Short summary

The European Parliament and Council negotiators reached a provisional political agreement to phase down substances that cause global warming and deplete the ozone layer during the Trilogue on 05 October 2023. More recently, both the Coreper I (composed of each country’s deputy permanent representatives) and the Committee on the Environment, Public Health and Food Safety (ENVI) of the Parliament endorsed the provisional deal reached.

The agreed text was made available on the respective websites of the two institutions.

Main provisions for the HVACR industry

Scope

The new Regulation will also regulate alternative substances that are not fluorinated gases, like natural refrigerants.

Definitions

The new Regulation introduces some relevant new definitions:

• Self-contained
• Split system
• Air-conditioning
• Heat pump
• Safety Requirements
• Refrigeration
• Chiller.

Extended producer responsibility schemes

By 31 December 2027, the financing obligations for electrical and electronic equipment waste referred to in Articles 12 and 13 of Directive 2012/19/EU (WEEE Directive) include the financing of the recovery, recycling, reclamation or destruction of fluorinated greenhouse gases, from the products and equipment which are electrical and electronic equipment pursuant to the same Directive and that have been placed on the market after the entry into force of the new Regulation.

Certification and training

Certification and training will be extended to relevant alternatives to fluorinated greenhouse gases including natural refrigerants.

Service and maintenance

From 2025, the servicing of refrigeration equipment using F-Gases with a global warming potential of 2500 or more will be banned unless the gases are reclaimed or recycled, in which case they benefit from a derogation until 2032. From 2032, HFCs with a GWP of 750 or more for the servicing or maintenance of stationary refrigeration equipment, with the exclusion of chillers, are prohibited.

For servicing of air conditioning and heat pump equipment, a ban is foreseen on the use of fluorinated greenhouse gases with a GWP of 2500 or more from 2026 with a derogation for reclaimed or recycled gases until 2032.

Quotas and Phase Down

The allocation of quotas will be subject to the payment of the amount due which equals to 3 EUR for each tonne of CO₂ equivalent of the quota to be allocated.

Refrigeration and air conditioning equipment, heat pumps and, from 1 January 2025, metered dose inhalers charged with substances listed in Annex I, Section 1, shall not be placed on the market unless those substances charged into the equipment or products are accounted for within the quota system.

The maximum amount of HFCs allowed to be placed on the Union market from 2025 onwards is defined in Annex VII.

Every year the Commission will assess the impact of the quota phase-down system on the Union’s heat pump market considering relevant factors in particular, the development of prices of fluorinated greenhouse gases (HFCs), the growth rate of heat pump equipment still requiring such gases, the market uptake of alternative technologies and the state of the heat pumps deployment rate target provided under the “REPowerEU” Plan.

Export

From one year after the entry into force of the Regulation, the export of stationary refrigeration and stationary air conditioning equipment and heat pumps that contain or whose functioning relies upon fluorinated greenhouse gases with a GWP of 1000 or more will be prohibited, with the exclusion of the products and equipment that can be placed on the market in the Union in accordance with Annex IV.

Review

No later than 1 January 2030 the Commission shall publish a report with an evaluation of whether cost-effective, technically feasible, energy-efficient, sufficiently available and reliable alternatives exist, which make the replacement of fluorinated greenhouse gases possible in the equipment of Annex IV covered by prohibitions that have not yet become applicable at the time of the evaluation, especially equipment subject to full fluorinated greenhouse gas prohibitions including ‘split’ air conditioners and heat pumps.

By 1 January 2040, the Commission shall review the needs for hydrofluorocarbons in the sectors where they are still used and the phase-out of HFC quotas set out in Annex VII for the year 2050.

Product bans

A full F-Gas ban is foreseen for the following new equipment placed on the market:

• 2032 for chillers with a rated capacity of ≤ 12 kW
• 2032 for plug-in room, monoblock air-conditioning and heat pump equipment with a rated capacity ≤ 12 kW;
• 2035 for split systems of a rated capacity ≤ 12kW.

All these bans have exemptions related to safety requirements.

Before the full F-Gas ban, intermediate steps are foreseen for each product category with different values of maximum allowable GWP.

The complete list of product bans is reported in the Annex IV.

Positions and actions

The Eurovent Task Force ‘F-Gas’ (TF-F-Gas) has started the assessment of the text in order to develop an industry interpretation to be shared with the other European Associations and with the European Commission.

Interested members are invited to join the TF-F-Gas.

Timeline

The text must be formally adopted by the European Parliament and the Council before being published in the Official Journal of the European Union and thus becoming law. The plenary of the European Parliament is expected to take place by the end of the year or at the latest at the beginning of 2024.

The new Regulation will be published in 2024.

Additional resources

Agreed text on Council website.

Agreed text on ENVI Committee website.

The post F-Gas Regulation: compromise text published appeared first on Eurovent.

Preface

The following paragraphs are based on the press releases of the European Parliament and Council further to the reached agreement. Official documents have not been distributed yet, therefore is not possible to give an exact overview of the provisions. As soon as the official text will be distributed, a dedicated and more detailed update will be developed.

Short summary

The agreement foresees the goal of a zero hydrofluorocarbons (HFCs) target by 2050, while the first two steps of the quota phase down will be higher than the original Commission proposal.

The text introduces a full ban on placing the products and equipment containing HFC on the market for several categories, including certain domestic refrigerators, chillers, foams and aerosols (Annex IV). It brings forward some deadlines for the bans and extends them to products that use F-Gases with a lesser global-warming potential (GWP). For all the new bans, an exemption is foreseen if there are safety concerns.

The agreement also covers strict conditions and deadlines for the use of F-Gases with high global warming potential for the servicing or maintenance of different types of equipment.

Provisions

Air Conditioners

For new equipment placed on the market after the application date of the bans, the provisional agreement introduces a full F-Gas ban on small (<12kW) monoblock heat pumps and air conditioning that contains F-Gases with a GWP of at least 150 starting in 2027, and a complete phase-out in 2032.

In regard to split air conditioning and heat pumps, for new equipment placed on the market after the application date of the bans the co-legislators agreed on a full F-Gas ban starting in 2035, with earlier deadlines for certain types of split systems with higher global-warming potential.

Exemptions are foreseen in case this equipment is needed to meet safety requirements.

A review is also foreseen to check if the bans as proposed can be maintained or not and that exemptions can be granted based on safety issues.

Service

From 2025, servicing equipment for refrigeration equipment that use F-Gases with high global warming potential will be banned unless the gases are reclaimed or recycled, in which case they benefit from a derogation until 2030.

For servicing of air conditioning and heat pump equipment, a ban is foreseen on the use of fluorinated greenhouse gases with high GWP (2500 or more, to be confirmed) from 2026 with a derogation for reclaimed or recycled gases until 2032.

Quota price

HFCs quota allocation price will be 3 EUR, adjustable for inflation.

Next steps

Parliament and Council need to formally approve the agreement before it can come into force. Therefore, both provisional agreements will now be submitted to the member states representatives within the Council (Coreper) and to the Parliament’s environment committee (ENVI) for endorsement. If approved, the text will be formally adopted by both institutions before it can be published in the EU’s Official Journal and enter into force.

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Background of the Q1/2023 report

The price data on refrigerants are obtained from 63 companies from 10 EU Member States (main respondents from Germany, France, and Italy) and all supply chain levels (3 gas producers, 11 gas distributors, 29 OEMs, 14 respondents from the service sector, 4 end-users and 1 equipment renting company) reported purchase and/or selling prices for HFCs and lower GWP alternatives either in absolute terms (EUR/kg) or as price index (with 2014 as baseline year). Please note that companies do not report prices for all refrigerants but only for the ones relevant to them.

Findings of the Q1/2023 report

The major findings of the Q1/2023 report are summarised below:

• For the high GWP gases/mixtures R410A, R404A, and R134a considerable increases have been observed throughout the supply chain (average prices up by 75%, 67%, and 48%, respectively, when compared with price levels reported for Q1/2022). This is especially the case for R404A
• Price developments on the EU market for R134a and R410A are contrasting the developments on the world market, where price levels have stood constant for R134a and gone down for R410A
• On the distributor level, prices of alternatives such as HFC/HFO blend solutions increased from previous quarter (R448A, and R449A up by 17% and 11%, respectively)
• In general, the EU refrigerant market appears to be quite stable in terms of supply. Limited regional availability was indicated for none of the refrigerants
• Prices of quota authorisations are reported to have changed a little, with some tentative indications for increasing average prices (range of 14.8 to 16 EUR/t CO2e, with an average of ca. 15.5 EUR/t CO2e)
• Compared to 2014, prices of R134a are 2.3-6.1, R404A prices are 2.6-13.5 and R410A prices are 2.1-6.9 times higher depending on the supply chain level

The post Development of HFC prices Q1-2023 appeared first on Eurovent.

1. To be aligned with the Montreal Protocol, we suggest replacing the term ‘natural refrigerants’, when it is used in the proposals, by ‘non fluorinated refrigerants’.
2. Where the text of the proposals set provisions concerning Substances from Annex I, it should also be accompanied by “and mixtures containing any of those substances”.
3. Parliament proposal phases out all F-gases in majority of RACHP systems and insulation foams. This is not achievable in our industry.

The post F-Gas 2022 0099 COD 4 column table RACHP and foam industry analysis appeared first on Eurovent.

• Definitions overlap
• Product bans
• Quota mechanism
• Parts
• Labelling

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Summary of the Council position

In short, the Council proposed to:

• Lower the HFCs quota allocation price from 3 EUR to 2 EUR
• Agreed to postpone a number of bans compared to the Commission’s proposal, mainly for heat pumps, in order to put the proposal more in line with the targets set under REPowerEU, and high voltage switchgear. The agreement also clarifies on what grounds possible exemptions can be given for safety reasons
• Proposed to split the ban of certain split heat pumps into an earlier ban for air-to-water systems, for which alternatives are more widely available, and a later ban for air-to-air systems, where it Is more difficult to use alternatives. To balance this, more quotas for placing on the market of HFCs are introduced
• Agreed to postpone the reduction of the use of HFCs in metered dose inhalers, or MDIs, to guarantee the safety of patients, and increase the number of quotas
• Added a safety clause to enable the Commission to react, through delegated acts, to release a limited number of additional quotas if the proposed bans were to endanger the attainment of the heat pumps deployment target required under REPowerEU
• Included bans on the use of the very potent greenhouse gas SF6, used in electrical switchgear, while adding a number of safeguards in order to avoid that these bans would endanger the functioning of the electric grids
• Made the provisions on penalties less prescriptive in order for them to better fit different national systems

Next steps

The Council and the Parliament will now enter the interinstitutional negotiations to find an agreement on the final shape of the regulation. The agreement will then need to be formally adopted by both institutions before it can be published in the EU’s Official Journal and enter into force.

Interested members are invited to assess the adopted position and provide the Secretariat with their comments to prepare the upcoming negotiations.

The post Council adopts position on F-Gas Regulation review appeared first on Eurovent.

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Link with PFAS initiative

The adopted text includes a new recital 6b “It is of great importance that the Commission takes the phasing out of HFCs into account in its upcoming legislative proposals, such as in the revision of  Regulation EC/1907/2006 on the Registration, Evaluation and Authorisation of Chemicals (the ‘REACH Regulation’) regarding the phase out of per- and polyfluoroalkyl substances (PFAS).”

It also includes a new paragraph 1c in article 35 “No later than three months following the adoption of the revised REACH Regulation, the Commission shall assess whether this Regulation is coherent with that Regulation. The Commission shall, where appropriate, accompany its assessment with a legislative proposal to amend this Regulation, if it concludes that this Regulation is not coherent with potential new restrictions of the use of PFAS laid down in that Regulation.”

Monitoring the attainment of RePowerEU heat pump deployment targets

The adopted text includes a new recital 11a “In May 2022, the European Commission presented the RePowerEU Plan, as a response to the hardships and global energy market disruption caused by Russia’s invasion of Ukraine, aiming at ending the Union’s dependence on Russian fossil fuels and tackling the climate crisis. The Plan includes a target to roll out 10 million hydronic heat pumps by 2027 and to double the rate of heat pump deployment by 2030. While the heat pump industry has started investing in HFC alternatives, it could prove challenging to quickly replace production of HFC-based heat pumps with natural alternatives and deliver to the market the amount of heat pumps targeted by RePowerEU. The Commission should therefore closely monitor market developments and should provide an additional amount of HFC quotas to the heat pump industry, should the HFC quota phase-down set out in Annex VII create disruptions in the Union’s heat pump market to an extent which would endanger the attainment of the RePowerEU heat pump deployment targets.”

It also includes a new paragraph 6a in article 17 “By … [one year following the entry into force of this Regulation] and every year thereafter, the Commission shall assess, in consultation with relevant stakeholders, the impact of the HFC quota phase-down on the Union’s heat pump market and shall submit a report to the European Parliament and the Council. The Commission shall adopt delegated acts in accordance with Article 32 to amend Annex VII and allow a limited amount of additional quotas for placing on the Union market HFCs to be used in heat pumps until the year 2029, where the assessment referred to in the first subparagraph concludes that the HFC quota phase-down set out in Annex VII creates disruptions in the Union’s heat pump market to an extent which would endanger the attainment of the RePowerEU heat pump deployment targets. In the report referred to in the first subparagraph the Commission shall provide a justification for its decision to adopt or not to adopt the delegated acts referred to in the second subparagraph. Where the Commission adopts a delegated acts as referred to in the second subparagraph, the additional quotas shall be distributed to producers and importers, following their requests, submitted to the F-Gas Portal, accompanied by evidence, in the form of sales contracts, that the quotas are to be used for heat pumps.”

Repairing and maintenance

The adopted text includes a new recital 13a “The ban on the placing on the market of parts of equipment that is banned under this Regulation should not apply to parts required for repairs and servicing of existing equipment that has already been installed in order to ensure that such equipment remains repairable and maintainable for their full lifespan, thereby avoiding the need for the unwarranted replacement of existing energy equipment and infrastructure, which could have a  negative effect on decarbonisation efforts. The repair or servicing for which such spare parts are used should not result in an increase in the capacity of the equipment or an increase in the amount of  fluorinated gases contained in the equipment or of the fluorinated gases used.”

It also includes a new subparagraph 1a for the article 11 – paragraph 1 “By way of derogation from the first subparagraph, the placing on the market of parts of equipment required for repairs and servicing of existing equipment shall be allowed provided that the repair or servicing does not result in an increase in the capacity of the equipment or an increase in the amount of fluorinated gases contained in the equipment or of the fluorinated gases used.”

Exports

The adopted text includes a new recital 15a “As third countries, particularly developing ones, might not have stringent recovery obligations for fluorinated greenhouse gases or not have the appropriate infrastructure to manage those gases at the end of life, exports to third countries of products and equipment containing those gases could result in the release of those gases in the atmosphere. In the framework of the Union’s global efforts to mitigate climate change, the bans on products and  equipment laid down in Annex IV should therefore apply to both their placing on the Union’s market  and their export from the Union to third countries.”

It also includes the new article 11a “The export of products and equipment, including parts thereof, listed in Annex IV, with an exemption for military equipment, shall be prohibited from the date specified in that Annex, differentiating, where applicable, according to the type or global warming potential of the gas contained.”

Leak checks during manufacturing

The adopted text modifies article 5 – paragraph 1 – subparagraph 1 as follows “Manufacturers and operators of equipment that contains 5 tonnes of CO₂ equivalent or more of fluorinated greenhouse gases listed in Annex I or 1 kilogram or more of fluorinated greenhouse gases listed in Annex II, Section I, not contained in foams, shall ensure that the equipment is checked for leaks, including during their manufacturing”.

Prohibitions on maintenance

The adopted text modifies article 13 – paragraph 3 – subparagraph 1 as follows “From 1 January 2024, the following uses shall be prohibited: the servicing or maintenance of air conditioning and heat pump equipment, mobile and stationary refrigeration equipment and chillers by fluorinated greenhousegases listed in Annex I, with a global warming potential of 2 500 or more. From 1 January 2030, the following uses shall be prohibited: the servicing or maintenance of stationary refrigeration equipment, with the exclusion of chillers, by fluorinated greenhouse gases listed in Annex I, with a global warming potential of 150 or more.”

Increased and increasing quota price

The adopted text modifies article 17 – paragraph 5 – subparagraph 1 as follows “The allocation of quotas is subject to the payment of the amount due which equals to five euro for each tonne of CO2 equivalent of quota to be allocated in the period 2024-2026 and shall increase every three years thereafter so as to ensure a constant revenue, in light of the quota phase-down set out in Annex VII. Importers and producers shall be notified via the F-Gas Portal of the total amount due for its calculated maximum quota allocation for the following calendar year and of the deadline for completing the payment.[…]”

Annex IV – bans

Annex VII – HFC phase-down

Next steps

The Council of the EU will adopt its position soon. Then the interinstitutional negotiations will start.

Interested members are invited to assess the adopted position and provide the Secretariat with their comments to prepare the upcoming negotiations.

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