessons and achievements of nearly 30 years under the Montreal Protocol, she urged delegates to take the next step and pass an amendment to phase down HFCs. She cautioned that it would “only be a true victory when the efforts that result in gains are shared among all parties.”

Delegates adopted the provisional agenda (UNEP/OzL.Pro.WG.1/resumed.37/1) without amendment. OEWG 37 Co-Chair Leslie Smith (Grenada) explained the organization of work, underscoring that much of the time would be spent in the HFC Management Contact Group co-chaired by Patrick McInerney (Australia) and Xia Yingxian (China), with a focus on continuing discussions on the Dubai Pathway on HFCs. He noted that informal groups would be held as needed.

CONTINUATION OF THE DISCUSSION UNDER ITEM 4 OF THE OEWG 37 AGENDA: “DUBAI PATHWAY ON HFCS”

Contact Group Co-Chair McInerney opened the contact group by reminding delegates of the progress made on the discussions regarding HFCs, stressing that, by the end of OEWG 37, participants should resolve the identified challenges and generate concomitant solutions. He highlighted progress on the HAT exemption at the previous OEWG 37 session and the generation of some solutions on funding and flexibility. He said the expectation is to consider the four amendment proposals once the group agrees that solutions have been generated as far as possible.

Annie Gabriel (Australia), as facilitator of the informal discussion on funding, informed that a group of countries met on 14 July 2016 to continue the informal discussions that began at the previous OEWG session. She said the following non-Article 5 parties attended: Canada; France; Germany; Italy; Japan; Slovakia; Sweden; Switzerland; the UK; and the US. From Article 5 parties, she noted participation by Argentina, Bahrain, Brazil, Burkina Faso, China, FSM, India, Kuwait, Nigeria, Pakistan, and Saudi Arabia. She said discussion focused on the manufacturing sector and guidance to the MLF Executive Committee (ExCom) on guidelines and cost elements to be included in financing guidelines for the sector. She said the group did not reach any firm conclusions, but that there had been a good exchange of views and generated options that could form the basis of final solutions for consideration by the contact group. Observing that some issues will need more time, she requested additional time for discussions, to which Co-Chair McInerney agreed.

On other issues, IRAN explained that his delegation was not present at the OEWG 37 in Geneva and asked about re-opening the discussion on HAT. Co-Chair McInerney suggested Iran liaise with other countries on the issue.

In the evening, Co-Chair Yingxian noted that constructive consultations had taken place throughout the day and requested informal discussion facilitators to provide updates. On funding, Annie Gabrielle said the group focused on the servicing sector because the production sector issues were of concern to fewer parties. She highlighted agreement on a large number of items that might be eligible for funding. She said that the first run through of the servicing sector issues is nearly complete but a number of other issues remain outstanding.

On negotiations on exemptions not related to HAT, Martin Sirois said discussions were very fruitful but requested additional time for consultations to agree on suitable solutions to the challenges. He said the group is close to being able to present text to the contact group.

On the linkages between HCFCs and HFCs, SAUDI ARABIA requested further time, emphasizing that the group had exchanged views on principles, without any solid proposals. The EU noted the discussions touched on differences between non-Article 5 and Article 5 parties, options for flexibility, timing of schedules and links with finance. Both proposed developing text for further consideration in the informal discussions.

Co-Chair Yingxian noted that all three groups would require extra time for their deliberations. He suggested finance reconvene later in the evening and on Saturday morning, and that linkages and exemptions meet on Saturday afternoon, to which participants agreed.

INFORMAL DISCUSSIONS ON HFCs-HCFCs LINKAGES: In the afternoon, Mazen Hussein (Lebanon) facilitated the informal discussions on the linkages between HFCs and HCFCs, with discussions centering on the need to avoid double conversions.

Many parties stressed the need to avoid double conversions, with some suggesting that careful design of schedules could minimize them. One Article 5 country emphasized that the rules of the “HCFC phase-down game” are changing midway due to the need to phase down HFCs, thus requiring a modification of the HCFC phase-out schedule for sectors where alternatives to HFCs are not readily available, in order to ensure they are not subject to double conversions. Many Article 5 countries expressed concern that the costs of multiple conversions would be a heavy burden for enterprises.

Some parties noted that, for many sectors, alternatives to HFCs already exist, and that, under the MLF, incentives to convert to low-global warning potential (GWP) alternatives to HCFCs and a focus on providing climate friendly alternatives already ensure that many HCFC conversion projects utilize alternatives to HFCs.

A number of non-Article 5 countries noted that double conversions are an issue for them as well, and called for using existing incentives and careful design of schedules to avoid double conversions. One noted the need for different solutions for Article 5 versus non-Article 5 countries, saying the various proposals already reflect this differentiation.

Summarizing, Hussein highlighted consensus on the need to avoid double conversions.

INFORMAL DISCUSSIONS ON EXEMPTIONS NOT RELATED TO HAT: An informal group on exemptions, facilitated by Martin Sirois (Canada), met to resume discussions from the April OEWG 37 session on possible solutions for exemptions not related to HAT. The draft text considered at Geneva was reviewed, discussed and revised by the group. Issues addressed by the group included whether: exemptions are needed at all, since the phase-down would leave a residual HFC production; an assessment of the need for, and decision on, a possible mechanism should be left for later, once more data becomes available and the situation becomes clearer, and if so, whether it should occur “no later than” or “not prior to” 2030; TEAP should be requested to assess the need for exemptions; and there should be periodic TEAP reviews of exemptions. The group decided to ask Australia and Canada to work on new draft text, which will be considered on Saturday.

IN THE CORRIDORS

The resumed OEWG 37 session convened with an air of anticipation. With the July meetings ending in the third ExMOP, and MOP 28 less than three months away, many delegates arrived in Vienna recognizing this series of meetings as critical for the negotiations for a phase down of HFCs, which some delegates said presented a “unique opportunity” for the future of the Montreal Protocol as a whole. The two-day session meant that delegates had to “hit the ground running,” with a few of the new delegates mentioning the need for “hours and hours of reading” to get up to speed on the process.

One particularly promising sign of progress as the session opened was a report from an informal discussion on funding, which had convened the day before the OEWG officially resumed. Many delegates have described funding as the lynchpin of any possible amendment on HFCs, with most agreeing that progress on funding was necessary before substantive discussions on other issues, like baselines and reduction schedules, could begin.

Participants remained optimistic after the afternoon’s informal discussions, with some welcoming the opportunity to split the discussion of challenges into distinct, concrete working sessions on key topics. Many noted that this opportunity to discuss issues in smaller groups could provide an opportunity for solid progress. Indeed, several came out of their respective sessions stating that “good progress” had been made. Some were also heard expressing happiness over the “one sentence” that was agreed upon in the informal discussions on possible exemptions not related to HAT. One seasoned delegate said that “progress is impossible without change,” opining that the changes in some delegations have played a role in helping advance the negotiations.

As the informal discussions on funding continued into the evening, delegates proved that they had come to Vienna ready and willing to negotiate, once again showing the power of the ozone family to listen to each other and hear an exchange of views—a promising sign for the negotiations ahead but a negative one for any promise of adequate sleep. As the Executive Secretary reminded participants, three months may be short, but it is enough time to reach an agreement if parties are determined to do so.