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Cost considerations surrounding the financing of HCFC phase-out

After hearing a statement from the facilitator of the contact group, the Executive Committee decided to consider at its 55th Meeting a revised version of document UNEP/OzL.Pro/ExCom/54/54 which would take into account any comments that Members had submitted to the Fund Secretariat by the end of April 2008.

(UNEP/OzL.Pro/ExCom/54/59, Decision 54/40, para.177).

(Supporting document: UNEP/OzL.Pro/ExCom/54/54, Corr.1 and Add.1).

The Fifty-fifth Meeting of the Executive Committee decided:

(a)  to take note of the discussion paper providing an analysis of relevant cost considerations surrounding the financing of HCFC phase-out contained in document UNEP/OzL.Pro/ExCom/55/47;

(b)  to invite bilateral and implementing agencies to prepare and submit project proposals to the Secretariat for those HCFC uses addressed in paragraphs ‎(c), ‎(d), ‎(e) and ‎(f) below so that the Executive Committee could choose those projects that best demonstrated alternative technologies and facilitated the collection of accurate data on incremental capital cost and incremental operating costs or savings, as well as other data relevant to the application of the technologies, on the understanding that the quantity of HCFC to be phased out under those projects needed to be deducted from the starting point for sustained aggregate reductions in eligible consumption as set by the HCFC phase-out management plan (HPMP);

(c)  to note the limited introduction of several of the HCFC alternative technologies available to date in Article 5 countries, the need to validate them and optimize their use in the light of the local conditions prevailing in Article 5 countries, and the wide variation in costs of replacement equipment and raw materials and, accordingly:

      (i)   to request the Secretariat to gather technical information related to HCFC phase out in the aerosols, fire extinguishers and solvents sectors on an ongoing basis, to review any project in those sectors when submitted and to refer it, as appropriate, for individual consideration by the Executive Committee;

      (ii)  to consider deferring to its first meeting in 2010 any decision it might wish to take on policies for the calculation of incremental operating costs or savings from HCFC conversion projects, as well as the establishment of cost-effectiveness thresholds, in order to benefit from the experience gained through review of HCFC phase-out projects as stand-alone projects and/or as components of HPMPs prior to that Meeting;

(d)  to agree that the technical information contained in document UNEP/OzL.Pro/ExCom/55/47, was sufficient to enable preparation, review and submission on a case-by-case basis of a number of stand-alone projects for HCFC phase out in the foam, refrigeration and air conditioning sectors;

(e)  to invite bilateral and implementing agencies, as a matter of urgency, to prepare and submit a limited number of time-specific project proposals involving interested systems houses and/or chemical suppliers for the development, optimization and validation of chemical systems for use with non-HCFC blowing agents on the following basis:

      (i)   as part of the projects, following the development and validation process, the collaborating systems houses would provide technology transfer and training to a selected number of downstream foam enterprises to complete the phase-out of HCFCs in those enterprises;

      (ii)  agencies would collect and report accurate project cost data as well as other data relevant to the application of the technologies;

      (iii) in order to be of benefit for the preparation and implementation of the HPMPs, as well as any stand-alone projects, these specific projects would be completed within a period not exceeding 18 months and a progress report on each of the two implementation phases as outlined in paragraphs (i) and (ii) above, would be made available to the Executive Committee;

      (iv) bilateral and implementing agencies and relevant collaborating systems houses were encouraged to address the technological issues surrounding preparation and distribution of premixed polyols containing hydrocarbon blowing agents;

(f)   to invite bilateral and implementing agencies to submit a limited number of demonstration projects for the conversion of HCFCs in the refrigeration and air conditioning sub-sectors to low-global warming potential (GWP) technologies to identify all the steps required and to assess their associated costs;

(g)  to continue its deliberations on policy relating to second-stage conversions and determination of the cut-off date for installation of HCFC-based manufacturing equipment, after which incremental costs for the conversion of such equipment would not be eligible for funding, with a view to concluding its considerations prior to submission of stand-alone projects;

(h)  to further analyse if an approach of the type outlined in document UNEP/OzL.Pro/ExCom/55/47 provided a satisfactory and transparent basis for the prioritization of HCFC phase-out technologies to minimize other impacts on the environment, including on the climate as originally envisaged in decision XIX/6 of the Nineteenth Meeting of the Parties, and to request the Secretariat to continue with its evaluation in order to report in a more detailed fashion at a subsequent Executive Committee Meeting;

(i)   to request the Secretariat to approach other institutions with the objective of identifying individual, regional or multilateral funding mechanisms that might be suitable and compatible as sources for timely co-financing to top up Multilateral Fund ozone funding in order to achieve additional climate benefits and to provide a further report to a future Meeting; and

(j)   to consider, at a future Meeting, issues relating to whether or not to retire, prematurely, functioning equipment once the 2013 and 2015 compliance targets had been addressed.

(UNEP/OzL.Pro/ExCom/55/53, Decision 55/43, para. 206).

(Supporting document: UNEP/OzL.Pro/ExCom/55/47).


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