Introduction
The note presents the background information to safety costs, the Committee’s previous decisions, the process by which the safety costs study was undertaken, an overview of the study and its results. A proposal for a decision by the Executive Committee in relation to the findings of the study is also presented.
Background
In a number of recently submitted projects using hydrocarbon technologies the proposed system designs to ensure adequate safety varied widely. Consequently, the claims for eligibility of safety related costs have also varied depending on the interpretation of “adequate safety” by the experts or enterprises preparing the projects.
Additionally, in the process of project preparation, individual consideration needs to be given to whether a particular enterprise has the minimum prerequisites to convert to hydrocarbon technology. If hydrocarbon technology is to be used, it may be necessary to identify and cost the measures needed to rectify deficiencies in the baseline situation of the enterprise so that the conversion activity can proceed. Improvements in the baseline situation may confer additional benefits to the enterprise which are not related to the conversion, as well as to the conversion process, or may be related to the normal development or upgrading of the operation of the enterprise.
The concept of safety related costs was discussed at the 23rd Meeting of the Executive Committee. In Decision 23/18 the Executive Committee decided that:
“(a) safety standards should follow international standards, where these are higher than standards in the country concerned. The practical application of established standards should be based on industry norms and practice in European countries.
(b) projects should be prepared and reviewed on the basis of this principle.”
In regards to the deficiencies in the baseline situation, the Executive Committee felt that the existing decisions on incremental costs should apply.
To give effect to Decision 23/18, the Fund Secretariat commissioned a report by a recognized industry consultant to evaluate safety costs for conversion of the production of domestic refrigerators to hydrocarbon technology taking into account international standards and industry norms and practice in European countries. The progress on the preparation of the Hydrocarbon Safety Cost Study was reported to the 24th Meeting of the Executive Committee. The Executive Committee decided “to request the Secretariat to continue its process of completing the report and submit it to the Twenty-fifth Meeting in July 1998, so that the Executive Committee could discuss it on its technical merits. On the basis of the Committee’s consideration of the report, the guidelines for hydrocarbon safety-related costs would emerge and would be applied to projects submitted for approval to the Twenty-sixth Meeting.” (Decision 24/57).
The Hydrocarbon Safety Cost Study was prepared by the consultant according to the Terms of Reference designed to capture the Committee’s views presented in paras 5 and 6 above. The draft of the Hydrocarbon Safety Cost Study were circulated to the Implementing Agencies for comments. TÜV (an internationally recognized body (Germany) in industrial safety) was also engaged to conduct a review of the Study. TÜV is actively involved in certification of refrigerator manufacturing plants converted to hydrocarbon technologies in both developed and Article 5 countries. Comments from the Implementing Agencies and from TÜV were received by the Secretariat. The Secretariat and the Implementing Agencies convened an interagency meeting to inter alia, discuss a second draft of the study which incorporated the relevant comments and opinions expressed by Implementing Agencies, TÜV and the Secretariat. The study was finalized by the consultant on the basis of the discussions at the interagency meeting. A copy of the final study is included as Annex I to this paper.
The Scope of the Hydrocarbon Safety Cost Study
The Hydrocarbon Safety Cost Study addresses the following issues in the terms indicated.
Safety standards
The use of flammable substances is regulated by a number of international standards. Hydrocarbon-based technologies in the production of polyurethane foams are widely and successfully used in European countries, where industry norms and practices for safe applications of these technologies are well established. The study is developed on the basis of the experience of European countries to provide guidance and to assist experts in designing safety systems and in estimating the costs of projects using hydrocarbon-based foam technologies in Article 5 countries.
The introduction of hydrocarbon technologies depends on the availability of baseline utilities and general industrial safety facilities. The study establishes the minimum prerequisites at the enterprise level to make the conversion to hydrocarbon technologies feasible. The baseline production equipment is analyzed providing guidance for the replacement or retrofitting the existing equipment depending on its condition and design.
Safety principles
The production of hydrocarbon-based foams involves the use of flammable blowing agents (cyclopentane, n-pentane, butane and others) which could create an explosive atmosphere when mixed with air. An area in which an explosive atmosphere is present, or may be expected to be present is classified as a hazardous area. Installations in which flammable materials are handled or stored should be designed, operated and maintained so that any releases of flammable material, and consequently the extent of hazardous areas, are kept to a minimum.
In a situation in which there may be an explosive atmosphere, either the likelihood of an explosive atmosphere or the source of ignition should be eliminated. In emergency situations, several measures can be undertaken: cut-off of power to unprotected electrical equipment; shut-down of the process; isolation of process vessels; containment of spillages; and provision of additional emergency ventilation. The Study provides specific recommendations regarding the implementation of safety principles.
Hazardous area classification
The environment in which an explosive atmosphere may occur, can be analyzed and classified to select the appropriate electrical apparatus and equipment. The analysis of potentially hazardous areas involves examination of the likely frequency, duration and rate of release of flammable material, and its concentration in the air. This analysis also involves examination of the application of ventilation to reduce the concentration of flammable gas below the maximum admissible level. The hazardous areas are classified into three zones (0,1 and 2) based upon the frequency of the occurrence and duration of an explosive atmosphere. The study provides guidance on the classification of hazardous zones, required grades of ventilation and the selection of the type of the most suitable electrical equipment related to the particular circumstances of hydrocarbon foam production process.
The study does not specifically deal with use of hydrocarbon for charging the refrigeration circuit. However, it should be noted that the safety principles are the same and the design elements are very similar. For example, the main safety requirements for hydrocarbon refrigerant charging are the provisions of ventilation and gas detectors, both of which are specified in principle and in detail in relation to the foam operation. The only equipment involved is that required to charge the refrigerant (a charging board) which is always procured as a new item in hydrocarbon refrigeration projects and is thus intrinsically safe as it is designed for this purpose by the manufacturer.
The conversion involves the supplier of equipment from one side and the Implementing Agency and the enterprise from the other. Their respective roles in making the conversion safe are identified in the study. The study also addresses the definition and technical requirements for the following specific components of a typical conversion project:
cyclopentane storage and distribution
premix area and foaming machines
ventilation
gas detection system
electrical grounding
electrical cabling
In each case, the study indicates where work can be done locally.
Identification of related safety costs
The study included an assessment of the costs of the most important items involved in a theoretical conversion project. However, this assessment is made from the perspective of the specific supplier of the equipment, Cannon Italy. More work is required to be done on equipment costs. Eventually, the cost information in project completion reports and the equipment cost database when completed will be taken into account to establish the cost range for major items related to safety. What the study has done is to provide a sound technical basis for the specifications of essential safety-related equipment items.
Conclusions
The Hydrocarbon Safety Cost Study establishes a solid technical ground for designing safety systems during conversion to hydrocarbon technology. The study can serve as guidance to the Implementing Agencies, enterprises in Article 5 countries in preparation of investment projects and to the Secretariat in reviewing the submitted projects.
The Secretariat will continue to work with the Implementing Agencies to further fine-tune the costs associated with safety in hydrocarbon projects by analyzing the reports on completed projects, the equipment costs incorporated in the database of equipment and through the updating the existing cost templates if necessary.
Recommendations
It is recommended that, on the basis of the discussion foreshadowed in Decision 24/57, the Executive Committee note the Hydrocarbon Safety Cost Study and agree to its findings being used as guidelines for the design of safety-related equipment, on which the eligibility of funding for such equipment in hydrocarbon refrigeration projects will be based.
(UNEP/OzL.Pro/ExCom/25/68, Decision 25/47, para. 84).
(Supporting document: UNEP/OzL.Pro/ExCom/25/54).