Make polluters pay the price

Countries are negotiating a treaty to reduce the use of hydrofluorocarbons (HFCs) under the aegis of the Montreal Protocol. Under the protocol, which was adopted in the early 1990s to eliminate the use of ozone-depleting chemicals, the world aims to phase out over 100 chemicals. So far, countries have phased out chlorofluorocarbons (CFCs) that were used as a refrigerant.

Chlorodifluoromethane (HCFC-22) that is part of hydrochlorofluorocarbon group of chemicals (HCFCs) was the main replacement for CFCs and is used as a common refrigerant in India. But HCFC-22 is a moderately ozone-depleting gas and is being phased out under the Montreal Protocol. While developed countries have achieved the target, developing countries like India will have to stop using HCFCs by 2030. India has put in place a law to curb the use of HCFCs in a phased manner. But there is no law to curb the emission of trifluoromethane (HFC-23), released during its production. Though HFC-23 does not harm the ozone layer, its global warming potential is 14,800 times more than that of CO2. 

Developed countries have replaced HCFCs with HFCs and developing countries are following suit. But given the concerns over climate change, countries now plan to phase down the use of HFCs as well. It is in this context HFC-23 is being discussed under the Montreal Protocol. As of now, HFC-23 has no use and it is being destroyed or emitted as a waste product.

In India, five fluorochemical companies manufacture HCFC-22. They have incinerators to destroy HFC-23, which they had procured under the Clean Development Mechanism (CDM) of the UN Framework Convention on Climate Change. During 2007-2013, these companies destroyed the gas and sold the carbon credits to developed countries under CDM. For every tonne of HFC-23 destroyed, they earned 14,800 carbon credits. This translates into a profit of over US $1 billion till 2012 -13. But it is not known if the companies continue to destroy HFC-23 following the collapse of the carbon credits market in 2012-13. When Down To Earth contacted the companies, they refused to divulge the amount of HFC-23 they make and if they still destroy it. 

Such attitude of companies is not limited to India. Worldwide, 19 other refrigerant facilities have installed HFC-23 incinerators under CDM. These are in China, Argentina, South Korea, and Mexico. Destroying HFC-23 was so profitable under CDM that several companies, mainly in China, increased the production of HCFC-22 just to be able to destroy HFC-23. This prompted New Zealand to stop trading in carbon credits in December 2012. The EU did the same in January 2013. These were the two major buyers of carbon credits. 

The levels of HFC-23 in the atmosphere have rapidly increased since the collapse of the carbon credits market. This indicates that HCFC-22 industries continue to emit HFC-23. Estimates show that in the business-as-usual scenario, all the HCFC-22 manufacturing units in the world will release more than 2 billion tonnes of CO2 equivalent of HFC-23 into the atmosphere by 2020.

So far, China is probably the only country that has successfully managed to persuade its companies to destroy HFC-23. 

In China, when companies were making windfall gains under the CDM regime, the government imposed a 65 percent tax on CDM projects involving HCFC-22. While the Montreal Protocol requires countries to phase out HCFCs by 2030, China has collected enough money to incinerate its by-product, HFC-23, for at least 50 years under the business-as-usual scenario. 

Yet, after the collapse of the carbon credit market, China introduced a temporary subsidy in 2015 to ensure that companies continue to incinerate HFC-23. Under this policy, the National Development and Reform Commission, China’s top economic planning agency, provides subsidies to companies that are manufacturing HCFC-22 but have not had access to CDM. Depending on the production capacity, new companies get up to 15 million Yuan (R150 million) to buy HFC-23 incinerators. The companies that received funds under CDM will also get subsidies up to 4 Yuan per tonne of CO2. The subsidy will be reduced every year and end in 2020. 

India did not impose a tax on fluorochemical companies when CDM was in place and allowed them to make huge profits. So unlike China, the Indian government is not obliged to incentivise companies to incinerate HFC-23. But there is an urgent need to introduce legislation so that the emission of this super greenhouse gas can be prevented.

Realising the importance of controlling HFC-23 emission, the National Green Tribunal in December 2015 directed the Ministry of Environment, Forest and Climate Change and other concerned authorities to carry out a study on the units that make HCFC-22. It also asked the ministry to provide guidelines on the storage, emission, and incineration of HFC-23. 

An analysis by Down To Earth shows that capture and destruction of HFC-23 is inexpensive and costs less than Rs 15-25 per tonne of CO2 equivalent. This means companies manufacturing HCFC-22 will have to spend as little as Rs 300 lakh a year, which is 0.2 percent of the revenue they earn. Over the next 15 years, they would require only Rs 25 crore to incinerate HFC-23 till they stop producing HCFC-22 by 2030. This is 0.5 percent of the money these companies made by selling carbon credits from HFC-23. 

As countries negotiate to phase down HFCs, HCFC-22 companies are demanding money to incinerate HFC-23. Chinese companies are in the forefront, but Indian companies are also demanding this. Under the Montreal Protocol, developed countries are obligated to provide financial and technical support to developing countries to reduce the use of chemicals.

Asking money to destroy HFC- 23, when these companies have made so much money from it in the past, is not only unfair but unethical. The Indian government should not support this demand of its industry. Instead, it should enact a law to make it mandatory for the companies to destroy HFCs. This will not only showcase India’s leadership position in dealing with HFC issues but also help the Indian government gain a foothold while negotiating its phase down.

 It is simple mathematics. We can only emit 990 billion tonnes of CO2 between 2012 and 2100 if we want to keep the rise in global temperature to less than 2 degrees. HFC phase-down and a direct transition to natural refrigerants can help eliminate 5-8 billion tonnes of CO2e.

 Adopting AC technology that is both cost-effective and energy-efficient could save over 192 terawatt-hours per year by 2020-the same amount of energy as produced by 64 medium-sized power plants.

 Appliances are rated with energy stars based on power efficiency. Energy efficiency of an appliance is improved by 10-30 percent with the use of low-GWP alternatives. Each star rating signifies a reduction in power consumption by around 6-8 per cent. For example, a 1-star refrigerator will consume nearly 750 units (kWh) of electricity a year. That comes to over two units a day. Whereas a 5-star rated refrigerator will consume only a little over 300 units a year, less than one unit a day. Therefore, low GWP alternatives will have climate and energy benefits.