Daily report for 19 July 2016

OEWG 38 convened for its second day in Vienna, Austria, on 19 July 2016. In the morning, delegates addressed TEAP organizational matters and a CRP on forming an ad hoc standard coordinating group on criteria or standards on substitutes. A contact group on the TOR for the study on the 2018-2020 replenishment of the MLF then convened.

The HFC Management Contact Group met throughout the afternoon and evening.

REPORT BY THE TEAP ON UPDATED AND NEW INFORMATION ON ALTERNATIVES TO ODS

OEWG Co-Chair Paul Krajnik opened the floor for further interventions regarding the report. The US said it would be presenting a CRP asking the TEAP to: examine their mitigation scenarios and adjust them to match HFC discussions at OEWG 38; address environmental and climate benefits; and consider the impact of an HFC phase-down on the MLF.

TEAP ORGANIZATIONAL MATTERS

OEWG Co-Chair Krajnik noted the need for more TEAP members and the submission of a nomination by India. He asked parties to discuss possible nominations with TEAP on the meeting’s margins, saying the OEWG would return to the matter later in the week.

OTHER MATTERS

OEWG Co-Chair Leslie Smith opened this agenda item. CHINA presented its proposal on an ad hoc coordination group on standards (UNEP/OzL.Pro.WG.1/38/CRP.1). Noting revisions of international standards will have important implications for an HFC phase-down, she said the proposed group could discuss this with relevant standardization organizations and update parties on these revisions. She noted the CRP calls for a workshop on standardization in 2017.

SWITZERLAND and INDIA supported the CRP. BURKINA FASO, the EU, the US, JAPAN, CANADA, and VENEZUELA said it was a good basis for further discussion. SAUDI ARABIA expressed concern that the CRP might seek to lower international safety standards. KUWAIT and BAHRAIN called for ensuring the CRP does not compromise safety.

 OEWG 38 Co-Chair Smith suggested delegates take time to examine the CRP before deciding on how to proceed.

CONTACT GROUPS

TOR FOR THE STUDY ON THE 2018–2020 REPLENISHMENT OF THE MLF: Participants nominated Philippe Chemouny (Canada) and Obed Baloyi (South Africa) as Co-Chairs of this Contact Group.

Parties discussed draft text based on the TOR for the study on the 2015-2017 MLF replenishment contained in Annex III of UNEP/OzL.Pro.WG.1/38/2/Rev.1.

Parties agreed to, inter alia: replace MOP 26 with MOP 29; update the 2015-2017 replenishment period to 2018-2020; and replace the 71st meeting of the ExCom with the 77th meeting of the ExCom, with possible reference to the 78th meeting.

On allocating resources to enable Article 5 parties to maintain compliance, parties discussed a placeholder to reflect a possible HFC amendment. One Article 5 party, opposed by a non-Article 5 party, proposed “providing full support for low-GWP alternatives in HCFC phase-out.”

On providing indicative figures for additional resources to enable Article 5 parties to gradually avoid high-GWP alternatives to ODS, one non-Article 5 party proposed adding “and the key issues related to funding being considered by the parties” as placeholder text for an HFC amendment. Another suggested adding: “provide information on methodology and cost calculation associated with expanding the list of eligible costs in the servicing sector when phasing down HFCs.” Following discussion, parties agreed text related to an HFC amendment should be separate from text addressing the HCFC phase-out.

On dividing funding relating to HCFC production and consumption equally between the 2015-2017 and 2018-2020 replenishment, several non-Article 5 parties suggested the language is no longer necessary. An Article 5 party preferred bracketing the text, to which parties agreed. 

On allocating resources to activities in the servicing sector in HCFC Phase-out Management Plans (HPMPs), Article 5 parties suggested adding “equipment support” and “measures to manage controlled substances destruction projects” to the activities list. Some non-Article 5 parties favored deleting the paragraph, saying it is no longer relevant, with one noting the Stage Two guidelines capture many of the issues.

On possible reference to the UN scale of assessment, parties agreed to discuss the issue in a small group.

HFC MANAGEMENT: HFC Management Contact Group Co-Chair Patrick McInerney opened the contact group, reminding delegates that they would begin with issue-by-issue discussions.

On baselines for non-Article 5 parties, many supported using an average over multiple historic years, including NEW ZEALAND, CANADA and NORWAY. Several noted such an approach allows for fluctuations over time.

For consumption, SWITZERLAND supported using an average of HFC and HCFC consumption from 2011-13 as proposed in the Island States’ proposal, and, with NEW ZEALAND, preferred the percentage of HCFC baseline consumption added to be between 10-25%. The US explained that the baseline in the North American proposal, 100% of an average of HFC consumption and 75% of average HCFC consumption between 2011-13, recognizes that non-Article 5 countries are already in transition. With CANADA, she stressed the proposal is not static and is open to adjustment.

The RUSSIAN FEDERATION favored the North American proposal’s baseline consumption formula and said the common methodology agreed upon should be as simple as possible for ease of use. JAPAN preferred the baseline formula in the EU or Island States’ proposal so as not to disadvantage those who have accelerated their HCFC phase-out.

AUSTRALIA said that they: agree with including some HCFC component to account for conversions; prefer a baseline set as an average of consumption between 2011-2013; and prefer the Island States’ proposal on the HCFC component, as reflecting actual consumption would be unfair to those who have accelerated their HCFC phase-out. NORWAY preferred an HFC baseline set after 2004.

In response to a question from CHINA on data accuracy and availability for production and imports, several countries shared their data and reporting processes. The EU said it has collected data on HFC imports and exports since 2006. AUSTRALIA said it has good data available since 2004 to set a historical baseline. CANADA said her country has good HFC consumption data. NORWAY said her country has solid data on HFC imports and HFCs in products and equipment. JAPAN explained that it relies on industry reporting on imports and exports, customs data and consumption data reported to the UNFCCC. GEORGIA noted the MLF has financed HFC consumption surveys in many countries, and in his country it has produced very good data.

CHINA also asked why the EU proposal uses a four-year data average. The EU responded this average reflects different reporting cycles among their 28 member states and also observed that longer time periods increase the accuracy of the number.

BELARUS expressed concern about setting historic baselines, as it does not currently have an accounting system for HFC imports and exports. Noting that the proposals all use carbon dioxide equivalents as a measure of GWP, he called for carefully considering which coefficients are used. ARMENIA noted they face the same challenge due to a lack of an HFC accounting system, but recalled, supported by AUSTRALIA, that when CFC baselines were set, most countries also lacked accounting systems and the CFC phase-out was still a great success.

CHINA thanked all countries who explained their baseline proposals, reporting systems and data reliability. She suggested that, based on what she had heard, what baseline parties choose for non-Article 5 countries is immaterial, since in most of the proposals the final amount arrived at would be approximately the same. On data accuracy, she suggested creating a mechanism to ensure that data used in baseline calculations is accurate.

PAKISTAN asked when HFC use peaked in non-Article 5 countries and what their cumulative HFC volume used is to date. The US replied that the world has not yet hit a peak, which is partly why an HFC amendment is needed. She also suggested data on cumulative volume is not readily available.

KUWAIT asked if the way the North American and EU baseline proposals are constructed would allow non-Article 5 countries to continue using HCFCs past Protocol phase-out dates. The US assured that none of the proposals were structured to undermine non-Article 5 party commitments on HCFCs.

On the baseline for Article 5 parties, FSM clarified that the Island States’ proposal sets a baseline based on the refrigerant needs of Article 5 parties, including both HFC and HCFC components, allowing for some expected growth. The EU highlighted their proposal takes a global view of HFCs and HCFCs and encourages leapfrogging out of HCFCs.

A number of Article 5 parties, including SAUDI ARABIA, EGYPT, MALAYSIA, INDONESIA and KENYA, highlighted the challenge posed by lack of reliable data, with some noting they currently do not have HFC accounting systems.

BURKINA FASO supported efforts to help countries collect data on HFC use and consumption to facilitate swift action.

CHILE informed that her country has a preliminary inventory on HCFC and HFC consumption and is preparing a detailed inventory. Observing that not all countries have data, she said the baseline should reflect realities for countries that do not have such data and supported a three-year period between 2016 and 2020 for a baseline.

MEXICO opposed a distant baseline, saying a nearer one would enable early control over HFCs and access to funding. SAUDI ARABIA supported a later date, underscoring the importance of avoiding double conversions. INDONESIA supported the Indian proposal to have a baseline between 2028-2030. MALAYSIA supported a baseline on a future year beyond 2020.

EGYPT stressed the importance of reflecting the special conditions affecting Article 5 countries’ consumption, such as political and economic upheavals during the baseline period.

NIGERIA and CAMEROON asked for more clarity on the rationale for baseline calculations and reduction schedules. LESOTHO said his country needed time to understand the multiple aspects of baselines, including dates, the HCFC percentage and the economic impacts.

IN THE CORRIDORS

In the morning, delegates quickly moved through the remaining items of the OEWG 38 agenda, with most eager to focus on the substance of the HFC amendment. “It’s really very exciting,” opined one, “we’ve been waiting for this moment for seven years.” Despite this general sentiment, getting the gears turning and the wheels spinning quickly towards an agreement gave way to reality. “We’re shifting gears between OEWG 37, where we looked at solutions, to actual amendment text, and a very different mode of work,” reflected one delegate, noting, “it’s bound to be slow going at first.”

Others wondered if everyone was prepared for the changing of the gears. Some countries had clearly done their homework on the intricacies of the proposals, with several countries reflecting on their baseline preferences among the different proposals. Other countries, however, admitted to some confusion over the baseline calculations, with more than a few delegates noting confusion over the pronunciation of HFC and HCFC in party’s statements. A few said they had not yet considered the implications for their country and some stated their country lacks the necessary current and historical data to assess the proposed baselines. “The reality is,” one said, “some countries have better data than others on some of these issues, which can make it more difficult to figure out the best way to proceed.”

As OEWG 38’s night session closed promptly, allowing delegates sufficient time for rest and refreshment, most participants expressed happiness that discussions on the elements of an amendment proposal were finally being addressed.