Note: The following methodology has been replaced by the methodology in Decision 26/36 below.
The Twenty-second Meeting of the Executive Committee decided that:
(a) in countries that do not have compressor manufacturers, or have undertaken not to seek funding for conversion of any compressor manufacturers, incremental operating costs for loaded non-CFC compressors would continue to be eligible for compensation unless such compressors are being procured from firms that the Fund is paying to convert;
(b) for countries that are seeking funding for conversion of a compressor manufacturer, in order to be eligible for incremental operational costs, they must first submit information on their 1995 production of compressors and downstream user products. If those data show that compressor production was equal to or greater than the production of the downstream equipment producers, no funds shall be provided for incremental operational costs associated with the compressors;
(c) for countries that are seeking funding for conversion of compressor manufacturers that produced less than the number of units produced by the downstream users, the eligible incremental operational costs associated with compressors for downstream users shall be reduced in accordance with the following example: if a country produced 100 refrigerators, but is seeking compensation for the production of 90 compressors, the eligible incremental costs for the downstream users would be 10 per cent of the level otherwise eligible for funding in a distributive manner;
(d) if a country has received compensation for the conversion of some of its compressor manufacturers, but for the remainder of its firms would like instead to receive compensation for its downstream users, such compensation for the downstream users for the cost of loaded compressors would be eligible - however, the level of compensation would have to be adjusted using, at the choice of the country, either the example used above, or in a manner (to be proposed by the Secretariat and the Implementing Agencies for the consideration of the Executive Committee) which would offset funds spent on the earlier conversion projects in a distributive manner;
(e) The above guidelines were adopted with the following understandings:
(i) incremental operating costs will no longer be considered for compressor manufacturers;
(ii) the guidelines will independently apply to domestic and commercial refrigeration projects;
(iii) further work may need to be done to accurately define domestic and commercial refrigeration;
(iv) the agencies and the Secretariat need to agree to a specific methodology for determining what incremental cost will be used for defining the eligible costs;
(v) further work needs to be done in relation to combined compressor and refrigerator manufacturers;
(vi) in considering the availability of domestic compressor production within Article 5 countries, one factor which may be considered by the Secretariat and the Implementing Agencies could be the source of supply used by the downstream users in the baseline;
(vii) given the apparent ambiguity that existed prior to this meeting regarding the eligibility of incremental operational costs for domestic refrigerator compressors, projects submitted to the Twentieth and Twenty-first Meeting will be approved with operational costs as agreed between the Implementing Agencies and the Secretariat;
(viii) domestic refrigeration compressor projects first submitted to this Meeting, one Meeting after the issue was originally raised, shall be agreed consistent with the above guidelines;
(ix) projects submitted to the present Meeting in the commercial refrigeration sector (where this issue was first raised) shall be decided consistent with the manner in which previous projects were approved;
(x) after the present Meeting, all compressor projects shall be considered in accordance with the above guidelines.
(UNEP/OzL.Pro/ExCom/22/79/Rev.1, Decision 22/26, para. 44).
The Twenty-third Meeting of the Executive Committee decided:
(a) to request the Secretariat, together with the Implementing Agencies, to prepare a document on a methodology for establishing compressor prices, taking into account the views expressed by the members of the Sub-Committee, for submission to its Twenty-fourth Meeting;
(b) to continue to consider projects involving compressors, with the portions of such projects related to the compressor prices being left pending until the guidelines on the methodology for establishing compressor prices had been agreed.
(UNEP/OzL.Pro/ExCom/23/68, Decision 23/13, para. 31).
The Twenty-fifth Meeting of the Executive Committee decided to request the Secretariat to rethink the whole question of incremental operating costs for compressors, and to produce a new document based on a much simpler approach, such as, for example, a percentage of the capital costs.
(UNEP/OzL.Pro/ExCom/25/68, Decision 25/49, para. 86).
The Twenty-sixth Meeting of the Executive Committee decided:
(a) to endorse the following principles:
(i) incremental operating costs will not be considered for compressor manufacturers;
(ii) in countries that do not have compressor manufacturers or have undertaken not to seek funding for conversion of any compressor manufacturers, incremental operating costs for loaded non-CFC compressors will continue to be eligible for compensation;
(iii) in countries that have both compressor manufacturers and downstream manufacturers of refrigerators, double-counting of compensation for the capital cost of conversion of compressor manufacture, and the incremental operating costs associated with compressors for downstream manufacturers of refrigerators, is to be avoided;
(iv) in countries which have received or will seek compensation for compressor conversion, any compensation proposed for downstream manufacturers for incremental operating costs associated with compressors will be discounted according to the ratio of the number of compressors in respect of which compensation for conversion of ODS-based production capacity has been paid or will be paid by the Fund, to the total number of refrigeration units produced in the country concerned using hermetic compressors;
(v) in countries in which downstream users have received or will seek compensation for incremental operating costs associated with compressors, any proposed compensation for the capital costs of compressor conversion will be discounted according to the ratio of the number of hermetic compressors for which incremental operating costs have been or will be paid to downstream users through projects approved by the Fund, to the total number of refrigeration units produced in the country concerned using hermetic compressors;
(b) to request relevant countries provide the necessary basic information on their refrigeration sectors, including:
(i) relevant enterprise-level data relating to the production levels and capacities of the manufacturers of compressors (hermetic compressors only, since non-hermetic compressors are not used in domestic or small commercial refrigerators), including those manufacturers who have received Multilateral Fund grants as applicable;
(ii) relevant enterprise-level data relating to the production level of downstream refrigerator manufacturers (both domestic and commercial, using hermetic compressors), including those manufacturers who received incremental operating costs associated with compressors, as applicable;
(iii) relevant enterprise-level data relating to both of the above for enterprises with combined production, including any compensation received for one or the other from the Multilateral Fund;
(iv) statement from the country concerned regarding its intention on the remaining enterprises for which it wishes to receive funding for incremental operating cost associated with compressors or incremental capital cost for conversion of compressor manufacture;
(c) to agree that the boundary between domestic and commercial refrigeration be delineated by compressor power rating and that refrigerators using hermetic compressors of 250 rated watts and below be classified as belonging to the domestic subsector;
(d) to note that specific arrangements for implementation of the decision will be proposed by relevant Implementing Agencies and the Fund Secretariat on a country-by-country basis in the context of project proposals;
(e) to decide that the guidelines in subparagraphs (a)–(d) above should be applied for a period of one year after which the issue could be brought again to the attention of the Executive Committee for further guidance, as pertinent.
(UNEP/OzL.Pro/ExCom/26/70, Decision 26/36, para. 63).