COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT REPORT Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on fluorinated greenhouse gases, amending Directive (EU) 2019/1937 and repealing Regulation (EU) No 517/2014

EN EN
EUROPEAN
COMMISSION
Strasbourg, 5.4.2022
SWD(2022) 96 final
PART 2/2
COMMISSION STAFF WORKING DOCUMENT
IMPACT ASSESSMENT REPORT
Accompanying the document
Proposal for a
REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
on fluorinated greenhouse gases, amending Directive (EU) 2019/1937 and repealing
Regulation (EU) No 517/2014
{COM(2022) 150 final} - {SEC(2022) 156 final} - {SWD(2022) 95 final} -
{SWD(2022) 97 final}
Offentligt
KOM (2022) 0150 - SWD-dokument
Europaudvalget 2022
EN EN
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A5 Evaluation of Regulation (EU) No 517/2014
A5.1 Introduction
A5.1.1 Purpose and scope
This evaluation assesses if Regulation (EU) No 517/2014 on fluorinated greenhouse
gases (hereafter: the Regulation)151
is fit for purpose by examining its effectiveness,
efficiency, coherence, relevance and EU added value. The assessment covers the period
of application from 2015 to today (i.e. until most recent available data) and the
geographic scope is the EU-28 (including UK).
The Commission has reviewed the Regulation due to the new climate objectives under
the European Green Deal as well as in order to better tackle some implementation
challenges notably related to illegal imports. In addition, it is also necessary to ensure
that the Regulation can safeguard EU compliance with new international obligations
under the Montreal Protocol on substances that deplete the ozone layer (hereafter: the
Montreal Protocol).
This evaluation also responds to Article 21(2) of the Regulation that requires the
Commission to publish a comprehensive report on its effects no later than 31 December
2022, including in particular:
 A forecast of the continued demand for hydrofluorocarbons (HFCs152
) up to and
beyond 2030;
 An assessment of the need for further action by the Union and its Member States
in light of existing and new international commitments regarding the reduction of
fluorinated gas emissions;
 An overview of European and international standards, national safety legislation
and building codes in Member States in relation to the transition to alternative
refrigerants;
151
Including its implementing act: Commission Implementing Regulation (EU) 2019/661 of 25 April
2019; Commission Implementing Regulation (EU) 2016/879 of 2 June 2016; Commission
Implementing Regulation (EU) 2015/2068 of 17 November 2015; Commission Implementing
Regulation (EU) 2015/2067 of 17 November 2015; Commission Implementing Regulation (EU)
2015/2066 of 17 November 2015; Commission Implementing Regulation (EU) 2015/2065 of 17
November 2015; Commission Implementing Regulation (EU) No 1191/2014 of 30 October 2014
amended by Commission Implementing Regulation (EU) 2017/1375 of 25 July 2017, Commission
Implementing Regulation (EU) 2018/1992 of 14 December 2018 and Commission Implementing
Regulation (EU) 2019/522 of 27 March 2019; Commission Regulation (EC) No 304/2008 of 2 April
2008; Commission Regulation (EC) No 306/2008 of 2 April 2008; Commission Regulation (EC) No
307/2008 of 2 April 2008; Commission Regulation (EC) No 1497/2007 of 18 December 2007;
Commission Regulation (EC) No 1497/2007 of 18 December 2007; Commission Regulation (EC) No
1516/2007 of 19 December 2007
152
HFCs (hydrofluorocarbons) are the most common type of fluorinated greenhouse gases, used in
particular in cooling appliances (i.e. refrigeration, air conditioning including heat pumps)
118
 A review of the availability of technically feasible and cost-effective alternatives
to products and equipment containing fluorinated greenhouse gases for products
and equipment not listed in Annex III, taking into account energy efficiency.
The results of this evaluation feed into the impact assessment of the future Regulation.
The evaluation and impact assessment have been undertaken “back-to-back”, with a joint
stakeholder consultation process.
A5.2 Background to the intervention
A5.2.1 Description of the intervention and its objectives
A5.2.1.1 The problem
Fluorinated greenhouse gases (F-gases) are man-made synthetic substances that include
hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6) and
other fluorinated compounds. They are produced for use in certain products and
equipment, e.g. for refrigeration and air conditioning (AC: including heat pumps153
)
equipment, insulation foams, aerosol sprays, fire protection equipment, electricity
transmission and can also be used as solvents. All F-gases contribute to climate change
as they often have very high global warming potentials (GWP154) once emitted into
the atmosphere. The most commonly used F-gases have a warming effect (“climate
forcing”) that is several thousand times higher than that of CO2. To be able to compare
F-gas emissions with other greenhouse gas emissions, quantities of F-gases are mostly
expressed in terms of the impact they would have after 100 years if they were CO2
emissions. Thus F-gas emissions can be expressed in both tonnes of CO2 equivalent
(tCO2e) and their weight in metric tonnes (t).
Emissions can occur at various stages e.g. when F-gases are being produced by the
chemical industry, transported, stored, filled into (products and) equipment or when they
leak during the lifetime or decommissioning of (products and) equipment. Some uses are
also outright emissive in nature, e.g. aerosol sprays and solvents.
Production and consumption of F-gases, specifically HFCs, increased considerably from
1990 because they were widely employed as substitutes for ozone depleting substances
(ODS), which needed to be phased out globally under the Montreal Protocol to protect
the ozone layer. As a result, the emissions of F-gases in the EU almost doubled from
1990 to 2014 – in contrast to emissions of all other greenhouse gases, which decreased.
However, today there are suitable alternatives to the use of F-gases with a very low
climate impact in most sectors and applications. These include the so-called natural
alternatives such as hydrocarbons (e.g. propane, butane, cyclopentane), ammonia, CO2 or
water. There are also synthetic alternatives such as the hydro(chloro)fluoroolefins
153
In general when air conditioning (AC) is mentioned it should be understood as including heat
pumps.
154
GWP is a metric for determining the relative contribution of a substance to climate warming. The
GWP of a substance is set relative to the warming effect of CO2 (GWP=1) over a timeframe of 100
years
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(hereafter H(C)FOs)155
. These are often blended with HFCs in order to lower the overall
GWP of the mixture.
A5.2.1.2 The international context
The impact of the F-gas Regulation is relevant for international obligations under both
the Paris Agreement on Climate Change and the Montreal Protocol.
The most common F-gas emissions are monitored by the United Nations Framework
Convention on Climate Change (UNFCCC) and the Paris Agreement under which the
EU must report on the status of the reduction commitments made and on legislative
efforts to achieve greenhouse gas (GHG) emission reductions. The EU’s mechanism
for monitoring and reporting the different types of greenhouse gas emissions is laid down
in Regulation (EU) No 525/2013 (“Monitoring Mechanism Regulation”, MMR).156
Due to rising HFC emissions Parties to the Montreal Protocol decided in 2016 to
implement a global HFC phase-down which will reduce HFC production and
consumption by more than 80 % over the next 30 years (Kigali Amendment). This
implies that each Party must comply with an HFC consumption and production
reduction schedule as well as licensing import/export and reporting on HFCs. It is
estimated that The Kigali Amendment alone will save up to 0.4°C of additional warming
by the end of the century and thus contribute significantly to the Paris Agreement goal to
stay well below 2°C warming of the climate and pursue efforts to limit it to 1.5°C.
A5.2.1.3 EU legislation on fluorinated greenhouse gases
The EU’s first legislation aiming at reducing F-gas use and emissions predates the Kigali
Amendment by a decade and established the EU as a frontrunner in this policy area. The
2006 F-gas Regulation157
focused to a large degree on containment or “better
management” of F-gases, i.e. avoiding that emissions occur during use of products and
equipment and at their end of life. This was reflected in e.g. provisions on certification
and training of technicians dealing with F-gases, leakage checking of equipment,
company record keeping and F-gas recovery requirements at end of life, labelling of F-
gas containers and equipment as well as company reporting. The only major sector
addressed by a use prohibition in 2006 was the automobile sector (passenger cars), which
is regulated separately by Directive 2006/40 /EC (“MAC Directive”) and not subject to
this evaluation158
.
The current F-gas Regulation came into force in 2015. It introduced an EU HFC
phase-down and has a significantly higher level of ambition than the 2006
Regulation. It was specifically designed to ‘make a significant contribution to reducing
155
H(C)FOs, which chemically are unsaturated H(C)FCs meaning there is an double bond in the
molecule making them more prone to degradation, break down rapidly in the atmosphere which
lowers their warming effect as compared to HFCs
156
Regulation (EU) No 525/2013 accessible under https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=CELEX:32013R0525
157
Regulation (EC) No 842/2006
158
Prohibiting the use of HFCs with a GWP > 150 in air conditioning of new passenger cars type
approved after 2011 and all new passenger cars after 2017 regardless of type approval date.
120
GHG emissions in the EU’ by 80 to 95% in 2050 compared to 1990 levels though the
following specific objectives:
 Discouraging the use of F-gases with high GWP in the EU where suitable
alternatives exist;
 Encouraging the use of alternative substances or technologies when they result in
lower GHG emissions without compromising safety, functionality and energy
efficiency, and achieving higher market shares for these technologies;
 Preventing leakage from equipment and proper end-of-life treatment of F-gases in
applications;
 Facilitating convergence towards a potential future agreement to phase down
HFCs under the Montreal Protocol;
 Enhancing sustainable growth, stimulating innovation and developing green
technologies by improving market opportunities for alternative technologies and
gases with low GWP.
To ensure a proportionate contribution to the (outdated) climate targets, policy measures
that could reduce emissions at abatement costs of less than 50 € per tCO2e abated were
included, as this was the cost threshold considered economy wide in the Low Carbon
Roadmap for 2050159
at that time (2011). Modelling showed that the selected measures
would result in a reduction of 60% in 2030 compared to 2005, meaning F-gas emissions
should decrease by 70 MtCO2e to ca. 35 MtCO2e. Care was also taken to limit
undesirable effects on SMEs and employment, the administrative burden for companies
and authorities and to preserve the competition in the internal market to the extent
possible.
New measures set out in the Regulation included a measure that is gradually reducing the
amount (in tCO2e) of HFCs that importers and producers may place on the market every
year (“EU HFC phase-down”), and a number of placing on the market bans for products
and equipment with F-gases in sectors where alternatives are available. All measures
from 2006 were retained and some were slightly extended.
The “HFC phase-down” is implemented through annual quotas to importers and
producers of HFCs. The total amount of quota is reduced in 3-yearly steps from 2015 to
2030 and will end up at 21% of the starting point. However, gases used for certain
special purposes are not subject to the quota system.160
Furthermore, since 2017
manufacturers and importers of cooling equipment filled with HFCs, must ensure that the
amount of HFCs is accounted for under the quota system. To do so equipment importers
can e.g. obtain an equivalent amount of authorisations from a quota holder to use his
quota. The scarcity of HFC supply results in higher HFC prices, which in turn promotes:
159
COM (2011) 112 A Roadmap for moving to a competitive low carbon economy in 2050
160
Exemptions exist for imports for destruction, for feedstock use in producing other chemicals, for
re-export of bulk gases, for the use in metered dose inhalers (MDIs, e.g. asthma sprays), for use in
the semiconductor industry and for use in military applications.
121
a shift towards climate-friendly alternatives, better leakage prevention to avoid refilling
with the expensive gases as well as increased recycling/reclamation of HFCs.
The intervention logic (Figure 15) illustrates the causality of the Regulation in delivering
expected results and impacts, by linking them to objectives, actions, and outputs. The
intervention logic starts from the needs that the Regulation is intended to address and its
general objective (to ‘make a significant contribution to reducing GHG emissions in the
EU’ by 80 to 95% in 2050 compared to 1990) and specific and operational objectives.
Inputs from various actors and a range of activities are leading to a number of outputs,
e.g. a functioning quota system, licensing, labelling, leakage prevention and recovery,
training and certification of service personnel. These outputs are expected to deliver the
effects (e.g. emission reduction and increased use of alternatives) and impacts (e.g.
climate targets and green growth).
Figure 15. Logical framework of the Regulation
External factors may also influence the delivery of the stated objectives. Such factors
include: other regulatory frameworks (both internationally or at EU/national level); wider
changes in the global F-gas market, both on the demand and supply side, including the
way in which equipment and substances are traded (e.g. a growing online market); R&D
on climate-friendly technologies in other markets; broader stakeholder interests and
wider public concerns (including political pressure linked to climate change).
Since the Regulation was adopted pursuant to Article 192 (1) of the Treaty on the
Functioning of the European Union (TFEU), it does not prevent EU Member States from
maintaining or introducing more stringent measures that are compatible with the TFEU,
provided the Member State notifies the EU Commission of any such measures.
122
A5.3 Baseline and points of comparison (“Counterfactual
scenario”)
To determine the effects of the Regulation, the baseline scenario (current Regulation in
place) is compared to the counterfactual scenario (old rules preceding the Regulation).
The counterfactual scenario takes into account the previous (2006) F-gas Regulation and
the (2007) MAC Directive (the latter covering F-gas use in passenger cars). The previous
Regulation included comprehensive measures on containment and recovery, which
reduce losses of F-gases from products and equipment, both during the use phase of the
equipment and its end-of-life, in particular for cooling equipment in the sectors of
refrigeration and stationary air conditioning. In addition, it is expected that new
equipment would be less leaky due to better technologies and that equipment lifetime
emission rates would be declining. On the other hand there would be only limited
reduction in HFC use (new demand) and related future emissions because the
measures having this aim were rather limited in scope161
.
Future F-gas demand and emissions are also influenced by external factors such as
population growth, economic and technical developments and lifestyle changes (e.g.
increased use of comfort cooling and heating as well as a shift towards heat pumps). A
positive correlation between population size and F-gas use is generally assumed.
However, for some subsectors, the demand is assumed to reach a point of saturation that
is defined by a maximum number of units per person. For example, for passenger cars,
the model assumes that the density of cars, and thus mobile air conditioning units, will
not exceed 75 % of the population of a given country. These external factors affect the
counterfactual and the baseline in similar ways.
In the counterfactual scenario, the overall F-gas demand in the years from 2015 (i.e. from
when the Regulation was in force)162
would have increased by 4% in metric tonnes, but
would have decreased by about 5% in CO2e (
161
E.g. use in windows, shoes, tyres, one-component foams, aerosol generators for entertainment
purposes, non-refillable containers, direct evaporation systems, fire protection with PFCs; as well
as use in larger installations of magnesium die-casting
162
It is useful to look at the counterfactual from 2010 to see when differences to the baseline scenario
start appearing. As many of the envisaged changes, albeit not the detail, became known already
from the time of the Commission proposal in 2012, some market players may have already reacted
before 2015 to these early signals. This is actually confirmed by a comparison with the baseline
where (very) small differences in demand already appear in 2013/2014 (see Annex A11.1.2)
123
Table 21). This difference between metric vs. CO2e indicates a slight tendency towards
an increased use of lower GWP gases. F-gas emissions, which often occur years later
after being charged into the equipment163
, would still increase slightly in the same period,
from 123 to 126 MtCO2e. The composition of the various F-gases is shown in Figure 16.
Hence, the high quantities of HFCs (and other F-gases) emitted would have
continued mostly unabated without the current Regulation.
163
As a result, demand reductions do not quickly translate into emission reductions. There is a
significant “lag time” of several years
124
Table 22: Yearly sums of the modelled demand and emissions of F-gases in the counterfactual scenario
between 2010 and 2019 for the EU
Counterfactual scenario F-gas demand F-gas emissions
Year Kt Mt CO2 eq kt Mt CO2 eq
2010 89 221 55 119
2011 91 224 57 121
2012 91 227 57 122
2013 89 216 58 122
2014 89 208 59 123
2015 90 213 60 123
2016 91 214 61 125
2017 92 203 62 127
2018 92 198 63 126
2019 93 198 63 126
Sum (2014 to 2019) 548 1,233 368 750
Source: AnaFgas modelling
Figure 16: Modelled demand and emissions of F-gases by gas/gas group in the counterfactual scenario
between 2010 and 2019 for the EU
Source: AnaFgas modelling
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A5.4 Implementation / State of Play
A5.4.1 Description of the current situation
A5.4.1.1 Affected stakeholders
The F-gas policy affects a diverse group of stakeholders in different ways, e.g.:
 Producers and importers of F-gases: Primarily affected by the HFC phase-down
quota mechanism and related provisions including requirements on registration as
well as import/export licensing, annual reporting, sectoral prohibitions and
labelling of F-gas containers.
 Exporters of F-gases: Compliance with licence need for export (registration
requirement) and annual reporting requirements.
 Bulk gas distributors: Affected by labelling requirements and sectoral
prohibitions.
 Manufacturers and importers of products and equipment: Primarily affected by
quota system and documenting compliance (“declaration of conformity”) for
import as well as placing on the market restrictions for new equipment, labelling
and annual requirements for reporting.
 Operators of equipment: Must ensure compliance with requirements on
containment (i.e. leakage checks and repair, end-of-life) and engagement of
certified service technicians for the installation, servicing, maintenance, repair
and decommissioning of the equipment and the recovery of F-gases, keeping of
records and sectoral prohibitions.
 Service technicians/companies: Affected by provisions on containment (i.e.
leakage checks and repair) and certification needs that includes training and an
evaluation process in order to carry out installation, servicing, maintenance or
repair of the equipment containing or relying on F-gases.
 Feedstock users: Must comply with the reporting requirements. Feedstock use164
is not part of the HFC phase-down but losses need to be minimised (Article 7(1)
and evidence needs to be provided that trifluoromethane (HFC-23) generated as a
by-product is destroyed or recovered for further use (Article 7(2)) (and not
emitted).
 Reclamation & destruction facilities: Need to comply with reporting
requirements, but reclaimed quantities of F-gases are not covered by the HFC
phase-down scheme.
 Training providers & certification bodies: Need to offer training and
evaluation/certification processes in line with the minimum requirements set by
the relevant implementing acts and the national programmes set up on this basis.
164
Feedstock use means the use of a chemical substance in chemical production processes where the
substance is entirely used up to synthesise other substances
126
A5.4.1.2 EU supply of F-gases
Supply of F-gases to the EU market165
is likely to result in future emissions when gases
leak from equipment during their use or at the end of useful life of the equipment. In
climate terms, supply was relatively stable until 2017, at quantities above 200 MtCO2e
(Figure 17). The year 2014 was exceptional as it was characterised by very large imports
and stock building of HFCs in preparation for the EU phase-down that began in 2015.
The supply of F-gases decreased drastically in the years 2018 (27% reduction from
2017) and once again in 2019 (42% reduction from 2017). The relative contribution of
the other F-gases (i.e. PFCs, SF6, NF3 and other gases listed in Annex II) to supply
therefore rose to 24% in 2020, from levels of 15% in 2015 (in tCO2e). Among the Annex
II gases, the supply in tonnes of H(C)FOs (unsaturated HFCs and HCFCs) has increased
significantly since 2017, but in terms of climate impact they amounted to less than 0.1
MtCO2e per year due to their low GWP.
Figure 17. EU supply of F-gases
Note: From 2007 to 2013, only HFCs, PFCs and SF6 had to be reported on and imports in products and
equipment (ca. 11%) were not included.
Source: [EEA 2021 F-gases reporting data]
A5.4.1.3 Intended use of F-gases
The most common F-gases are HFCs used in RAC equipment (about two-thirds of F-
gases in climate terms). Electrical equipment (SF6), electronics manufacture (HFC-23,
165
“Supply” is a parameter calculated on the basis of available data on imports, stocks, production
etc. that indicates the actual use of F-gases by EU industry. It includes gases imported in products
in equipment as well as those exported in products and equipment. It is similar to the “demand”
derived from modelling, which is however based rather on the yearly gas “requirements” of filling
new and old equipment. “Demand” also does not include gases filled into exported equipment.
127
PFCs, SF6, NF3) and use as aerosol sprays (including MDIs: HFCs) make up most of the
remainder of F-gas usage, see Figure 18.
Figure 18: Intended uses of the total EU supply of F-gases in 2019 (in CO2e)
Source: [EEA 2020 public report]
A5.4.1.4 EU emissions of F-gases
From 2004 until 2014, F-gas emissions had been increasing year-on-year. Since
then, emissions have started to fall, in particular those related to HFCs (which
represent ca. 85% of total F-gas emissions), while PFCs and SF6 emissions appear to
have remained relatively stable in recent years, see Figure 19.
Figure 19: F-gas emissions in the EU-28 by substance group
Source: AnaFgas modelling (2021)
A5.4.2 State of Implementation
A5.4.2.1 Implementation at EU level of the HFC phase-down and reporting
The Commission implements the HFC phase-down at EU level. The quotas are based on
a formula that ensures that the annual quantity of quota is reduced in accordance with the
phase-down schedule and it takes into account three elements:
0
20
40
60
80
100
120
140
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Emissions
in
Mt
CO
2
eq
HFCs PFCs SF6 NF3 Unspecified mix of HFCs and PFCs
128
 An individual reference value (incumbent companies only). The Commission
must establish new reference values for companies every 3 years, which means
that new entrants are gradually becoming incumbents.
 A pro-rata quota share to new entrants and incumbents (from 2018) that have
declared that they need (more) quota from a reserve. The Commission invites
incumbents and new entrants every year to declare if they need quota from the
reserve. The share of the total quota allocated from the reserve started out at 11%.
The more declarations there are, the lower the individual quota.
 In case a company has exceeded its quota in a given year, the Commission
imposes a penalty corresponding to a reduction in quota of 2 times the
exceedance for that company the next year(s).
The phase-down steps are expressed in declining percentages of a maximum amount that
partly depends on what happened in previous years. Thus the total quota amount cannot
be precisely predicted years in advance.
The Commission calculates and allocates annual quotas to HFC bulk importers and
producers for free by uploading the quotas in the F-gas Portal and Licensing system (the
Registry). This Registry is open 24-7 and complemented by manuals and a help desk that
is answering thousands of requests every year. The Registry includes:
- Registrations of importers, producers and exporters of bulk HFCs. The
Registry includes their trade licence and keeps track of their annual quota, their
authorisations given to equipment importers and potential quota exceedances
(ex post).
- Registrations of HFC equipment importers. It keeps track of their acquired
authorisations to use quota and includes a delegation module for equipment
importers that allows them to pool their authorisations and a function to find
quota holders that may wish to authorise (part of) their quota (match making).
- Registrations of all companies that have reporting obligations. The annual
company reporting data is collected and stored in the European Environment
Agency’s (EEA) Business Data Repository (BDR). Reporters can find an auditor
carrying out independent verification of the yearly (bulk and equipment) reports.
- Member States competent authorities and custom have access to the Registry.
Figure 20 shows the amount of quota allocated each year (blue dot) and the way the
quota was used by HFC producers and importers to either place bulk HFCs on the market
(green) or to authorise an equipment importer to use the quota (purple). While some
quota holders exceeded their quota, the total allowable quota ceiling was respected in all
years.
129
Figure 20: Placing on the market (POM) of HFCs in the EU
Source: EEA, Annual report on fluorinated greenhouse gases 2020
There are, however, some issues relating to the implementation of the phase-down which
are outlined in the effectiveness section (A5.6.1).
A5.4.2.2 Implementation at MS level
The Member States are in general responsible for enforcing all measures of the
Regulation, which includes custom controls and market surveillance and setting
effective, proportionate and dissuasive penalties. Italy and Romania received a formal
notice in July 2019 for failing to establish and notify national penalties as required by 1
July 2017. In response, the two notifications were received in late 2019 and early 2020,
respectively. Since HFC prices are high in the EU (due to the phase-down), it is rather
profitable to circumvent the quota system and penalties for illegal imports must be
relatively high to be dissuasive. Industry and an NGO are questioning the dissuasiveness
of penalties in some Member States. The Commission has reminded Member States
repeatedly of the need to continue to reassess their penalties in the light of EU HFC price
developments and the Commission opened an EU pilot in October 2021 for Romania due
to the perceived insufficiency of penalties on quota non-compliance.
Industry and an NGO are also concerned about the different levels and/or insufficiency of
controls at customs or market surveillance level. Authorities on the other hand pointed to
a lack of clarity of the rules that complicated putting in place efficient controls. To
increase clarity, best practice guidelines for enforcing F-gas rules at customs were
developed in 2020 by a group of Member States under the Customs 2020 programme.
0
50
100
150
200
250
300
POM
of
HFCs
(Mt
CO
2
eq)
Bulk HFC POM 2007-2013 Quota-relevant bulk HFC POM
Issued authorisations to use quota Maximum quantity of HFC phase-down
130
Member States updated their relevant training, attestation and certification bodies for
technical personnel. Such programmes already existed as a result of the previous
Regulation and needed only to be marginally extended in scope, e.g. to include
refrigerated trucks and trailers and information about alternatives to F-gases.
A requirement to collect emissions data is done in different ways by Member States.
Some rely on inventories and expert studies and some have established equipment
registers. Member States are not (yet) commonly using those data for their UNFCCC
reporting.
Member States are also encouraged by the Regulation to develop producer
responsibility schemes for the recovery, recycling, reclamation and destruction of HFCs.
There are a number of schemes in place to support HFC recovery at end of life, including
take-back schemes (DK, FR, NL), deposit-refund schemes (DK), or refrigerant tax
rebates (ES). Further schemes are planned by EE and MT. Where these schemes have
been implemented, they are generally considered to be working well by stakeholders, but
direct data on their performance is lacking. Some producers felt these schemes create the
risk of free-riders. There are also voluntary take-back schemes organised by industry on
SF6 equipment (e.g. DE, ES).
Some Member States have implemented additional measures such as tax schemes (e.g.
DK, ES, FR), additional requirements for F-gas related customs controls (e.g. EE) or
leakage checks (e.g. FI, PO, SE), additional national reporting requirements and
databases (e.g. CZ, EE, HU, IT, PL), better control over the distribution chain of HFCs
(DE) or measures to support the market uptake of low GWP alternatives (e.g. FI, DE,
SE), and voluntary agreements on SF6 (DE, ES).
A5.5 Methodology
A5.5.1 Short description
The work was supported by an external study and work by external experts carried out
between April 2020 and October 2021 (Oeko-Recherche et al., 2021166
).
Eleven evaluation questions were developed to guide the analytical work on the five
evaluation criteria. The questions and a detailed evaluation matrix that includes sub-
questions, assessment criteria, indicators and data analysis approach as well as sources
and collection methods are given at the end of this annex (A5.8).
An extensive literature review was conducted to inform the assessment based on the
evaluation criteria. It involved an in-depth review of a range of sources, including current
or previous work being undertaken by project partners; from reports and other evidence
at pan-European level and national level studies, scientific articles, position papers,
meeting proceedings and legal texts. In total, over one hundred literature sources have
been reviewed in detail, providing evidence related to all of the evaluation criteria.
166
Support contract for an Evaluation and Impact assessment for amending Regulation (EU) No
517/2014 on fluorinated greenhouse gases (CLIMA.A2/ETU/2019/0016): Evaluation Final Report)
131
The technical input from a series of Commission reports, required by Article 21 of the
Regulation, were also taken into account.167
Another important source for this evaluation is the annual company reporting data
related to production, imports (including equipment), exports, destruction, and feedstock
use of F-gases. These data are compiled and comprehensively analysed in annual reports
produced by the EEA.168
A5.5.2 Modelling to derive baseline and counterfactual scenario
In order to quantify the effect of the Regulation, a bottom-up stock model at sub-sectoral
basis was set up to calculate yearly demand and emissions of F-gases in metric tonnes
and CO2e for all relevant sectors and sub-sectors. The model is based on the AnaFgas
(abbreviation for ‘Analysis of Fluorinated greenhouse gases in the EU’) model described
in Schwarz et al. (2011)169
, but was updated with the most recent data available in the
course of this work. In the following, AnaFgas refers to the updated model used for this
evaluation. A detailed description of the model can be found in Annex A4.
Demand is defined as quantities of gas required for first filling of new equipment and re-
filling of existing equipment in a given year.
Emissions are defined as quantities being released from existing equipment (lifetime
emissions) and emissions at end-of-life (disposal emissions), as well as manufacturing,
by-product and fugitive emissions from the production of halocarbons, semiconductors
and aluminium. The AnaFgas model assumes specific emission factors for the different
sectors and sub-sectors, as well as scenarios. A full list of parameters used to identify
these emissions can be found in the external study.
167
REPORT FROM THE COMMISSION on barriers posed by codes, standards and legislation to using
climate-friendly technologies in the refrigeration, air conditioning, heat pumps and foam sectors,
COM/2016/0749 final (https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=CELEX:52016DC0749); REPORT FROM THE COMMISSION of assessing the
2022 requirement to avoid highly global warming Hydrofluorocarbons in some commercial
refrigeration systems, C(2017) 5230 final (https://ec.europa.eu/clima/sites/default/files/f-
gas/legislation/docs/c_2017_5230_en.pdf);
REPORT FROM THE COMMISSION assessing the quota allocation method in accordance with
Regulation (EU) No 517/2014, COM(2017) 377 final
(https://ec.europa.eu/clima/sites/default/files/f-gas/legislation/docs/com_2017_377_en.pdf);
REPORT FROM THE COMMISSION on the availability of refrigerants for new split air conditioning
systems that can replace fluorinated greenhouse gases or result in a lower climate impact, C(2020)
6637 final (https://ec.europa.eu/clima/sites/clima/files/news/docs/c_2020_6637_en.pdf);
REPORT FROM THE COMMISSION assessing the availability of alternatives to fluorinated
greenhouse gases in switchgear and related equipment, including medium-voltage secondary
switchgear, C(2020) 6635 final
(https://ec.europa.eu/clima/sites/clima/files/news/docs/c_2020_6635_en.pdf); and
REPORT FROM THE COMMISSION on the availability of hydrofluorocarbons on the Union market,
C(2020) 8842 final (https://ec.europa.eu/clima/sites/clima/files/f-
gas/docs/20201216_c_2020_8842_en.pdf)
168
https://www.eea.europa.eu/publications/fluorinated-greenhouse-gases-2020
169
https://ec.europa.eu/clima/sites/default/files/f-gas/docs/2011_study_en.pdf
132
The baseline and counterfactual scenarios were calculated for the period from 2010 to
2019. This is useful to cover the period before any changes could take an effect and
discover when a discrepancy is first discovered170
. The counterfactual scenario is an
update of the “with measures” (WM) scenario from the preparatory study for a review of
Regulation (EC) No 842/2006 by Schwarz et al. (2011) which takes into account the
actual data on e.g. developments in technology, sales and stocks, population growth and
gross domestic product (the WM was forward looking and based on assumptions). Also,
it was necessary to include data for Croatia (not included in WM). This update implies
that the counterfactual is consistently higher than the WM scenario by 6-8%.
A5.5.3 Macro-economic analysis
An evaluation of economic effects was undertaken using descriptive analysis, looking at
the change of value added for the NACE sector “Manufacture of non-domestic cooling
and ventilation equipment (28.25)”171
over time. This sector is considered as most
representative of the EU industry sectors affected by the Regulation, representing
approximately 80 % of HFC demand.
A counterfactual scenario is constructed by applying three steps: First, economic
development of the sector 28.25 with regard to the development observed for total
industry by establishing a time series for the coefficient between sectoral and total
development172
. Second, the trend for this coefficient prior to the revision of the
Regulation is derived from a simple linear trend analysis for the years 2010 to 2014173
.
Finally, the pre-revision trend is extrapolated into the future (2015+) to arrive at the
counterfactual development for the years 2015 to 2018. Impacts on employment were
analysed using an analogous methodology. As above, the change of employment for the
NACE sector “Manufacture of non-domestic cooling and ventilation equipment (28.25)”
over time has been analysed.
A5.5.4 Assessment of adjustment costs to industry
In the assessment of the costs to Businesses a distinction is made between:
170
As is apparent from Figure 22, first signs of an impact on demand are seen from 2013 and 2014.
This is assumed to be due to “early birds” market players that react already to the writing on
the wall, i.e. the measures proposed in the Commission proposal in 2012 and the discussions
during the negotiations. However, these effects are of course very small.
171
According to the statistical classification of economic activities in the European Community of the
NACE codes (https://ec.europa.eu/eurostat/documents/3859598/5902521/KS-RA-07-015-
EN.PDF), this class includes: manufacture of refrigerating or freezing industrial equipment,
including assemblies of components; manufacture of air-conditioning machines, including for
motor vehicles; manufacture of non-domestic fans; manufacture of heat exchangers; manufacture
of machinery for liquefying air or gas; manufacture of attic ventilation fans (gable fans, roof
ventilators, etc.). This class excludes: manufacture of domestic refrigerating or freezing equipment,
see NACE code 27.51; manufacture of domestic fans, see NACE code 27.51
172
”Total industry” includes NACE codes B mining and quarrying, C manufacturing, D electricity, gas,
steam and air conditioning supply and E water supply; sewerage, waste management and
remediation activities.
173 Any effects before 2015 that may be linked to the Regulation as seen for demand (see section
A5.5.2) are so small that cost differences would not be picked up by this analysis.
133
 F-gas using industries, i.e. the operators of equipment
(end-users) usually relying on F-gases (or low-GWP alternatives), and
 Businesses involved in the supply chain of the gases, i.e. producers and
importers of gases; gas distributors and service companies.
Equipment manufacturers are also impacted but any costs incurred are taken into account
as higher equipment prices for the F-gas using industry.
The total expenditure (totex) for all F-gas using industries has been calculated for the
period 2015 -2019 using the AnaFGas model both for the baseline and counterfactual
scenario. It takes into account:
 Capital expenditure (capex), which includes the equipment operators’ investment
in new hardware. In all F-gas application sectors where the gases are not directly
emitted on application, the cost of the first fill of F-gases is also considered as
capex, e.g. the first fill of refrigerants into refrigeration equipment
 Operational expenditure (opex), which includes the cost of refill of gases into
equipment (to balance losses from leakage), the cost for electricity or fuel needed
to operate the equipment and maintenance costs affected by the Regulation (i.e.
additional cost for leak checks and repairs as imposed on HFC installations by the
Regulation, and for installations using CO2, NH3 or hydrocarbons as refrigerants
instead of HFCs)..
The difference in total costs between the two scenarios are the ‘operative compliance
costs’ of the Regulation. These have been averaged over the evaluation period and
divided by the average totex of the counterfactual scenario to provide a relative increase
or decrease in totex for F-gas using sectors.
For a meaningful assessment of F-gas using industries compliance, the adjustment costs
are divided into:
 costs of technological change which are borne by those equipment operators that
invest in alternatives to the established HFC-based technologies; and
 costs related to HFC price increases174 which are borne by operators of existing
(HFC-based) equipment which need to be refilled subject to increased HFC prices
as well as operators of new installations that still buy HFC-based technologies.
However, the costs for users related to any increase in the price of HFCs are ‘offset’ (in
cost-benefit analysis terms) by equivalent additional benefits to businesses in the supply
chain of HFCs, i.e.:
 producers and importers175
of HFCs that can sell the gases to the gas distributors
at considerably higher prices than they could have done without the Regulation.
174
Based on the EU HFC price monitoring an average HFC premium of 8 €/t CO2e at gas distributor
selling price level, or 16 €/t CO2e at service company selling level for the 2015-2019.
175
Importers of bulk HFCs receive quota for free. However, importers of pre-charged RAC equipment
do have to acquire quota authorisation from quota holders. Thus, equipment importers are
134
Given the free allocation of quota under the Regulation, these additional revenues
come without176
associated costs.
 service companies that usually charge their customers (i.e. operators of equipment
in need of refill) a levy in proportion to bulk prices (e.g. a fixed mark-up on bulk
prices) and thus pass on and add to any upstream price increase. The same
principle applies for gas distributors, situated between producers/importers and
e.g. service companies in the HFC supply chain. On average, prices per kg of gas
sold at service level are approximately twice the price of gases sold by
distributors177
.
Consequently, the gas price increase is having distributional effects and the overall net
cost to business is zero. Total adjustment costs are therefore limited to the changes in
investment and operating costs related to technological changes.
A5.5.5 Administrative costs
Industrial stakeholders were asked to provide information on administrative costs that are
additional to those that were already incurred as a consequence of the 2006 Regulation.
The Regulation affects many different types of companies (gas producers, distributors,
importers, equipment manufacturers, service companies, end users etc.) and in many
different ways (different measures affect different companies (types)). Thus, the data
collected needed to be complemented by further analysis. This detailed analysis,
assumptions made and data considered are given in Annex A14. By way of example, one
adjustment that had to be made was due to the fact that the stakeholder consultation
focussed primarily on interviews and feedback from large business organisations. Costs
were therefore adjusted for small and medium firms based on levels of activity. For some
measures, the costs for large companies were expected to be equivalent to the costs borne
by small and medium companies. The final number of estimated working days was
calculated based on the aggregated working days for each company. A cost of EUR 230
per day was applied to calculate a total estimated cost (based on an assumed average
annual salary of around EUR 50,000, and annual days worked - around 220).
For the EU Commission the costs were estimated by DG CLIMA. The data for the EEA
are based on EEA time recording and invoice information from EEA’s contractors.
All 27 Member States were asked to fill out a questionnaire related to the administrative
costs associated with the implementation and enforcement of the Regulation. The
questionnaire provided the option of reporting either time or financial expenses (average
number of annual working days or average annual cost in €) and invited information on
the certainty of estimates. The respondents were not able to provide answers to all the
basically in the same situation like EU original equipment manufacturers (OEMs): Both have to pay
GWP-based a premium on the HFCs charged / to be charged into equipment. Findings of the Öko-
recherche HFC prices management support that authorisation cost have been approximately at
the same level as HFC prices increases experienced by EU OEMs.
176
Except for small admin cost related to quota management.
177
Source: EU HFC price monitoring conducted by Öko-Recherche
135
questions and the figures obtained include a combination of time effort and monetary
expenditure estimates. The level of certainty ranges from ‘definitive’ to ‘rough
estimates.’ Nonetheless, a good base of data was collected from the competent authorities
on which an estimate of administrative costs could be made. In total 13 Member States
provided information on administrative burden178
, with six noting upfront costs. To
arrive at total costs, the data from those Member States that provided cost data were
aggregated and extrapolated to an overall total using the number of reporting companies
in each Member State179
. This approach, considering the total number of reporting
companies, has been applied to the majority of measures as this was considered to
provide the most accurate basis for extrapolating the costs. However, where appropriate,
in some cases the extrapolation has been based upon the number of reporting importers
within Member States.
A5.5.6 Consultations
The consultation exercise was carried out in parallel with those for the impact assessment
of potential changes to the Regulation. The main consultation activities were the
following:
 Stakeholder feedback received on the Initial Impact Assessment.
 Public consultation from 15 September to 29 December 2020. A total of 241
responses and 44 attachments were provided which are available on ‘Have your
say’180
.
 34 additional semi-structured targeted stakeholder interviews (16 Member States
competent authorities, 2 customs authorities, 1 NGO and 16 EU business
associations/companies). In addition, two competent authorities and two customs
authorities provided written responses to the interview questions.
 A full-day stakeholder workshop (virtual) on 6 May 2021 with 355 participants,
primarily industry stakeholders representing relevant business organisations and
associations, but also NGOs and public authorities were represented. Additional
written feedback could be provided until 24 May (69 submissions received).
A summary of the stakeholder consultation activities and findings is presented in the
Consultation Synopsis report (Annex A2).
A5.5.7 Limitations and robustness of findings
A5.5.7.1 Limitations related to the data available
The following limitations on data were detected:
 Reporting data used to examine the effectiveness of placing on the market
restrictions only covers imports (not EU produced equipment) and does not
178
13 Member States provided data based on time effort required, and 9 Member States provided
data on financial costs.
179
EEA report - Fluorinated greenhouse gases: Data reported by companies on the production,
import, export and destruction of fluorinated greenhouse gases in the European Union, 2007-
2019, 2020, 2020, EEA
180
https://ec.europa.eu/info/law/better-regulation/have-your-say
136
provide a precise sector split. Also, reporting data for placing on the market
restrictions only goes up to 2020, so one cannot judge the impact of prohibitions
which fall after this date.
 No comprehensive data is available on labelling compliance, which is difficult to
separate from related obligations e.g. under the Classification, Labelling and
Packaging (CLP) and the Registration, Evaluation, Authorisation and Restriction
of Chemicals (REACH) Regulations.
 No comprehensive data is available on recycled and reclaimed F-gas
quantities. Reporting data for recovery and reclamation only exists for importers,
producers and exporters, hence the data is not complete.
 Compliance with the leak checking requirements under Article 4 and Article 5
of the Regulation is difficult to assess first-hand as there are no comprehensive
studies in this area and existing databases are not publicly available or are
confidential. No consistent data set tracking leakage rates pre-implementation are
available.
 It is not feasible to make an accurate estimate of the level of illegal imports.181
As
a consequence, the levels of demand and emissions presented throughout the
reporting and modelling analysis on demand and emissions do not capture any
quantities from illegal imports.
A5.5.7.2 Limitations related to the AnaFgas model
The following limitations of the AnaFgas model should be noted:
 The AnaFgas model assumes yearly re-fillings of emitted quantities, which is
not necessarily the case over the lifetime of equipment, and thus the modelled
yearly demand can deviate in the short term (i.e. on an annual basis) from actual
demand while accurately predicting the longer term trends (i.e. multi-annual).
 For the assessment of the cost of technological change, generalisations were made
by representing each modelled sector by one typical installation size, assuming
to represent the full sector. Thus, the full variety of existing installation types and
sizes cannot be fully covered. Assumptions on parameters affecting investment
and operating costs rely on expert judgement and industry input.
 A clear separation of the impacts of the different individual measures of the
Regulation on e.g. the demand for HFCs or F-gas emissions is not always
possible. By way of example, observed reduction effects on HFC demand and
emissions in the model cannot be cleanly ascribed to specific prohibitions, the
overall phase-reductions or smaller leakage rates due to the containment
provisions. Generally, specific effects of measures can only be extracted from the
model when no confounding effects of other measures are present. For other F-
gases that are not HFCs, on the other hand, direct effects of prohibitions can be
more easily extracted from the model results (as they are not covered by the
phase-down and containment measures mostly do not apply).
181
https://ec.europa.eu/clima/sites/default/files/f-
gas/legislation/docs/report_illegal_trade_hcf_en.pdf
137
A5.5.7.3 Macroeconomic and cost analysis
Finally, the following approximations were made in the analysis:
 Stakeholder costs cannot be split by business size, Member State or measure
with any degree of confidence. Technical compliance costs were assessed by
application sub-sectors, which hardly correlate with business sizes
 There is little published data or studies on the administrative burden placed on
different stakeholders by the Regulation. To close this gap, data was requested
from stakeholders repeatedly but data collected remained limited, in particular
regarding costs to industry, both due to limitations in the evidence available on
costs per undertaking, the number of undertakings affected and the type of
companies affected by different measures and in different ways. These gaps were
filled by expert judgement to provide quantitative estimations. In addition, cost
data collected was predominantly provided by larger firms and as a proxy, the
costs for small and medium firms were scaled down.
 The analysis of macro-economic effects is based on a simple analysis of trade
flows, production and employment in the most relevant F-gas sectors used as a
proxy for the rest of the market. This approach was deemed appropriate as effects
at this level and over the relatively short timeframe (2015-2020) are small and
very difficult to detect at the economy-wide level. The results are in line with the
main conclusions on efficiency that were based on the analysis of compliance and
administrative costs.
A5.6 Analysis and answers to the evaluation questions
A5.6.1 Effectiveness
The overall objective of the Regulation was to provide a cost-efficient contribution to
reach the EU’s previous climate targets, i.e. to reach at least a 60% reduction in
emissions by 2030. The modelling exercise confirms that the demand and resulting
emissions savings are a result of the Regulation, as compared to the counterfactual
scenario (compare Figure 22). The drop in demand (13% in CO2e) is more striking than
that of emissions (6% in CO2e), because emissions occur years after gases are put into
equipment (from leakage, losses at end-of-life etc.). The largest changes are observed in
refrigeration (62% of emission reductions), and to some degree in air conditioning, while
a transition is also going on in other HFC using sectors. Forward modelling indicates that
emissions will continue to fall significantly but the 2030 emission goal set for the
Regulation may not be fully reached (see efficiency). Still it can be concluded that
overall the measures in the Regulation have worked rather effectively.
The degree to which the four specific objectives are being met is summarised below.
A5.6.1.1 Objective 1: Discourage the use of F-gases with high GWP in the EU and encourage
the use of alternative substances or technologies
The development of the F-gas supply to the EU market is an indication of the extent to
which the Regulation managed to discourage the use of F-gases. For HFCs, the supply
138
declined by 37% in metric tonnes and 47% in terms of CO2 equivalents between 2015
and 2019. A significant share of the decline in HFC supply was due to a lower use of a
few types of high GWP HFCs and HFC mixtures (R134a182
, R404A and R410A) and a
shift to natural alternatives and the synthetic alternatives, H(C)FOs. Users of natural
refrigerants have the advantage that they are not restricted in any way under the
Regulation, but this also means that data on their consumption is not collected. The
supply of the synthetic alternatives, H(C)FOs, has grown to about 18,000 tonnes (2019
data; from 1,300 tonnes in 2014). In addition, while the amounts of HFCs imported
inside of products and equipment have remained rather constant in metric tons since
2016, the GWP of these HFCs dropped by 33 % from 2015 to 2019 (see Figure 21).
This is a clear indication that this sector has shifted from using higher warming HFCs
(e.g. R410A) to HFCs with a medium-high GWP (e.g. R32). These findings indicate that
the HFC phase-down (i.e. the quota system) combined with placing on the market
(POM) and use prohibitions worked rather well.
Figure 21. Development of average GWP in HFC supply
By design, the HFC phase-down restricts supply in CO2 equivalents. Prices of high GWP
HFCs increased significantly in mid-2017 and early 2018 reaching a peak of 6 to 13
times higher than the original price in 2015183
. The observed price increases for the
different HFCs roughly reflected their GWP184
and were passed on from the upper to the
lower levels of the refrigerant supply chain. Prices of high GWP HFCs in the 3rd quarter
of 2021 continue to be two to seven times higher (compared to 2014) depending on the
supply chain level and therefore continue to be an incentive for innovation. Since,
prices for HFC alternatives have remained rather stable climate-friendly
technologies have become more competitive. Stakeholders agreed that the HFC phase-
down in combination with prohibitions has proven to be an effective measure. Some
182
The ability to reduce supply for HFC-134a is partly due to a lower need for this gas in the
production of new passenger cars from 2017. This is an effect of the MAC Directive which is both
taken into account in the counterfactual and the baseline scenario.
183
https://ec.europa.eu/clima/document/download/11f89677-c97e-420d-97b7-97b9ad14618a_en
184
The higher the GWP of the HFC the more quota is needed for the same metric quantity. Thus the
higher the GWP of the HFC the higher is the price increase for the gas.
1000
1200
1400
1600
1800
2000
2200
2015 2016 2017 2018 2019
Average
GWP
139
stakeholders suggested that the phase-down has been the most important measure of the
Regulation as it provides flexibility and clarity and is driving change.
The phase-down also incentivised the reclamation of F-gases in the EU, resulting in a
low, but steady increase of these activities. Based on the reported data under the
Regulation185
, reclaimed HFCs made up 8 % of the amount produced in 2019, equalling
3 % of the EU supply of virgin HFCs (or 9 % and 4 % respectively in CO2e). This means
that quantities reclaimed have roughly tripled since 2014. This is assumed to be a direct
consequence of gases having a higher value as a result of the quota system, making
reclamation activities more attractive. A reclaimed gas is of the same quality as virgin
gas but does not require any quota to be placed on the EU market. HFCs make up the
vast majority of reclaimed F-gases in metric tonnes (97 %), with SF6 contributing
approximately 20 % in tCO2e of reclaimed gas. As not all reclamation facilities are
required to report today, the real numbers are expected to be higher.
The placing on the market and use prohibitions were implemented successfully as
seen by the reporting data, and were considered to be effective by stakeholders.
Prohibitions related to F-gas products and equipment appear to be mostly complied with
(on the basis of Article 19 reporting data). The successful technological transition reflects
that prohibitions were introduced where suitable alternatives were available. This is
supported by the fact that no derogations on the basis of Articles 11(2) and 11(3) were
made. The prohibitions efficiently avoided the use of HFCs in certain applications where
this was easy and economical to do, while facilitating the availability of HFCs where
finding alternatives is more difficult or costly in the context of scarce overall HFC
quantities due to the HFC phase-down measure. Stakeholders also broadly agreed on the
effectiveness of the control of use restrictions in meeting the objectives of the
Regulation. Still, there appears to be further potential to reduce HFCs, in particular in
the area of AC. Furthermore, some emissive types of uses that could be avoided are
currently not restricted, e.g. uses of HFCs for cooling skin in beauty clinics and some
inhalation anaesthetics in hospitals.
Moreover, the Regulation has not promoted a transition for uses that are not
covered by the phase-down (exempted or non-HFC) and/or prohibitions. As regards
the exempted uses, HFCs amounts (in CO2e) for metered dose inhalers (MDIs) has
even increased by about 45% since 2015. Feedstock use (for which there are normally
no alternatives) was rather constant in that period and amounts related to export
exemptions have been fluctuating. Semiconductor and military uses remained moderate
and accounted for only 3 % of total quota exemptions in 2019. Some stakeholders noted
that the quota exempted uses were a cause for concern. Others signalled that
pharmaceutical undertakings are moving to lower GWP propellants (the first
undertakings have announced their intention to commercialise the first lower GWP MDIs
by the end of 2025).
185
Currently only producers, importers, and exporters are reporting on reclamation activities. Any
company that does not fall into any of these company types but carries out reclamation is currently not
obliged to report. The data is therefore incomplete.
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As regards other gases, SF6 and PFCs represented 18 % of F-gas emissions in terms of
CO2e due to their very high GWP (ranging from 7 000 to 23 000), but there are few
restrictions on their current use. In particular, in the case of SF6 for use in electrical
transmission, suitable alternatives have been developed, intensively researched or
even placed on the market in the past years, but the Regulation is not sufficiently
promoting the deployment of these new alternatives. Also, there is concern that use
of SO2F2 in pest control of timber for export, is not currently covered by the
Regulation,
Consequently, the Regulation has been less effective in promoting a transition to
climate friendly alternatives for quota exempted uses, some special HFC uses and
for F-gases other than HFCs.
A5.6.1.2 Objective 2: Prevent leakage from equipment and proper end of life treatment of F-
gases in applications
Because there is still a large bank of existing equipment and products that contain F-
gases, prevention of leakages remains key to achieving significant emission reductions.
To this end, the Regulation is building on the rules put into place by the previous F-gas
Regulation as they had already proven to be effective. Data available from surveys in a
number of Member States has shown the importance of regular leakage checks and
associated servicing activities, especially in the commercial refrigeration sector, as HFC
leakage rates from cooling equipment have declined (further) in recent years. Data
from a comprehensive Polish database shows that leakage rates have declined in all
cooling equipment (refrigeration, air conditioning) from 12.6% average in 2016 to 3.0 %
in 2020. This trend also appears to have been generally observed in Germany and
Slovakia. Such reductions result in both savings on adding new (expensive) gas and
better energy efficiency of the equipment. Similarly, some data suggests that recovery
rates may also have gone up in recent years.186
Roughly two-thirds of quantities were
reported to have been recovered from maintenance activity and one-third from equipment
at end-of-life in France. In Poland about 30% of recovered refrigerant was reclaimed in
2019, which increased to 44% in 2020. These levels are thought to rank highest within
the EU. Reclamation activities are strongly linked to the availability of facilities within
the country, as cross-border shipments are difficult to organise. High shares of
reclamation are thus expected in France, Belgium, Czech Republic, Germany, the
Netherlands and (looking back) the UK.
The Regulation was less effective in preventing leaking emissions of other uses and
substances other than HFCs. Firstly, SF6 emissions will continue unabated and for
many years to come due to the long lifetimes of the equipment in place (40-50 years).
Secondly, a requirement to prevent emissions during production, transport and storage
applies only to producers and not to other relevant actors. Thirdly, the Regulation will
stop the additional use of HFCs in foams by 2023, but does not ensure the safe disposal
and recovery of HFCs already used in insulation material. The Regulation states that
186
Reported quantities of reclaimed gas have been going up 4 times between 2014 and today, but
these data are not complete as not all companies are required to report currently.
141
recovery of F-gases is required at end-of-life from foams where it is “technically feasible
and does not entail disproportionate cost”. However, in practice costs, whatever they are,
are often used as an excuse for not recovering the gas and it is difficult for authorities to
enforce this provision strictly. As a result, HFCs in insulation foams are likely to be
released into the atmosphere in the future. Finally, current emission prevention
requirements only concern F-gases listed in Annex I of the Regulation. Thus such
requirements do not apply to other fluorinated gases listed in Annex II (or relevant gases
not listed in the Regulation), such as NF3, H(C)FOs, fluorinated ethers and alcohols and
other perfluorinated compounds.
A5.6.1.3 Objective 3: Facilitate convergence towards a potential future agreement to phase
down HFCs under the Montreal Protocol
The Regulation clearly demonstrated to other countries that ambitious action on
HFCs is possible and enabled a joint EU negotiation position and the tabling of an
EU amendment proposal to the Montreal Protocol that provided crucial impetus for
the negotiations. The Commission and the EU Member States were vocal supporters and
advocates of the proposed Kigali Amendment during its negotiation, on the basis of the
established best-practice rules of the Regulation. Prior to the implementation of the
Regulation, there was no international agreement tackling the growing use of HFCs and
there were little effective HFC measures elsewhere in the world187
. Some industry and
NGO stakeholders have labelled the Regulation ‘the world’s gold standard’ and there is
consensus that the F-gas Regulation had a positive impact on reaching an agreement
internationally.
A5.6.1.4 Objective 4: Enhance sustainable growth, stimulate innovation and develop green
technologies by improving market opportunities for alternative technologies and gases
with low GWP
The Regulation has been a strong trigger for innovation in the relevant sectors.
Dozens of new, more climate-friendly blends, especially mixtures consisting of HFCs
and H(C)FOs, have entered the EU market since 2015. In addition, the number of
companies working with natural refrigerants increased from 400 to 650 in the period
2013 to 2016 and, for example, in the commercial refrigeration sector, over 80% of
companies increased their levels of investment in R&D between 2011 and 2016.188
The
same source concluded that overall the Regulation has led to an increase in businesses
switching to HFC-free technologies, with additional suppliers entering the market
following its implementation, and that Europe is now a global leader in the adoption of
low-GWP alternatives, not least due to the favourable policy environment. By way of
example, by 2019:
 Europe had adopted around 2,200 low-charge ammonia systems, relative to a
global total of 4,000.
187
With the exception of Switzerland and the EEA countries. Japan introduced legislation on HFCs
shortly after the EU.
188
Shecco (2016): F-Gas Regulation Shaking up the HVAC&R Industry.
142
 Europe had installed over 40,000 transcritical CO2 systems, considerably more
than the rest of the world combined.
 Hydrocarbons (in particular propane) in plug-in display cases has emerged as a
viable refrigerant for supermarkets and smaller convenience stores. By early
2017, it was reported that there were around 700,000 hydrocarbon integral units in
European supermarkets.
The report also observed that the large number of (new) suppliers has helped to increase
the efficiency of the alternative technologies. These findings are fully reflected in the
responses of stakeholders. 84 % of the respondents in the OPC reported that the
Regulation has had a positive or very positive impact on the stimulation of innovation
and development of green technologies. Further to this, stakeholders have noted the
Regulation has provided certainty for undertakings although, initially considerable
awareness raising on the rules of the Regulation and their meaning for stakeholders and
the use of technologies proved to be necessary to support the uptake of the new
technologies.
It is expected that innovation and development of green technologies will continue to
grow as a result of the tightening quota system and the prohibitions that will come into
effect in the coming years.
Stakeholders largely agree that the Regulation has been quite effective. The vast
majority of OPC respondents suggested the Regulation has had either a ‘positive’ or
‘very positive’ impact on: contributing to the EU’s climate targets, facilitating agreement
to phase down HFCs under the Montreal Protocol, discouraging the use of F-gases with
high GWP in the EU, and preventing leakage and ensuring proper end-of-life treatment.
A5.6.1.5 Identified Challenges to an effective implementation
Despite the relatively high effectiveness, there are also a number of challenges:
 There remain barriers to the use of climate-friendly alternatives due to safety
codes that have not been updated in line with technological progress. They
therefore inhibit a more widespread use of alternatives even though this is not
warranted on safety grounds (see also A5.6.4.3.4).
 An insufficient number of service personnel qualified to install equipment
with climate-friendly alternatives may have reduced the uptake of such
technologies. This was pointed out already in a report by the Commission in
2016.189
The European installers association AREA confirmed that this problem
persists: Only 3.5-7% of certified F-gas personnel was trained on the alternatives
(ammonia, CO2, hydrocarbons, HFOs). This is better than the situation in 2016
(0-2.3%) but still very far from sufficient. Only half of the current training centres
in the EU offering any training on alternative refrigerants and they are unevenly
189
http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52016DC0748
143
spread throughout the Union.190
Industrial stakeholders including the service
personnel strongly advised to remedy the lack of training and certification for
alternatives.
 There is evidence of imports of HFCs outside the quota system although it is
not feasible to provide an accurate estimate of the extent of these illegal activities.
A Commission study confirmed that there are discrepancies between Chinese
export data labelled as intended for the EU market and the actual EUROSTAT
import data. 191
There are also increasing imports to EU neighbourhood countries
that could, illegally, be diverted to enter the Union market. Based on these
findings, and assuming that all unexplained quantities would indeed become HFC
illegally sold in the EU (while there are also other factors that could explain at
least some of these discrepancies such as trade re-routing and higher growth rates
in neighbouring states), stakeholders such as the large chemical producers claim
that illegal gases could be up to 30% of the total allowed quota. While the exact
extent cannot be determined as numbers on smuggling is not available, it is
apparent from increasing illegal HFC quantities discovered through border
controls that this is happening. OLAF has investigated a number of illegal
smuggling activities and identified a number of modus operandi of illegal traders
as well as shortcomings in the Fgas Regulation. The industry has set up a
noticeboard where illegal activities can be reported and a private investigation
firm has been following up, and discovering wrongdoing. Industrial stakeholders
(gas producers, importers, distributors, service companies and endusers) confirm
the existence of illegal gases on the market. The refilling of ACs in passenger
cars, where smaller bottles are usually used, is experiencing high quantities of
HFCs from dubious origins. Internet sales are also often cited. A number of
actions to prevent the latter activities are ongoing, including by industry itself, but
the current legal situation due to the Regulation (e.g. lack of detail on custom and
market surveillance role, lack of detail on obligations of economic operators) is
limiting an effective enforcement and border controls.
 Some company owners with several affiliates (including single actors setting up
and registering multiple mailbox companies), benefit disproportionately from
the reserve by getting multiple quota shares. As a consequence, the number of
bulk importers increased by a factor of more than twenty between 2012 and 2019
(data from DG CLIMA’s HFC registry). The Commission adopted an
Implementing Regulation in 2019 that clarified the rules and this resulted in a
decrease in the number of applications for quota from the new entrant reserve for
2020 and 2021. Still, there appears to be a large number of quota holders with no
apparent link to the F-gas business, including mailbox firms and multiple
companies registered under the same address (data from DG CLIMA’s HFC
registry). This results in very low quota shares from the reserve to the real F-
gas traders. It also makes it more challenging to prevent illegal imports.
190
All data from OekoRecherche, 2021
191
https://ec.europa.eu/clima/document/download/8b970e78-c5c3-41fd-b846-c75c1b6b045b_en
144
 While substances replacing HFCs generally have negligible climate impacts,
some of them could potentially have undesirable eco-toxicological effects that
require further monitoring. It concerns the generation of environmentally
persistent and accumulative trifluoroacetic acid (TFA) as a breakdown product of
H(C)FOs in the atmosphere and its subsequent accumulation in the aqueous
environment (see Quadrennial Report of the Scientific Advisory Panel to the
Montreal Protocol192
). The H(C)FOs are listed in Annex II of the Regulation,
and are currently not covered by measures aiming at preventing their
emissions. Given that they are common substitutes for many RAC equipment
including ACs in passenger cars, their emissions are rising strongly (see A11.2).
 All Member States have introduced penalties for non-compliance with the
Regulation. However, penalties are quite heterogeneous and their level may
not be dissuasive enough considering the possible economic gains achievable
through illegal activities. This implies that the same violation for importing
illegally into the EU single market is penalised differently depending on in which
Member State the goods enter. Moreover, the different judicial approaches and
legal mechanisms related to the penalties are making it difficult to ensure that
penalties in all Member States serve the purpose of being dissuasive. To
industrial stakeholders and NGOs, low penalties is one of the major issues
facilitating the illegal trade, as rogue traders could pay the low fines and still
make a profit off selling the illegal gases. Also, European-wide operating
networks could direct their activities towards Member States where penalties are
minor. Based on information provided by Member States, DG CLIMA has
collected available information on penalties. While that is a less than
straightforward exercise, in particular in Member States with a federal
organisation, the collected data confirms the large differences in penalties
applied, both from an administrative view and, where relevant, the applicability
of criminal sanctions.
 A large share of quota holders are not subject to independent verification of
reported data. Independent and appropriate verification is crucial for
effective enforcement of the phase-down. However, the amount of quota allocated
per company from the reserve in 2019 dropped below the mandatory verification
threshold of 10,000 tonnes of CO2e (because of the high number of quota
declarations). This meant that 78% of the quota holders in 2021 (12.6% of
amounts reported) did not need to have the reported amounts verified
independently (data from CLIMA’s HFC registry). Thus under-reporting is less
likely to be caught as it would normally require individual inspections to
establish. Furthermore, the mandatory verification obligation is not very
prescriptive, thus the quality of reports provided by companies varies. This is
apparent from reports submitted to DG CLIMA during the yearly compliance
192
https://csl.noaa.gov/assessments/ozone/2018/downloads/2018OzoneAssessment.pdf
145
checking exercise. A study by the Dutch enforcement agency has come to similar
results.
A5.6.2 Efficiency
A5.6.2.1 Benefits
The Regulation has provided benefits in terms of F-gas emissions saved and better
energy efficiency. Some economic and social benefits also appear likely.
A5.6.2.1.1 Emissions saved
The Regulation has saved F-gas emissions in the order of 44 million tonnes of CO2e
cumulatively up to and including 2019 (EU-28). In the baseline scenario, emissions
started to fall from 2015 onwards, and demand shows even earlier effects in anticipation
of the new rules (Figure 22). In contrast, in the counterfactual scenario emissions
continue to increase slightly until 2017 and remain stable thereafter. Until 2030,
significant decreases in emissions are expected under the baseline scenario (430 MtCO2e
emissions less than counterfactual scenario193
). Still they are expected to fall short of the
emission savings anticipated originally (60% in the 2012 impact assessment). The
highest absolute emission savings were achieved in the refrigeration sector, but the
highest relative reductions were achieved in the foam sector194
.
193
By 2050, emission savings by the Regulation is estimated to be 1991 MtCO2e vs. the
counterfactual
194
In the foam sector the industry has moved rapidly to alternatives from 2017, thus anticipating the
2020 and 2023 prohibitions.
146
Figure 22. Total demand and emissions of F gases in the period of 2010 to 2019 in the baseline and the
counterfactual scenario in metric tonnes and CO2e
A5.6.2.1.2 Energy use
Based on research on the technology employed, detailed documentation for the sub-
sectors was compiled on energy efficiency assumption for the alternative technologies.
Generally, new products on the market employing F-gas alternatives are achieving at
least the same energy efficiency as comparable products based on F-gas technology.195
In
some cases, adaptations may be required to ensure this is the case: for example,
insulating foams may require some additional space for hydrocarbons as an alternative to
HFCs, to achieve the same insulating efficiency.
At sectoral level small energy savings in the refrigeration and air-conditioning
(RAC) sector in the evaluation period 2015 to 2019 can be attributed to technological
changes brought about by the Regulation. Given the low intensity of energy savings
(about 0.1 %) of final energy use, no quantification of linked indirect emission reductions
was attempted. Stakeholders corroborated these calculated energy savings: Some
highlighted that energy-efficiency of home appliances for heating, ventilation, and air
conditioning equipment has indeed improved over the implementation period (although
this is also attributable to synergies with other EU legislation, e.g. Eco-design and
Energy Labelling). In summary, reductions of direct emissions (F-gases) and indirect
195
Shecco report “Toward energy - efficient refrigeration with natural refrigerants” and the 2015
Gluckman Consulting UNEP Ozone Secretariat Fact Sheets
147
emissions (energy efficiency) were achieved in parallel and synergies with e.g. eco-
design rules have been exploited.
A5.6.2.1.3 Economic benefits
The effects of the Regulation on production and gross value added (GVA) are more
likely to have been positive than negative. Value added decreased more strongly during
the financial and economic crisis in 2008/2009 in the manufacturing of non-domestic
cooling and ventilation equipment and recovered more slowly than total industry.
However, it has performed better with higher growth rates since 2014 and the
introduction of the Regulation appears to align with a period of expansion for the sector
above the trend observed for industry as a whole. Furthermore, compared to the
counterfactual scenario, actual value added (baseline) appears to have grown faster in the
RAC sector since 2014, see Figure 23. The need for replacement due to high leakages,
the phase-down and prohibitions under the Regulation may have contributed to additional
investment supporting that trend.
Figure 23: Value Added (VA) manufacturing of non-domestic cooling and ventilation equipment – actual
development and counterfactual scenario (EU 28)
Other variables may have influenced the sector over this period, such as demand for heat
pumps due to energy efficiency policies in the building sectors, general growth in
demand for climate cooling, rising living standards or other climate change or energy
efficiency policies that lead to demand and investment responses. As described above,
there are however clear indications that the Regulation has increased R&D and
investment by industry and developed a wide range of new alternatives which can
promote economic growth (see effectiveness).
With respect to trade, the Regulation did not significantly affect the production of F-
gases in the EU and EU exports. However, it did have an impact on the imports of F-
gases into the EU: Reacting to the switch in demand from HFCs to, partly, natural
refrigerants, imports of HFCs and H(C)FOs, measured in tonnes of gas, were about 7%
lower than they would have been without the Regulation. Given the higher cost for
H(C)FOs, however, the value of HFCs and H(C)FOs imports was about 16% higher.
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
0.5
0
5 000
10 000
15 000
20 000
25 000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Coefficient
(VA
sector
28.25/VA
total
industry)
Million
Euro
Manufacture of non-domestic cooling and ventilation 28.25 (EU 28)
Counterfactual scenario
Coefficient Value Added 28.25/Value added total industry
Linear regression (2010-2014) - second axis
y = 0.0008x + 0.1635
148
These limited (if any) economic impacts were corroborated by respondents to the OPC,
the majority of whom suggested the Regulation has had a neutral effect on EU
competitiveness.
A5.6.2.1.4 Social benefits
Sectoral employment has performed better than total industry with higher growth
rates since 2014 (see rising red (coefficient) trendline in Figure 24). Employment
performed slightly worse than the counterfactual trend scenario in 2014 and picked up
thereafter with substantially better performance than the counterfactual scenario in the
years 2017 and 2018. Although it appears that the Regulation may have had a positive
effect on employment, the precise effect is highly uncertain as it has also been affected
by other (external) factors (see preceding section).
Figure 24: Employment - Manufacturing of non-domestic cooling and ventilation equipment – actual
development and counterfactual scenario (EU 28)
Employment impacts were not directly raised by stakeholders but some noted that there
is a lack of qualified technicians that can handle climate-friendly equipment. Out of the
certified personnel, who have been trained in line with the minimum requirements for
handling F-gases, only a minority are competent and experienced in handling the F-gas
alternatives that are often characterised by being either flammable, toxic or require higher
pressures.
A5.6.2.2 Costs
A5.6.2.2.1 Adjustment costs for end-users
The estimated annual net adjustment cost for end-users related to technological
change was 461 million € per year (Table 22) and covers additional investment and
operating cost for using low(er) GWP technologies in comparison to established high-
GWP HFC technologies. The refrigeration users bore over 75% of total cost, stationary
149
air-conditioning 11 % and mobile air-conditioning about 1%. Foam and propellants,
solvents and fire protection take on 5-6 % each. Data at sub-sector level are given in
Annex A12.1.
However, the majority of the costs to end-users were linked to higher HFC prices for
those users that did not (or not yet) fully switch to low-GWP alternatives196
. That share
was gradually reduced over the years as climate friendly alternatives were increasingly
being introduced. Moreover, the expenses were distributed over a large number of users
(still) buying new HFC equipment or topping up existing equipment (approximately
150,000 large supermarket refrigeration systems, 10 million small commercial
refrigeration units, 100 million air conditioning systems in buildings and 200 million air
conditioning units in older vehicles). Moreover, similar higher benefits occurred in the
HFC supply chain when they were selling the gas (distributional effect).
The RAC sector accounted for approximately 94 % of the total adjustment costs in 2015-
2019. That is equivalent to about 0.3 % - 2.3 % of total expenditure (totex). In the foam
sector, the cost increase was substantially higher at about 18 %.197
For the HFC use as
propellant, solvent or fire suppression agent, the cost increase is about 0.01 %.198
There were also other types of costs effects of Regulation due to the requirement of
reducing emissions on production (Article 7) and recovery of F-gases (Article 8; only
refrigerated trucks and trailers were added with the Regulation). The linked estimated
costs are €0.4 million and €5.9 million, respectively (see Annex A14.1).
Table 23: Average annual compliance cost of Regulation to industry 2015-2019 (costs difference between
counterfactual and baseline)
Gross equipment
operators compliance
cost
thereof:
cost of HFC price
increases
(= cost to equipment
operators, = revenue in
HFC supply chain)
thereof:
Cost of technological
change
(= net EU industry
compliance cost)
Share of compliance
cost in total costs
Mio € / a Mio € / a Mio € / a % of equipment
operators’ totex in
counterfactual scenario
Refrigeration 1 075 723 352 2.3%
Stationary AC 581 530 50 0.7%
Mobile AC 374 370 4 0.3%
Foam 69 44 25 18.3%
196
The HFC-price related share of the compliance cost at F-gas user level is based on an average 2015-
2019 HFC premium of 8 €/t CO2 eq at OEM purchase price level, or 16 €/t CO2 eq at service
company selling level, concluded from the regular EU HFC price monitoring conducted by Öko-
Recherche.
197
It should be noted that in the present analysis only focus on a rather small part of the overall EU
foam sector and if the cost increases were seen in relation to the complete EU foam sector the
percentage would be far lower.
198
The cost of HFCs is very low in relation to total product cost. This is partly because there are no
additional costs for propellants used in MDIs (exempted from the HFC phase-down). If product
costs for MDIs are not considered, an average price increase of about 13 % is calculated for the
few applications in those sectors that still use HFCs.
150
Propellants, Solvents &
fire protection
69 40 29 0.01%
Other HFC sectors - - - NA
SF6 sectors - - - NA
Total 2 169 1 707 461
Source: AnaFgas cost modelling
A5.6.2.2.2 Cost efficiency of the emission reductions
Abatement costs compared to the emissions saved were lower than expected in the
2012 Impact Assessment. As HFC price increases lead to distributional effects rather
than overall costs, a meaningful comparison of total cost to industry vs the achieved
emission reductions takes into account cost of technological change only.
The average emission reduction costs calculated as the ratio of the annualised
technological cost relative to the lifetime averaged emissions savings observed until 2019
were on average about 6.4 €/tCO2e and are thus far below the 16 €/tCO2e that was
estimated for the 2030 time-horizon in the 2012 Impact Assessment.
At sectoral level, the low-GWP alternative technologies in stationary air-conditioning
equipment were on average less costly than the traditional HFC-based options (negative
costs). For refrigeration, the average emission reduction cost was 10 €/ tCO2e. For
mobile air conditioning the average emission reduction cost was 94 € /tCO2e199
. This
relatively high number is due to the fact that there were very few emission savings
observed so far (mostly for air conditioning systems for trucks and buses). For the foam
and propellant / solvents / fire protection sectors, technological emission reduction costs
are calculated as 8 and 10 €/ tCO2 e, respectively. Data for the calculation of emission
reduction cost at sub-sector level are presented in Annex A12.2. For those sub-sectors
that did not reduce emissions at all compared to the counterfactual scenario, a calculation
of emission reduction cost is not possible.
Table 24: Average emission reduction cost 2015-2019
199
These costs would represent ca. 0.6% on average of total expenditure of mobile AC (excluding
passenger cars)
151
Lifetime-integrated
emission reductions
of new equipment
installed in 2015-
2019 average
Cost of technological
change of lifetime-
integrated emission
reductions of new
equipment installed in
2015-2019 average
Calculated emission
reduction cost
for technological
change
Mt CO2 eq Mio € € / t CO2 eq
Refrigeration 13.0 125 10
Stationary AC 5.5 -25 -5
Mobile AC 0.1 12 94
Foam 0.0 0 8
Propellants, Solvents & fire
protection
2.5 24 10
Other HFC sectors - - NA
SF6 sectors - - NA
Total 21.2 137 6.4
Note: Data on subsector level are presented in the Annex to EQ5 in Annex 9.
Source: AnaFgas cost modelling
A5.6.2.2.3 Distribution of costs across business size
A high share of SMEs is likely to be found among equipment importers and service
companies. For both, however, no particular strong disadvantage is assumed: Equipment
importers basically face the same premium on HFCs in equipment as EU manufacturers.
On the other hand service companies benefit from higher margins on HFC prices and,
with the increasing use of alternatives, they are needing more skilled personnel to work
with H(C)FOs and natural refrigerants. Since 2006 they have been required to obtain
certifications for installations of F-gas equipment.
A5.6.2.2.4 Distribution of costs across EU regions
In the sub-sectors of domestic refrigeration, commercial refrigeration, transport
refrigeration, mobile air-conditioning as well as for aerosols, a large number of
installations have been affected by the 2014 revision and the type of equipment is
relatively equally distributed among Member States. Investments in replacement
technologies will, however, show some variations: The use of natural refrigerants has
been common in Northern European countries for many years, especially CO2
technology in commercial refrigeration, so that a large number of installations have been
running on alternatives for years. Furthermore, the structure of applications differs
between Member States especially in the commercial refrigeration sector as small shop
formats are more common in Southern Europe requiring different types of refrigeration
and air conditioning systems than hypermarkets and large shopping malls.
Stationary air conditioning units as well as air conditioning systems in buses and trams
are more frequently used in southern Member States than in temperate climates in the
north. Therefore, for these subsectors higher direct net costs will occur for Southern
European countries. On the other hand, heating-only heat pumps are more frequently
used in the northern EU region.
The assessment shows that the southern EU region, representing approximately 35% of
EU28 population has borne about 37.5% of total end-users’ compliance cost. The
152
northern EU region, representing about 65% of the EU 28 population, has borne about
62.5% of total cost. Hence, even if some regional effects may have taken place due to the
reasons above, the overall economic impacts are not that different between North
and South, with the latter bearing just a marginally larger share of the cost burden.
A5.6.2.2.5 Split of costs by measure
Business on average did not perceive the costs of the measures as exceedingly high.
Stakeholders clearly identified the ‘Restrictions on use and equipment’ and ‘HFC quota
system’ as the measures with the highest costs on industry (Table 24) while also
recognising that these are most effective measures in terms of saving emissions and that
their costs were justified on the basis of their benefits (e.g. OPC). Most other measures
(training/certification, producer responsibility, reporting) were seen to represent at most
medium-level costs, while costs for labelling were considered less important. Responses
on the basis of company size did not differ very strongly. A majority of business
associations and companies agreed that the costs of the individual measures were
justified to achieve the objectives, i.e. that the benefits of action had outweighed the costs
(a result which matched overall responses across all stakeholder groups).
Table 25 : Costs for businesses as determined on the basis of answers to the OPC rating costs from 1
(marginal costs) to 5 (very high costs))
Containment
Training
and
certification
Recovery
and
producer
responsibility
schemes
Labelling
Restrictions
on
use
and
equipment
HFC
quota
system
Reporting
and
verification
Micro (1 to 9 employees)
2.39 3.13 2.89 2.03 3.31 3.37 3.06
Small (10 to 49 employees)
2.89 3.00 3.13 2.20 3.17 3.50 3.00
Medium (50 to 249
employees) 2.83 2.97 3.04 2.27 3.00 3.41 2.85
Large (250 or more)
3.17 2.95 3.02 2.16 3.40 3.76 2.73
All Business
2.89 3.00 3.01 2.16 3.25 3.54 2.87
All
2.88 3.01 2.96 2.13 3.23 3.38 2.84
A5.6.2.2.6 Administrative costs to undertakings
Additional200
administrative costs arise from the need (i) to keep records on refrigerants
and for certification of service personnel in cooling equipment of trucks and trailers, (ii)
for extended labelling requirements, (iii) to prove compliance with the quota system for
new cooling equipment using HFCs, (iv) to comply with the quota system for bulk HFCs,
and (v) for reporting and verification of annual company data. Different measures apply
to different company types, and the range of costs can vary, e.g. between large and small
200
On top of those costs already incurred from measures of the previous 2006 Regulation.
153
companies. In Annex A14.1 the rationale and assumptions made for the estimation of
cost related to each measure are given. The highest total administrative costs are related
to ensuring that HFCs filled in new HFC cooling equipment are being counted under the
quota system (4.8 million € in total), followed by record keeping (3 million €; due to a
relatively high number of companies affected), and reporting and verification (2.4 million
€). Note that adjustment costs related to equipment and bulk gas under the quota system
(e.g. quota (authorisation) purchasing) are not included in these numbers. The smallest
total costs are incurred for extended labelling requirements (0.3 million €). In total, 14.1
million € are recurrent additional annual administrative costs for industry.
Table 26. Additional administrative costs for industry resulting from the different measures
Measure Companies
impacted
ca.
Average burden
(person days)
Total
Costs
(million €)
Keeping records 25,750 0.5*
3.0
Obtain certification 9,400 1*
2.2
Label equipment 4,700 L:1, M: 0.5, S: 0.25 0.3
Ensure HFC equipment
under quota system
2,900 L:27, M:13.5, S 6.75 4.8
Ensure HFC gas under
quota system
1,700 L:15, M:7.5, S: 3.75 1.5
Reporting & verification 3,000 L:13, M:6.5, S:3.25 2.4
TOTAL 14.1
L: large companies; M: medium-sized companies; S: small companies
*: As it is more difficult for smaller companies to comply, the burden was not scaled down from that established for larger
companies
A5.6.2.2.7 Administrative costs to Member State competent authorities
The total yearly costs across all Member State competent authorities and across all
measures is estimated to be a total of ca. 58,000 person days p.a. to ensure
enforcement or compliance with the Regulation. The Member States provided
quantitative feedback on a number of measures, but the costs associated vary widely not
least due to the different number of stakeholders affected. A detailed overview is
provided in Annex A14.3.1. These figures may not fully include the most significant cost
item of ‘conducting national inspections or checks’ (e.g. linked to emission prevention
and leakage). The latter is difficult to determine since these controls are jointly carried
out with other general environmental inspection activities (e.g. Industrial Emissions
Directive, Ozone Regulation), and checks are coordinated and carried out at local or
regional level. National authorities also report a wide range of costs when it comes to the
efforts linked to guidance and awareness raising, which may have represented the highest
costs besides compliance related actions.
In addition, one-off costs are incurred for establishing training and certification schemes
(truck and trailers201
), and producer responsibility schemes (encouraged in Article 9)
where these are set up (only encouraged by the Regulation). A further cost is associated
201
Member State responses were likely not limited to truck and trailers, but refer to all certification
programmes put in place by the 2006 F-gas Regulation
154
with the storing of company refrigerant management records (Article 6) in a national
database to determine emissions (Article 20). This action is not required under the
Regulation, but is the way some Member States chose to implement these articles. The
cost effort varies strongly depending on how these actions were implemented, see Annex
A14.3.1.
A5.6.2.2.8 Administrative costs to the European Commission
Five full-time equivalents (person days) are needed to run the quota system and
other central elements of the Regulation (DG CLIMA). An overview of
the administrative costs incurred is provided in Annex A14.3.2. The most significant
number of working days are associated with IT related aspects of the HFC Registry (an
additional 1.5 person days), implementing the quota system and its registry, as well as
providing information on the implementation of the Regulation (including compliance) to
stakeholders. External support to DG CLIMA for implementing the Regulation amounted
to ca €185,000 per year on average from 2014 to 2019. The costs incurred by other
services in the Commission, e.g. in DG TAXUD and OLAF are estimated to be up to 2
person days in total. The staff resources required under the old Regulation was 2 person
days.
A5.6.2.2.9 Administrative costs to the European Environment Agency (EEA)
The EEA has up to 1 person days internal staff for the collection, analysis and
publication of company reporting data. There has been a gradual increase in
administrative costs since 2012, which is linked to the big increase in quota holders. In
addition, 409 person days of external support are needed (2019). The greatest number
of workdays are linked to external IT consultancy supporting the F-gas webform, see
Annex A14.3.2.
A5.6.2.2.10 Areas of unnecessary burden or excessive costs
Many stakeholders agreed that the Regulation is efficient. Only very few mentioned areas
that were not including: that (i) the threshold for mandatory independently verified
reporting is too high; the (ii) verification requirements are unclear (especially for smaller
undertakings) and leave too much room for interpretation which is resulting in a low/
variable quality; there is (iii) no obligation for registered undertakings to submit a
‘NIL’202
report if they have nothing to report, thus it is unclear if they have nothing to
report or if their report is missing.
At a more general level, equipment manufacturers, importers and operators expressed
dismay that they were footing the bill, while others benefitted from the quota system
(distributional effects). An analysis showed that about 60 % of the HFC-price increases
to EU F-gas using industries 2015-2019 reflected as additional revenues for further
upstream actors in the HFC supply chain, i.e. producers and importers of HFCs and the
gas distributors. About 40 % of the equipment operators’ costs due to HFC price
202
A nil report is a notification by a company that it considers itself not obliged to report under the
Regulation.
155
increases is generated further downstream in the HFC supply chain by service
undertakings providing a re-fill to compensate for leakages or, in some sub-sectors, the
first fill.
A5.6.2.2.11 Trade, competitiveness and consumer prices
The intended decline of EU HFC supply will evidently impact on amounts imported and
produced in the EU. In the beginning this decline was primarily a result of lower EU
HFC production for domestic use, but after 2017 HFC imports also declined more
significantly. The decline of domestic production is however largely due to an expansion
of production in China, and not strongly related to the Regulation. Furthermore, the
decline in HFC imports is partly compensated (by mass) by strongly rising imports of
H(C)FOs that are normally more expensive. Thus the value of imported HFCs and
H(C)FOs 2015-2019 was approximately 15 % (90 Mio €/year) higher than it would have
been without the revision of the Regulation. Imports of HFCs in equipment (measured in
tonnes of gas) have been stable since 2016. About 70% of HFC imports into the EU
come from China and about 30 % from Japan and the United States.
Total EU HFC exports remained relatively stable. The ratio of bulk HFC exports to HFC
production has been moving from about 50 % in the years before 2014 to more than 100
% in 2018 and 2019. The exported HFCs are mainly sourced from EU production and
from HFC imports for inward processing and re-export (e.g. blending of mixtures).
Those export-related trade patterns are hardly affected by the Regulation.
Thus the Regulation has had at most a limited impact on trade and competitiveness. This
was corroborated by stakeholders (OPC), who consider the Regulation to have had a
neutral impact on competitiveness and at most, a slightly negative impact on trade with
third countries (although the majority of stakeholders were unable to provide insight on
the latter impact).
As regards consumer prices it can be concluded that the overall effect of the revised
Regulation was insignificant since (i) most sub-sectors have negative or very low relative
compliance costs, (ii) compliance costs can be balanced within sectors (or applications),
(iii) equipment operators have always had to cope with highly fluctuating input costs and
that (iv) the cost of the F-gas using equipment often constitutes only a marginal share of
overall system costs of the users.
A5.6.2.2.12 COVID-19 Pandemic
The COVID-19 pandemic is expected to have an impact on trade of products and
equipment containing F-gases. Cooling systems and their use were scrutinized closely
during the pandemic due to their role of circulating air in closed spaces and influencing
the risks of catching COVID or other air-borne diseases203
. As the pandemic is still
ongoing, the full effects are not yet known. A recently published study explored the
impact of COVID on the EU heating, ventilation and air-conditioning market (Eurovent,
2020). The report, which surveyed more than 100 manufacturers across 16 countries,
203
European Centre for Disease Prevention and Control (2020).https://www.ecdc.europa.eu/en
156
suggested that within the EU, Spain, Italy and the Czech Republic appear to have been
most negatively impacted. In contrast, Germany and Austria are reported to have fared
the best, with some even seeing an increase in orders over the crisis. The report explored
that the strength of performance also differs by product and market type: While products
such as dry coolers, CO2 gas coolers, cooling towers and air filters fared better, rooftop
units saw the biggest drop in demand. In addition, suppliers to hospitals, data centres and
the food industry have ‘profited’ from the crisis (especially with regard to additional
refrigeration requirements), whereas the worst affected were suppliers of equipment for
offices and shopping centres and for niche applications in cruises and air travel.
Another study by BSRIA204
, based on interviews with air conditioning manufacturers in
20 major world markets, concluded that the six months to September 2020 following the
onset of the pandemic had been ‘challenging’ to the sector. As a result of the surveys,
BSRIA revised down its predictions for global air conditioning sales in 2020 and 2021.
The study reported falls in sales across the board, with different air conditioning
equipment types down 4-12%. That said, the report also suggests that there have been
growth opportunities in some sectors, with the shift to home working and a resulting
increase in demand for residential air conditioning.
Complementing these reports, several major equipment (parts) manufacturers reported
declines in sales over the period of the pandemic (noting the detrimental impact of the
pandemic as a key driver). However, following the peak of the pandemic many
undertakings are seeing a bounce-back in sales. In summary, it appears that 2020 was a
challenging and disruptive year for nearly the whole of the market, with many
undertakings having to change and adapt their ways of working. Those most strongly
affected according to stakeholders included the mobile air conditioning sector, transport
refrigeration, fire protection and the manufacture of electronics. Other sectors identified
by stakeholders as being detrimentally affected included activities such as servicing and
maintenance, leak checks of installed equipment, and installation of new air conditioning
systems in hotels and offices. Short-term impacts mentioned included the shutdown of
production facilities, delays and shortages in supply of material and equipment
components and reduction in revenue. Other industry stakeholders reported impacts on
innovation activity, such as reducing discretionary funding for R&D and postponement
or cancellation of projects. Effects have also been felt in market-supporting activities,
such as delays and closure of training centres, limited access for service technicians, and
delayed compliance testing of products in test labs due to limited capacities and
unavailable prototypes. On the positive side, the outlook for 2021 and beyond appears to
be brighter with a backlog in orders coming through and a stabilization of spending.
Recent press articles205
suggest there has been a strong recovery in some sectors, e.g.
Germany and France have seen double-digit growth in the split air conditioning market.
204
Building Services Research and Information Association (2020).https://www.bsria.com/uk/
205
www.coolingpost.com
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In addition, in the switchgear and related equipment sector, the majority of respondents
felt that this sector as critical infrastructure was not negatively impacted by COVID-19.
Other sectors seeing an increase according to stakeholders are the food production and
retail sector, cold storage sectors – including for cooling of vaccines (overall demand in
the medical sector was apparently stable), and increased demand for air circulation in
public and commercial buildings.
A5.6.2.3 Benefits vs. Costs
The Regulation has delivered a range of benefits since its revision in 2014. It has
changed an increasing trend of EU F-gas emissions (until 2014) to a decreasing trend
(every year since). The decrease of F-Gas emissions from 2015 to 2019 amounted to a
total of 44 MtCO2e saved. Also, the average GWP value of F-gases supplied to the
market was significantly lowered due to the increase in more climate-friendly alternatives
(- 32 % in 2018 compared to 2014). This was achieved while the level of energy
efficiency was maintained (or even slightly increased). In terms of wider economic
effects, the Regulation has not had any negative effects on EU F-gas production or
exports and gross value added or employment and may even have slightly increased these
parameters. The imports of F-gases into the EU was reduced while imports of synthetic
alternatives increased. Industry has increased R&D investment and the wide range of
new alternatives is indicative of the high levels of innovation driven by the Regulation.
As the 2015-2019 evaluation period is characterised by remaining high shares of installed
equipment relying on established HFC technologies, there are still relatively high total
HFC price-related cost for users that are slow in shifting to climate-friendly alternatives.
These HFC price-related costs were however borne by many millions of users and in
addition they were offset by benefits in the HFC supply chain, thus for the economy as a
whole the cost is zero (distributional effects). In terms of overall value-for-money, the
calculated averaged ratio of the technological cost relative to emissions savings is about
6 €/t CO2e. Emission reduction costs observed for the first years of the phase-down are
thus below the average of 16 €/t CO2e calculated for the 2030 time horizon in the 2012
Impact Assessment. As such, it is concluded that the Regulation has resulted in
significant emission savings at very low abatement costs linked to technological
change. The cost-effectiveness of the Regulation is generally supported by stakeholders.
Most measures also place some administrative costs on different actors (industry,
competent authorities and at European level). The total administrative costs are however
much smaller than the cost of technological change.
Finally, very few areas of the Regulation were found to be unnecessarily burdensome. An
issue where improvements can be made is the area of reporting and verification
obligations. Some stakeholders also noted that equipment operators are mostly paying for
the technological transition, while others are profiting e.g. from higher HFC selling
prices. In addition, a number of important challenges to implementation have been
identified.
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A5.6.3 Relevance
In light of the more ambitious climate targets enshrined in the European Climate Law,
the objective of the Regulation to mitigate F-gas emissions to prevent climate
change has never been more relevant. F-gas emissions contribute ca. 2.5 % to the EU’s
total GHG emissions. The continued supply and use of F-gases contributes to a ‘bank’ of
potential emissions (e.g. in equipment in use) in the future. The model output underlines
that relevant emission volumes will continue to occur in the coming decades, which
would, without the Regulation, be much higher (counterfactual scenario). Thus the
underlying problem clearly persists and ambitious action is required to ensure that F-
gas emissions are being reduced in line with the new climate targets.
Furthermore, it remains essential that the EU can comply with its international
commitments related to the Montreal Protocol. The Regulation is the most appropriate
instrument to safeguard compliance given its EU added value compared to national rules.
In this respect there is a need to regulate the phase-down for the period after 2030 and
adjust reporting, quota exemption rules and minimum thresholds to ensure long-term
compliance.
The Regulation has been effective notably on reducing HFC emissions, but even more
could still be done cost-effectively for some HFC appliances and notably for other
types of F-gases. Stakeholders identified e.g. the potential for reducing F-gas emissions
from skin-cooling equipment and anaesthetics as well as SF6 in switchgear. Research on
alternatives to HFCs for the (hitherto) more complicated uses shows that technical
feasibility has progressed in many areas, but is not sufficiently supported by the current
scope of restrictions in the case of all applications.
The scope of some measures (actors, activities, gases) was found to be somewhat
limited. For instance certification and training requirements do not cover climate-
friendly alternatives and there are monitoring gaps of e.g. recycling/reclamation
activities, recipients of exempted gases, the distribution of HFCs after import/production
and the export of HFC equipment. Also, there are F-gases that are not currently covered
by either Annex I or Annex II (only monitoring) of the Regulation that are relevant on
the EU market or starting to become commercialised. Finally, Article II substances are
not subject to emission controls while there are some potential concerns about other
environmental impacts due to emissions of some of these substances.
The Regulation has been flexible to respond to some external challenges, but not to
others. The Regulation does not entail sufficient flexibility to allow for alignment with
the Montreal Protocol, nor to any unforeseen issue related to the quota system, such as
the lack of gas supply due to unexpected high growth in equipment that cannot (yet)
replace HFCs. If such a situation should occur, it could create serious problems for
certain sectors unless it is possible to swiftly adjust the phase-down without having to
amend the Regulation in co-decision. Furthermore, the current rules have proven to be
inadequate to allow the Member States and the Commission to address illegal activities
and the undesirable multiplication of traders, in an effective way.
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A5.6.4 Coherence
A certain amount of international and EU legislation affects the F-gas Regulation (and
vice versa), e.g.
 International agreements, in particular the
 Montreal Protocol on Substances that Deplete the Ozone Layer
 Paris Climate Agreement
 EU environmental policies
 Chemicals: Directive 2006/40/EC (“MAC Directive”), Regulation (EC)
No 1005/2009 (“Ozone Regulation”), Directive 2010/75/EU (“Industrial
Emissions Directive”, IED), Regulation (EC) No 166/2006 on the
establishment of a European Pollutant Release and Transfer (EPRTR),
REACH (Regulation (EC) No 1907/2006)
 Energy: Directive 2009/125/EC (“Eco-design Directive”), Regulation
(EU) No 2017/1369 (“Energy Labelling Regulation”), Directive
2010/31/EU (“Energy Performance of Buildings Directive”), Directive
(EU) 2018/2001 (“Renewable Energy Directive”)
 Waste: Directive 2008/98/EC on waste (“Waste Framework Directive”),
Directive 2012/19/EU (“Waste Electrical and Electronic Equipment
Directive”, WEEE)
 EU policies on customs and market surveillance
 Regulation (EU) 2019/1020 (“Market Surveillance Regulation”)
 Regulation (EU) No 952/2013 (“Union Customs Code”)
 Directive 2008/99/EC (“Environmental Crime Directive”)
 Safety standards and building codes
A5.6.4.1 Coherence with international policies
A5.6.4.1.1 Montreal Protocol
The Regulation predates the Kigali Amendment to the Montreal Protocol and is therefore
not fully aligned with these international rules so that long-term compliance with the
Montreal Protocol is not fully guaranteed for HFCs:
 The EU phase-down concerns placing on the market (POM: includes import and
EU production) whereas the Montreal Protocol regulates consumption (slightly
different parameters than POM) and production separately. Hence, consumption
and POM may not always develop in the same way, and production may not be
limited to the extent needed to comply with the Montreal production phase-
down/ban in each Member State206
.
206
For consumption the so-called REIO clause apply, which means that EU must comply as a region.
The REIO clause does not currently apply to production. There are individual phase-down
schedules based on how much production occurred in each Member State in the past. If no
production occurred it means production is banned. Only France and Germany have HFC
production today.
160
 The EU HFC phasedown after 2030 is currently not legislated, whereas the
Montreal Protocol has a last step in 2036 and continues at that level thereafter.
Even if it is assumed that the placing on the market in the EU after 2030 stays at
the limit required in 2030, long-term compliance with the Protocol’s
consumption phase-down is not ensured.
 Quota exemptions that do not exist under the Protocol make it complex to
safeguard compliance for both the production and the consumption phase-downs
under the Protocol. In particular the exemption for MDIs (asthma sprays) is
problematic for compliance because it represents high quantities207
.
 Minimum thresholds for placing gases on the market and for reporting are
not foreseen by the Montreal Protocol and therefore the EU’s reporting data is
currently slightly incomplete.
 The Montreal Protocol’s requirement to have HFC export and import
licences is fulfilled by requiring registration in the EU F-gas Portal and Licensing
System before undertaking such activities. However, it is not stated clearly in the
Regulation that this is a trade licence and for transparency it would be more
appropriate to legally label it a licence.
Stakeholders overwhelmingly agree that further action is required to ensure compliance
with the Montreal Protocol, in particular after 2030.
A5.6.4.1.2 UNFCCC and Paris Agreement on Climate Change
The Regulation aims to make a proportionate contribution to the objective of the
Paris Agreement to stay well below a 2°C global temperature rise and pursue efforts to
limit it to 1.5°C. This contribution is discussed in previous chapters above. There are also
reporting requirements on emissions of F-gases in both the Regulation and under the
United Nations Framework Convention on Climate Change (UNFCCC). 208
Article 20 of
the Regulation calls on Member States to set up reporting systems to acquire to the extent
possible emission data. However, given the relatively non-specific wording of this
requirement, there are large discrepancies between Member States on how this is done.
While some countries continue to rely on default emission factors or surveys to establish
their national emissions, others including Belgium, Italy, Slovenia and Poland have
established central databases of relevant equipment containing F-gases and installed
volumes, losses, quantities added etc. are electronically logged by service personnel or
operators which allows for acquiring very good data on emissions.
A5.6.4.2 Coherence with EU environmental policies
A5.6.4.2.1 Ozone Regulation
The Regulation is closely related to the Ozone Regulation, as it concerns similar sectors
and strategies to reduce gases or avoid their emissions, besides minor differences in
207
The other two exemptions, for semiconductor manufacture and for military equipment, are less
relevant in quantitative terms.
208
Regulation (EU) No 525/2013 (“MMR Regulation”) and Regulation (EU) 749/2014 define the
mechanism and requirements for reporting EU GHG emissions to the UNFCCC
161
definitions or containment measures209
. Stakeholders are asking for similar approaches
on both Regulations, wherever possible and sensible, in particular with regard to the
custom measures to control illegal activities. The Ozone Regulation uses a Per-Shipment-
Licensing approach to authorise imports and exports. Here an alignment is achieved with
the Fgas Regulation through the development of the EU Single Window Environment for
Customs, which enables automatic per shipment controls for both ODS and F-gases. The
Ozone Regulation is being reviewed in parallel with this Regulation. While HFCs
replaced ODS in the past, this is not anymore the case today since ODS have been
eliminated in the EU in sectors where this took place (in particular refrigeration, AC,
foams, aerosols). Therefore, changes to the ODS Regulation regulating the few
remaining uses of ODS will not affect the Fgas Regulation.
A5.6.4.2.2 MAC Directive
Directive 2006/40/EC (“MAC Directive”) relates to emissions from air-conditioning
systems in new passenger cars and complements the Regulation by having a
prohibition on using strong greenhouse gases (i.e. HFCs) in this sector. The same
sector is covered by additional obligations contained in the (F-gas) Regulation such as
the containment measures, including the training need for technicians. This is analogous
to other F-gas sectors that are also affected by prohibitions as well as the phase-down and
containment measures. Generally, there has been consensus amongst stakeholders in the
OPC that coherence between the Regulation and the MAC Directive is high.
A5.6.4.2.3 Energy efficiency and eco-design legislation
There are important synergies between energy efficiency measures and the
Regulation. The HFC phase-down and the prohibitions aim to drive the transition from
high to low GWP refrigerants in existing and new RAC applications which can have an
indirect impact on energy consumption depending on the efficiency of the new
equipment. Based on experience from previous conversions in this sector, energy
efficiency tends to go up on balance. Moreover, the Regulation was designed to only
promote technologies that would provide at least equal energy efficiency. The Regulation
also improves energy efficiency through better control, monitoring and maintenance of
existing cooling equipment (to avoid the loss of refrigerant and thus prevent efficiency
losses), including leakage checks repairs, leakage detection systems, and training and
certification of technicians.
To be fully coherent with eco-design policies, Article 11(2) of the Regulation allows an
exemption from the placing on the market bans if the equipment with HFCs would
achieve lower overall GHG emissions during its life cycle than the same equipment
without HFCs. To date there has been no need to use that exemption and despite this
possible alignment some industry stakeholders have a perception that there are trade-offs
between reducing F-gas emissions and energy efficiency, i.e. that there may be a lack of
209
Most HFCs were phased in as replacements for substances that damage the ozone layer. The
climate-warming impact was considered less important at the time. The ODS Regulation is
therefore somewhat of a precursor to the Fgas Regulation with similar types of measures.
162
energy efficiency in equipment using lower GWP alternatives. However, only very
limited examples could be provided by the same stakeholders. Overall, a trade-off
between replacing refrigerants and efficiency was not the case in the observation period
2015-2019, and small efficiency gains were achieved overall. Eco-design requirements
continue to be refined as technologies develop. In this way, Eco-design requirements
have an impact on the charge amount needed, with higher efficiencies typically needing
more refrigerant. Since hydrocarbon refrigerants210
are more limited in potential
refrigerant charge size by existing standards, their scope regarding energy efficiency
improvements continues to be more limited than fluorinated alternatives, unless existing
barriers in standards are addressed.
A revision of the Renewable Energy Directive (RED II) 2009/28/EC was proposed in
2021 which is expected to lead to an acceleration in the installation of new switchgear
units. If this new installation base continues to use SF6, there is a risk that renewable
energy growth will promote the growth of the most potent GHG (SF6) which could lead
to more harmful emissions of GHG to the atmosphere.
A5.6.4.2.4 Waste policies
Some stakeholders find that a lack of clarity if and when F-gases should be
considered as waste affects the recovery, recycling and reclamation of F-gases. In the
targeted interviews, Member State competent authorities noted that it is difficult to
determine the classification of a substance as waste or not, especially when different
Regulations apply, leading to disagreements within the market. Furthermore, this
confusion may lead to artificial barriers being put in place for some of the activities being
encouraged under the Regulation: Competent authorities highlighted in the interviews
that, in some cases, an environmental permit may be required to carry out recycling as
recovered refrigerants may be considered ‘waste’. Similarly, stakeholders also identified
the rules on waste shipment (Regulation (EC) No 1013/2006) as a barrier to effective
end-of-life F-gas treatment, as in some cases recovered refrigerants transported to
another location are considered to be hazardous waste and require specific permits for
transport and storage, which are issued and controlled by the local environment agency.
These become particularly relevant when EU Member States without reclamation and
destruction facilities intend to export used F-gases for reclamation and/or destruction
purposes to other Member States. Currently transport of waste across EU national
boundaries requires significant quantities of documentation for each shipment. However,
not all stakeholders agreed this was a significant issue and some stakeholders also
warned that, should transboundary shipments become too simple, this may open the
market for actors with lower standards or levels of expertise in handling hazardous waste.
Stakeholders further pointed out that relevant terms such as “recovery” or reclamation”
are defined differently by the Regulation and the Waste Framework Directive (Directive
2008/98/EC). Such differences are however the result of seeking close alignment of the
Regulation with Montreal Protocol definitions. Other stakeholders, in particular NGOs,
210
Hydrocarbons are the most straightforward solution to avoiding HFCs in small AC equipment
163
believed that setting minimum requirements and specifying the activities to be included
in extended Producer Responsibility schemes by Member States in Art. 9 would achieve
even better alignment.
The Waste Electrical and Electronic Equipment Directive 2012/19/EU (“WEEE
Directive”) complements the Regulation. The former is relevant for a number of
equipment types affected by the Regulation, e.g. large household appliances (large
cooling appliances, refrigerators, freezers, air conditioners), medical devices (freezers)
etc. The WEEE sets out requirements for MS to (i) minimise disposal of WEEE in
unsorted municipal waste to ensure correct treatment (and noting as a priority fluorinated
GHGs), (ii) prohibit disposal of separately collected WEEE that has not undergone
‘Proper Treatment’ and (iii) ensure that collection and transport of WEEE is done in a
way that optimises conditions for preparing for re-use, recycling and confinement of
hazardous waste. In addition, the cost of such actions are covered by producer
responsibility schemes. The WEEE Directive goes beyond the provisions of the
Regulation through requiring the extraction and treatment gases with a GWP>15 from
foams and refrigeration circuits used as insulation in domestic and small commercial
refrigeration appliances (although foams do not require recovery under Art. 8 of the
Regulation, Art. 12 does require their presence being noted on the label, enabling
treatment under the WEEE Directive). In terms of ‘proper treatment’, the WEEE contains
(Annex VII) specific directions for the treatment of equipment containing gases of GWP
above 15 that these gases must be properly extracted and treated. It should be noted that
it is stated in WEEE that ozone-depleting gases must be treated in accordance with the
ODS Regulation, but no mention is made of the Regulation in this context. This perhaps
misses an opportunity to reinforce the link to the Regulation and the objectives around
recovery. Although not an incoherence, some stakeholders have noted that WEEE
schemes in Member States need to be improved to better facilitate the recovery, recycling
and reclamation of refrigerants.
A5.6.4.2.5 REACH Regulation
Under REACH, there is an obligation to register substances placed on the market above a
certain amount (typically around 1 tonne per annum in total – not per operator), which
includes F-gases. Representatives of large chemical companies feel that REACH
registration for importers is not fully complied with by competitors which creates a
disadvantage for EU-based businesses. F-gas reporting and registration data could be
exploited to achieve better enforcement. Under REACH there are currently ongoing
efforts by some Member States to better identify the risks of PFAS, which includes HFCs
and H(C)FOs due to their breakdown products (i.e. TFA).
A5.6.4.2.6 Industrial Emissions Directive (IED) and E-PRTR Regulation
The E-PRTR Regulation monitors emissions of HFCs, but only as an aggregate value in
metric tonnes for all HFCs and therefore gives little indication of the climate impact (due
to varying GWPs for HFC species). More granularity on these data would be useful to
complement the reporting data collected under the Regulation.
164
Under the IED, emission limit values are set by the competent authority and should not
exceed emission levels associated with the BATs. The BAT Reference Document for the
Food, Drink and Milk (FDM) industries includes limits for some refrigerant gases used in
the dairy industry. A more systematic consideration of F-gases in the development of
BREFs as a key environmental parameter would be useful.
A5.6.4.2.7 EU LIFE programme
F-gases are also a priority area under the EU's LIFE programme, the EU's funding
instrument for environmental and climate action. A number of recently selected F-gas
related projects aim to replace F-gases with climate-friendly refrigerants in various
applications, train service technicians in the use of low GWP alternatives, support the
updating of standards and raise awareness of climate-friendly technologies in various
sectors.211
A5.6.4.3 Coherence with custom and surveillance policies
A5.6.4.3.1 Customs legislation
Effective customs controls are complicated by current rules. Customs controls and
surveillance activities are relevant to the success of the Regulation and better alignment.
Uncertainty about the role of customs in enforcing the Regulation has shown that
instructions for customs and market surveillance authorities were not sufficiently clear.
Border controls using the licensing system described above are limited by the fact that
controls require manual checking of the company’s registration in DG CLIMA’s F-gas
Portal and HFC Licensing System and the fact that many customs offices have not
registered in the system themselves and therefore do not have access. The CERTEX/EU
Single Window Environment for Customs system will remedy this issue and achieve
automatic controls, but there are some data needs. Some stakeholders have also pointed
out that special customs procedures such as transit and online trade may be vulnerable to
misuse.
A5.6.4.3.2 Market surveillance legislation
Regulation (EC) No 765/2008 (“Market Surveillance Regulation”) established conditions
for the placing of ‘products’ on the Union market. It therefore compliments the controls
set out in the Regulation and reinforces their implementation. The revised Market
Surveillance Regulation (EU) 2019/1020 explicitly states that the Regulation falls under
its scope of application. In addition, the role of market surveillance authorities (customs
or others) is strengthened; for example, such authorities are obliged to suspend the
release for free circulation of F-gases where there are reasons to consider that the
Regulation requirements have not been complied with. The Regulation opted to establish
a different definition for ‘placing on the market’ compared to the one stated in the Market
Surveillance Regulation. However, there is no contradiction in this respect; as lex
specialis, the placing on the market definition established under the Regulation is the
applicable one vis-a-vis F-gases. That said, this difference causes additional complexity
211
https://ec.europa.eu/environment/life/project/Projects/index.cfm?fuseaction=home.search&cfid=1
4659734&cftoken=4f1fb6e93a74514e-B83F4D45-9F09-8461-24ED460AF947F533
165
(interviews with Member States). In addition, stakeholders (interviews with MS)
perceive that definitions of import and export also vary.
A5.6.4.3.3 Environmental Crime Directive
Article 3 of Directive 2008/99/EC (“Environmental Crime Directive”) establishes certain
conducts as criminal offences, ‘when unlawful and committed intentionally or with at
least serious negligence’. The Directive applies vis-à-vis a number of sectoral legislations
including the first Regulation (EC) No 842/2006 (see Annex to that Directive). At the
same time, the prescribed conducts are too general and outdated to address specific
infringements of the current Regulation. For example, the intentional or negligent
emission of F-gases is considered a criminal offence, but the illegal import and trade of
HFCs is not. The Commission proposed an amendment to the Environmental Crime
Directive in 2021; this proposal will update the list of criminal offences to take into
account more recent legislation and related challenges (e.g. illegal import of HFCs).
Coherence between the two revised pieces of legislation should be maintained.
A5.6.4.3.4 Whistleblower Directive
Directive (EU) 2019/1937 of 23 October 2019 aims to strengthen the protection of
whistleblowers under Union law as reports by whistleblowers feed national and Union
enforcement systems with information, leading to effective detection, investigation and
prosecution of breaches of Union law rules. The material scope of the Directive covers a
wide range of key EU policy areas, including the protection of the environment. The
criteria for determining which policy areas and acts should be included in the material
scope of the Directive are the following: “there is a need to strengthen enforcement,
underreporting by whistleblowers is a key factor affecting enforcement, and breaches of
Union law can cause serious harm to the public interest” (recital 5). In addition, Article
2(1) defines the material scope of this Directive by means of a reference to a list of Union
acts set out in the Annex. While several pieces of EU climate legislation are included in
the Annex, including the Ozone Regulation, the F-Gas Regulation is not. To ensure
coherence, the material scope of that Directive should be amended in order to include the
F-Gas Regulation.
A5.6.4.3.5 Coherence with safety standards and building codes
A recent Commission report has pointed out that standards and codes represent
important barriers to the uptake of climate-friendly alternatives to HFCs and they
should be addressed with urgency.212
In particular it was noted that existing restrictions
on flammable refrigerants no longer appear justified on the grounds of safety due to
technological development. Failure to do so would jeopardise the technological progress
and therefore make reaching the Regulation’s objectives more difficult.
The most relevant European safety standards for refrigeration, air conditioning and heat
pumps are EN 378, a horizontal standard which covers the use in commercial and
212
REPORT FROM THE COMMISSION on barriers posed by codes, standards and legislation to using
climate-friendly technologies in the refrigeration, air conditioning, heat pumps and foam sectors
(see https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52016DC0749&from=EN)
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industrial applications, as well as specific product standards including: EN 60335-2-24
for household refrigerators and freezers, EN 60335-2-40 for heat pumps and air
conditioners, and EN 60335-2-89 for commercial refrigeration appliances. These
standards are referenced as harmonised standards in EU legislation (e.g. Machinery
Directive 2006/42/EC) which gives their use a legal basis.213
The Commission gave a mandate (M/555) to CEN/CENELEC214
to address these issues
in European-level standards by drafting, on the basis of a thorough assessment, technical
specifications for the safe installation and operation of cooling equipment containing
flammable refrigerants. In March 2021, the final documents were issued by the Technical
Committee WG 12 that was formed in response to the mandate.215
In parallel, the EU-
funded project LIFE FRONT provided relevant data such as a leak size/concentration
database to support evidence-based risk assessment for the use of flammable refrigerants
and released recommendations on how to safely raise the charge limits of flammable
refrigerants.216
The overarching refrigeration and air conditioning standard EN 378 was updated in 2017
to include the refrigerant R744 (CO2) and is currently, once again subject to review. A
primary focus of this revision is the broader use of flammable refrigerants, particularly
for equipment not explicitly covered through product standards. However, the process is
not expected to be completed before 2024. The latter work will seek to include the
technical specifications developed under Mandate M/555.
Concerning plug-in commercial refrigeration applications, the international standard IEC
60335-2-89 increased the refrigerant amounts (“charge limits”) from 150 g to 500 g for
flammable refrigerants (e.g. hydrocarbons like propane) and for “mildly” flammable
refrigerants (e.g. HF(C)Os), from 150 g to 1.2 kg. The corresponding European EN
standard still needs to be adjusted in light of this international development and an
updated standard is expected for early 2022. The latter standard is referred to by the
Machinery Directive. EN 60335-2-24 for domestic refrigeration equipment was updated
in 2020.
As regards air conditioning and heat pumps, a new proposal for the international product
standard IEC 60335-2-40 is currently being discussed, including the issue of flammable
refrigerants, and could be adopted by June 2022. Following this, an adjustment of the
corresponding European standard EN 60335-2-40 would be necessary.
Certain restrictions for the application of flammable refrigerants also exist at Member
State level, some of which are considered as important constraints. Some progress was
made in those countries where restrictive rules had been identified, specifically in France,
213
Without such reference in legislation, standards would represent technical documents whose use
is voluntary.
214
CEN and CENELEC are the European standardization organisations. https://www.cencenelec.eu/
215
CEN/TS 17607:2021 Operation, servicing, maintenance, repair and decommissioning of
refrigeration, air conditioning and heat pump equipment containing flammable refrigerants,
complementing existing standards.
216
http://lifefront.eu/
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Italy and Spain, which have recently amended their national building codes and fire
prevention rules to allow installation of flammable refrigerants in certain types of public
or high-rise buildings. However, some barriers still remain, as these updates often only
allow the use of H(C)FOs and not hydrocarbons and there are still remaining restrictions
for certain types of buildings. In other Member States, the national authorities believe
that there were no such restricting rules at national level. However, this does not preclude
that there continue to be restrictive rules at the local or regional level, such as specific
fire protection codes.
In summary, while some progress is made and some improvements have been
achieved, in particular in commercial refrigeration, standard setting is a slow
process and divergent industry interests217 continue to hinder a timely, purely risk-
based setting of standards that ensures high safety levels while allowing a maximal
use of climate-friendly refrigerants.
A5.6.4.4 Internal Coherence
As for internal coherence, the Regulation has generally been found to be consistent and
coherent internally and across its implementing acts. This is also reflected in the fact that
no requests for derogations for certain sectors have been received by the Commission to
date. Nevertheless, some provisions were identified as not being fully aligned or
sufficiently clear (mostly by authorities, rather than by industrial stakeholders). These
provisions include:
 Consistency of thresholds for the import of pre-charged equipment. Some
requirements related to the import of pre-charged equipment according to Article
14 are not clear enough in the main part of the Regulation and should be further
specified. This includes the 100 tCO2e de minimis exemption for pre-charged
equipment which is not clearly stated but must be inferred from the reference in
Article 14 to the quota system in Article 15 (which includes such an exemption).
 In Article 15 it is not sufficiently clear that the placing on the market of HFCs in
excess of the quota limits is strictly prohibited. The current provision “shall
ensure” is not strong enough to avoid the need for national public authorities to
impose an additional prohibition to be able to designate the violation as a criminal
offence.
 The quota exemption for HFCs supplied directly for export (Article 15(2)(c)) only
applies to bulk gases but some stakeholders initially thought that it also applied to
HFCs supplied for exported equipment and products containing HFCs.
Reporting and verification have been key measures in the success of the Regulation in
meeting its objectives and data reported under the Regulation and were mostly found to
provide a reliable basis for monitoring how the EU industries react to the intervention.
217
The technical background work on standards is done in technical working groups composed of
industry stakeholders. Small companies with innovative technologies find it difficult to be
represented in these groups as involvement is resource-intensive and therefore dominated by the
established players.
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The requirements have also supported the aim of the phase-down, helping to ensure
compliance with the quota system, and supporting consistency across industry. However,
the following issues were identified:
 There is an inconsistency between the need to have a quota authorisation for the
import of equipment from 100 tCO2e, but a reporting threshold of 500 tCO2e,
which complicates accounting of the authorisations used.
 There are different dates, thresholds and other requirements for reporting and
verification on bulk and equipment which lack a sound logical basis and are
inefficient.
 Article 17(4) provides that competent authorities, including customs authorities,
shall have access to the HFC registry for information purposes. However, the
provision does not specify whether and in which situation the authorities should
actually use the HFC registry.
Also, a number of smaller clarifications would be needed (Annex A6.5).
A5.6.5 EU added value
There is a continued need for action at EU level due to the transboundary nature of
the global warming effect of fluorinated greenhouse gases. It must be ascertained that
F-gas emissions are being reduced at EU level in line with the climate ambitions of the
European Green Deal.
The Regulation has a clear added value by implementing co-ordinated action at EU
level to ensure compliance with the Montreal Protocol and the EU climate goals.
This is supported by many different stakeholders and the competent authorities. Without
the Regulation, each Member State would need to introduce their own mechanisms to
regulate e.g. their national F-gas consumption. It would be much more costly to conduct
27 implementation measures rather than EU-wide measures.218
The Regulation has increased ambition relative to what would have been likely
achieved as the sum of individual actions at national levels. Taking co-ordinated
action at EU level has increased the effectiveness of the policy to reduce F-gas demand
and emissions and can better and more easily ensure compliance with the Protocol. The
climate targets to be achieved under the Green Deal are an order of magnitude that
requires that strong, effective and coordinated policies are in place. Under the EU quota
allocation system, quotas are not allocated to certain Member States, sectors or
applications, but to the whole EU market on an annual basis by the EU Commission.
This allows for the most efficient abatement solution to be found across a broader (EU)
market, which is likely to lead to lower implementation costs. Furthermore, the ongoing,
218
For the recent evaluation of the ODS Regulation, which guarantees complying with the rules of the
Protocol concerning ozone-depleting substances and implements similar measures as the Fgas
Regulation for this purpose (e.g. prohibitions, reporting, licensing systems), it was calculated that
introducing individual measures at MS level would cost 17 times the costs of EU-wide measures (in
an EU of 28).
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successful reduction of F-gas emissions is due to the combination of an EU-wide phase-
down and prohibitions working together. Individual measures introduced by Member
States would likely result in inconsistent and lower reduction in F-gas emissions across
Europe. The 2012 impact assessment for the Regulation showed that the environmental
benefit of having prohibitions alone was approximately 29 % inferior to also having a
phase-down.
National approaches to effectively meet the individual HFC phase-down targets
would present a very fragmented and costly situation for all the different industry
sectors concerned, particularly those which place their goods on the market in multiple
Member States. An EU approach allows for these central requirements to be consistent
across Member States, with only small deviations in some countries that have introduced
more restrictive or additional measures, minimising compliance burden for market
players and providing for a level-playing field, e.g.:
 The HFC phase-down at EU level, implemented by a quota allocation system,
not only increases the environmental benefit and reduces costs by setting an
EU-wide cap, but also provides certainty on the allowed maximum quota
quantity, creating a level playing field for market players operating in a
single, integrated EU market. Likewise, the use of EU-wide placing on the
market and use restrictions, and requirements for labelling and containment
also contribute to this level playing field for the F-gas using industry and end-
users. Stakeholders agree that the Regulation has created a level playing field
across the EU.
 Through the F-gas Portal, the Regulation has introduced a common electronic
tool which companies can access to register, apply for quota, transfer quota
and manage quota authorisations. With no such central system in place, IT
infrastructure would have been needed to be developed separately at Member
State level. The same applies to the Business Data Repository (BDR), the
second component of the central F-gas Portal: The centralised collection of
reported F-gas data enables the EEA to publish annual reports on companies’
compliance with the reporting requirements of Article 19 and at the same time
to assess the EU’s progress towards the set F-gas reduction targets. 219
 Each Member State would have to set up a licensing system for goods being
imported and exported to and from the EU from their territory. As outlined
above, many companies do not operate solely in one Member State, but across
borders. Thus, that would greatly increase the administrative burden for
Member States and companies.
219
This can be illustrated by the administrative efforts needed in the UK after BREXIT. They have
replicated the EU system with important needs of staff and resources on the administrative side
and industry trading in both the UK and the EU27 now have to deal with two phase-downs and
two reporting systems and there is no environmental gain involved.
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 A joint approach across Member States makes it easier to enforce F-gas rules.
One Member State noted specifically that common elements such as
definitions, labelling, etc. would be complicated to agree at national level.
 Common legislation has also enhanced the market for new alternatives
(Stakeholder interviews).
Finally, given the rules of the common market, ensuring compliance with the Kigali
Amendment (e.g. consumption reduction rules, import and export licensing) at
Member State level in an EU without borders would be very difficult if not
impossible to do.
A5.7 Conclusions
The Regulation has been mostly effective in meeting its original objectives and the
individual measures were found to work well together to meet the objectives. The
Regulation has driven a significant reduction in the supply and emissions of F-gases, in
particular the HFCs, predominantly through a switch to gases with lower GWP, but also
through the uptake of natural alternatives. The effectiveness of the Regulation as a whole
would have been impacted if one or more of the measures had not been included. In
particular the phase-down and accompanying prohibitions have had good synergistic
effects and have been strong drivers for innovation. Leakage rates from equipment have
declined and reclamation rates have gone up. That said, forward modelling indicates that
the emission reductions in 2030 will be lower than expected in the 2012 impact
assessment which was aligning measures with the outdated 2030 climate target. There are
also continuing emissions from sectors or substances not yet covered by the phase-down
measures or prohibitions or not yet included in the scope, and in some sectors high global
warming potential (GWP) F-gases continue to be used where this could be avoided due
to technological progress.
The Regulation enabled a joint EU negotiation position and the tabling of a proposal for a
global phase-down. It also established the EU as a frontrunner in taking measures on F-
gases and ensured EU global credibility on this issue. Since the adoption of the Kigali
Amendment to the Montreal Protocol, the Regulation is the main instrument to ensure
compliance with the international obligations to date. In addition, the Regulation has
safeguarded high environmental ambition by maintaining the same obligations across the
EU, while also ensuring a level-playing field for concerned industries and undertakings.
There are some challenges, however, which include safety standards that are not fully
updated according to technological progress and hinder the use of climate-friendly
alternatives, as well as the lack of personnel that have skills to install and maintain
equipment with climate-friendly alternatives. In addition, illegal trade and the
multiplication of bulk importers pose a challenge to the future implementation of the
phase-down. Finally, some stakeholders express concerns about the increased use of
H(C)FOs and potential effects related to degradation products such as TFA in the
atmosphere.
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The Regulation has resulted in significant emission savings at very low abatement costs
linked to technological change (i.e. 6 € per tonne CO2e), even with minor gains in energy
efficiency. Higher HFC prices imply higher gas cost to end-users that are still using
HFCs. These costs are distributed over a large number of end-users and were offset by
equivalent benefits to companies in the HFC supply chain. Most of these costs accrued in
the refrigeration and air conditioning sector, where they represented 1% of the
investment and operation costs of related equipment. Effects on the overall economy
were very small and likely to have been slightly positive in some affected sectors (e.g.
service sector and equipment manufacturing). While there are different patterns in use of
different types of equipment in the northern and southern Member States, overall the
costs were quite balanced between the two regions when taking into account the size of
the population. Administrative costs were considered proportionate by stakeholders and
are of a lower magnitude than the costs of technological change. A few areas linked to
the reporting and verification obligations were identified where unnecessary burden may
be reduced. The pandemic has been challenging to the sector, even though in some areas
business profited (e.g. food retail, energy transmission). However, it has apparently been
rebounding well in recent months.
The high-level objectives of the Regulation continue to reflect and respond to the
fundamental need of the EU to reduce demand and emission of F-gases. However,
developments over the period of implementation, specifically the European Green Deal
and a changed international policy environment (Paris Agreement, Kigali Amendment),
pose a challenge to the Regulation in its current form, and require more emission
reductions as well as some adaptions to be fully compliant with the Montreal Protocol in
the future. There are also some relevant gaps in the substances and activities covered by
monitoring and reporting measures. Finally, there is currently no flexibility to react in
case of undesirable effects of the quota system such as lack of supply.
The Regulation interacts with a number of regulatory instruments, such as other EU
policy areas but also international agreements. In general, the Regulation was found to be
externally consistent and coherent with other interventions that have similar objectives,
although there are areas that have led to some incoherencies that should be addressed. An
important area is customs law, where synergies with the EU Single Window
Environment for Customs should be exploited and efficient border controls facilitated to
stop illegal activities. Another important synergy is with the REACH Regulation where
Member States-led efforts are underway to look into the relevance of persistent
degradation products from H(C)FOs. Internal consistence of the Regulation is good, but
some clarifications and alignments are needed.
The Regulation has a clear added value by implementing co-ordinated action at EU level
to ensure compliance with the Montreal Protocol and the EU climate goals. The
Regulation has increased ambition relative to what would have been likely achieved as
the sum of individual actions at national levels. Taking co-ordinated action at EU level
has increased the effectiveness of the policy to reduce F-gas demand and emissions.
Ensuring compliance with the Kigali Amendment at Member State level in an EU
without borders would be very difficult if not impossible to ensure. Alongside additional
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environmental improvements, a key benefit is the creation of a more efficient and less
burdensome regulatory environment for the EU F-gas industry and helping to minimise
costs during the technology conversion.
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A5.8 Evaluation questions and link to intervention logic
Criteria Evaluation questions and related sub-questions Link to intervention logic
1) Effectiveness 1. To what extent have the objectives of the Regulation been met? To what extent can the observed
effects be attributed to the Regulation and its individual elements?
a. To what extent have the ‘HFC Phase down’ and ‘Placing on market and control of use’
requirements discouraged the use of F-gases and encouraged use of alternatives?
i. What has been the combined effect?
ii. What has been the contribution of the ‘Placing on market and control of use’
requirements (Article 11-13)?
iii. To what extent have the ‘HFC phase down’ requirements (Articles 14 to 18)
discouraged the use of F-gases and encouraged use of alternatives?
b. How effective has the Regulation been in preventing leakages of F-gases (Articles 3 to 8 and
10)?
c. How effective have the reporting and verification obligations (Articles 19 to 20) and the F-gas
Consultation Forum (Article 23) been in supporting the achievement of the objectives of the
Regulation?
d. To what extent have Member State actions contributed to the achievement of the objectives
(covering Articles 9 and 25)?
e. How effective has the Regulation been to enhance sustainable growth, stimulate innovation and
develop green technologies by improving market opportunities for alternative technologies and
gases with low or zero GWP?
f. To what degree has the Regulation facilitated convergence towards a potential future
international agreement?
Analysis of effectiveness seeks to determine how
successful EU action has been in achieving or
progressing towards the original objectives of the
intervention.
Intervention logic: compares the ‘Effects’ of the
F-gas Regulation (including ‘Outputs’, ‘Results’
and ‘Impacts’) to its ‘Objectives’
2. What factors have contributed to or hindered the achievement of the objectives of the Regulation?
What have been the unintended/unexpected effects?
a. What external factors have contributed to the success or not of the Regulation?
b. Have there been any unintended/unexpected effects of the intervention, including on trade of F-
gases?
2) Efficiency 3. What have been the benefits of the Regulation?
a. What environmental benefits has the Regulation delivered?
b. What economic benefits has the Regulation delivered?
c. What social benefits (health and safety) has the Regulation delivered?
Analysis of efficiency compares how
proportionate the benefits of the F-gas Regulation
have been to the costs.
Intervention Logic: compares ‘Inputs’ to ‘Outputs’,
‘Results’ and ‘Impacts’
4. What have been the costs of the Regulation?
a. What has been the change in operative and other costs to businesses of undertakings? How are
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these costs split by sector and EU Member State?
b. Which administrative costs have been incurred by undertakings?
c. What have the environmental costs of the Regulation been?
d. Have there been any other (indirect) economic costs?
e. What have the social costs of the Regulation been?
5. To what extent have the costs been proportionate to the benefits?
6. Are there any unnecessarily complicated or burdensome aspects and areas of excessive costs?
What are the reasons and magnitude of any identified inefficiencies?
3) Relevance 7. To what extent do the objectives of the Regulation continue to reflect and respond to the needs of
the EU?
a. Does the problem persist?
b. Does the Regulation cover all relevant F-gases, sectors and sub-sectors that use F-gases, as
well as all actors in the F-gas supply and use chain?
c. Does the Regulation continue to sufficiently contribute to EU climate change goals (also with
view to the ambition raising as part of the EU Green Deal)?
d. Does the Regulation sufficiently safeguard compliance with international commitments related to
the Montreal Protocol (Kigali Amendment)?
Analysis of relevance seeks to ascertain whether
the original objectives of the intervention are still
representative of the current needs of society.
Intervention logic: links ‘Objectives’ back to
original ‘Needs’
8. Has the Regulation been flexible enough to respond to new or emerging issues, such as
technological or scientific advances or other changes?
4) Coherence 9. To what extent is the Regulation externally consistent and coherent i.e. with other interventions
which have similar objectives?
Analysis of coherence seeks to identify any
internal gaps, overlaps, inconsistencies or
complementarities within the F-gas policy
framework but also externally with other
EU/international policies
Intervention logic: Links ‘Objectives’, ‘Inputs’,
‘Activities’ and ‘outputs’ to ‘External factors’, in
particular other policies; as well as to some of the
´operational objectives’ (e.g. efficient mechanism)
10. To what extent is the Regulation internally consistent and coherent, in particular across its
implementing acts? How well do the different provisions of Regulation operate together to achieve
its objectives?
5) EU added value 11. To what degree has the Regulation enabled successful and cost-effective EU action regarding the
reduction of F-gases beyond what would have been possible at national level?
Analysis of EU added value aims to identify
where the implementation of the Regulation at
EU level has exceeded the value which could
have been achieved at Member State level.
Intervention logic: Considers whether ‘Results’
and ‘Impacts’ could have been achieved without
the ‘Inputs’, ‘Activities’ and ‘Outcomes’ specific to
the F-gas Regulation
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A6 Individual Measures
Table 26 below lists the detailed measures included in the three options, arranged by
policy objectives (A, B, C, D and E) and policy responses (A1, A2, ..). The singular
measures are described in detail further below.
Table 27. Individual measures considered under the three options
Objective A – Achieving additional emission reductions
A1: Increasing the ambition of the HFC quota system (mutually exclusive)
 * Option 1: Steps included after 2030 simply to ensure long-term compliance with the HFC
consumption schedule of the Protocol under all circumstances
 * Option 2 Steeper phase-down assuming replacement at proportionate costs
 * Option 3 Steepest phase-down based on maximum replacement of high GWP HFCs as soon as it is
technically possible
A2: New prohibitions for F-gas products and equipment
 Prohibit placing on the market and installation of fire protection equipment with F-gases (i.e. Annex
I) from 1 January 2024, except if required to meet safety rules. For enforcement it necessitates
labeling of F-gas equipment to be used in accordance with safety rules.
 Prohibit placing on the market and installation of small hermetic RAC70
systems (e.g. cream and ice
cream makers, (slushed) ice makers, cooled trolleys, water coolers, juice makers, milk coolers
(attached to coffee machines), beer and wine coolers, heat pump tumble driers etc.) with F-gases (i.e.
Annex I) from 1 January 2025.
 Prohibit placing on the market and installation of RAC equipment with F-gases (i.e. Annex I) from 2024
for the existing prohibitions in Annex III [extending HFC prohibition (preemptively) to PFCs]
 Prohibit placing on the market and installation of the following stationary AC from 1 January 2025
 of a rated capacity of up to 12 kW with F-gases with a GWP of 150 or more except if required to comply with
safety rules
 of a rated capacity of more than 12 kW with F-gases with a GWP of 750 or more except if required to comply
with safety rules
For enforcement it necessitates labelling of F-gas equipment to be used in accordance with safety
rules.
 Prohibit servicing refrigeration equipment with charge sizes under 40 tCO2e with F-gases (i.e.
Annex I) with a GWP above 2500. [Remove the exemption from an existing prohibition (Article 13(3)]
 Prohibit personal care products (creams, mousses, foams) with F-gases from 1 January 2024:
 Prohibit placing on the market and installation of skin cooling equipment with F-gases 1 January
2024 except if required for strictly medical reasons. This necessitates labeling of HFC equipment for
enforcement.
 Prohibit placing on the market and installation of the following electrical switchgear, unless evidence is
provided that no other suitable alternative is available on technical grounds:
 medium voltage switchgear for primary distribution, differentiated by voltage level – up to 24 kV (2026) and
24-52 kV (2030), with insulating or breaking medium with GWP > 2000
 medium voltage switchgear for secondary distribution differentiated by voltage level – up to 24 kV (2026) and
24-52 kV (2030), with insulating or breaking medium with GWP > 2000
 high voltage switchgear, differentiated by voltage level – 52-145 kV and up to 50 kA short circuit current
(2028) and more than 145 kV or more than 50 kA short circuit current (2031), with insulating or breaking
medium with GWP > 2000
70
As throughout this document, RAC and AC includes heat pumps.
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 Prohibit the use of desflurane as inhalation anesthetic from 2026 unless there are no suitable
alternatives for the intended use
A3: Extend requirements for prevention of F-gas emissions
 Extend prevention requirement to some substances listed, or proposed to be added (H(C)FOs, NF3,
SO2F2 and fluorinated ethers used as anesthetics)
 Extend prevention requirement to all relevant actors during production, manufacturing, storage,
transfer and transport [currently only required for EU producers and equipment operators]
A4: Recovery obligation of insulation foams blown with HFCs
 Require destruction or reuse of HFCs in metal-faced panels from 1 January 2024
 Require destruction or reuse of HFCs in laminated boards in built-up structures and cavities from
1 January 2024, unless infeasibility is proven by the building owner/demolition company
Objective B – Seeking alignment with the Montreal Protocol
B1: To achieve full alignment, remove some exemptions not foreseen by the Montreal Protocol
 Remove exemption from the HFC quota system for Metered dose inhalers (MDIs) (Art. 15(2))
 Remove exemptions from the HFC quota system (Art. 15(2))
 Etching of semiconductor material or cleaning of chemicals vapor deposition chambers within the
semiconductor manufacturing sector
 Military use
B2: To achieve full alignment, remove some thresholds not foreseen by the Montreal Protocol
 Remove quota system thresholds for placing HFCs on the market (Art. 15(2))
 Remove reporting thresholds for HFC production, import, export, and destruction (Art. 19)
B3: To achieve full alignment, make separate phasing down of HFC production
 Include a separate HFC production phase-down at entity level that is mirroring the Protocol’s
reduction schedule (see Annex A8)
B4: Disallow trade with countries that have not ratified the Kigali Amendment
 Prohibit import and exports of bulk HFCs from/to any country not party to the Kigali Amendment (2033
for Option 1; 2028 for Options 2 and 3)
Objective C – Improving implementation and enforcement
C1: Extend certification and training for RAC71
technicians, adding energy efficiency and low-GWP alternatives
 Extend certification and training programmes to cover energy efficiency aspects
 Extend training and certification programmes to cover equipment with H(C)FOs and other relevant
alternatives (e.g. CO2, ammonia, hydrocarbons)
 Extend the coverage of the certification requirements for personnel and undertakings that carry out
installation/servicing/maintenance/repair/decommissioning of RAC equipment containing H(C)FOs
C2: Including detailed rules to empower customs and surveillance authorities in the EU Member States and facilitate the
use of the EU “Single Window environment for Customs”
 Empower the EC to require specification of the 8/10-digit TARIC code for special custom procedures
when this becomes feasible under customs rules
 Limit the release of free circulation, even when following transit (T1) or similar procedures, to certain
well-equipped destination offices with expertise in F-gas requirements
 Prohibit physical entry for goods that are prohibited from being placed on the market, including non-
71
RAC: refrigeration and air conditioning (including heat pumps)
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refillable cylinders with HFCs and HF(C)Os. This includes online sales.
C3: Strengthening obligations of economic operators to prevent illegal trade
 Require that producers and importers hold sufficient quota at the time of release for free
circulation/placing on the market
 Require that importers have quota-exempted quantities labelled at the moment of POM/physical entry
as “exempted from quota”
 Require Member States to impose minimum penalties for non-compliance with the quota system
 Require labelling of H(C)FO, NF3, SO2F2 and fluorinated ethers used as anesthetics, as well as MDIs
 Strengthen the obligation on destruction of HFC-23 by-production to require evidence to be presented
at import that HFC23 has been destroyed during the production process
 Require documentation for downstream sales of bulk HFC/F-gases (e.g. “declaration of conformity”)
and record keeping
 Require mandatory certification for importers of bulk HFCs
 Requires mandatory certification for natural persons and undertakings selling bulk F-gases online
C4: Ensuring that only genuine F-gas traders participate in the quota system
 Remove right of authorising quota for new entrant companies (Art. 18(2))
 Align the establishment of the annual declaration-based quota allocation with the frequency of the
quota allocation based on reference values (i.e. for three years)
 Introduce a moderate quota price of initially €3/CO2e and use the revenue to cover administrative
costs related to running the quota system and return the residual amount to the EU budget
Include flexibility to adjust in case of major HFC market disruptions and withhold some quantities when
allocating quota with a view to distributing the amounts later
Participation condition for companies (e.g. experience in trading with chemicals)
Objective D – Improving Monitoring and Reporting
D1: Reporting scope – substances
 Include new substances in Annex I
 New PFCs
 Include new substances in Annex II
 sulfurylfluoride (SO2F2)
 4 new H(C)FOs
 2 Inhalation anesthetics
 A number of fluorinated ethers and alcohols
 2 fluorinated ketones and fluoronitriles
 3 other Fgases : Perfluorotripropylamine (C9F21N), Perfluoro-N-methylmorpholine (C5F11NO),
Perfluorotributylamine (PFTBA, FC43, C12F27N)
D2: Reporting scope - F-gas related activities
 Include recipients of quota-exempted HFCs
 Include undertakings performing reclamation of F-gases
 Include exporters of products and equipment with F-gases (plus registration obligation)
 Include undertakings performing recycling (in addition to reclamation) of F-gases
D3: Emission reporting
 *Option 2: Encourage EU Member States to use electronic reporting systems for collection of F-gas
service intervention, technicians, sale of non-hermetic equipment and emissions data (mutually
exclusive)
 * Option 3: Require EU Member States to use electronic reporting systems for collection of F-gas
service intervention, technicians, sale of non-hermetic equipment and emissions data (mutually
178
exclusive)
 Reporting obligations for operators of switchgear and electrical equipment with regard to SF6
emissions
D4: Reporting process and data verification (see also Annex A10)
 Add obligation to provide NIL reports for quota holders
 Add obligation to submit verification reports for bulk HFCs
 Lower the threshold for verification of bulk HFCs placed on the market
 Relax the threshold for verification of placing on the market products and equipment and align with
verification of bulk
 Align reporting and authorization thresholds for placing pre-charged products and equipment on the
market
 Align reporting and verification dates between bulk and pre-charged products and equipment
 Introduce an electronic verification process (separately for bulk and pre-charged products and
equipment)
A6.1 (A) Measures to increase ambition
A1. Phase-down ambition
The Regulation’s main policy driver to reduce HFCs is the quota system (“phase-down”).
Option 1 is having the least ambitious phase-down (simply compliant with the Protocol),
Option 2 has a more ambitions phase-down (entailing abatement costs up to 390€ per
tCO2e up to 2050 excluding a few sub-sectors with very high marginal abatement costs)
and Option 3 has the steepest phase-down measures (maximum technical feasibility
considering also safety and energy efficiency aspects, but not costs). Whereas the current
Regulation is defining the steps in percentages of a baseline, for the three options the
maximum annual quantities of HFCs that may be placed in total on the EU market each
year in the future are given for better transparency, see Annex A7 “Operationalising the
HFC placing on the market (POM) quota system (phase-down) going forward” for
details.
The quota system directly affects producers and importers of bulk and importers of HFC
cooling equipment. Potentially higher HFC gas prices for equipment that does not use
climate-friendly alternatives and higher prices on equipment using alternatives due to
technological conversion are mostly borne by equipment end-users such as in the food
retail sector (cooling), AC users (building owners) etc. The quota system is implemented
by the European Commission. Member States have to enforce compliance including
through custom controls and market surveillance. Authorities and other non-industrial
stakeholder mostly agree to increase the level of ambition, whereas F-gas producers and
some stakeholders of the refrigeration and AC industry consider that the current level of
ambitions is sufficient. Those that disagree are the manufacturers and users of innovative,
Objective E – More Coherence and Clarifications
All 3 options include the envisaged improvements (see Annex A6.5) to make the Regulation more coherent
and clear.
179
alternative equipment, especially those employing natural alternatives with very low
GWP (CO2, hydrocarbons, ammonia etc.).
A2. Additional prohibitions for equipment and products
The new prohibitions on equipment and products concern mostly placing on the market
or installation as such equipment. There are also two use bans considered72
. They
typically are specified to cover all F-gases73
, but in practice they target a specific group
of F-gases only. The prohibitions related to the RAC sectors, fire protection, personal
care products and skin cooling equipment are directed towards HFCs and they thus
complement the phase-down. While HFCs can be safely replaced, stakeholders have
pointed out as regards air conditioning equipment that there remain technical barriers in
building codes and in standards that prohibit substances with certain characteristics (e.g.
flammability) that apply to alternatives with a GWP below 150. Therefore, for two
prohibitions there is an exemption allowing HFCs with a higher GWP relating to safety
rules. Since, the actor placing the equipment on the market cannot always know where it
will be used, it is necessary to combine these exemptions with a labelling requirement as
well as a prohibition to install the high GWP equipment. Some stakeholders agree that
further HFC prohibitions are an essential complement to the phase-down, whereas others
consider there is no need to increase ambition and/or that the phase-down should be the
only measure targeting HFCs to allow maximum flexibility for industry.
The prohibition relating to electrical switchgear is targeting SF6 and restricting the use of
one inhalation aesthetic is targeting a substance with a high GWP for which there are
good alternatives. These measures will achieve additional emission savings on top of
those achieved by the phase-down measure.
Based on cost considerations, the number of additional prohibitions varies between the
three options (see Table 1). Prohibitions need to be enforced by Member States,
including through border controls and market surveillance. In case there are exemptions
to the prohibitions, the products will have to be labelled to facilitate enforcement. As
regards SF6, manufactures of switchgears have been calling for prohibitions to give a
clear signal whereas some users of switchgears such as network operators have called for
longer transition times.
A3. Add additional requirements for preventing F-gas emissions
In Options 2 and 3, emission prevention measures (i.e. Article 3) that already apply to
gases in Annex I will also become mandatory for gases in Annex II section I (i.e.
H(C)FOs) and NF3, as well as for the substances sulfurylfluoride and fluorinate ethers (to
be newly added by measure D1) and others used as inhalation anaesthetics (isoflurane,
norflurane (both newly added), in addition to desflurane and isoflurane (already in Annex
72
Use in personal care products and the use of one anaesthetic
73
To avoid that in the future another type on F-gases would be used, e.g. replacing HFCs with PFCs in
cooling equipment
180
II and where already not prohibited by measure A2)). Intentional releases that are not
technically necessary will be prohibited and operators must take precautions to prevent
unintentional releases.
Sulfurylfluoride is used most as post-harvest fumigation agent for pest control in e.g.
hardwood and softwood in containers destined for export74
. Despite its high GWP of
4732 and increasing use, the emissions of sulphurylfluoride are not yet monitored or
regulated.
Fluorinated ethers are regularly used as inhalation anaesthetics during operations in
human medicine. In Europe, this use is limited to three substances, desflurane (HFE-
236ea2; GWP 989, Regulation; GWP 2 590, AR6), sevoflurane (HFE-347mmz1; GWP
216, AR5; GWP 195, AR6) and isoflurane (HCFE-235da2; GWP 350, AR4; GWP 539,
AR6; ODP 0.03, WMO 2018). According to medical experts, for human medicine
desflurane and isoflurane are not needed in ca. 99 % of cases, as practically all operations
with the indication for use of inhalation anaesthetics can be conducted with sevoflurane.
Isoflurane is still used, mainly because it is the cheapest fluorinated ether. All gases do,
however, differ in certain clinical aspects, such as duration of onset and offset, and how
well tolerated they are by the patient. Isoflurane is routinely used in veterinary medicine
and usually fully vented to the atmosphere, according to information from practitioners
and clinics. Apart from that, it is also the main gas used in the newly obligatory
anaesthesia of mail piglets during castration.
Furthermore, the requirement to take precautionary measures will be extended to all
relevant companies in the EU carrying out production, manufacturing, storage, transfer or
transport of gases and F-gas equipment (already currently in place for EU gas producers
and equipment operators). Emissions from refrigerant container management and
handling are estimated at 2-5 % of the entire refrigerant market by industry experts. This
places some obligations on EU importers, distributors, and EU manufacturers to handle
these substances with care, but such care should already be the case today under best
practice refrigerant management procedures. In general authorities and also the relevant
industry actors appear to support these type of measures.
A4. Recovery obligations for insulation foams
It becomes mandatory to recover/capture and destroy HFCs by incineration (or reuse the
foam) for certain types of foams75
found in construction and demolition wastes (See
Annex A15 for detail). In this way, HFC quantities contained in foam banks will not be
emitted at the end of life of these construction products but will need to undergo an
organized recovery and recycling process to prevent emissions. This is fully aligned with
a key policy measure suggested for a review of the ODS Regulation and will lead to
74
There is also, to a much lesser degree, structural fumigation of dried fruits, tree nuts, grain flours
and timbers.
75
An insulation foam consist of a matrix material and a gas phase. During production a liquid was
“blown” with HFCs that created the foam matrix after hardening. HFCs remain in the gas “bubbles”
of the foam. Foams have long lifetimes of 50 years and more.
181
comprehensive treatment of end-of life foam products. Under Option 1 the obligation
concerns only sandwich panels. Under Option 2 and 3 the obligation applies to both
sandwich panels and laminated boards, however as regards the laminated boards76
the
obligation does not apply if the building owner and/or the contractor performing the
works can provide proof that such recovery is infeasible and is keeping that proof for five
years. Member States would need to enforce this obligation. This effort may often be
linked to other requirements in existing national legislation on renovation/demolition
works, waste policy and the need for separation of materials, in particular in light of
objectives for a circular economy. There are also important synergies with the ODS
Regulation, where this measure leads to important emission savings. A joint collection of
ODS and HFC foams would facilitate the recovery and keep costs for auditing and
separation down. In general, the relevant industry stakeholders appear to support these
type of measures (as confirmed by the recent consultations for the review of the ODS
Regulation).
A6.2 (B) Measures to align with the Protocol
B1. Removal of exemptions
In all options the exemption for MDIs from the quota system is removed, as it is not
provided for in the rules of the Montreal Protocol and the quantities are significant77
.
MDIs currently use HFC-134a as a propellant, but HFC-227ea is also used in some cases.
According to the relevant stakeholders (i.e. gas producers and some MDI manufacturers),
MDIs with the more climate-friendly HFC-152a (GWP 124) should be available on the
market starting in 2025 after an extensive period of testing, homologation and necessary
approval by the European Medicines Agency that is currently ongoing. Research is also
currently conducted on the safety of the unsaturated HFC-1234ze (GWP 7) as another
alternative for use in MDIs.78
Both these options would not require a change of usage by
the patients that are used to the current HFC MDI inhalers. These new options
complement other existing options such as dry powder inhalers and soft mist inhalers
which are also suitable alternatives, but may be more difficult to use or get used to by
patients depending on the personal situation.
In the absence of a policy driver, the market uptake of these alternatives is expected to be
rather slow. Assumptions for the modelling were based on industry information and for
the baseline scenario a decrease in the share of HFC-134a in new inhalers from 92% in
2020 to 48% in 2050 was assumed. For HFC-227ea, the share was assumed to decrease
from 8 to 2 %. Consequently, a share in new inhalers with HFC-152a from 1 % in 2026
to 50 % in 2050 was assumed in the baseline scenario.
76
Feasible to recover are foams installed in cavity or built-up structures, as well as block foams used
in district heating or cooling pipes.
77
In addition, HFCs amounts for MDI use have grown by about 45 % from 2015 to 2019 and have
reached levels of over10 Mt CO2e per year
78
There are also other existing inhaler options to patients such as dry powder inhalers (DPI) or soft
mist inhalers that do not use F-gases.
182
The MDI exemption concerns only a few HFC producers and MDI manufacturers. If the
exemption is removed the latter may experience higher gas prices unless they switch to
alternatives. The price of the gas is however only a very small part of the price of the
overall product (less than 1%) which is mostly determined by the medicinal agent. On the
other hand, when exemptions are removed, importers and producers will no longer be
required to include special labelling for such quantities. Some producers of alternatives
and MDIs would like to see a policy driver to support their actions of introducing
alternatives more quickly. Others would like to have more time. Authorities and other
stakeholder generally are supportive.
In order to account for the HFC quantities needed, the calculation rules for the
determination of reference values for the HFC suppliers to the MDI sectors need to be
amended. As a principle, the reference values for companies supplying HFCs to the MDI
sector should be based on recent available data for the average POM in the EU-27 (i.e.
2020-2021). In the case of HFC suppliers for (previously exempted) MDIs, this data is
available from company reporting under Art. 19 of the Regulation. The quota allocated to
HFC suppliers of the MDI sector for the first reduction step 2024-2026 under a revised
Regulation will equal 100% of the average e.g. 2021-2022 POM. For subsequent
reduction steps, the relative reductions for the MDI sector will be proportionate to the
reductions applicable to all other HFC use sectors (see also Annex A7). It means
therefore that the sector will experience a gradual introduction of the alternatives, as the
first phase-down step will not come before in 2027. This step will increase prices which
will be a soft driver for change (given that the gas price is only a very small increment to
the price of the product). Under these circumstances an insufficient of supply of HFCs to
this sector is improbable. Nonetheless, in the unlikely event of a major HFC market
disruption, measure C4 would provide the Commission with the flexibility to react and
take countermeasures.
Option 3 also removes the exemptions for the much smaller semiconductor and military
sectors. At present, no viable measures to reduce HFC demand in semiconductor industry
for etching or cleaning of chemicals vapour deposition chambers are available. The EU
semiconductor manufacturing industry is supplied with HFCs by specialised gas traders
providing special-grade gas qualities. Those specialised trades have no or low reference
values. If included in the quota system, these gas traders would need to rely on quota
transfers from other quota holders in order to maintain HFC supply in case of constant
HFC demand. A lift of the quota exemption for semiconductor manufacturing could thus
possibly contribute to a supply risk for the semiconductor industry, beyond rising HFC
prices. The calculation approach for determining reference values would therefore need
to follow a similar approach as that for MDIs above to include the specialised HFC
suppliers. This is also the case for military use which, based on reporting data, are very
small amounts.
B2. Removal of thresholds
In all options the phase-down exemption for annual imports below 100 tCO2e (Art.
15(2)) and the minimum thresholds for reporting on production, imports, exports, and
183
destruction (Art 19) for HFCs are removed, as they are not compatible with the Protocol.
This places a burden on companies dealing with small quantities of HFC. However, in an
estimation based on import data in Poland these appear to be only very few companies79
.
It may also limit illegal imports as these thresholds have allegedly been exploited to
cover up illegal activities in the past. In the consultations stakeholders supported these
type of measures.
B3. Production phase-down
In all options a separate HFC production phase-down mirroring the Protocol’s
requirements is included. This will give production rights and annual quota to seven80
producing entities in four Member States that were active in the years 2011-2013 that
were used for the Protocol’s production baseline. Similar to the ODS Regulation,
flexibility for industrial rationalization will be possible. Further details are described in
Annex A8 “Separate production phase-down”. The Member States and producers
concerned appear to support this measure. See Annex A8 for further detail.
B4. Disallow trade with Parties that have not ratified the Kigali Amendment
In all options HFC bulk imports from and exports to countries that have not ratified the
Kigali Amendment will be prohibited from 2033 (Option 1), and 2028 (Option 2 and 3).
This measure would affect, in the same way, EU importers of gases sourced from non-
Parties, as it affects EU exporters to such countries. For Options 2 and 3, this is slightly
anticipating the Kigali Amendment deadline of 2033 for such trades, incentivising
remaining Parties to implement it as soon as possible, which would save up to 0.4 degree
Celsius of climate warming. It therefore represents an important contribution to reach the
goals of the Paris Agreement to stay well below 2 degrees Celsius of climate warming
and make efforts to reach 1.5 degrees Celsius. The latest scientific findings on climate
change clearly indicate the need to limit the warming to as little as possible and
emphasise that reaching the 1.5 degrees Celsius goal is crucial to avoid dangerous
consequences. While there are differences in the rules for developed and developing
countries in the Kigali Amendment, all countries have a first compliance step on HFC
consumption already before 2033 as well as a baseline before 2025, so that early
ratification is needed to ensure full implementation of the Kigali Amendment. So far 129
out of 197 parties to the Montreal Protocol have ratified the Kigali Amendment. Given
that the Amendment was adopted in 2016, 12 years should be enough time to ensure
timely completion of the national procedures to enable ratification by 2028 for the
remaining Parties. In general, industry, authorities and other consulted stakeholders
appeared to support these measures.
79
The Polish database (which does not apply a threshold) on imports to Poland (both from outside
EU and from EU countries) did not have any entries below the threshold of Article 19 (database
consulted in 2019)
80
Only five of which currently have on-going HFC production (in DE and FR)
184
A6.3 (C) Measures to improve implementation and
enforcement
C1. Extension of the RAC certification programmes
Member States will be required to include new aspects in the certification programme
and training for technicians covering refrigeration, AC and heat pump equipment81
.
Under all options, know-how on energy efficiency must be included (Art. 10(3)). Options
2 and 3 also require that the programme include certification and training on HFC
alternatives such as H(C)FOs and naturals (e.g. hydrocarbons, CO2 and ammonia),
including practical training (Art. 10(1)). In addition, it becomes obligatory that the
technicians hold the relevant certificate when performing certain activities on AC
equipment containing H(C)FOs (Art. 11(4)). Currently only half of the current training
centres are able to offer training programmes on the safe use of F-gas alternatives
(including flammable, high-pressure and/or toxic refrigerants). The training programmes
are spread unevenly across Member States. Thus, under this option Member States would
have to update their certification programmes and ensure that training is available, if that
is not the case already. Technicians will be certified with additional skills and may have
to acquire a certificate even if they install equipment with H(C)FOs only. Industry
stakeholders, in particular the association of service technicians AREA, strongly support
these measures.
C2. Capacitate Customs to fight illegal imports
All options require that traders specify the 8-digit CN or 10-digit TARIC82
code for
relevant customs procedures83
(already the case for “release for free circulation”). This is
needed to allow an identification of the F-gas and will thus enable significantly better
controls as customs can identify shipments as F-gas policy relevant and carry out risk-
based controls. Furthermore, goods with F-gases that may not be placed on the market in
the EU will also be prohibited from physical entry into the customs territory of the Union
to make illegal circumvention of custom clearance more difficult, including online and
from outside the Union. Surveillance authorities are required to monitor goods offered
online. In addition, release for free circulation, even if following the use of special
custom procedures, will only be permitted for goods sent to particular destination custom
offices specially equipped for and knowledgeable on F-gases, to limit the feasibility of
illegal activities. This may affect the logistics of legitimate traders but should not affect
the volumes of trade. Member States would need to identify the customs offices that are
equipped to handle HFC trade to ensure good control. Customs should control, using
risk-based approaches, if the conditions are provided for such shipments. All
stakeholders strongly support these measures as they are essential to fight illegal imports.
81
in accordance with Commission Implementing Regulation (EU) 2015/2067
82
CN = Combined Nomenclature: https://ec.europa.eu/taxation_customs/business/calculation-customs-duties/customs-tariff/combined-nomenclature_en
TARIC = Integrated tariff of the EU https://ec.europa.eu/taxation_customs/business/calculation-customs-duties/what-is-common-customs-tariff/taric_en
83
already the case for “release for free circulation”
185
C3. Obligations of economic operators to fight illegal imports
All three options require producers and importers to have sufficient quota at the time of
placing on the market instead of using an end-of-year balance that includes a deduction
of exported quantities. This enables customs to stop imports before entry, instead of only
relying on ex-post controls. Quota exceedance will be checked automatically via a link
between the CERTEX/Single Window Environment for customs and the F-gas Portal.
This approach may affect the logistics of some companies doing imports and exports, as
later exports in the same year can no longer compensate for high imports in the beginning
of the year. To close any loopholes, gases exempted from the phase-down should be
labelled as such already at the time of entry.
Member States must already have proportionate effective and dissuasive penalties for all
infringements of the Regulation. Option 2 and 3 specify that non-compliance with the
rules of the quota system must be fined with an amount that is several times higher than
the market value of HFCs illegally imported in bulk or contained in the imported
equipment. The Directive 2008/99/EC on the protection of the environment through
criminal law is being reviewed at the same time as the Regulation and is likely to also
impose criminal sanctions on such offenses. These rules aim to have a deterrent effect on
such activities.
Options 2 and 3 are also requiring that undertakings must provide evidence at the
moment of placing on the market that HFC-23 was destroyed or captured during
production in line with the Art. 7(2). As this is an existing obligation, the measure would
only clarify when the evidence should be produced as well as specifying what such
evidence could be (e.g. a declaration of conformity backed up by supplementary
information where the gas was produced and how emissions of HFC-23 by-production
were prevented during the production process). This is done to make the obligation more
implementable for authorities, while not placing any substantial burden on companies
that are compliant with current rules, except for a small admin burden of drawing up the
declaration of conformity. This obligation affects both EU-based producers of gases as
well as EU importers. Furthermore, a number of substances from Annex II would require
labelling, namely HF(C)Os, NF3, as well as SO2F2 and inhalation anaesthetics (to be
added to the Regulation, see D1 below). MDIs should be labelled with information to
inform the users that they contain strong greenhouse gases, in analogy to other products
and equipment.
Option 3 also adds a mandatory certification similar to those currently issued to RAC
technicians for importers of gases and for online sellers. This means that the latter two
would have to get their personnel trained and certified. The option provides better
overview over importers/online sellers and their personnel for competent and
surveillance authorities and ascertains that handling of gases is appropriate. Finally,
Option 3 would also require that downstream sales (i.e. sales within the EU, after import)
of bulk HFCs would need to be documented and a certificate of conformity provided on
their origins and compliance with the quota system. This places a burden of record
186
keeping on distributors, service personnel and end-users. Member States would need to
ensure compliance.
Stakeholders generally support the measures in Option 1 and 2. The Option 3 measures
are supported by the large F-gas producers/importers who are concerned about fighting
illegal trade and NGOs, and some Member States. Affected companies are less
supportive.
C4. Limitation to genuine F-gas traders
All options include the measure to limit the right of authorising equipment importers to
use one`s quota (i.e. essentially selling one’s marketing rights in that year), to
incumbent84
companies, as this right has been misused by new entrant companies85
.
Furthermore, instead of providing the possibility to apply for quota from the reserve
every year, such applications will instead cover a 3 year period. A yearly application has
led to a multiplication of mailbox companies without previous experience or connection
to the gas trade, limiting the availability of quota for those new entrants who required it
for their on-going businesses. The measure should also reduce the administrative burden
of companies as the yearly application cycle is replaced with a 3-year cycle.
Options 2 and 3 add a price per ton of CO2 allocated which must be paid by the
companies that receive quota (i.e. gas importers in the same way as EU-based gas
producers), in order to ascertain that participants have a legitimate interest in the HFC
trade and to remove current gains of some stakeholders from the hitherto free distribution
of a good that has a distinct value. Equipment importers and EU equipment
manufacturers as well as end-users have pointed out that with the existing system (free
allocation of quotas) they are asked to pay the bill, while gas importers, EU gas
producers and others make an additional benefit out of increased HFC prices on the EU
market. The price will be set at a moderate level to prevent that it is being passed on to
the end-users. As for the proceeds, it seems preferable to simply assign the revenue to the
EU budget after all related administrative expenditure is covered.86
The European
Commission will seek external assistance such as through an agency such as ECHA to
handle the revenue collection. See Annex A7.3 for further detail. The Commission
should have some flexibility to adapt quota allocations e.g. if the quota allocation price is
having unintended effects, if there is a proven serious issue on the market linked to the
quota system (e.g. a shortage of gas availability of critical infrastructure such as
84
These have a minimum of two years of participation in the quota system.
85
Currently these companies needed to prove physical supply of the gas, a requirement that has
been difficult to ascertain, and has been circumvented in different ways, i.e. inconclusive evidence,
forged evidence etc.
86
Auctioning of quota has been discarded. HFC quotas are rights to sell HFCs (not to emit as is the
case in the EU Emission Trading System) and an auctioning price would reflect the willingness to
pay for higher market shares and would most likely lead to higher market concentration. Also, all
quotas could be acquired by non-EU business, possibly state-funded, and lack of predictability
would induce great uncertainty for EU businesses.
187
hospitals), when compliance cases are unsettled at the moment of annual quota allocation
or to require certain skills/characteristics for quota-holding companies.
A6.4 (D) Monitoring and Enforcement
D1. Reporting scope – substances
Taking into account the latest information on types of substances and their quantitative
relevance, a number of frequently used PFCs need to be added to complete Annex I:
 Perfluorodecalin (PFC-9-1-18)
 Perfluoro-2-methylpentane (C6F14)
The following substances will be added to Annex II due to relevant GWPs or significant
and/or rising usage:
 Sulfurylfluoride (SO2F2) used in particular for treating timber prior to export with
significant emissions;
 the anaesthetics sevoflurane (GWP of 19587
) and enflurane (GWP of 654);
 H(C)FOs:
o HCFO-1224yd(Z), for use as refrigerant in RAC applications, but also as
blowing agent, aerosol solvent, and cleaning solvent;
o Cis/Trans-1,2-difluoroethylene (HFO-1132), new refrigerant for mobile
AC
o 1,1-difluoroethylene (HFO-1132a), part of new refrigerant blends and
feedstock for fluoropolymers
o 1,1,1,2,3,4,5,5,5(or1,1,1,3,4,4,5,5,5)-nonafluoro-4-(trifluoromethyl)pent-
2-ene (C6F12) (and isomers), used as a co-blowing agent for improving
thermal performance of insulating foams
 Fluorinated alternatives to SF6 in switchgear:
o Heptafluoroisobutyronitrile (2,3,3,3-tetrafluoro-2-(trifluoromethyl)-
propanenitrile) with GWP of 2750
o Iso-C3F7CN (NOVEC 4710) with GWP of 2100
o NOVEC 5110 with GWP of 0.29
• Fluorinated ethers and alcohols: HFE-7300 (GWP 200); HFE-7100 (C4F9OCH3;
GWP 320), HFE-7200 (C4F9OC2H5; GWP: 55) used as heat transfer fluids,
cleaning and rinsing agents for industry applications, carrier for lubricants and
other specialized industry applications.
 Others:
o Perfluorotributylamine (PFTBA, FC43, C12F27N) used as heat transfer
fluid in the semiconductor industry. GWP: 8690.
87
All GWPs given in this section are latest available based on the IPCC Assessment Reports (i.e. 6th
Assessement Report, or if not available 5th
etc.)
188
o Perfluoro-N-methylmorpholine (C5F11NO) used as heat transfer fluid.
GWP: 9500.
o Perfluorotripropylamine (C9F21N) used in electronics industry, for
medical and analytical purposes.
The reporting system run by the EEA would need to be updated to take into account the
additional reporting requirement. The reporters are expected to be mostly entities that are
already reporting some fluorinated gases today.
D2. Reporting scope – reporters
Options 2 and 3 would put reporting obligations on recipients of quota-exempted HFCs
(for better control of these transactions88
), and all entities carrying out reclamation
(currently only those that are also producers, importers or exporters have to do so). Such
additional companies would be few as sophisticated equipment usually only employed by
chemical industry (already affected by the current measure) is needed. Option 3 would
also require recyclers to report such activities which increases the number of affected
companies significantly. Furthermore, option 3 requires equipment exporters to report
export of HFC equipment (to better estimate the EU’s impact on other regions). The
reporting system run by the EEA would need to be updated to take into account the
additional reporting requirement. The number of equipment exporters affected is not
known but may be similar to the number of equipment importers (over 2000 registered in
DG CLIMA’s Fgas Portal).
D3. Emission reporting
Option 2 would encourage Member States to establish electronic databases on emission-
related activities such as servicing, sales of gas, losses etc. similar to those existing in
some countries already (e.g. PL, IT, BE, SI). The data is already collected by companies
following the obligations of Art. 6 (record keeping) today. Such national databases would
serve to obtain better emission data and give authorities much better control over the use
of F-gases as well as providing incentives to minimise losses. By way of example,
primary data from a set of retailers in 2014/2015 showed that leak rates of their cooling
equipment did not go below 6% and routinely went up to 10%. Companies who carry out
leak checks conscientiously are also more likely to take better care of their systems.
Under the option, equipment operators and/or service technicians would have to submit
the relevant data electronically, rather than store them at their premises.
Option 3 makes these databases mandatory. Option 3 would also require emission
reporting of SF6 from decommissioning of switchgear in electrical transmission lines.
This would require network operator and/or their servicing companies to report such
data.
88
Given that these options also remove some exemptions (option B1), the number of affected
companies decreases.
189
D4. Reporting process and data verification
All options would make it an obligation to submit a verification report for bulk HFCs89
(currently only on request by the Commission or competent authority), and an obligation
to provide NIL reports for quota holders to better ensure that all relevant companies
report their data. The reporting and verification thresholds for bulk gas and equipment, as
well as reporting and verification dates, will be aligned. This will improve coverage of
the relevant entities and contribute to more effective and efficient compliance checking
(see separate Annex A10 on reporting and monitoring). The variance in thresholds was
highlighted by competent authorities through the evaluation to have led to confusion in
industry and a less than complete compliance checking. Rules are relaxed for equipment
importers but made tighter for bulk gas importers (ca. 90% of HFC trade). The reporting
system run by the EEA would need to be updated to take into account the changes to the
reporting requirements.
Option 2 and 3 would add a requirement of submitting the verification reports for bulk
HFCs and equipment electronically, that would clearly indicate the data to be verified.
This would have to be enabled by the Commission via the electronic Fgas Portal and will
be linked to the EEA’s reporting platform BDR. Independent verifiers would be given
direct access to the F-gas Portal, and would introduce their opinion directly in the system,
similar as is the procedure for ETS compliance checking in e.g. Germany. Verification
results as well as corrected data would immediately be available to the authorities. The
reporting system run by the EEA would need to be updated to take into account these
changes.
A6.5 (E) List of clarifications needed in Regulation
These clarifications were collected from stakeholders, in particular from Member States
authorities, during the consultation. Others are based on DG CLIMA’s experience in
implementing this Regulation.
CLARIFY THAT
 concerning prohibitions
- transport, storage, sale and use of illegal goods, in particular the one-way cylinders
(for all uses with Annex I, empty), is prohibited (not just the initial placing on the
market). This includes online sales. It also includes a prohibition to make HFCs
available to third parties, to transfer HFCs to third parties or to use HFCs which have
been placed on the market in violation of the requirements of Article 15(1), including
by internet sales, with the exception of provision, transfer or use for return or
disposal.
- entry into EU territory of non-refillable F-gas containers is prohibited.
89
It is already an obligation for data on equipment.
190
 concerning the quota system
- that the placing on the market of HFCs in excess of the quota limits is strictly
prohibited.
- imported HFCs are always considered virgin and therefore require quota
- quotas are also required for gases emitted during production
- the exemption in Article 15(2)(c) does not cover exports of HFCs contained in pre-
charged products or equipment.
- the principle of beneficial ownership for quota holders in the Regulation (currently
in Implementing Regulation only).
- that the verification obligation for equipment imports applies to both their Art 19
report as well as their Declaration of Conformity pursuant to Art 14.
- imports of equipment with HFC quantities that are below 100 tCO2e on an annual
basis are exempted from Article 14.
- authorisations can only be given/must be introduced into the registry (F-gas Portal)
 concerning custom control and market surveillance
- obligations of the importer fall on the consignee.
- imported gases are always considered virgin, and therefore cannot be used for
servicing where this is allowed for reclaimed/recycled.
- all importers/exporters of bulk gases need to register before undertaking the relevant
import/export activities. A relevant and valid registration is considered their import or
export license. This is required by the Montreal Protocol, but the obligation is
currently in an Implementing Regulation only.
- that a tCO2e metric (not only the weight) and operator’s ID are added to the
information required in the customs declaration for gases and equipment to allow for
better automated controls, in the case of import and export.
- importers of pre-charged products and equipment need to register prior to
import/export (while keeping the threshold of 100 tCO2e).
- importers of pre-charged products and equipment need to have an Only
Representative (OR) and specify their EORI number, similar to bulk gas importers.
- customs and surveillance authorities should seize illegal goods (products, equipment
or gases) and dispose of them as appropriate. Goods should not be re-exported.
- customs should, based on risk profiling, make use of the information in the Fgas
Portal & Licensing system when treating relevant custom declarations.
- customs should have clear instructions on role and procedures
- customs should exchange with competent authorities and surveillance authorities as
well as the Commission relevant data for checking compliance and enforcement.
191
- customs and surveillance authorities should seize illegal goods (products, equipment
or gases) and dispose of them as appropriate. Goods should not be re-exported.
- Member States shall use the registry to carry out enforcement activities including
custom controls, market surveillance and company compliance checking.
- Member States should keep commercial and personal information related to
companies in the Fgas Portal & Licensing System and the BDR system confidential.
 concerning containment measures
- the need for certification/attestations on selling HFCs to/purchasing HFCs by
garages in Article 11(4).
- Article 6(1)(c) refers not only to installed gases but also to added gases as regard
information to be included in the records by operators of equipment on the quantities
of recycled or reclaimed F-gases.
- Article 6(1)(f) that information to be included in the records should also cover
details about leakage repairs.
- Article 8(1) that the recovered refrigerant cannot be used for filling or refilling
equipment unless it has been recycled or reclaimed.
 concerning reporting
- include, for transparency, also the 20-year time horizon GWP values relative to
CO2 for all substances listed in Annex I and II.
- the current GWP values on a 100-year basis for all substances but HFCs90
by using
the most recent available data from IPCC’s Assessment Reports.
- minor corrections in Annex I and II to formulas, names, etc.
 others
 clarify some definitions where there is ambiguity such as “medical” or banned
“hermetical” equipment
 add a list of allowed destruction technologies as stipulated by the Protocol
A6.6 List of discarded measures
A number of measures were suggested by stakeholder that were not considered for the
impact assessment for reasons specified below:
 Objective A
- A general prohibition of F-gases in the RAC sector. This was not deemed feasible
at this time as F-gases continue to be needed in many niche applications, albeit in
falling numbers. Instead, the approach is to rely on the phase-down to further
90
HFCs are linked to compliance with the Protocol which uses the IPCC’s Assessment Report 4 as
does the Regulation. A delegated act already would allow adjustment of the values should those
change in the Protocol.
192
provide an economic incentive to use climate-friendly alternatives while
specifying additional prohibitions in sub-sectors where there is no more need for
medium and high GWP F-gases.
- Remove the exemption for reclaimed and/or recycled high GWP F-gases for
servicing existing stationary refrigeration equipment. This measure was
considered counterproductive since this existing exemption provides a strong
incentive for recycling and reclaiming F-gases, rather than (illegally) venting
them.
- A prohibition on the use of HFCs in MDIs. A prohibition date would not be
possible in the near future as the alternatives would have to be available on the
market in sufficient quantities to allow satisfying the demand. This sector requires
a policy driver with a more gradual incentive to replace HFCs, in the interest of
patients.
- Extend coverage of emission prevention requirements to include all substances
listed in Annex II. This scope was considered too large as there is a number of
substances in Annex II with very low use quantities. The scope was reduced to
the relevant substances H(C)FOs (breakdown products!) and NF3 (high quantity
use) as well as some newly added substances (see retained measures A3).
 Objective B
- Remove threshold for reporting on feedstock. Contrary to the other thresholds for
the quota system that are removed in order to align with the Protocol, this is not
required by international rules, and therefore it was considered to leave the
threshold in place in the interests of reducing the administrative costs for smaller
entities.
- Make an import quota system rather than a “placing on the market” quota
system. This would have allowed for easier compliance checking at customs but
could have created issues for correctly offsetting quantities for export and other
transactions in view of maintaining compliance with the Protocol and
safeguarding environmental ambition of the quota system.
 Objective C
- Separate certification programmes for low GWP alternatives, including for
naturals. The use of H(C)FOs in RAC is linked to HFC so an integration into
existing certification programmes seems the most cost-effective way to certify the
needed skills. A separate certification programme for naturals was deemed out of
scope of the F-gas Regulation.
- Requirement of certification for activities such as installation, maintenance,
recovery etc. for natural alternatives to F-gases in RAC. This was deemed out of
scope of the F-gas Regulation.
- Change of the frequency of quota allocation from once a year to twice a year.
This would have added more complexity and administrative burden for both
193
authorities and companies. Also, planning certainty for quota holders would have
been reduced.
- Remove the option to make declarations for quota. This measure would have
excluded new entrants from joining altogether, which was deemed not acceptable
even for a declining and strongly regulated market.
• Objective D
- Reporting on use of inhalation anaesthetics by large volume users. This would
have required that hospitals would have to report on these emissions which would
have placed a high burden on these critical infrastructures.
- Include the possibility to adopt delegated acts to allow for amendments in Annex
I and II if new scientific evidence become available. This was considered too far
reaching since it is not clear what would constitute sufficient “scientific
evidence”. The current legal text of the Regulation to rely on the Protocol’s
Scientific Assessment Panel and the IPCC’s Assessment Reports is preferable.
Also, stakeholders suggested many different definitions to be adjusted (see background
study). In most cases it seemed more straightforward to reply on agreed implementation
practices rather than introduce new uncertainty with adjusted definitions.
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A7 Operationalising the HFC placing on the market
(POM) quota system (phase-down) going
forward
A7.1 Methodological approach
The HFC POM phase-down as set out in the Regulation is characterised by the reduction
schedule given in Annex V of the Regulation, expressed in percentages, which is used for
two purposes:
a) Calculation of the EU-wide annual maximum quantities (MaxQ) of HFCs to
be placed on the market 2015 onwards, featuring a complex calculation
scheme including a baseline derived from 2009-2012 reporting data and quota
exemptions;
b) Calculation of company-specific HFC quota based on reference values (RV-
quota), i.e. grandfathering: Company-specific reference values, which are
recalculated triennially to determine average POM of HFCs since 2015, are
multiplied by the percentage given in Annex V for the respective year and by
a factor of 0.89 to determine RV-quota. The gap between the total MaxQ and
the sum of RV quota allocated to companies (“new entrants’ reserve”) is
subsequently distributed on a pro-rata basis to all companies having submitted
an annual declaration on additional need (D-quota).
In order to increase the transparency of the EU-wide schedule for the MaxQ of HFCs, it
is proposed for the revision of the F-gas Regulation to abandon the complex MaxQ
calculation rule of the Regulation and disentangle the previous Annex V schedule into
a) An explicit schedule for the maximum quantity of HFCs to be placed on the
EU27 market, beginning in 2024 and expressed in tCO2e/year
b) A reduction schedule in percentage units beginning 2024, for the purpose of
calculating RV-quota. The equation to calculate RV-quota from reference
values involving the 89% reduction factor to feed the new entrants reserve
would remain unchanged.
The percentages in the reduction schedule for RV-quota should be calculated by dividing
the maximum quantities (expressed explicitly in tCO2e) by a new 2015 base value to be
defined in a revised Regulation. The 2015 base value needed for a revised Regulation
should be calculated based on the methodology defined in F-gas Regulation 2014/517 to
derive the 2015 MaxQ for the EU-28, and account for the change in geographical scope
of the EU (EU-27 after Brexit) and for a change in scope of quota exemptions still
applying from 2024 onwards (after the revision), based on available data.
Lifting the MDI quota exemption from 2024 requires that special calculation rules for the
triennial RV-recalculation needs to be introduced in order to avoid that the supply of
HFCs to this previously exempted sector would be cut by the quota system initially. As a
principle, 2024 allocations levels of RV quota to MDI suppliers should be at 100% of
195
the levels established before lifting the exemption (e.g. available data for 2020-22),
and that subsequent reduction steps will be proportionate to the relative reduction steps as
defined for the overall HFC POM. In the case of HFC suppliers for (previously
exempted) MDIs, this data is available from company reporting under Art. 19. It should
be noted that exports of MDIs containing HFCs are not considered bulk HFC exports and
thus not subject to the quota exemption for exports according F-gas Regulation Art
15(2)(c).
To calculate RVs for HFC suppliers to the (previously exempted) MDI sector, the
average POM from recent years (e.g. 2020-21) needs to be increased in order to arrive at
a quota that would represent 100% as a starting point. This increase is to be calculated
a) by dividing by the percentage calculated for 2024 in the new reduction schedule
to be applied for the RV-quota calculation, and
b) by dividing by the ‘new entrants reduction factor’ of 0.89.
This RV can be used for the calculation of RV-quota like for all other companies, by
multiplying with the 0.89 reduction factor and by multiplying with the RV-quota
reduction percentage for the respective year91
. As the result of this calculation
approach, the RV-quota allocated to HFC suppliers of the MDI sector for the first
reduction step 2024-2026 under a revised Regulation will be 100% of the POM in
the most recent years available. For subsequent reduction steps, the relative reductions
for the MDI sector will be proportionate to the reductions applicable to all other HFC use
sectors. The first such subsequent reduction step for the overall market that will affect
MDIs will come in 2017.
A7.2 Total annual quantities for the different reduction
schedules
The maximum quantity of HFCs for the EU27 in the years 2021-2023 is approximately
62.3 Mt CO2e under the current Regulation. Table 27 shows the calculated limits for the
different Options and including a removal of the exemption for MDIs from 2024.
91
Essentially the POM values are increased by phase-down factor and new entrants factor first, so
that when these are applied using the Annex V and VI methodology, they cancel out and MDI
gases are
196
Table 28. Options for the F-gas Regulation phase-down schedule for the maximum quantity of HFCs
placed on the EU27 market [Mt CO2e]
Baseline Option 1 Option 2
Option 3
t CO2e t CO2e t CO2e t CO2e
2021 - 2023
(existing
Regulation)
62 273 330 62 273 330 62 273 330 62 273 330
2024 - 2026 37 535 263 49 035 263 41 701 077 41 039 167
2027 - 2029 25 166 229 36 666 229 17 688 360 15 963 275
2030 - 2032 19 865 215 31 365 215 9 132 097 6 916 849
2033 - 2035 19 865 215 28 717 529 8 445 713 5 794 785
2036 - 2038 19 865 215 20 538 147 6 782 265 5 467 823
2039 - 2041 19 865 215 20 538 147 6 136 732 5 006 355
2042 - 2044 19 865 215 20 538 147 5 491 199 4 544 888
2045 - 2047 19 865 215 20 538 147 4 845 666 4 083 420
2048 onwards 19 865 215 20 538 147 4 200 133 3 621 953
Figure 25 gives the time series for the maximum quantity, i.e. the total quota available to
the EU market in those years. For improved comparability of the discussed options in
terms of considered quota exemptions, a time series was added for an adjusted baseline
which incorporates a lifting of the MDI quota exemption as of 2024, assuming high MDI
demand of approximately 11.5 Mt CO2e per year, consistent with the scenario definition
for Option 1. It is apparent that the ambition of the schedule of the maximum quantity in
Option 1 basically follows the “adjusted” baseline and features two (significant)
reduction steps in 2033 and 2036 in order to safely stay below MP consumption limits.
Options 2 and 3 have earlier reductions starting in 2024, 2027 and 2030.
197
Figure 25: Options for the development of maximum quantity of HFCs
A7.3 Introduction of a Quota Allocation Price
Under the existing Regulation the allocation of quota under the HFC phase-down has
been for free. It is based mostly on a grandfathering approach, complemented with a
reserve for new entrants to be distributed evenly among all applicants, unlike the EU
ETS, where emission certificates are being auctioned. While the existing approach would
be maintained in Option 1, the introduction of a fixed quota allocation price is considered
in the Options 2 and 3. That allocation price is proposed to be set at initially 3 €/ t CO2e
for 2024 to be well below recent market levels on HFC price increases (average 6 €/t
CO2e since 2015 as OEM purchasing prices92
) to avoid significant pass-through to end-
users.
The procedure for implementing the allocation price could work as follows:
Step1 subject to quota price: Calculation of ‘reserved quota’ based on reference values,
penalties and declarations to get quota from the Reserve:
1) Calculation of Reference Value-based quota for each incumbent93
, taking into
account potential quota penalties for incumbents.
2) Determination of the total HFC quota available in the Reserve taking into account
the total amount allocated on the basis of reference values minus penalties (Step 2
in the Regulation).
92
Source: Öko-Recherche HFC price monitoring on behalf of the European Commission, prices at all
levels of the supply chain are monitored quarterly since 2015
93
The reference values will have to be re-calculated to take into account quantities that are linked to
uses that are currently exempted from the phase-down.
0
10
20
30
40
50
60
70
2021 2024 2027 2030 2033 2036 2039 2042 2045 2048
Mt
CO2e
FGR maximum quantity of HFCs
Baseline BL adjusted* MP alignment Proportionate action Maximum feasibility
* BL adjusted: Baseline scenario adjusted as of 2024 to lifting the MDI exemption, assuming
high HFC demand for MDIs
198
3) Calculation of Declaration-based quota from the Reserve for each declaring
company while taking into account applicable quota penalties (penalty amounts
are being re-distributed to other declarants).
4) Flexibility for the European Commission to temporarily withhold some quota
allocations in case of pending decisions on e.g. quota penalties.
Step 2: Requesting payment for reserved quota
5) Quota holders are informed of the total amounts reserved for allocation to them
based on reference values and/or declaration, and requested to pay the allocation
price for the reserved amount by an appropriate deadline.
Step 3: Redistribution of unpaid reserved quota
6) Quota amounts where the allocation price has not been paid by the deadline will
be distributed free of charge, on a pro-rata basis to all declarants which have fully
paid their allocation price and whose declaration had not yet been fully satisfied.
Step 4: Quota allocation
7) The reserved quota for which the price has been paid in addition to a possible top
up resulting from the redistribution of unpaid reserved quota is allocated to the
company.
Step 5: Ad hoc allocation of temporarily withhold quota
8) Where cases relating to withheld quota have been resolved, the quota will be
allocated against payment if it is allocated to one quota holder. If it is to be
redistributed among all quota holders who have declared a quota need, it will be
allocated for free.
Table 28 shows the total amount of quota allocation revenue that could be collected
annually if all quota is fully paid during Step 2 (i.e. no quota allocated under Step 3) and
based on total quota amounts foreseen for 2024 under the different options (assuming
that all companies pay the quota price). IF unadjusted, the total revenue would decline
proportional to the maximum quantity as shown in Table 27 above.
Table 29: Expected volume of quota allocation revenues
Option 1 Option 2 Option 3
2024 Maximum quantity of HFCs Mt CO2e 49.0 41.7 41.0
Revenue for sale at 3 €/t CO2e Mio €/a * 125.1 123.1
Note: * In option 1, no quota allocation price is included.
The allocation price collected from quota holders will reduce the benefit that would
normally occur in the HFC supply chain due to the HFC price increases resulting from
the phase-down.
199
A8 Separate production phase-down
Next to the HFC consumption phase-down, the Protocol’s Kigali Amendment features a
parallel phase-down scheme for the production of HFCs in the EU and its Member
States. The EU & their Member States can under the Protocol’s REIO94
clause (Article
2(8)(a)) decide jointly whether
a) each Member State would need to comply individually with their respective HFC
production phase-down, or
b) the EU would comply jointly as a REIO.
While the HFC consumption phase-down is complied with jointly as a REIO, the status
quo for HFC production currently is compliance at Member State level. A REIO
compliance would need to be notified to the Ozone Secretariat of the Protocol. With an
EU-wide scheme addressing the HFC production phase-down in a revised Regulation,
Member States would have the option to in the future to agree to switch to the REIO
approach without in any way endangering compliance.
In order to facilitate compliance with the Protocol’s HFC production phase-down, both
jointly as EU or at Member States basis, the introduction of an EU-wide phase-down
scheme for HFC production, similar to the one that was successfully implemented under
the Ozone Regulation that ended in 2020, is proposed for all three policy options in the
same way, as described below.
A8.1 Metrics to be considered for the HFC production
phase-down
“Production” as defined under the Protocol is produced amounts minus feedstock use
minus destruction. As clarified by means of the reporting rules,
 feedstock use eligible for subtraction is limited to produced amounts for feedstock
use in the own country (for EU MS, this would apply on MS level), and
 non-captured amounts of generated HFCs (by-production) are not considered.
The baseline for the HFC production phase-down under the Protocol is calculated by
adding
 the average 2011-2013 HFC production (defined as above) and
 15% of the HCFC production baseline (as defined below).
The HCFC production baseline is the average of
 1989 HCFC production + 2.8% of 1989 CFC production
 1989 HCFC consumption + 2.8% of 1989 CFC consumption95
94
Regional Economic Interest Organisation
95
For the Member States of the EU-12 of 1989 (Belgium, Denmark, France, Germany, Greece,
Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain and the United Kingdom) consumption
data for individual MS is not available. For those parties to the MP, the Ozone Secretariat at UNEP
thus uses HCFC & CFC production data only for the calculation of the HFC production baselines.
200
Consumption under the Protocol is production (as defined above) plus imports minus
exports.
The envisaged Regulation’s HFC production phase-down would apply to remaining EU
HFC producers. For those companies, uncaptured by-production, production for
feedstock use and production destroyed before placing on the market should be
considered (= subtracted from gross production reported in section 1A of the reporting
questionnaire under F-gas Regulation Art 19). “Downstream” destruction of recovered
used HFCs, imported into or collected within the EU, should not be considered for the F-
gas Regulation production phase-down. Any such amounts (~ 0.5 – 2 Mt CO2e/a in 2015-
2019, EU28) can be considered a safety margin for compliance with the Protocol’s
production phase-down, both at Member State or possibly at EU/REIO level.
The activity subject to limitations under the EU production phase-down should thus be:
“Production for Sale” (PfS) = Gross production (BDR: 1A) – uncaptured (by-)
production amounts – Production for destruction – Production for feedstock use
A8.1.1 Definition of production for destruction
In this context, production for destruction covers the following as annually reported
under Art 19:
a) Captured production amounts destroyed by the producer
b) Captured production amounts handed over by the producer to another company
for destruction
A8.1.2 Definition of production for feedstock use
The subtraction for feedstock use may possibly refer to
a) own feedstock use by the producer
b) production for feedstock use with in the own MS
c) production for feedstock use by any company within the EU
d) production for feedstock use anywhere.
Note that cases a) & b) have been reported so far. Only cases a) & b would be
subtractable under MP monitoring rules for compliance on EU MS level. However, to
avoid any conflict with EU internal market principles, the definition should be
extended to cases a, b & c96.
A8.1.3 Coverage of HFC-161
HFC-161 is an HFC according to Annex I of the Regulation, but it is not covered under
the MP. So far, no production of HFC-161 has been reported in the EU. An explicit
96
In case HFC amounts would be reported for feedstock use in other EU MS, those could possibly be
counterbalanced by downstream destruction of used HFCs, subject to subtraction under MP
accounting rules for HFC production. Nevertheless, such an approach could theoretically lead to
MP non-compliance at MS level. If EU MS will opt for the REIO approach, non-compliance at EU is
even more unlikely.
201
exemption of HFC-161 from the EU PfS production phase-down is thus not
necessary.
A8.2 The Protocol’s HFC production baseline for the EU
and its Member States
The Protocol’s HFC baseline of EU Member States sum up to 84.3 MtCO2e for the
EU27. 72% thereof are derived from 2011-2013 HFC production (corrected for feedstock
use and destruction according to Protocol definitions), 28% are derived from the 1989
HCFC production baseline. 98% of the aggregated HFC production baselines for the
EU27 are allocated to a set of five Member States: France, Germany, Spain, the
Netherlands and Italy.
A8.2.1 HFC production in the EU
Since 2015, HFC Production (defined as Production for Sale, PfS) in the EU27 has been
limited to France and Germany. HFC production ended 2014 in Spain, and 2012 in Italy.
For all other EU MS, the Protocol’s HFC production baseline is fully derived from the
HCFC production baseline, i.e. from production capacities in place over 30 years ago
which for that reason do not correspond anymore to today’s activity. The distribution of
the PfS baseline between MS thus significantly differs from the Protocol’s HFC
production baseline. 2011-2013 PfS of HFCs was reported by 7 companies in the EU27:
2x DE, 1x ES, 3x FR & 1x IT.
A8.2.2 Allocation of Protocol’s HFC production baseline to EU HFC producers
Given the world-wide HFC consumption phase-down schemes agreed under the
Protocol, the Protocol’s HFC production phase-down scheme needs to ascertain that
overall production is phased down, but at the same time attempts to address a level-
playing field between HFC producers located in different parties to the Protocol, while
leaving more time for developing countries. The objective of the proposed Regulation’s
HFC production phase-down scheme at EU level is thus to facilitate compliance with the
Protocol’s production phase-down at Member State and EU levels. The allocation
method of the EU HFC production baseline to companies involved should ideally feature
a complete distribution of total available EU production rights.97
The general approach for the allocation of the Protocol baseline to companies is to assign
to companies their 2011-2013 PfS baseline and additionally allocate a top-up based on
the gap between the EU27 Protocol HFC production baseline and the aggregated EU27
2011-2013 PfS baseline (since the Protocol allows for more rights than distribution based
solely on PfS). That gap amounts to 22.6 Mt CO2e, which is about 27% of the EU27
baseline under the MP or 37% of the EU-wide 2011-2013 PfS baseline. That gap of 22.6
Mt CO2e would, following the considerations above, be distributed among the 7 EU27
PfS incumbents.
97
Given that „production“ is also part of the “placing on the market” HFC quota system which is
going down quickly, a re-introduction of production into the EU is not feasible
202
However, a relevant condition for a distribution of the gap is also that the EU production
phase-down scheme shall be designed to safeguard compliance with the Protocol’s
production phase-down not only at aggregated EU27 level, but also at Member State
levels (in case the REIO clause is never used). An allocation approach for the gap which
would avoid a stricter restriction of HFC production than in the case of measures taken
individually by affected Member States (i.e. France and Germany) to comply with the
Protocol’s HFC production phase-down does necessarily require that the gaps at Member
State level (i.e. Protocol baseline vs. PFS at DE, FR, …level) are also allocated to the
HFC producers of the respective Member State. Given such an approach, the Protocol
baselines for France, Germany, Italy and Spain could be fully distributed, while the
Protocol baselines for the other EU27-MS, amounting to about 5.2 Mt CO2e, or 23%, of
the EU wide ‘gap’ would not be directly allocated to EU HFC producers.
For the allocation of the French and German gaps to French and German HFC producers,
a distribution method needs to be defined, for Italy and Spain this does not matter as only
one company per Member State is involved. The gap could be distributed either
a) Pro rata (same amount in t CO2e per company in the respective Member State), or
b) Proportional to the size of the 2011-2013 PfS baseline of each company, or
c) In any combination of both approaches above (e.g. 50% of gap distributed pro
rata, 50% proportional etc)
The choice of the distribution method for the gap will imply at what speed and schedule
the involved companies per MS will need to reduce domestic production. The pro-rata
approach appears to be easiest to justify. However, the choice of approach does not have
further implications on the general workings of the EU production phase-down, or the
assessment of impacts.
A8.3 Approach for legal implementation in the F-gas
Regulation
For the legal implementation in a revised Regulation, it is suggested to follow the
approach taken in the ODS-Regulation for the ODS production phase-down which
allows both companies and Member States to engage in transfers of production rights.
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A9 Prohibitions considered in the impact assessment
A9.1 Prohibition of F-gases (Annex I) in new fire protection
equipment
The prohibition is based on the significant decrease of HFCs used as fire extinguishing agents
since 2015 as well as the large-scale use and availability of non-F-gas alternatives which was
confirmed by industry stakeholders and consulted experts. Alternative technologies are
common in this sector and allow for an immediate replacement of HFCs, except for when
national safety standards are to be met in special applications including mining, military,
aviation, and nuclear power plants which require substances with special extinguishing
capacities that cannot be met by the alternatives currently available on the market. From
2024, all HFC quantities needed can come from reclaimed quantities. PFCs and SF6 are not
used.
A9.2 Prohibition of F-gases (Annex I) in new small hermetic
refrigeration and heat pump appliances
The prohibition addresses small hermetic refrigeration and heat pump appliances for
household and commercial use which still use high-GWP HFCs (PFCs and SF6 are not used),
but where suitable alternatives are fully available. Examples include cream and ice cream
makers, (slushed) ice makers, water coolers, juice makers, milk coolers attached to coffee
machines, beer and wine coolers, heat pump tumble driers etc.
Due to the small charge size and the hermetic nature of these appliances, end-of life recovery
of the HFC charge is typically not carried out as many appliances are not separated in the
waste scheme so that the full charge is often emitted at end-of-life. Alternatives to HFCs for
small hermetic refrigeration units (such as R290) are already widely available and allow for
immediate and full replacement of HFCs.
The prohibition concerns manufacturers, importers and distributors of small hermetic
appliances.
A9.3 Prohibition the use of PFCs in RACHP equipment
PFCs are contained in a few refrigerant blends, especially blends that were introduced as
retrofit options (drop-in) for equipment formerly containing HCFCs (R22; R503) or CFCs
(R13) to allow the use of existing equipment and systems until end-of-life. Examples include
R413A (“Isceon 49”; R134a 88%; C3F8 9%; isobutane 3%), R508A (“Klea 5R3”; R23 39%;
C2F6 61%) and R508B (“Freon 95” or “Suva 95”; R23 46%; C2F6 54%; for ultra-low
temperature applications).
The analysis of reported data shows that PFCs play a niche role as refrigerants today. Even
though the use of such blends is not necessary anymore as there are suitable alternatives, new
equipment running on PFC refrigerant blends is still entering the market.
204
The prohibition refers to refrigerant manufacturers and equipment producers, importers and
distributors as well as RAC service technicians.
A9.4 Prohibition of F-gases (Annex I) in stationary AC and
heat pumps
The prohibition relates to stationary air conditioning equipment and heat pumps (heating and
cooling mode)
 of a rated capacity of up to 12 kW that contain, or whose functioning relies upon
fluorinated greenhouse gases with a GWP of 150 or more from 1 January 2025 and
 of a rated capacity of more than 12 kW that contain, or whose functioning relies upon
fluorinated greenhouse gases with a GWP of 750 or more from 1 January 2025.
Current technology trends towards low-GWP alternatives can be seen in all AC and heat
pump applications and already resulted in the introduction of A2L and A3 refrigerants (such
as R32, R454C, R290) in a wide range of air conditioning and heat pump products and ahead
of the prohibition spelled out in Annex III(15) of the current regulation98,99
. At the same time,
research on charge-size minimisation for flammable refrigerants is progressing fast. In
addition, both small and larger single-split air conditioning systems and heat pumps offer
great potential for further GWP reductions. However, due to larger charge sizes, safety
concerns are more limiting for the larger equipment types (i.e. larger than 12kW) at this
moment in time, so that the introduction of low-GWP alternatives will likely need more time.
Given the expected growth rates of the heat pump sector, which is currently driven mainly by
the promotion of more energy efficient heating, the choice of refrigerant is also
fundamentally relevant to reduce emissions from the anticipated and desirable growth in this
sector. Safety standards are being revised to allow for easier use of low-GWP alternatives
including flammables at higher charges and are expected be updated in the near term (i.e.
2022) according to information from experts involved in the standardisation working groups.
The metrics for this prohibition are based on capacity (kW) to align with other relevant
regulations (e.g. eco-design regulation), and the prohibition would refer to placing on the
market as well as installation of such equipment from 2025. This date would give sufficient
time for further technological refinement and progress on updating the relevant standards in
line with technology. For perspective, R32 was introduced in this sector in a timeframe of 4
years from near zero to close to 90 %, even without a prohibition deadline.
An exemption would be included to allow for continued use of HFCs where standards and
codes do not currently allow for the use of A3 refrigerants, i.e. hydrocarbons. Equipment for
this purpose would need to carry special labelling and evidence such as technical
documentation needs to be kept and provided upon request to Member State authorities. This
98
EU COM 2020: The availability of refrigerants for new split air conditioning systems that can replace
fluorinated greenhouse gases or result in a lower climate impact.
https://ec.europa.eu/clima/sites/clima/files/news/docs/c_2020_6637_en.pdf
99
Announcement by Midea to introduce R290 in split air conditioning units in the EU in 2021 at the Green
Cooling Summit 2021, 26 May 2021.
205
exemption would allow for further technical development as stakeholders such as the industry
associations EPEE or JBCE pointed out that there may be special circumstances such as long
pipes or similar that require higher charges than permitted under safety standards.
The prohibition would concern manufacturers, importers and distributors of stationary air
conditioning and heat pump equipment as well as end-users and service companies.
A9.5 Removal of exemption for smaller refrigeration equipment
from the prohibition of using high GWP F-gases
The current provision to use F-gases with GWP >2500 for servicing and maintenance from
2020 onwards exempts stationary and mobile refrigeration equipment with a charge size
below 40 t CO2 equivalents. Feedback from industry showed that this exemption is not
relevant in practice, i.e. a distinction is often not made between charge sizes above and below
40 tCO2e during service and maintenance. Alternatives to high-GWP refrigerants (R404A,
R507) are available for all stationary and mobile refrigeration applications including the
exempted capacity range.
The stakeholders concerned by removing this exemption are manufacturers, equipment
owners/operators, service companies performing maintenance work at existing systems and,
indirectly, refrigerant importers and distributors.
A9.6 Prohibition of F-gases (Annex I) in personal care
products
This prohibition relates to the use of HFCs and PFCs in personal care products (SF6 is not
used) such as creams and liquids for skin and nail care (mainly perfluorodecalin) as well as
sprays and mousses for hair and skin care. The use of F-gases in these product types is
limited as various alternatives are commonly used by most manufacturers. F-gases contained
in this type of products are fully emitted and cannot be recovered or contained (emissive
uses).
Stakeholders concerned include manufacturers, importers and distributers of personal care
products currently containing F-gases. They would need to adapt their product formulations
where they do not already use the alternatives.
A9.7 Prohibition of the use of F-gases (Annex I) for skin
cooling
Skin cooling equipment relying on HFCs are not only used for purely medical, but also for
cosmetic purposes in beauty treatments, e.g. hair removal, and direct emissions occur from
such uses. Alternatives are available and should allow for replacement of HFCs.
A9.8 Prohibition of SF6 in new switchgear
In recent years, several alternatives to SF6 in both medium-voltage (MV) and high-voltage
(HV) electrical switchgear were developed. While the market introduction in the MV
segment is more advanced and alternatives are widely available, this is not yet the case for
206
some HV applications so that a little more time is needed for this market segment. The
prohibitions distinguish between voltage and distribution levels and relates to
- new MV electrical switchgear for primary and secondary distribution, differentiated
by voltage level – up to 24 kV from 2026 and 24-52 kV from 2030,
- new HV electrical switchgear, in the range of 52-145 kV and up to 50 kA short
circuit current from 2028, more than 145 kV or more than 50kA short circuit current
from 2031, using F-gases with GWP > 2000 as insulating or breaking medium.
Industry input and literature research suggest that several alternative mixtures and substances
are available with GWP<2000 within the indicated time frames. The transition from SF6
towards lower-GWP alternatives will lead to a reduction in the demand of SF6.
A9.9 Use prohibition of desflurane as inhalation anaesthetic
The prohibition relates to the use of the fluorinated inhalation anaesthetic desflurane (GWP
989) that is currently not restricted but is commonly used throughout the EU and fully
emitted during use. Recently, a technology to capture inhalation anaesthetics has been
developed but it is not yet widely available. Suitable alternatives include sevoflurane (GWP
216; AR5) and isoflurane (GWP 350; AR4) which are both widely available and commonly
applied as well and can replace desflurane in almost all cases. An exemptions to the
prohibition is specified for the few instances where this may not be the case.
The prohibition would affect producers, importers and distributors of medical products as
well as end-users such as hospitals and clinics.
207
A10 Detailed analysis on reporting and verification
thresholds
A10.1Verification thresholds for HFC bulk producers/ importers
and for importers of cooling equipment containing HFCs
A10.1.1Bulk POM verification thresholds
Based on the quota amounts100
received by companies in the years 2018, 2020 and 2021101
,
an analysis was conducted to determine the share of companies which received quota
amounts above different thresholds as well as the share of total allocated quota covered by
different verification thresholds.
Under the assumption that the total number of companies remains at 2021 levels (i.e. 1772)
between 2021 and 2030 and that companies’ share of total allocated quota is constant during
this period, a projection of shares of companies and quota below different thresholds was
developed, for the phase-down schedule of the current Regulation.
Table 30: Share of companies which received quota amounts above different thresholds
% of companies with quota … 2018 2020 2021 2025 2030
>500t CO2e 100% 99% 99% 98% 97%
>1,000t CO2e 100% 99% 98% 95% 86%
>2,000t CO2e 99% 99% 89% 86% 83%
>2,500t CO2e 99% 98% 88% 85% 59%
>3,000t CO2e 99% 98% 87% 84% 30%
>5,000t CO2e 98% 98% 84% 32% 15%
>10,000t CO2e 97% 19% 23% 14% 3%
>20,000t CO2e 33% 17% 12% 3% 2%
Source: DG Clima HFC registry, own calculations
Table 31: Share of total allocated quota covered by different verification thresholds
% of Quota covered with threshold 2018 2020 2021 2025 2030
>500t CO2e 100.0% 100.0% 100.0% 100.0% 99.9%
>1,000t CO2e 100.0% 100.0% 100.0% 99.8% 99.3%
>2,000t CO2e 100.0% 100.0% 99.5% 99.3% 99.0%
>2,500t CO2e 100.0% 100.0% 99.5% 99.2% 94.4%
>3,000t CO2e 100.0% 100.0% 99.4% 99.1% 87.5%
>5,000t CO2e 100.0% 99.9% 99.1% 88.0% 82.7%
>10,000t CO2e 99.9% 91.6% 85.7% 82.3% 75.3%
>20,000t CO2e 91.8% 90.8% 81.0% 75.2% 74.1%
100
Both quota allocated based on reference values as well as quota based on declarations were
considered.
101
2019 was not considered as that year had a very high number of new entrants, before introduction of
Commission Regulation (EU) 2019/661 requiring more registration data from applicants
208
Source: DG Clima HFC registry, ÖkoRecherche et al (2021)
The analysis indicates that while the current threshold for verification of bulk (i.e.
10,000 tCO2e) affects 19 % of companies and covers about 92 % of reportable quota use in
2020, the same threshold would only cover about 75 % of reportable quota use in 2030. In
order to achieve a quota coverage closer to 100% in the 2030 time horizon, the threshold for
the verification obligation would need to be lowered to at least 2,000 t CO2e. Then, a quota
coverage of 99%, affecting 83% of quota holders (approx. 1500 out of ~1800 assumed quota
holders) would be reached. A threshold of 1,000 t CO2e would de facto have very similar
effects like a threshold of 2,000 t CO2e. Only few additional companies are likely to be
affected.
A10.1.2RAC Equipment verification thresholds
Authorisation use as reported by equipment importing companies for the year 2020
(approximately 1,000 companies reporting on imports of approx. 10 Mt CO2e) was compared
to different thresholds for verification. It shows that while the current de facto threshold of
100 tCO2e requires about 83 % of equipment importing companies to verify their report, a
threshold of 500 t CO2e would reduce this share to 61% and a threshold of 1000 t CO2e
would require less than half of equipment importing companies to verify their report. Due to
the large amount of small equipment importing companies, a verification threshold of
1000t t CO2e would however still cover 98% of the HFCs in imported equipment.
Table 32: Authorisation use by companies compared to verification thresholds
% of companies with authorisation use in
need of verification
% of authorisation use in need of verification
covered by threshold
>100t CO2e 83% 100%
>500t CO2e 61% 99%
>1000t CO2e 48% 98%
>2,000t CO2e 36% 96%
>2,500t CO2e 33% 96%
>3000t CO2e 29% 95%
>5000t CO2e 22% 92%
>10,000t CO2e 15% 86%
>20,000t CO2e 8% 76%
Source: Data reported by companies to EEA BDR, own calculations
A10.1.3Conclusion on verification thresholds for bulk and equipment
For a joint threshold for bulk & equipment verification, i.e. aligning the two thresholds
for better coherence and transparency, a threshold of 1,000 t CO2e is suggested which
would likely cover about 99% of bulk quota & 98% of equipment imports while lifting the
verification obligation for approx. 50% of equipment importers and thus reducing the burden
for small companies.
209
A10.1.4Overview of changes envisaged to the reporting and verification thresholds
A number of changes to reporting and monitoring rules are foreseen due to (i) the need to
adjust to the Protocol, (ii) control illegal trade more efficiently, (iii) improve clarity of the
rules for companies and (iv) reduce administrative burden where possible. Table 32 gives an
overview of all changes considered under the three options and the rationale for doing so.
Table 33. Overview of considered changes to the reporting and verification rules
Measure target Status quo Comment Option 1 Option 2 Option 3
Reporting obligation & thresholds (Art 19)
Production Threshold:
1t / 100 t CO2e
of Annex I & II
For HFCs, a reporting threshold is
inconsistent with the EU reporting
obligation under the MP
Remove threshold
for HFCs,
keep threshold
for other Annex I
& Annex II gases
= option 1 = option 1
Bulk import Threshold:
1t / 100 t CO2e
of Annex I & II
For HFCs, a reporting threshold is
inconsistent with the EU reporting
obligation under the MP
Remove threshold
for HFCs,
keep threshold
for other Annex I
& Annex II gases
= option 1 = option 1
Bulk export Threshold:
1t / 100 t CO2e
of Annex I & II
For HFCs, a reporting threshold is
inconsistent with the EU reporting
obligation under the MP
Remove threshold
for HFCs,
keep threshold
for other Annex I
& Annex II gases
= option 1 = option 1
Destruction Threshold:
1t / 1000 t CO2e
of Annex I & II
For HFCs, a reporting threshold is
inconsistent with the EU reporting
obligation under the MP
Remove threshold
for HFCs,
keep threshold
for other Annex I
& Annex II gases
= option 1 = option 1
Reclamation None Obligation currently only for
producers, bulk
importers and exporters
none Add obligation
for Annex I &
Annex II gases,
threshold: 1t /
100 t CO2e
= option 2
Recycling None Obligation currently only for
producers, bulk importers and
exporters in 2014 F-gas Regulation
none none Add
obligation
for Annex I
& Annex II
gases,
threshold:
1t / 100 t
CO2e
Recipients of
quota-exempted
gases for military,
semiconductor &
MDIs (unless
exemption
removed)
none none Add obligation
to report on
received
exempted HFCs
& identify
supplier, no
threshold
= option 2
Product/Equipment
imports
Threshold:
500 tCO2e
of Annex I & II
This currently conflicts with 100
tCO2e HFC threshold for authorisation
obligation and verification obligation
Threshold:
100 tCO2e of HFCs
and 500 tCO2e of
Annex I & II
= option 1 = option 1
Product/Equipment
exports
None SF6 likely relevant in absolute terms none none Threshold:
1t / 100 t
CO2e
of HFCs &
210
Measure target Status quo Comment Option 1 Option 2 Option 3
SF6
Operation and
decommissioning
of electrical
equipment / SF6
None Reporting on lifetime losses by grid
operators:
Scope of reportable data should
include:
Country of operation, type and
quantity of refilled equipment,
SF6 amounts refilled
Reporting obligation directed to
undertakings active in the
decommissioning of electrical
equipment (EoL treatment).
Scope of reportable data should
include:
Country of decommissioning, type of
equipment, Standard charge,
Recovered charge, Supplementary
Obligation for equipment operators
to provide standard charge to
decommissioner to be added
None None Threshold:
5 kg SF6 [~
100 t CO2e)
Mandatory NIL
report for
companies with
activities below
thresholds
None Would help compliance checks for
quota & authorisation holders
Obligatory for
quota holders
= option 1 = option 1
Verification obligation & thresholds (Art 19 & 14)
POM of HFCs (bulk) Threshold:
10 000 t CO2e
Many new entrants are falling under
the threshold
Threshold:
1000 t CO2e
Threshold:
1,000 t CO2e
= option 1
POM of HFCs in
RAC equipment
In F-gas
Regulation
2014, de-facto
100t CO2e
threshold based
on Art 14
pointing to Art
15
Threshold:
1,000 t CO2e
= option 1 =option 1
Submission obligation for verification reports (Art 19 & 14)
POM of HFCs (bulk) On request by
authorities
BDR submission facility is available Obligatory in all
cases above
threshold
= option 1 = option 1
POM of HFCs in
RAC equipment
Obligatory in all
cases above
threshold
BDR submission facility is available Keep Keep Keep
Timing of reporting obligation (Art 19)
All reporters 31 March Keep Keep Keep
Timing of verification (& submission) obligation (Art 19, Art 14)
POM of HFCs (bulk) 30 June Joint date for bulk & equipment
preferable,
30 June is challenge for compliance
process
30 April = option 1 = option 1
POM of HFCs in
RAC equipment
31 March Aligning reporting deadline bulk &
equipment.
Timespan between report &
verification makes sense
many Verifiers are busy with ETS for
31 March deadline
30 April = option 1 = option 1
211
Measure target Status quo Comment Option 1 Option 2 Option 3
Integration of electronic verification into the BDR reporting process
POM of HFCs (bulk) none Process modelled after established
ETS processes would render
verification processes more efficient
and easier accessible for compliance
checks. Processes would cover
verification thresholds & submission
obligations & is in line with approach
to timing deadlines;
Admin burden for EEA to set up
none Set legal basis = option 2
POM of HFCs in
RAC equipment
none none Set legal basis = option 2
212
A11 Detailed information on emissions
A11.1 Historic development of emissions
Figure 26: F-gas emissions in EU27 + UK from 1990 to 2019
HFCs rose quickly in the 1990s due to the replacement of ODS, in particular in refrigeration
and AC, but also in foams, aerosols etc. The reductions from 1997-2001 were achieved due to
the elimination of HFC-23 emissions in chemical industrial production. However, the
growing trend of HFC emissions continued until 2014, after which the EU F-gas policy
started to take effect and led to year-on-year decreases until today. Emissions of PFCs, and
from 1996 onwards also SF6, could be reduced until ca. 2010, most likely due to higher
awareness and better production and management processes. However, from 2010 onwards,
the emissions of both substance (groups) has stagnated
A11.2 Baseline development of emissions
The existing Regulation reduced the emission of F-gases in the EU (see Evaluation report,
Annex A5). For the future, the projections show that without further EU action (baseline
scenario), the emissions will decrease until 2040 and thereafter stagnate until 2050 at 27 Mt
CO2e. F-gas emission reductions will only reach 44MtCO2e in 2030, while the original
objective for a cost-efficient contribution would be a 60% reduction from 2005 levels, e.g. 33
MtCO2e (see Figure 26).
213
Figure 27: EU27 modelled baseline F-gas emissions and data reported under the UNFCCC [in tCO2e]
Source: AnaFgas modelling, UNFCCC (https://unfccc.int/documents/275968). Reported values under United
Nation Framework Convention on Climate Change (UNFCCC) are included for comparison to the modelled
214
Figure 27. Baseline development of F-gas demand and emissions at sectoral level
A11.3 Emissions of the Options
Under Option 1, emissions will exceed baseline values until 2046 and will drop slightly
below the baseline from 2047. In contrast, under Option 2, emissions slightly fall below the
baseline already in 2025, further strongly decrease until 2040 and then level out until 2050 at
around 14 Mt CO2 eq. Option 3 shows a similar development in emissions, but the decrease is
more pronounced and emissions level out at around 13 Mt CO2 until 2050.
Across all scenarios, HFCs are by far the most important contributor to the overall emissions,
especially in the years until 2040. Under Option 2 and 3, SF6 shows slightly more reduction
in emission compared to the baseline and the Option 1, while other F-gases (PFCs,
unsaturated H(C)FCs and NF3) show no discernible difference between the options.
As for cumulative emissions from 2024 until 2050, Option 1 does slightly worse than the
baseline (increase of 3%), but Option 2 and 3 lead to significant savings (253 and 280
MtCO2e, respectively or reductions of 25 and 28% from the baseline). See Table 34.
215
Figure 28. Modelled emissions of F-gases under the different scenarios in the EU-27
Source: AnaFgas modelling
Table 34. Modelled emissions of F-gases in Mt CO2 eq under the different options in the EU-27
Year Gas group BL O1 O2 O3 O1-BL O2-BL O3-BL
2020 Total 92 92 92 92 0 (0%) 0 (0%) 0 (0%)
HFCs 82 82 82 82 0 (0%) 0 (0%) 0 (0%)
SF6 7 7 7 7 0 (0%) 0 (0%) 0 (0%)
Other 3 3 3 3 0 (0%) 0 (0%) 0 (0%)
2025 Total 69 69 68 68 0 (0%) -1 (-1%) -1 (-1%)
HFCs 61 61 60 60 0 (0%) -1 (-2%) -1 (-2%)
SF6 5 5 5 5 0 (0%) 0 (0%) 0 (0%)
Other 3 3 3 3 0 (0%) 0 (0%) 0 (0%)
2030 Total 44 46 37 36 2 (5%) -7 (-16%) -8 (-18%)
HFCs 37 39 30 29 2 (5%) -7 (-19%) -8 (-22%)
SF6 4 4 4 4 0 (0%) 0 (0%) 0 (0%)
Other 3 3 3 3 0 (0%) 0 (0%) 0 (0%)
2035 Total 35 37 23 21 2 (6%) -12 (-34%) -14 (-40%)
HFCs 28 30 17 15 2 (7%) -11 (-39%) -13 (-46%)
SF6 4 4 3 3 0 (0%) -1 (-25%) -1 (-25%)
Other 3 3 3 3 0 (0%) 0 (0%) 0 (0%)
2040 Total 27 30 16 15 3 (11%) -11 (-41%) -12 (-44%)
216
HFCs 21 24 10 9 3 (14%) -11 (-52%) -12 (-57%)
SF6 3 3 3 3 0 (0%) 0 (0%) 0 (0%)
Other 3 3 3 3 0 (0%) 0 (0%) 0 (0%)
2045 Total 26 27 14 13 1 (4%) -12 (-46%) -13 (-50%)
HFCs 19 20 8 7 1 (5%) -11 (-58%) -12 (-63%)
SF6 4 4 3 3 0 (0%) -1 (-25%) -1 (-25%)
Other 3 3 3 3 0 (0%) 0 (0%) 0 (0%)
2050 Total 27 25 14 13 -2 (-7%) -13 (-48%) -14 (-52%)
HFCs 19 17 7 6 -2 (-11%) -12 (-63%) -13 (-68%)
SF6 5 5 4 4 0 (0%) -1 (-20%) -1 (-20%)
Other 3 3 3 3 0 (0%) 0 (0%) 0 (0%)
Note: BL is baseline; O1, O2, and O3 are the 3 options
Table 35. Sum of modelled cumulative emissions of F-gases in Mt CO2 eq from 2024 to 2050 for the different
options for important sectors in the EU-27
Sector BL O1 O2 O3 O1-BL O2-BL O3-BL
Refrigeration 128 134 112 107 6 (5%) -16 (-13%) -21 (-16%)
Stationary AC 284 311 169 169 27 (10%) -116 (-41%) -116 (-41%)
Mobile AC 187 187 150 127 0 (-) -37 (-20%) -60 (-32%)
Switchgear 78 78 71 71 0 (-) -7 (-9%) -7 (-9%)
MDIs 138 138 66 66 0 (-) -72 (-52%) -72 (-52%)
Other 200 200 196 196 0 (-) -4 (-2%) -4 (-2%)
Total 1 016 1 050 763 736 33 (3%) -253 (-25%) -280 (-28%)
Note: BL is baseline; O1, O2, O3 are the three options
217
Looking at the major use sectors, emissions from stationary AC applications show the most
pronounced deviations between Options (
Figure 29). Cumulative emissions from 2020 to 2050 are higher for Option 1 compared to the
baseline in the sectors of stationary AC and refrigeration. Both Options 2 and 3 show lower
cumulative emissions for all sectors, with Option 3 having the lowest emissions. Differences
between Option 2 and 3 are mostly due to differences in mobile AC and, to a lesser extent,
refrigeration applications. The sector “Others” in
Figure 29 contains multiple smaller sectors that are shown in detail in Figure 30. The largest
contributors to the emissions in this diverse category are HFCs and PFCs from the production
of halocarbons. There are only small differences between the options in the sector “Others”.
Overall, Options 2 and 3 would lead to a 19 % and 21 % cumulative reduction in F-gas
emissions in CO2 eq from 2020 to 2050, respectively.
218
Figure 29. Modelled emissions of F-gases under the different options in the EU-27 by major sectors
Source: AnaFgas modelling
Figure 30. Modelled emissions of F-gases under the different scenarios in the EU-27 in the sector “Other”
Notes: ‘Production’ is F-gases emitted in the production process of HFCs, ‘Sp window’ is soundproof windows
Source: AnaFgas modelling
219
A11.4 Emissions of HFO-1234yf
Figure 31: EU-27 emissions of HFC-1234yf in the 2015 – 2050 time period
Source: AnaFgas modelling 2021
220
A12 AnaFgas Cost Modelling Results
A12.1Operative adjustment costs to industry under the existing
Regulation (2015-2019)
Table 36. Operative adjustment costs to end-users/equipment operators under the existing Regulation
Total equipment
operators’ adjustment
cost
thereof:
cost of HFC price increase
(= cost for equipment
operators, = revenue in
HFC supply chain)
thereof:
Cost of technological
change
(= net EU industry
adjustment cost)
Total equipment
operators’ adjustment
cost
Mio € / year Mio € / year Mio € / year % of equipment
operators’ totex in
counterfactual scenario
Domestic Refrigeration -3.7 - -3.7 -0.0%
Commercial refrigeration
– Hermetics
-6.1 2.3 -8.4 -0.2%
Commercial refrigeration -
Condensing units
92.2 88.8 3.4 1.0%
Commercial refrigeration -
Central systems
491.7 405.2 86.6 5.8%
Industrial refrigeration -
small
103.6 76.4 27.2 4.4%
Industrial refrigeration -
large
316.6 75.8 240.8 4.5%
Transport refrigeration -
Vans
7.2 7.1 0.2 1.5%
Transport refrigeration -
Trucks & Trailers
51.5 46.9 4.6 0.9%
Transport refrigeration -
Ships
22.1 21.0 1.2 10.5%
Room AC - Moveables 2.1 3.1 -1.0 0.5%
Room AC - Single split 201.2 190.7 10.6 0.9%
Room AC - Rooftop 90.1 85.6 4.5 0.5%
Room AC - VRF 99.3 99.2 0.1 1.5%
Minichillers 1.1 1.2 -0.1 0.1%
Displacement chillers -
small
15.9 10.2 5.7 1.3%
Displacement chillers -
large
94.5 73.3 21.2 1.5%
Centrifugal chillers 9.3 7.6 1.7 1.0%
Heat pumps - small 42.3 30.2 12.1 0.2%
Heat pumps - medium 27.9 24.8 3.1 0.4%
Heat pumps - large -3.1 4.5 -7.5 -0.1%
Mobile AC - Passenger
cars
271.0 271.0 - 0.2%
Mobile AC - Buses 23.2 23.2 -0.0 0.4%
Mobile AC - Trucks N1 29.3 25.1 4.2 0.4%
Mobile AC - Trucks N2 4.9 4.9 - 0.6%
Mobile AC - Trucks N3 16.0 16.0 - 0.6%
Mobile AC - Passenger
ships
16.7 16.7 - 10.7%
Mobile AC - Cargo ships 11.3 11.3 - 10.7%
221
Total equipment
operators’ adjustment
cost
thereof:
cost of HFC price increase
(= cost for equipment
operators, = revenue in
HFC supply chain)
thereof:
Cost of technological
change
(= net EU industry
adjustment cost)
Total equipment
operators’ adjustment
cost
Mio € / year Mio € / year Mio € / year % of equipment
operators’ totex in
counterfactual scenario
Mobile AC - Tram 0.4 0.4 - 0.5%
Mobile AC - Metro 0.1 0.1 - 0.5%
Mobile AC - Train 1.2 1.2 0.0 0.5%
Aerosols - technical 22.4 12.5 9.9 7.2%
Aerosols - MDIs - - - -
Fire extinguishers 44.8 25.8 18.9 22.0%
Solvents 1.8 1.5 0.3 11.8%
Foam OCF - - - -
Foam XPS 29.1 12.4 16.7 26.1%
Foam PU spray 26.1 21.1 5.0 15.4%
Foam PU non-spray 14.1 10.4 3.7 15.0%
Total 2 169 1 707 461
Source: AnaFgas cost modelling
222
A12.2Average emission reduction costs under existing
Regulation (2015-2019)
Table 37. Average emission reduction costs to end-users/equipment operators under the existing Regulation
Implied lifetime-integrated
emission reductions of new
equipment installed in 2015-
2019 average
Cost of technological
change of lifetime-
integrated emission
reductions of new
equipment installed in
2015-2019 average
Calculated emission
reduction cost
for technological change
Mt CO2e Mio € € / t CO2e
Domestic Refrigeration 0.013 -13.3 -1 052
Commercial refrigeration -
Hermetics
0.035 -26.7 -758
Commercial refrigeration -
Condensing units
0.143 -2.7 -19
Commercial refrigeration - Central
systems
6.938 95.9 14
Industrial refrigeration - small 1.365 20.3 15
Industrial refrigeration - large 3.684 37.1 10
Transport refrigeration - Vans 0.027 0.7 27
Transport refrigeration - Trucks &
Trailers
0.543 13.2 24
Transport refrigeration - Ships 0.228 0.8 3
Room AC - Moveables 0.176 -5.8 -33
Room AC - Single split 4.146 18.1 4
Room AC - Rooftop 0.245 -11.8 -48
Room AC - VRF 0.007 0.2 24
Minichillers 0.005 -1.2 -250
Displacement chillers - small 0.052 0.5 10
Displacement chillers - large 0.342 3.8 11
Centrifugal chillers 0.055 -1.9 -34
Heat pumps - small 0.247 -24.4 -99
Heat pumps - medium 0.106 -4.5 -43
Heat pumps - large 0.137 1.8 13
Mobile AC - Passenger cars - - NA
Mobile AC - Buses 0.008 2.5 334
Mobile AC - Trucks N1 0.121 9.5 78
Mobile AC - Trucks N2 - - NA
Mobile AC - Trucks N3 - - NA
Mobile AC - Passenger ships - - NA
Mobile AC - Cargo ships - - NA
Mobile AC - Tram - - NA
Mobile AC - Metro - - NA
Mobile AC - Train 0.000 0.0 513
223
Implied lifetime-integrated
emission reductions of new
equipment installed in 2015-
2019 average
Cost of technological
change of lifetime-
integrated emission
reductions of new
equipment installed in
2015-2019 average
Calculated emission
reduction cost
for technological change
Mt CO2e Mio € € / t CO2e
Aerosols - technical 1.359 10.3 8
Aerosols - MDIs - - NA
Fire extinguishers 1.164 13.9 12
Solvents 0.026 0.3 11
Foam OCF - - NA
Foam XPS 0.008 0.1 10
Foam PU spray 0.006 0.0 5
Foam PU non-spray 0.002 0.0 7
Total 21.2 137 6.4
Source: AnaFgas cost modelling
224
A12.3Equipment operators’ additional adjustment cost for the
policy options at sub-sector level
Table 38. Option 1: Equipment operators’ additional adjustment costs, 2024 – 2036 average (costs difference
to the baseline)
Sector Option 1, 2024-2036
total adjustment cost vs baseline
thereof: additional
cost of HFC price
increase
thereof:
cost of technological
change (= net
compliance cost)
Mio EUR/year % of baseline totex Mio EUR/year Mio EUR/year
Domestic Refrigeration 0.0 0.0% 0.0 0.0
Commercial refrigeration - Hermetics 0.0 0.0% 0.0 0.0
Commercial refrigeration - Condensing units 25.5 0.3% 24.5 0.9
Commercial refrigeration - Central systems -33.2 -0.4% -13.8 -19.3
Industrial refrigeration - small -10.5 -0.4% -4.7 -5.8
Industrial refrigeration - large -8.7 -0.2% -8.7 0.0
Transport refrigeration - Vans -0.9 -0.2% -0.9 0.0
Transport refrigeration - Trucks & Trailers -4.1 -0.1% -4.1 0.0
Transport refrigeration - Ships -0.9 -0.5% -0.9 0.0
Room AC - Moveables 0.0 0.0% 0.0 0.0
Room AC - Single split 12.5 0.1% 4.1 8.4
Room AC - Rooftop 1.7 0.0% 9.1 -7.3
Room AC - VRF 5.5 0.1% 18.1 -12.6
Minichillers 2.6 0.4% 0.3 2.4
Displacement chillers - small 2.0 0.1% 3.8 -1.8
Displacement chillers - large 12.3 0.2% 23.2 -10.9
Centrifugal chillers -0.7 -0.1% -0.7 0.0
Heat pumps - small 50.2 0.1% 15.4 34.8
Heat pumps - medium 34.0 0.3% 20.8 13.2
Heat pumps - large -1.8 0.0% -1.8 0.0
Mobile AC - Passenger cars -11.9 -0.1% -11.9 0.0
Mobile AC - Buses -6.7 -0.1% -6.7 0.0
Mobile AC - Trucks N1 -12.4 -0.2% -12.4 0.0
Mobile AC - Trucks N2 -2.5 -0.3% -2.5 0.0
Mobile AC - Trucks N3 -9.4 -0.3% -9.4 0.0
Mobile AC - Passenger ships -7.1 -3.4% -7.1 0.0
Mobile AC - Cargo ships -4.6 -3.5% -4.6 0.0
Mobile AC - Tram -0.2 -0.1% -0.2 0.0
Mobile AC - Metro 0.0 -0.1% 0.0 0.0
Mobile AC - Train -0.5 -0.1% -0.5 0.0
Aerosols - technical -0.1 0.0% -0.1 0.0
Aerosols - MDIs 186.6 0.0% 186.6 0.0
Fire extinguishers -4.9 -2.3% -4.9 0.0
Solvents -0.2 -2.5% -0.2 0.0
225
Sector Option 1, 2024-2036
total adjustment cost vs baseline
thereof: additional
cost of HFC price
increase
thereof:
cost of technological
change (= net
compliance cost)
Mio EUR/year % of baseline totex Mio EUR/year Mio EUR/year
Foam OCF 0.0 0.0% 0.0 0.0
Foam XPS -0.1 0.0% -0.1 0.0
Foam PU spray 0.0 0.0% 0.0 0.0
Foam PU non-spray 0.0 0.0% 0.0 0.0
Switchgear MV 0.0 0.0% 0.0 0.0
Switchgear HV 0.0 0.0% 0.0 0.0
Total 211.7 0.0% 209.8 1.9
226
Table 39. Option 1: Equipment operators’ additional adjustment costs, 2050 (costs difference to the baseline)
Sector
Option 1, 2050
total compliance cost vs
baseline
thereof:
additional
cost of HFC
price
increase
thereof:
cost of
technological
change (= net
compliance cost)
Mio
EUR/year
% of
baseline
totex
Mio
EUR/year
Mio EUR/year
Domestic Refrigeration 0.0 0.0% 0.0 0.0
Commercial refrigeration - Hermetics 0.0 0.0% 0.0 0.0
Commercial refrigeration - Condensing units -20.0 -0.2% 4.9 -24.9
Commercial refrigeration - Central systems -132.3 -1.6% -53.9 -78.4
Industrial refrigeration - small 3.4 0.1% 4.2 -0.7
Industrial refrigeration - large 0.5 0.0% 0.5 0.0
Transport refrigeration - Vans 0.1 0.0% 0.1 0.0
Transport refrigeration - Trucks & Trailers 1.7 0.0% 1.7 0.0
Transport refrigeration - Ships 0.8 0.7% 0.8 0.0
Room AC - Moveables 0.0 0.0% 0.0 0.0
Room AC - Single split -262.3 -1.0% -171.3 -91.0
Room AC - Rooftop -15.9 -0.1% 16.3 -32.2
Room AC - VRF 17.2 0.1% 30.1 -12.9
Minichillers -2.8 -0.8% 0.2 -3.0
Displacement chillers - small -1.2 -0.1% 1.2 -2.5
Displacement chillers - large 0.7 0.0% 10.5 -9.8
Centrifugal chillers 0.0 0.0% 0.0 0.0
Heat pumps - small -85.9 -0.1% -9.2 -76.7
Heat pumps - medium -139.4 -0.7% -15.4 -124.0
Heat pumps - large 0.0 0.0% 0.0 0.0
Mobile AC - Passenger cars 22.6 2.1% 22.6 0.0
Mobile AC - Buses 11.1 0.2% 11.1 0.0
Mobile AC - Trucks N1 24.8 0.3% 24.8 0.0
Mobile AC - Trucks N2 5.0 0.6% 5.0 0.0
Mobile AC - Trucks N3 19.7 0.7% 19.7 0.0
Mobile AC - Passenger ships 5.6 3.1% 5.6 0.0
Mobile AC - Cargo ships 3.3 3.0% 3.3 0.0
Mobile AC - Tram 0.1 0.1% 0.1 0.0
Mobile AC - Metro 0.1 0.3% 0.1 0.0
Mobile AC - Train 0.8 0.3% 0.8 0.0
Aerosols - technical 0.1 0.1% 0.1 0.0
Aerosols - MDIs 185.7 0.0% 185.7 0.0
Fire extinguishers 14.6 6.2% 14.6 0.0
Solvents 0.4 5.1% 0.4 0.0
Foam OCF 0.0 0.0% 0.0 0.0
Foam XPS 0.0 0.0% 0.0 0.0
227
Sector
Option 1, 2050
total compliance cost vs
baseline
thereof:
additional
cost of HFC
price
increase
thereof:
cost of
technological
change (= net
compliance cost)
Mio
EUR/year
% of
baseline
totex
Mio
EUR/year
Mio EUR/year
Foam PU spray 0.0 0.0% 0.0 0.0
Foam PU non-spray 0.0 0.0% 0.0 0.0
Switchgear MV 0.0 0.0% 0.0 0.0
Switchgear HV 0.0 0.0% 0.0 0.0
Total -341.4 0.0% 114.6 -456.1
228
Table 40. Option 2: Equipment operators’ additional adjustment costs, 2024 – 2036 average (costs difference
to the baseline)
Sector
Option 2, 2024-2036
total compliance cost vs
baseline
thereof:
additional
cost of HFC
price
increase
thereof:
cost of
technological
change (= net
compliance cost)
Mio
EUR/year
% of
baseline
totex
Mio
EUR/year
Mio EUR/year
Domestic Refrigeration 0.0 0.0% 0.0 0.0
Commercial refrigeration - Hermetics -2.8 -0.1% -0.2 -2.6
Commercial refrigeration - Condensing units 3.6 0.0% 22.2 -18.7
Commercial refrigeration - Central systems 53.0 0.6% 75.4 -22.4
Industrial refrigeration - small 81.9 3.2% 80.8 1.1
Industrial refrigeration - large 54.0 1.2% 42.8 11.2
Transport refrigeration - Vans -2.1 -0.4% 0.2 -2.3
Transport refrigeration - Trucks & Trailers -27.1 -0.5% 6.7 -33.7
Transport refrigeration - Ships 2.1 1.2% 2.2 -0.1
Room AC - Moveables 0.0 0.0% 0.0 0.0
Room AC - Single split -271.7 -1.1% -200.7 -71.0
Room AC - Rooftop 7.2 0.0% -26.0 33.2
Room AC - VRF 27.7 0.3% -34.2 61.9
Minichillers -4.1 -0.7% 0.0 -4.1
Displacement chillers - small 3.8 0.3% -0.9 4.7
Displacement chillers - large 11.0 0.2% -10.4 21.4
Centrifugal chillers 2.3 0.3% 4.3 -1.9
Heat pumps - small -118.1 -0.3% -15.7 -102.4
Heat pumps - medium -24.0 -0.2% -3.9 -20.1
Heat pumps - large 1.3 0.0% 5.6 -4.3
Mobile AC - Passenger cars 80.7 0.7% 80.7 0.0
Mobile AC - Buses 64.5 1.2% 23.2 41.3
Mobile AC - Trucks N1 69.4 1.0% 33.0 36.4
Mobile AC - Trucks N2 12.0 1.4% 3.9 8.1
Mobile AC - Trucks N3 58.9 2.1% 19.8 39.1
Mobile AC - Passenger ships 30.9 14.9% 34.6 -3.6
Mobile AC - Cargo ships 18.7 14.4% 20.7 -1.9
Mobile AC - Tram 3.5 2.4% 0.4 3.1
Mobile AC - Metro 0.9 2.9% 0.1 0.8
Mobile AC - Train -11.7 -3.5% 2.3 -14.1
Aerosols - technical 0.4 0.2% -0.2 0.6
Aerosols - MDIs 209.5 0.0% 207.5 2.0
Fire extinguishers 36.4 17.1% 36.4 0.0
Solvents -0.9 -11.9% -1.5 0.5
Foam OCF 0.0 0.0% 0.0 0.0
Foam XPS 0.3 0.2% 0.3 0.0
229
Sector
Option 2, 2024-2036
total compliance cost vs
baseline
thereof:
additional
cost of HFC
price
increase
thereof:
cost of
technological
change (= net
compliance cost)
Mio
EUR/year
% of
baseline
totex
Mio
EUR/year
Mio EUR/year
Foam PU spray 0.0 0.0% 0.0 0.0
Foam PU non-spray 0.0 0.0% 0.0 0.0
Switchgear MV 26.2 3.5% 0.0 26.2
Switchgear HV 23.1 3.7% 0.0 23.1
Total 420.8 0.1% 409.4 11.5
230
Table 41. Option 2: Equipment operators’ additional adjustment cost, 2050 (costs difference to the baseline)
Sector
Option 2, 2050
total compliance cost vs
baseline
thereof:
additional
cost of HFC
price
increase
thereof:
cost of
technological
change (= net
compliance cost)
Mio EUR/a
% of
baseline
totex
Mio EUR/a Mio EUR/a
Domestic Refrigeration 0.0 0.0% 0.0 0.0
Commercial refrigeration - Hermetics 0.0 0.0% 0.0 0.0
Commercial refrigeration - Condensing units -137.7 -1.7% -2.7 -135.0
Commercial refrigeration - Central systems -134.0 -1.6% -54.4 -79.6
Industrial refrigeration - small 10.5 0.4% 19.8 -9.3
Industrial refrigeration - large -9.9 -0.4% 2.4 -12.4
Transport refrigeration - Vans -2.1 -0.3% 0.4 -2.5
Transport refrigeration - Trucks & Trailers -15.9 -0.2% 7.2 -23.1
Transport refrigeration - Ships 5.1 4.6% 5.4 -0.3
Room AC - Moveables 0.0 0.0% 0.0 0.0
Room AC - Single split -512.6 -2.0% -286.9 -225.7
Room AC - Rooftop -209.9 -1.4% -27.5 -182.4
Room AC - VRF 21.8 0.1% 27.2 -5.4
Minichillers -41.4 -12.4% -0.7 -40.8
Displacement chillers - small -10.4 -0.7% -5.0 -5.4
Displacement chillers - large -64.2 -1.1% -45.4 -18.9
Centrifugal chillers -7.9 -1.0% 0.0 -7.9
Heat pumps - small -456.6 -0.4% -74.4 -382.2
Heat pumps - medium -373.2 -1.8% -107.8 -265.4
Heat pumps - large 0.0 0.0% 0.0 0.0
Mobile AC - Passenger cars 278.6 26.1% 278.6 0.0
Mobile AC - Buses 104.6 2.0% 90.5 14.1
Mobile AC - Trucks N1 147.6 2.0% 81.1 66.5
Mobile AC - Trucks N2 10.4 1.3% -11.6 22.0
Mobile AC - Trucks N3 72.3 2.5% -42.9 115.2
Mobile AC - Passenger ships -14.0 -7.8% 7.5 -21.5
Mobile AC - Cargo ships -7.8 -7.0% 4.4 -12.2
Mobile AC - Tram -0.4 -0.3% -0.3 -0.1
Mobile AC - Metro 0.7 3.1% 0.4 0.3
Mobile AC - Train -11.2 -3.5% 7.6 -18.7
Aerosols - technical 0.6 0.2% -0.6 1.1
Aerosols - MDIs 169.7 0.0% 138.5 31.2
Fire extinguishers 180.1 76.9% 180.1 0.0
Solvents -1.2 -14.5% -1.7 0.5
Foam OCF 0.0 0.0% 0.0 0.0
Foam XPS 0.0 0.0% 0.0 0.0
231
Sector
Option 2, 2050
total compliance cost vs
baseline
thereof:
additional
cost of HFC
price
increase
thereof:
cost of
technological
change (= net
compliance cost)
Mio EUR/a
% of
baseline
totex
Mio EUR/a Mio EUR/a
Foam PU spray 0.0 0.0% 0.0 0.0
Foam PU non-spray 0.0 0.0% 0.0 0.0
Switchgear MV 92.1 8.9% 0.0 92.1
Switchgear HV 81.2 9.3% 0.0 81.2
Total -835.2 -0.1% 189.4 -1024.6
232
Table 42. Option 3: Equipment operators’ additional compliance cost, 2024 – 2036 average (costs difference to
the baseline)
Sector
Option 3, 2024-2036
total compliance cost vs
baseline
thereof:
additional
cost of HFC
price
increase
thereof:
cost of
technological
change (= net
compliance cost)
Mio EUR/a
% of
baseline
totex
Mio EUR/a Mio EUR/a
Domestic Refrigeration 0.0 0.0% 0.0 0.0
Commercial refrigeration - Hermetics -2.8 -0.1% -0.2 -2.6
Commercial refrigeration - Condensing units 5.8 0.1% 30.0 -24.1
Commercial refrigeration - Central systems -0.8 0.0% 49.8 -50.5
Industrial refrigeration - small 102.8 4.1% 101.7 1.1
Industrial refrigeration - large 64.3 1.5% 53.1 11.2
Transport refrigeration - Vans -4.5 -0.8% -0.1 -4.4
Transport refrigeration - Trucks & Trailers -50.9 -0.9% 4.4 -55.3
Transport refrigeration - Ships 1.1 0.6% 1.2 -0.1
Room AC - Moveables 0.0 0.0% 0.0 0.0
Room AC - Single split -265.7 -1.1% -194.8 -71.0
Room AC - Rooftop 18.6 0.1% -14.6 33.2
Room AC - VRF 53.3 0.5% -8.6 61.9
Minichillers -4.0 -0.7% 0.1 -4.1
Displacement chillers - small 4.4 0.3% -0.3 4.7
Displacement chillers - large 15.5 0.3% -5.9 21.4
Centrifugal chillers 3.4 0.4% 5.3 -1.9
Heat pumps - small -114.2 -0.3% -11.7 -102.4
Heat pumps - medium -18.4 -0.1% 1.6 -20.1
Heat pumps - large 3.6 0.0% 7.8 -4.3
Mobile AC - Passenger cars 99.8 0.8% 99.8 0.0
Mobile AC - Buses 108.0 2.1% 12.2 95.8
Mobile AC - Trucks N1 70.0 1.0% 12.5 57.5
Mobile AC - Trucks N2 9.4 1.1% -4.6 14.0
Mobile AC - Trucks N3 58.6 2.1% -34.2 92.8
Mobile AC - Passenger ships 30.9 14.8% 38.1 -7.2
Mobile AC - Cargo ships 22.1 17.0% 24.7 -2.5
Mobile AC - Tram 3.8 2.6% 0.4 3.4
Mobile AC - Metro 1.3 4.1% 0.1 1.2
Mobile AC - Train 18.6 5.6% 2.9 15.7
Aerosols - technical 0.4 0.2% -0.2 0.6
Aerosols - MDIs 228.1 0.0% 226.1 2.0
Fire extinguishers 46.0 21.6% 46.0 0.0
Solvents -0.9 -11.9% -1.5 0.5
Foam OCF 0.0 0.0% 0.0 0.0
233
Sector
Option 3, 2024-2036
total compliance cost vs
baseline
thereof:
additional
cost of HFC
price
increase
thereof:
cost of
technological
change (= net
compliance cost)
Mio EUR/a
% of
baseline
totex
Mio EUR/a Mio EUR/a
Foam XPS 0.3 0.3% 0.3 0.0
Foam PU spray 0.0 0.0% 0.0 0.0
Foam PU non-spray 0.0 0.0% 0.0 0.0
Switchgear MV 26.2 3.5% 0.0 26.2
Switchgear HV 23.1 3.7% 0.0 23.1
Total 557.4 0.1% 441.7 115.7
234
Table 43. Option 3: Equipment operators’ additional adjustment cost, 2050 (costs difference to the baseline)
Sector
Option 3, 2050
total compliance cost vs baseline
thereof: additional
cost of HFC price
increase
thereof:
cost of
technological
change (= net
compliance cost)
Mio EUR/year
% of baseline
totex
Mio EUR/year Mio EUR/year
Domestic Refrigeration 0.0 0.0% 0.0 0.0
Commercial refrigeration - Hermetics 0.0 0.0% 0.0 0.0
Commercial refrigeration - Condensing
units
-175.1 -2.2% -5.2 -169.8
Commercial refrigeration - Central
systems
-135.4 -1.6% -55.2 -80.2
Industrial refrigeration - small 14.6 0.6% 23.9 -9.3
Industrial refrigeration - large -9.4 -0.4% 3.0 -12.4
Transport refrigeration - Vans -5.4 -0.8% -0.4 -5.0
Transport refrigeration - Trucks & Trailers -53.3 -0.7% -7.2 -46.1
Transport refrigeration - Ships 3.6 3.2% 4.0 -0.4
Room AC - Moveables 0.0 0.0% 0.0 0.0
Room AC - Single split -512.6 -2.0% -286.9 -225.7
Room AC - Rooftop -203.3 -1.3% -20.8 -182.4
Room AC - VRF 53.0 0.3% 58.4 -5.4
Minichillers -41.4 -12.4% -0.6 -40.8
Displacement chillers - small -10.4 -0.7% -5.0 -5.4
Displacement chillers - large -64.2 -1.1% -45.3 -18.9
Centrifugal chillers -7.9 -1.0% 0.0 -7.9
Heat pumps - small -456.6 -0.4% -74.4 -382.2
Heat pumps - medium -372.5 -1.8% -107.2 -265.4
Heat pumps - large 0.0 0.0% 0.0 0.0
Mobile AC - Passenger cars 322.1 30.2% 322.1 0.0
Mobile AC - Buses -8.1 -0.2% -23.6 15.6
Mobile AC - Trucks N1 159.4 2.1% 89.7 69.7
Mobile AC - Trucks N2 4.9 0.6% -19.3 24.2
Mobile AC - Trucks N3 51.3 1.7% -76.1 127.3
Mobile AC - Passenger ships -28.4 -15.8% -2.1 -26.3
Mobile AC - Cargo ships -12.7 -11.4% 1.2 -13.9
Mobile AC - Tram -0.4 -0.3% -0.3 -0.1
Mobile AC - Metro 1.1 4.6% 0.5 0.6
Mobile AC - Train 22.6 7.1% 8.7 13.9
Aerosols - technical 0.6 0.2% -0.6 1.1
Aerosols - MDIs 185.9 0.0% 154.7 31.2
Fire extinguishers 208.2 88.9% 208.2 0.0
Solvents -1.2 -14.5% -1.7 0.5
235
Sector
Option 3, 2050
total compliance cost vs baseline
thereof: additional
cost of HFC price
increase
thereof:
cost of
technological
change (= net
compliance cost)
Mio EUR/year
% of baseline
totex
Mio EUR/year Mio EUR/year
Foam OCF 0.0 0.0% 0.0 0.0
Foam XPS 0.0 0.0% 0.0 0.0
Foam PU spray 0.0 0.0% 0.0 0.0
Foam PU non-spray 0.0 0.0% 0.0 0.0
Switchgear MV 92.1 8.9% 0.0 92.1
Switchgear HV 81.2 9.3% 0.0 81.2
Total -897.8 -0.1% 142.2 -1040.1
236
A12.4 Emission reduction cost at sub-sector level
Table 44. Option 1: Emission reduction cost, new equipment installed in 2024 – 2036 average
Sector
Option 1
new equipment installed,
annual average 2024-2036
lifetime-
integrated
emission
reductions
compared to
baseline
Cost of
technological
change of
lifetime-
integrated
emission
reductions
Calculated
emission
reduction
cost for
technological
change
Mt CO2e Mio € € / t CO2e
Domestic Refrigeration 0.00 0.0 NA
Commercial refrigeration - Hermetics 0.00 0.0 NA
Commercial refrigeration - Condensing units -0.24 13.0 NA
Commercial refrigeration - Central systems -1.53 -14.0 NA
Industrial refrigeration - small -0.17 -4.5 NA
Industrial refrigeration - large 0.00 0.0 NA
Transport refrigeration - Vans 0.00 0.0 NA
Transport refrigeration - Trucks & Trailers 0.00 0.0 NA
Transport refrigeration - Ships 0.00 0.0 NA
Room AC - Moveables 0.00 0.0 NA
Room AC - Single split -0.82 3.6 NA
Room AC - Rooftop -0.19 -8.2 NA
Room AC - VRF -0.64 -19.0 NA
Minichillers -0.01 4.6 NA
Displacement chillers - small -0.03 -0.3 NA
Displacement chillers - large -0.27 -3.3 NA
Centrifugal chillers 0.00 0.0 NA
Heat pumps - small -0.54 169.1 NA
Heat pumps - medium -0.49 50.4 NA
Heat pumps - large 0.00 0.0 NA
Mobile AC - Passenger cars 0.00 0.0 NA
Mobile AC - Buses 0.00 0.0 NA
Mobile AC - Trucks N1 0.00 0.0 NA
Mobile AC - Trucks N2 0.00 0.0 NA
Mobile AC - Trucks N3 0.00 0.0 NA
Mobile AC - Passenger ships 0.00 0.0 NA
Mobile AC - Cargo ships 0.00 0.0 NA
Mobile AC - Tram 0.00 0.0 NA
Mobile AC - Metro 0.00 0.0 NA
Mobile AC - Train 0.00 0.0 NA
Aerosols - technical 0.00 0.0 NA
237
Sector
Option 1
new equipment installed,
annual average 2024-2036
lifetime-
integrated
emission
reductions
compared to
baseline
Cost of
technological
change of
lifetime-
integrated
emission
reductions
Calculated
emission
reduction
cost for
technological
change
Mt CO2e Mio € € / t CO2e
Aerosols - MDIs 0.00 0.0 NA
Fire extinguishers 0.00 0.0 NA
Solvents 0.00 0.0 NA
Foam OCF 0.00 0.0 NA
Foam XPS 0.00 0.0 NA
Foam PU spray 0.00 0.0 NA
Foam PU non-spray 0.00 0.0 NA
Switchgear MV 0.00 0.0 NA
Switchgear HV 0.00 0.0 NA
Total -4.9 191.4 NA
238
Table 45. Option 1: Emission reduction cost, new equipment installed in 2050
Sector
Option 1
new equipment installed in 2050
lifetime-
integrated
emission
reductions
compared
to
baseline
Cost of
technological
change of
lifetime-
integrated
emission
reductions
Calculated
emission
reduction
cost for
technological
change
Mt CO2e Mio € € / t CO2e
Domestic Refrigeration 0.00 0.0 NA
Commercial refrigeration - Hermetics 0.00 0.0 NA
Commercial refrigeration - Condensing units 0.29 -27.6 -96.3
Commercial refrigeration - Central systems 0.40 -44.1 -111.3
Industrial refrigeration - small 0.00 0.2 NA
Industrial refrigeration - large 0.00 0.0 NA
Transport refrigeration - Vans 0.00 0.0 NA
Transport refrigeration - Trucks & Trailers 0.00 0.0 NA
Transport refrigeration - Ships 0.00 0.0 NA
Room AC - Moveables 0.00 0.0 NA
Room AC - Single split 2.69 -127.7 -47.5
Room AC - Rooftop 0.01 -33.5 -4460.0
Room AC - VRF 0.10 -6.0 -61.2
Minichillers 0.00 0.0 NA
Displacement chillers - small 0.00 0.0 NA
Displacement chillers - large 0.00 0.0 NA
Centrifugal chillers 0.00 0.0 NA
Heat pumps - small 0.45 -204.3 -451.3
Heat pumps - medium 0.46 -338.3 -734.2
Heat pumps - large 0.00 0.0 NA
Mobile AC - Passenger cars 0.00 0.0 NA
Mobile AC - Buses 0.00 0.0 NA
Mobile AC - Trucks N1 0.00 0.0 NA
Mobile AC - Trucks N2 0.00 0.0 NA
Mobile AC - Trucks N3 0.00 0.0 NA
Mobile AC - Passenger ships 0.00 0.0 NA
Mobile AC - Cargo ships 0.00 0.0 NA
Mobile AC - Tram 0.00 0.0 NA
Mobile AC - Metro 0.00 0.0 NA
Mobile AC - Train 0.00 0.0 NA
Aerosols - technical 0.00 0.0 NA
Aerosols - MDIs 0.00 0.0 NA
Fire extinguishers 0.00 0.0 NA
Solvents 0.00 0.0 NA
239
Sector
Option 1
new equipment installed in 2050
lifetime-
integrated
emission
reductions
compared
to
baseline
Cost of
technological
change of
lifetime-
integrated
emission
reductions
Calculated
emission
reduction
cost for
technological
change
Mt CO2e Mio € € / t CO2e
Foam OCF 0.00 0.0 NA
Foam XPS 0.00 0.0 NA
Foam PU spray 0.00 0.0 NA
Foam PU non-spray 0.00 0.0 NA
Switchgear MV 0.00 0.0 NA
Switchgear HV 0.00 0.0 NA
Total 4.4 -781.1 -178.1
240
Table 46. Option 2: Emission reduction cost, new equipment installed in 2024 – 2036 average
Sector
Option 2
new equipment installed,
annual average 2024-2036
lifetime-
integrated
emission
reductions
compared to
baseline
Cost of
technological
change of
lifetime-
integrated
emission
reductions
Calculated
emission
reduction
cost for
technological
change
Mt CO2e Mio € € / t CO2e
Domestic Refrigeration 0.00 0.0 NA
Commercial refrigeration - Hermetics 0.00 -2.8 -2209.3
Commercial refrigeration - Condensing units 0.43 -54.1 -124.7
Commercial refrigeration - Central systems 0.83 -27.9 -33.6
Industrial refrigeration - small 0.15 0.7 4.6
Industrial refrigeration - large 0.05 1.9 40.1
Transport refrigeration - Vans 0.02 -2.4 -109.0
Transport refrigeration - Trucks & Trailers 0.13 -36.1 -285.5
Transport refrigeration - Ships 0.05 -0.2 -3.6
Room AC - Moveables 0.00 0.0 NA
Room AC - Single split 3.90 -168.3 -43.1
Room AC - Rooftop 0.48 26.4 54.5
Room AC - VRF 1.45 35.6 24.5
Minichillers 0.01 -19.9 -3955.8
Displacement chillers - small 0.02 0.5 21.6
Displacement chillers - large 0.25 4.2 16.6
Centrifugal chillers 0.00 -6.9 -2094.8
Heat pumps - small 0.76 -308.3 -408.0
Heat pumps - medium 0.42 -109.4 -260.5
Heat pumps - large 0.03 -13.2 -389.9
Mobile AC - Passenger cars 0.00 0.0 NA
Mobile AC - Buses 0.14 47.3 333.9
Mobile AC - Trucks N1 0.56 51.3 92.4
Mobile AC - Trucks N2 0.11 9.7 85.1
Mobile AC - Trucks N3 0.40 51.3 128.3
Mobile AC - Passenger ships 0.24 -21.7 -91.4
Mobile AC - Cargo ships 0.19 -16.3 -87.7
Mobile AC - Tram 0.01 2.6 219.1
Mobile AC - Metro 0.00 0.6 234.9
Mobile AC - Train 0.02 -28.5 -1809.3
Aerosols - technical 0.01 0.6 88.9
Aerosols - MDIs 2.42 2.1 0.9
Fire extinguishers 0.00 0.0 NA
Solvents 0.04 0.5 13.4
241
Sector
Option 2
new equipment installed,
annual average 2024-2036
lifetime-
integrated
emission
reductions
compared to
baseline
Cost of
technological
change of
lifetime-
integrated
emission
reductions
Calculated
emission
reduction
cost for
technological
change
Mt CO2e Mio € € / t CO2e
Foam OCF 0.00 0.0 NA
Foam XPS 0.00 0.0 NA
Foam PU spray 0.00 0.0 NA
Foam PU non-spray 0.00 0.0 NA
Switchgear MV 0.16 53.0 335.8
Switchgear HV 0.53 26.6 50.2
Total 13.8 -501.1 -36.3
242
Table 47. Option 2: Emission reduction cost, new equipment installed in 2050
Sector
Option 2
new equipment installed in 2050
lifetime-
integrated
emission
reductions
compared to
baseline
Cost of
technological
change of
lifetime-
integrated
emission
reductions
Calculated
emission
reduction
cost for
technological
change
Mt CO2e Mio € € / t CO2e
Domestic Refrigeration 0.00 0.0 NA
Commercial refrigeration - Hermetics 0.00 0.0 NA
Commercial refrigeration - Condensing units 0.06 -49.8 -862.7
Commercial refrigeration - Central systems 0.40 -44.1 -111.3
Industrial refrigeration - small 0.05 -5.2 -102.5
Industrial refrigeration - large 0.00 0.1 141.5
Transport refrigeration - Vans 0.00 -2.4 -951.4
Transport refrigeration - Trucks & Trailers 0.04 -20.9 -483.5
Transport refrigeration - Ships 0.00 0.0 NA
Room AC - Moveables 0.00 0.0 NA
Room AC - Single split 3.58 -170.2 -47.5
Room AC - Rooftop 0.36 -231.3 -637.3
Room AC - VRF 1.19 -3.4 -2.8
Minichillers 0.01 -46.6 -7917.3
Displacement chillers - small 0.02 -0.4 -16.9
Displacement chillers - large 0.28 -6.2 -22.2
Centrifugal chillers 0.00 -8.6 -96505.5
Heat pumps - small 1.36 -612.8 -451.3
Heat pumps - medium 1.25 -394.5 -315.8
Heat pumps - large 0.00 0.0 NA
Mobile AC - Passenger cars 0.00 0.0 NA
Mobile AC - Buses 0.08 25.7 333.9
Mobile AC - Trucks N1 0.82 64.0 78.4
Mobile AC - Trucks N2 0.20 17.4 87.0
Mobile AC - Trucks N3 1.01 129.3 128.2
Mobile AC - Passenger ships 0.00 0.0 NA
Mobile AC - Cargo ships 0.00 0.0 NA
Mobile AC - Tram 0.01 0.5 94.0
Mobile AC - Metro 0.00 0.3 261.7
Mobile AC - Train 0.01 -31.0 -3035.9
Aerosols - technical 0.01 1.2 88.9
Aerosols - MDIs 2.84 32.5 11.4
Fire extinguishers 0.00 0.0 NA
Solvents 0.04 0.5 13.5
243
Sector
Option 2
new equipment installed in 2050
lifetime-
integrated
emission
reductions
compared to
baseline
Cost of
technological
change of
lifetime-
integrated
emission
reductions
Calculated
emission
reduction
cost for
technological
change
Mt CO2e Mio € € / t CO2e
Foam OCF 0.00 0.0 NA
Foam XPS 0.00 0.0 NA
Foam PU spray 0.00 0.0 NA
Foam PU non-spray 0.00 0.0 NA
Switchgear MV 0.55 186.1 335.8
Switchgear HV 1.86 164.4 88.4
Total 16.0 -1005.2 -62.7
244
Table 48. Option 3: Emission reduction cost, new equipment installed in 2024 – 2036 average
Sector
Option 3
new equipment installed,
annual average 2024-2036
lifetime-
integrated
emission
reductions
compared to
baseline
Cost of
technological
change of
lifetime-
integrated
emission
reductions
Calculated
emission
reduction
cost for
technological
change
Mt CO2e Mio € € / t CO2e
Domestic Refrigeration 0.00 0.0 NA
Commercial refrigeration - Hermetics 0.00 -2.8 -2209.3
Commercial refrigeration - Condensing units 0.50 -68.8 -136.4
Commercial refrigeration - Central systems 1.08 -52.3 -48.4
Industrial refrigeration - small 0.15 0.7 4.6
Industrial refrigeration - large 0.05 1.9 40.1
Transport refrigeration - Vans 0.03 -4.8 -153.4
Transport refrigeration - Trucks & Trailers 0.16 -62.2 -376.9
Transport refrigeration - Ships 0.07 -0.3 -3.6
Room AC - Moveables 0.00 0.0 NA
Room AC - Single split 3.90 -168.3 -43.1
Room AC - Rooftop 0.48 26.4 54.5
Room AC - VRF 1.45 35.6 24.5
Minichillers 0.01 -19.9 -3955.8
Displacement chillers - small 0.02 0.5 21.6
Displacement chillers - large 0.25 4.2 16.6
Centrifugal chillers 0.00 -6.9 -2094.8
Heat pumps - small 0.76 -308.3 -408.0
Heat pumps - medium 0.42 -109.4 -260.5
Heat pumps - large 0.03 -13.2 -389.9
Mobile AC - Passenger cars 0.00 0.0 NA
Mobile AC - Buses 0.26 119.1 457.1
Mobile AC - Trucks N1 0.87 75.8 87.3
Mobile AC - Trucks N2 0.19 15.8 83.5
Mobile AC - Trucks N3 0.96 122.6 127.9
Mobile AC - Passenger ships 0.33 -32.2 -98.8
Mobile AC - Cargo ships 0.22 -19.5 -89.2
Mobile AC - Tram 0.01 2.9 204.6
Mobile AC - Metro 0.00 1.2 402.5
Mobile AC - Train 0.02 18.2 1030.2
Aerosols - technical 0.01 0.6 88.9
Aerosols - MDIs 2.42 2.1 0.9
Fire extinguishers 0.00 0.0 NA
Solvents 0.04 0.5 13.4
245
Sector
Option 3
new equipment installed,
annual average 2024-2036
lifetime-
integrated
emission
reductions
compared to
baseline
Cost of
technological
change of
lifetime-
integrated
emission
reductions
Calculated
emission
reduction
cost for
technological
change
Mt CO2e Mio € € / t CO2e
Foam OCF 0.00 0.0 NA
Foam XPS 0.00 0.0 NA
Foam PU spray 0.00 0.0 NA
Foam PU non-spray 0.00 0.0 NA
Switchgear MV 0.16 53.0 335.8
Switchgear HV 0.53 26.6 50.2
Total 15.4 -361.2 -23.4
246
Table 49. Option 3: Emission reduction cost, new equipment installed in 2050
Sector
Option 3
new equipment installed in 2050
lifetime-
integrated
emission
reductions
compared to
baseline
Cost of
technological
change of
lifetime-
integrated
emission
reductions
Calculated
emission
reduction
cost for
technological
change
Mt CO2e Mio € € / t CO2e
Domestic Refrigeration 0.00 0.0 NA
Commercial refrigeration - Hermetics 0.00 0.0 NA
Commercial refrigeration - Condensing units 0.00 -46.4 -22822.8
Commercial refrigeration - Central systems 0.40 -44.1 -111.3
Industrial refrigeration - small 0.05 -5.2 -102.5
Industrial refrigeration - large 0.00 0.1 141.5
Transport refrigeration - Vans 0.00 -4.7 -951.4
Transport refrigeration - Trucks & Trailers 0.09 -41.7 -483.5
Transport refrigeration - Ships 0.00 0.0 NA
Room AC - Moveables 0.00 0.0 NA
Room AC - Single split 3.58 -170.2 -47.5
Room AC - Rooftop 0.36 -231.3 -637.3
Room AC - VRF 1.19 -3.4 -2.8
Minichillers 0.01 -46.6 -7917.3
Displacement chillers - small 0.02 -0.4 -16.9
Displacement chillers - large 0.28 -6.2 -22.2
Centrifugal chillers 0.00 -8.6 -96505.5
Heat pumps - small 1.36 -612.8 -451.3
Heat pumps - medium 1.25 -394.5 -315.8
Heat pumps - large 0.00 0.0 NA
Mobile AC - Passenger cars 0.00 0.0 NA
Mobile AC - Buses 0.28 148.6 529.8
Mobile AC - Trucks N1 0.82 64.0 78.4
Mobile AC - Trucks N2 0.20 17.4 87.0
Mobile AC - Trucks N3 1.07 136.9 128.1
Mobile AC - Passenger ships 0.00 0.0 NA
Mobile AC - Cargo ships 0.00 0.0 NA
Mobile AC - Tram 0.01 0.5 94.0
Mobile AC - Metro 0.00 0.9 822.4
Mobile AC - Train 0.01 21.7 2111.0
Aerosols - technical 0.01 1.2 88.9
Aerosols - MDIs 2.84 32.5 11.4
Fire extinguishers 0.00 0.0 NA
Solvents 0.04 0.5 13.5
247
Sector
Option 3
new equipment installed in 2050
lifetime-
integrated
emission
reductions
compared to
baseline
Cost of
technological
change of
lifetime-
integrated
emission
reductions
Calculated
emission
reduction
cost for
technological
change
Mt CO2e Mio € € / t CO2e
Foam OCF 0.00 0.0 NA
Foam XPS 0.00 0.0 NA
Foam PU spray 0.00 0.0 NA
Foam PU non-spray 0.00 0.0 NA
Switchgear MV 0.55 186.1 335.8
Switchgear HV 1.86 164.4 88.4
Total 16.3 -841.2 -51.7
248
A12.5Emission reduction costs baseline scenario
Table 50. Equipment operators baseline compliance cost at sector level, 2024 – 2036 average (costs difference
to the counterfactual scenario assuming no 2014 F-gas Regulation revision)
Sector
baseline scenario
total baseline compliance
cost vs counterfactual
scenario assuming no 2014
F-gas Regulation revision
thereof:
additional
cost of HFC
price
increase
thereof: cost of
technological
change (= net
compliance cost)
Mio EUR/a
% of
counterfactual
totex
Mio EUR/a Mio EUR/a
Refrigeration 754.1 2.3% 634.6 119.5
Stationary A/C 845.0 0.7% 976.2 -131.2
Mobile A/C 611.2 2.1% 453.0 158.1
Propellants, solvents & fire protection 74.3 0.0% 36.0 38.3
Foam 56.8 16.0% 0.9 55.9
Other HFCs 0.0 NA 0.0 0.0
SF6 0.0 0.0% 0.0 0.0
Total 2341.3 0.3% 2100.8 240.5
249
Table 51. Equipment operators’ baseline compliance cost at sector level, 2050 (costs difference to the
counterfactual scenario assuming no 2014 F-gas Regulation revision)
Sector
baseline scenario
total baseline compliance
cost vs counterfactual
scenario assuming no 2014
F-gas Regulation revision
thereof:
additional
cost of HFC
price
increase
thereof: cost of
technological
change (= net
compliance cost)
Mio EUR/a
% of
counterfactual
totex
Mio EUR/a Mio EUR/a
Refrigeration -388.1 -1.2% 88.3 -476.4
Stationary A/C -1193.3 -0.5% 849.6 -2042.9
Mobile A/C 584.1 3.3% 381.1 203.0
Propellants, solvents & fire protection 95.5 0.0% 62.1 33.4
Foam 54.6 15.3% 0.0 54.6
Other HFCs 0.0 NA 0.0 0.0
SF6 0.0 0.0% 0.0 0.0
Total -847.2 -0.1% 1381.1 -2228.3
250
A12.6Energy use
Table 52. EU-27 final annual energy use savings in the refrigeration & AC (RAC) sector between 2024-2036
(average) and in 2050 for the 3 policy options compared to the baseline (changes in GWh/a and percentage)
Sector Unit time horizon Option 1 Option 2 Option 3
Refrigeration GWh per year
% of baseline 2024- 2036 average
-0.1
-0.1%
0.7
0.4%
0.9
0.6%
Stationary A/C GWh per year
% of baseline 2024- 2036 average
-0.8
-0.1%
1.6
0.2%
1.4
0.2%
Mobile A/C GWh per year
% of baseline 2024- 2036 average
0.0
0.0%
0.3
0.3%
0.5
0.6%
Total RAC sector GWh per year
% of baseline
2024- 2036 average -0.9
-0.1%
2.5
0.3%
3.0
0.3%
Total RAC sector GWh per year
% of baseline
2050 2.3
0.1%
8.2
0.5%
9.1
0.5%
Source: AnaFgas modelling
251
A13 Detailed modelling results of GEM-E3
Figure 32. Effects of the Options on GDP
Note: EU South: Bulgaria, Croatia, Cyprus, France (25% of model results for France), Greece, Italy, Malta,
Portugal, Romania, Spain; EU North: other EU27 MS, including 75% of model results for France.
“MP alignment” is Option 1, “proportionate action” is Option 2, “maximum feasibility” is Option 3
Figure 33: Consumption and investment effects
Note: EU South: Bulgaria, Croatia, Cyprus, France (25% of model results for France), Greece, Italy, Malta,
Portugal, Romania, Spain; EU North: other EU27 MS, including 75% of model results for France.
“MP alignment” is Option 1, “proportionate action” is Option 2, “maximum feasibility” is Option 3
Table 53. Effects for the ‘other equipment goods’ sector, policy options in comparison to the baseline
indicator
time
horizon
baseline
percentage change vs baseline
Option 1 Option 2 Option 3
output 2030 714.5 bn USD 2014 -0.14% 0.13% 0.15%
imports 2030 55.5 bn USD 2014 -0.19% 0.19% 0.22%
exports 2030 83.7 bn USD 2014 0.01% -0.02% -0.03%
investment 2030 33.9 bn USD 2014 -0.14% 0.13% 0.15%
employment 2030 5335 thousand persons -0.14% 0.12% 0.15%
output 2050 924.1 bn USD 2014 0.09% 0.19% 0.20%
-0.004%
-0.002%
0.000%
0.002%
0.004%
0.006%
0.008%
MP alignment proportionate action maximum feasibility
Percentage
change
vs
baseline
GDP effects at EU and regional levels
EU27 - 2030 EU North - 2030 EU South - 2030
EU27 - 2050 EU North - 2050 EU South - 2050
-0.004%
-0.002%
0.000%
0.002%
0.004%
0.006%
0.008%
0.010%
0.012%
MP alignment proportionate action maximum feasibility
Percentage
change
vs
baseline
Consumption effects at EU and regional levels
EU27 - 2030 EU North - 2030 EU South - 2030
EU27 - 2050 EU North - 2050 EU South - 2050
-0.0010%
-0.0005%
0.0000%
0.0005%
0.0010%
0.0015%
0.0020%
0.0025%
0.0030%
MP alignment proportionate action maximum feasibility
Percentage
change
vs
baseline
Investment effects at EU and regional levels
EU27 - 2030 EU North - 2030 EU South - 2030
EU27 - 2050 EU North - 2050 EU South - 2050
252
imports 2050 81.8 bn USD 2014 0.13% 0.44% 0.46%
exports 2050 134.7 bn USD 2014 0.00% -0.13% -0.14%
investment 2050 43.3 bn USD 2014 0.09% 0.20% 0.20%
employment 2050 4786 thousand persons 0.09% 0.19% 0.19%
253
A14 Detailed information on administrative costs
A14.1Costs to industry – current Regulation
Table 53 below shows the estimated additional administrative costs per relevant measure required to ensure compliance with the Regulation. It
also explains the feedback received, and the assumptions and expert guesses made in order to arrive at an estimate of total cost per measure.
Table 54. Administrative costs for industrial stakeholders under the current Regulation
Measure Action Overlap
with Costs
Included in
Mitigation
Model
Impact on costs relative to the
2006 Regulation as
determined by stakeholder
feedback
Estimated number of Companies Impacted Average Working Days Reported per
annum
Estimated Total
Sector Working
Days
Total Cost
(EUR, M)
Record Keeping
(Article 6)
Record keeping for each
piece of leak-checked
equipment
New requirement for
refrigerated trucks and
trailers and ORCs
included in the 2014 F-
gas Regulation
No Increase in Costs: 4 Responses
No Change/significant impact:
1 Response
It has been noted within
stakeholder feedback that the
costs attributed to this
measure have not necessarily
diverged from the costs
incurred as a result of the 2006
Regulation. The costs provided
through stakeholder feedback
have been adjusted to take
into account that the 2014
Regulation represented an
increase in scope of record
keeping only.
The extension of scope of the 2006
Regulation will require truck and trailer
operators to oblige with the requirement on
record keeping. The total number of
companies impacted has been derived from
the number of refrigerated trucks and trailers
operated within the EU. The number has
been derived based upon the total number of
registrations of refrigerated trailers in
Germany, France, Spain and Poland in 2016,
as referred to in the ICCT102
. Based upon the
proportion of semi-trailers which are known
to be refrigerated (based upon ICCT figures),
a total number of refrigerated trailers has
been estimated. Using population sizes, this
figure has been extrapolated to provide an
estimate for the total number of refrigerated
trailers in the EU.
Total: 25,752
Range reported by stakeholders
(Excluding outliers): 5-20 days pa
Average (Excluding outliers): 8 days
per large company pa
The above costs determined
through stakeholder feedback for
large stationary RAC companies
have been reduced to be relevant
for the sector of trucks and trailers
only (estimated to be approximately
0.5 day per year). The costs have
been applied equally across all sized
firms.
12,900 p.a. 3
102
https://theicct.org/sites/default/files/publications/EU_Trailer_Market_20180921.pdf
254
Training and
Certification
(Article 10)
Attending training
programmes
Completion of theoretical
and practical tests
(examination)
Receiving personal
certificates or company
certificates
No Increase in Costs: 1 Responses
No Change/significant impact:
3 Responses
The total number of companies impacted has
been based upon the number of companies
which are required to ensure their employees
(technicians for specialised refrigerated
trucks and trailers) attend the appropriate
training course.. Although the exact number
is uncertain, based upon expert judgment this
is expected to be approximately 5% of the
number of service companies in the RACHP
sector (derived from a survey by AREA).
Range reported by stakeholders
(Excluding outliers): 5-10 days pa
Average (Excluding outliers): 8 days
per large company pa
However, as the stakeholder costs
include the costs of attending
training, which is considered a
compliance cost, the costs have
been revised down based on expert
judgement of the administrative
burden.
Values for small and medium
companies (scaled down by
reporting thresholds):
Small: 0.5day pa
Medium: 1 day pa
Large: 2
9,400 p.a. 2.2
255
Labelling and
product and
equipment
information (Article
12)
Labelling of F-gas
containers
Labelling of products or
equipment containing
or relying on F-gases
No
Increase in Costs: 6 Responses
No Change/significant impact: 2
Responses
The extended labelling requirements
(relative to the 2006 Regulation) concern
few adjustments and more details. The
extension is expected to impact producers
labelling F-gas containers and equipment
manufacturers. The number of companies
has been derived from the number of bulk
producers, importers and equipment
importers as provided in the 2020 EEA
report. Additionally, an estimate of the
number of companies manufacturing
equipment within the EU has been included.
Given costs will vary with levels of activity,
this has then been split by size according to
the split of companies in the EEA reporting
database.
Total: 4,699
Large: 36
Medium: 191
Small: 4,455
The administrative cost has been
determined through analysis of
stakeholder feedback. Due to the
high average cost reported through
feedback, and the known costs
already incurred as a result of the
2006 Regulation, expert judgement
has been used to support the final
cost estimation. It should also be
noted that the costs are closely
related to those incurred as a result
of CLP or REACH Regulations.
Average cost (large company): 1 days
per annum
Values for small and medium
companies (scaled down by reporting
thresholds):
Small:
0.25 day pa
Medium: 0.5 day pa
1,245 p.a. 0.3
256
Admin costs linked
to documenting
compliance for pre-
charged equipment
with HFCs . HFC
equipment
importers (EEA) -
EU equipment
manufacturers.
Documentation of
compliance and
drawing up a
declaration of
conformity
Verification of
documentation and
declaration of
conformity by an
independent auditor
Registering in the
electronic HFC registry
No (if costs
relate to
registering
& managing
transactions
in the
registry.
Cost for
authorisatio
ns
purchases
etc are
captured in
technical
cost
modelling)
Increase in Costs: 3 Responses
No Change/significant impact: 1
Response
The number of companies impacted has
been based upon the number of equipment
importers as registered through the HFC
registry. In addition, the number of EU
equipment manufacturers (estimated based
upon expert judgement) will also be
impacted.
Total: 2,900
Given costs will vary with levels of activity,
this has then been split by size according to
the split of companies in the EEA reporting
database.
Large:22
Medium:118
Small: 2,749
Range reported by stakeholders
(Excluding outliers): 1-40 days pa
Average (Excluding outliers): 27 days
per large company pa
The costs for medium sized
companies is expected to be
approximately half of the costs of
large companies. The costs incurred
by smaller companies is expected to
be a quarter of those incurred by
large companies.
20,749 p.a. 4.77
Admin costs linked
to Complying with
the HFC phase-
down and quota
system (Article 15 +
Article 16 + Annex
V + Annex VI) and
registration in the
HFC Registry
(Article 17) and its
use for quota
management and
transfer.*
Applying for HFC
quota/declaring quota
need
Transfer of HFC quota
and/or quota
authorisations (excl.
purchase price)
Registering in the
electronic HFC registry
No (if costs
relate to
registering
& managing
transactions
in the
registry.
Cost for
quota
purchases
etc are
captured in
technical
cost
modelling)
Increase in Costs: 8 Responses
Quotas are required for the import and
production of bulk HFC’s. The number of
bulk importers (1694) and F-gas producers
as reported for the year 2019 in the EEA
report on fluorinated greenhouse gases
2020.
Total: 1701
Given costs will vary with levels of activity,
this has then been split by size according to
the split of companies in the EEA reporting
database.
Large: 13
Medium: 69
Small: 1,613
Range reported by stakeholders
(Excluding outliers): 1-50 days pa
Average (Excluding outliers): 15 days
per large company pa
The costs for medium sized
companies is expected to be
approximately half of the costs of
large companies. The costs incurred
by smaller companies is expected to
be a quarter of those incurred by
large companies.
6,709 p.a. 1.54
257
Reporting and
verification*
Preparation of the
annual F-gas report
Verification of the F-gas
report by an
independent auditor
Submission of the F-gas
report and the
verification report
through the Business
Data Repository (BDR)
No
Increase in Costs: 7 Responses
No Change/significant impact: 1
Response
The number of companies impacted has
been aggregated based upon four criteria:
- Number of equipment importers
operating above the threshold of
> 100 t CO2e (1024)
- Number of bulk importers
required to report (1694)
- Number of bulk importers
operating above > 10000 t CO2e
requiring verification (179)
- Number of bulk exporters
require to report (112)
Total: 3,009
Given costs will vary with levels of activity,
this has then been split by size according to
the split of companies in the EEA reporting
database.
Large: 23
Medium: 122
Small: 2,853
Range reported by stakeholders
(Excluding outliers): 5-30 days pa
Average (Excluding outliers): 13 days
per large company pa
The costs for medium sized
companies is expected to be
approximately half of the costs of
large companies. The costs incurred
by smaller companies is expected to
be a quarter of those incurred by
large companies.
10,499 p.a.
2.4
Total 61,540 14,1
In addition to the administrative costs outlined in the table above, stakeholders were also asked to provide feedback on the costs associated with the
measures related to Articles 3, 7 and 8, some of which are rather adjustment costs then administrative costs. The costs for these measures are not captured
in the AnaFGas costs.
258
Table 55. Additional adjustment costs to Industry (not covered by the AnaFGas modelling)
Measure Action Impact on costs relative
to the 2006 Regulation as
determined by
stakeholder feedback
Range of estimated Cost Per
Company (Based on Stakeholder
Feedback)
Number of companies impacted Total Cost
[million €]
Prevention of F-gas emission
(Articles 3 & 7)
Preventing emissions from production Increase in Costs: 7
Responses
No Change/significant
impact: 1 Response
To note responses also
considered costs incurred
as a result of Article 3
Cost per company has been
estimated at approximately 3.5
days per year based on
stakeholder feedback of
combined costs for Article 3 and
Article 7 and understanding of
the sector
The costs associated with Article
7 are expected to impact
approximately 1700 companies.
This has been based upon the
known number of importers of
bulk gases, as determined by the
2020 EEA report103
0.4
Recovery of F-gases (Article 8) Carrying out recovery of F-gases from
equipment by a certified person so that
those gases are recycled, reclaimed or
destroyed
The requirement existed in the 2006 F-
gas Regulation for most sectors.
Additional provision was introduced in
the 2014 Regulation for refrigerated
trucks and trailers
Increase in Costs: 7
Responses
No Change/significant
impact: 1 Response
5 – 10 days/year (excluding
outliers and based upon three
stakeholders)
Average cost (Large RAC
company): 7 days/year
However, for refrigerated trailer
operators specifically the costs
have been revised downward
and are estimated to be
approximately 1 days per year.
.
The number of companies has
been set to the equivalent as
the number of companies
impacted by Article 6 ‘Record
keeping’. The costs have been
adjusted down to take into
consideration that the measure
is only an extension. The cost
will only impact the refrigerated
trucks and trailers sector.
5.9
103
https://www.eea.europa.eu/publications/fluorinated-greenhouse-gases-2020
259
A14.2Costs to industry – policy options
Table 56. Results and detail on the calculations and assumptions regarding administrative costs to industry
Policy Measure Scenario Number of
companies
Days/Year
per
Company
Total Days
(Annual)
Total
Days
(One-off)
Total
Annual
Cost
(EUR,M)
Total One
Off Cost
(EUR, M)
Explanation
Apply requirements
for prevention of
emissions of
fluorinated gases to
some substances
listed in Annex II and
some new substances
Policy
Options 2
and 3
Total: 13,075
Similar effort
assumed for
large and small
companies
Large: 1
Medium:
1
Small: 1
N/A 13,075 - 3 The policy measure is associated with 'Article 3 (Prevention of
emissions)' and the costs are therefore expected to be
predominately compliance costs. The number of companies
impacted will be based upon the number of users of SO2F2,
anesthetics, NF3 and HCFOs.
The bulk of the users are related to the use of anesthetics. Based
on data reported by the European Hospital and Healthcare
Foundation, there are approximately 2.9 hospitals per 100,000
inhabitants. Based upon the current population of the EU this
would equate to approximately 13,000 hospitals. The use of
SFOF2 (predominately logistics companies for wood storage and
fumigation), NF3 (solar /PV energy and semi-conductor industry)
and HCFOs (EV battery cooling) represent only a small number of
additional EU users concerned, estimated to be approximately
50 – 100.
A small one-off administrative cost is expected to determine any
requirements necessary to prevent a leakage of emissions. This
cost is expected to be approximately 1 day, and will be
consistent across all users regardless of size. There are not
expected to be any ongoing reporting requirements associated
with the policy measure.
Apply requirements
for prevention of
emissions of F-gases
to manufacturing,
transport, transfer
and storage of bulk
gases also to non-
producers
Policy
options 2
and 3
Total: 19,016
Large: 1711
Medium: 380
Small: 16,925
Similar effort
assumed for
large and small
Large: 1
Medium:
1
Small: 1
19,016 - 4.4 - As a result of the policy measure, the requirement will be
extended to service companies, importers and distributors.
Although the measure will be a legal requirement, it is already
considered to be best practice within industry, and therefore it is
estimated that approximately 85% of relevant companies will
not be impacted. The number of service companies has been
based on a survey by AREA and complementary information
from MS authorities. The number of importers has been based
upon EEA BDR reporting, and the number of distributors through
expert judgement of the sector. The administrative burden has
been estimated to be approximately 1 day linked to identifying
260
Policy Measure Scenario Number of
companies
Days/Year
per
Company
Total Days
(Annual)
Total
Days
(One-off)
Total
Annual
Cost
(EUR,M)
Total One
Off Cost
(EUR, M)
Explanation
companies and regular checking of processes in place to avoid emissions.
The breakdown of company size has been based upon a German
industrial survey determining the number of employees at
German service operators.
Remove the limit for
reporting on
production, import,
export and
destruction of Annex I
and II gases (HFCs
only)
All options Total: 100
Large:1
Medium:4
Small:95
Similar effort
assumed for
large and small
companies
1 day 100 - 0.02 - The removal of the reporting limit is expected to impact
approximately 100 companies. This is based upon checks
conducted by of the Polish CBR database for imports/exports for
which no threshold applies. This search yielded no entries which
were below the current threshold definition. Production &
destruction below the threshold are very unlikely (as those who
operate such facilities have higher amounts per year). It has
therefore been concluded that there will be a very low number
of affected companies: Those companies affected would be
those which buy a few bottles per year abroad. The policy
change would require these additional companies to now submit
an additional report, with an expected additional administrative
burden of approximately one day expected, based upon current
reporting costs and the fact that the report will consist of very
little input data.
F-gas certification
programmes also to
include HCFOs and F-
gas free alternatives
and practical training
on all alternatives and
add energy efficiency
issues to be part of
training (stationary
RACHP)
Policy
Options 2
and 3
Total:125,649
Large: 1,425
Medium: 5,101
Small: 119,122
Large: 6
Medium:
2
Small: 0.6
90,225 20.8 The number of companies impacted is based upon the number of
company certificates in the RACHP sector as determined by a
survey by AREA and complementary information from MS
authorities. Certification will become more expensive for those
companies that wish to train their personnel in the future, as the
training is more extensive (practical training) and the scope is
wider.
The costs determined here are related to having personnel
trained. These costs are considered adjustment costs. Large
companies are expected to train 3 employees per year, medium
sized companies 1 and small companies between 0 – 1 employee.
These extra costs may also be regarded as adjustment costs and
following the training is not explicitly required, only certification
is.
F-gas certification
programmes also to
include HCFOs and F-
Policy
Options 2
and 3
Total:125,649
Large: 1,425
0.2 (a
couple
hours per
25,130 5.8 The number of companies impacted is based upon the number of
company certificates in the RACHP sector as determined by a
survey by AREA and complementary information from MS
261
Policy Measure Scenario Number of
companies
Days/Year
per
Company
Total Days
(Annual)
Total
Days
(One-off)
Total
Annual
Cost
(EUR,M)
Total One
Off Cost
(EUR, M)
Explanation
gas free alternatives
and practical training
on all alternatives and
add energy efficiency
issues to be part of
training (stationary
RACHP)
(energy
efficiency
also
included on
Option 1)
Medium: 5,101
Small: 119,122
company
only)
authorities. The current administrative costs linked to
certification are based upon data collected through stakeholder
engagement for the evaluation of the Regulation. Certification
will become more expensive for those companies that wish to
train their personnel in the future, as the training is more
extensive (practical training) and the scope is wider.
The costs determined here are only the true admin costs related
to obtaining and presenting certificates.
The requirement to install etc. stationary RAC only by certified
personnel only has an additional bearing if such equipment holds
pure HCFOs, rather than HFC blends with HCFOs which are
already covered by today’s obligations. This is the case in very few
applications. The administrative cost linked to energy efficiency
issues are expected to be very minor as this will entail only an
additional aspect of the training curriculum.
General prohibition of
entry into EU territory
of non-refillable F-gas
containers and other
illegal goods under
the Regulation and
extend the scope to
unsaturated HFCs
All policy
options
Total: 204
Large: 2
Medium: 8
Small: 193
Similar effort
assumed for
large and small
companies
Large: 1
Medium:1
Small:1
204 - 0.05 - Administrative burden for those respecting the rules and using
best practice as importers will not be impacted as companies
should be using re-fillable cylinders for HCFOs already. The
number of companies impacted has been based upon the number
of bulk importers registered in 2019 based on BDR reporting. It
has been estimated that approximately 5% of importers are not
currently conducting best practice for HCFOs and will therefore
incur additional administrative cost. The admin burden upon
these companies is expected to be minimal.
Mandatory
certification for bulk
gas importers
Only Policy
Option 3
Total:1694
Large: 19
Medium: 69
Small:1606
Annual:
0.2 (a
couple
hours per
company
only)
One Off:
Large:10
Medium:
8
Small: 6
847 10378 0.18 2.3 As noted in Commission Implementing Regulation EU 2015/2067
there are currently four categories relating to environment-
friendly handling of the system and refrigerant during installation,
maintenance, servicing or recovery and leakage checks. The policy
option will require company compliance with category III.
The number of companies involved in importing HFCs are taken
from the Fgas Portal & HFC Licensing System. The administrative
costs linked to certification are be based upon data collected
through stakeholder engagement for the evaluation of the
Regulation.
262
Policy Measure Scenario Number of
companies
Days/Year
per
Company
Total Days
(Annual)
Total
Days
(One-off)
Total
Annual
Cost
(EUR,M)
Total One
Off Cost
(EUR, M)
Explanation
Add obligation for
certification for
natural persons and
undertakings selling
bulk F-gases online
Only Policy
Option 3
Total: 500
Large:7
Medium: 20
Small: 473
Annual:
0.2 (a
couple
hours per
company
only)
One Off:
Large:10
Medium:
8
Small: 6
100 3063 0.02 0.7 As noted in Commission Implementing Regulation EU 2015/2067
there are currently four categories relating to environment-
friendly handling of the system and refrigerant during installation,
maintenance, servicing or recovery and leakage checks. The policy
option will require company compliance with category III. The
number of companies involved in selling F-gases online has been
based upon desk-based research through examining the number
of sellers on sites such as Alibaba. The administrative costs linked
to certification are be based upon data collected through
stakeholder engagement for the evaluation of the Regulation.
Add obligation for
documentation for
downstream sales for
bulk HFC/F-gases (e.g.
“declaration of
conformity”) and
record keeping
Only Policy
Option 3
Calculated
based upon
costs to German
industry rather
than to specific
companies.
n/a 1641 - 0.38 - The policy option is expected to lead to an increase in
administrative costs across all actors in the supply chain, including
service companies and gas distributors. As a result of the policy
option, additional administrative costs are anticipated as a result
of the need for companies to submit further documentation. The
estimated costs have been based upon costs estimated for
German industry, as this requirement has been previously
adopted by the German government. The costs have been
attributed to bureaucratic costs from information obligations and
estimated to be an annual cost of 70,000 EUR. The costs for the
German economy have been extrapolated across the EU based
upon population size to give an estimated total annual cost of
377,500 EUR. This is the equivalent of 1,641 days per year a rate
of 230 EUR per day.
Add requirement for
producers and
importers to be
registered and hold
sufficient quota at the
time of release for
free
circulation/placing on
the market / physical
entry into territory
All Options Total: 1694
Large: 19
Medium: 69
Small:1606
Similar effort
assumed for
large and small
companies
Large:1
Medium:
1
Small: 1
1694 - 0.39 - The policy option will require exporters and importers to schedule
trade to ensure that their quotas are not exceeded. This could, for
instance, lead to a delay in importing (to ensure the correct
amount has been exported) and a subsequent administrative cost
will be associated with ensuring this is planned properly. The
number of companies impacted has been based upon the number
of reporting bulk importers in 2020 as determined through the
BDR database. The administrative impact of undertaking the
additional planning is expected to be approximately 1 day,
regardless of company size.
263
Policy Measure Scenario Number of
companies
Days/Year
per
Company
Total Days
(Annual)
Total
Days
(One-off)
Total
Annual
Cost
(EUR,M)
Total One
Off Cost
(EUR, M)
Explanation
Add obligation for
importers to have
quota-exempted
quantities labelled
during POM/physical
entry into territory
and that gases must
be explicitly labelled
as “exempted from
quota”
All Options Total: 65
Similar effort
assumed for
large and small
companies
Large:1
Medium:
1
Small: 1
65 - 0.02 - The policy option will extend the labelling requirements for
importers. As importers are already required to comply with
labelling requirements, the policy is expected to lead to only a
minimal additional burden for companies based upon additional
labelling requirements for exempted gases. The requirement is
expected to impact approximately 65 companies dealing with
exempted gases (from F-gas Portal & HFC Licensing System)
Strengthen the
obligation on
destruction of HFC-23
by-production
Options 2 &
3
Total:1694
Large: 19
Medium: 69
Small:1606
Large:2
Medium:
0.5
Small: 0.3
552 - 0.1 - The policy option will lead to a small additional administrative
burden for importers as additional information will be required to
be provided. The administrative burden of this policy is however
expected to be small to companies compliant with existing rules
and will require only outlining additional information to
document compliance.
Align the
establishment of the
annual declaration-
based quota
allocation with the
frequency of the
quota allocation
based on reference
values
All Options Total: 1800
Large:20
Medium: 73
Small: 1707
Similar effort
assumed for
large and small
companies
Large: 3
Medium:
3
Small: 3
-5,400 -1.2 - Annual quota application requirements will be required once
every three years, leading to a reduction in administrative burden
for reporting companies. This will lead to a reduction in
administrative for the estimated 1800 current quota holders.
Based upon stakeholder and an understanding of the expected
cost of the measure a time saving of 3 days per year is expected.
Introduction of a
registration fee
and/or quota
allocation price linked
to CO2 equivalents
Options 2 &
3
Total: 2,000
Large: 23
Medium: 81
Small: 1,896
Large:5
Medium:
3
Small: 1`
2,253 0.5 The admin burden is linked to the requirements for companies
having to pay for their quota. The number of companies impacted
is estimated to be 2000 quota companies. The admin burden is
linked to internal administrative work including arrangements to
transfer relevant fees.
Registration and
reporting obligation
for exporters of
products and
equipment containing
Only Option
3
Total: 2,000
Large: 23
Medium: 81
Small: 1,896
Large:15
Medium:
4
Small:1
1,581 - 0.4 - Based on expert judgement a significant number of companies
are expected be impacted by the policy option, with an estimate
of 2000 companies expected to be impacted, similar to importers.
The costs of registration and reporting are estimated based on
stakeholder feedback indicating the number of days required for
264
Policy Measure Scenario Number of
companies
Days/Year
per
Company
Total Days
(Annual)
Total
Days
(One-off)
Total
Annual
Cost
(EUR,M)
Total One
Off Cost
(EUR, M)
Explanation
F-gases and other
fluorinated
substances
reporting under article 19.
Labelling
requirements for
H(C)FOs, NF3, SO2F2,
anesthetics; as well as
MDIs
Options 2
and 3
Total: 30
Large: 30
Large:
Medium:
Small
Not
applicable
60 0.01 Extending the labelling requirements for the gases HFCOs, NF3,
SO2F2, anesthetics as well as MDIs will lead to an increase in
administrative costs for a small number of producers and
importers. The production and importation of these gases is
considered relatively uncommon, with, for example, only one
producer for SO2F2 known to reside within the EU. The additional
costs are therefore expected to impact approximately 30
companies, all of which would be expected to be rather large. The
administrative cost associated with the labelling requirements has
been based upon stakeholder feedback for labelling costs as
collected through stakeholder consultation for the evaluation of
the Regulation.
Reporting obligation
for recipients of
quota-exempted HFCs
Options 2 &
3
Total: 65
Large: 45
Medium: 13
Small: 7
Large:4
Medium:
1
Small:0.5
196.5 - 0.04 - The additional requirement is expected to impact approximately
65 companies based upon reporting assessed in the EEA’s BDR
database. The administrative burden is expected to be minimal,
with a small report required only. The breakdown of companies
by size has been based upon expert judgement of the sector, and
knowledge that the majority of the companies impacted will be
large.
Reporting obligation
for undertakings
performing
reclamation of F-
gases
Options 2 &
3
Total: 50
Large:35
Medium:10
Small:5
Large:2
Medium:
1
Small: 0.5
83 - 0.02 - The policy option will lead to an increased admin burden for both
companies reporting on reclamation. In terms of companies
reporting on reclamation it is estimated that approximately 50
companies will be affected, based upon expert judgement. An
annual administrative cost of approximately 1 day per year is
expected to account for the additional reporting for a medium
sized company. Reclamation companies can be assumed to have
already in place an internal monitoring system on the data to be
reported. The breakdown of companies by size has been based
upon expert judgement of the sector, and knowledge that the
majority of the companies impacted will be large.
Reporting obligation
for undertakings
performing recycling
of F-gases
Only Option
3
Total: 750
Large: 9
Medium: 30
Large:5
Medium:
3
Small: 1
845 - 0.2 - A larger number of companies reporting on recycling will be
impacted (vs. those doing reclamation), with an estimate of 750
companies expected to be impacted, based upon the current
number of certified technicians and expert judgement. The
265
Policy Measure Scenario Number of
companies
Days/Year
per
Company
Total Days
(Annual)
Total
Days
(One-off)
Total
Annual
Cost
(EUR,M)
Total One
Off Cost
(EUR, M)
Explanation
Small: 711 administrative costs are expected to include both the annual
reporting costs and also a small implementation report linked to
the collection requirements. The annual cost for recycling
companies is expected to be higher than for reclamation and has
been based upon expert judgement of the sector.
Reporting obligation
for operators of HV
switchgear and
electrical equipment
(< 52 kV) with regard
to SF6 emissions
during lifetime and
for operators in
cooperation with
certified personnel of
electrical equipment
for decommissioning
of such equipment
Only Option
3
Total: 2475
Large:28
Medium:100
Small:1016
Large:5
Medium:
3
Small: 1
2788 - 0.6 - The administrative burden will apply to the switchgear sector and
decommissioning companies. In addition, the policy will also
impact distribution grid operators. Based on expert judgement
there is expected to be a 5 day/year administrative burden
associated with this requirement for a large sized company. The
administrative burden is primarily associated with the installation
of new equipment which will now need to be accounted for. The
switchgear sector is estimated to account for approximately 50 -
100 companies, and 2400 distribution grid operators.
Lower the threshold
for verification of bulk
HFCs placed on the
market
All Options Total: 1,072
Large: 12
Medium: 44
Small: 1,016
Large: 6
Medium:
4
Small: 2
2295 - 0.5 - The current threshold has been set at >10,000t CO2e, with the
threshold set to be lowered to >1,000t CO2e. The current number
of companies impacted is estimated to be 19% of quota holders
(estimated to be 19% of 1800 companies). Following the
reduction of the threshold, the number of companies impacted is
expected to increase to 86% of quota holders. It should also be
noted that approximately 134 companies are known to be
voluntarily reporting in 2020, and therefore the potential
additional cost to these companies has been removed as they are
already incurring the burden. The additional costs for the
companies impacted is estimated to be 1000 - 3000 EUR per year
(based on feedback collected through consultation with an
auditor) which has been converted into days per year based on a
rate of 230 EUR per day.
Add obligation to
submit verification
reports for bulk HFCs
All Options Total: 1694
Large: 19
Medium: 69
Small: 1606
Large: 0.5
Medium:
0.5
Small: 0.5
847 - 0.2 - The obligation to record the information is already included
within the current Regulation and therefore the obligation to
submit this will only lead to a small increase in administrative
burden. Based on current reporting companies this will be
estimated to impact approximately 2000 companies.
266
Policy Measure Scenario Number of
companies
Days/Year
per
Company
Total Days
(Annual)
Total
Days
(One-off)
Total
Annual
Cost
(EUR,M)
Total One
Off Cost
(EUR, M)
Explanation
Cost are
assumed to be
similar for large
and small
companies
Align reporting and
authorization
thresholds for placing
pre-charged products
and equipment on
the market
All Options Total: -358
Large: -4
Medium: -15
Small: -339
Large:5
Medium:
3
Small:1
-404 - -0.09 - The reporting threshold is changing from 500 t CO2e of Annex I &
II to 100 t CO2e of HFCs or 500 t CO2e of Annex I & II. This avoids
that use of authorizations are not reported in such cases. This is
expected to likely impact a small number of companies which
import equipment now captured by the amended threshold. The
total number of importers has been based upon data from BDR
reporting. The reporting requirements are estimated to be
approximately 5 days/year for large companies.
Align reporting and
verification dates
between bulk and
pre-charged products
and equipment
All Options Total: 6,535
Large: 74
Medium: 265
Small: 6,196
Negligible Negligible - Negligible - For bulk, the accuracy of the data is verified by an independent
auditor by 30 June each year, while reporting is, however, set to
take place by 31 March each year. For equipment, it is 31 March
for both. The option relaxes the time to deliver the verification to
may (for equipment) and anticipates it for bulk. The additional
costs for companies is expected to be minimal as companies will
undertake the verification shortly after data has been collected
(and reported). It will nominally impact time pressures only and
will not represent an additional burden for reporting companies.
Relax the verification
threshold for placing
pre-charged products
and equipment on
the market
All Options Total: -1428
Large: - 16
Medium: -58
Small: -1354
Large:10
Medium:
8
Small: 5
-7395 - -1.7 - The current threshold is set at >100t CO2e with the policy option
set to increase this to >1,000 t CO2. Currently 17% of companies
are below the threshold and this number will rise to 52% as the
threshold rises. The total number of equipment importers (1024)
has been based upon the BDR reporting database.
Add legal basis for
electronic verification
process (separately
for bulk and pre-
charged products and
equipment)
Only
Options 2 &
3
Total: 6,535
Large: 74
Medium: 265
Small: 6,196
Large:1
Medium:
1
Small:1
-6535 - -1.5 - As a result of the policy option there is expected to be a slight
saving for a number of companies that are compliant with current
verification rules once the system has been introduced, which is
expected to be approximately 10% of current costs. This is due to
the auditor’s role and task becoming clearer, and because the
relevant data will now be readily available through the electronic
process. It is considered inefficient overall for companies to adopt
different approaches. Utilising an electronic verification system
will enable synergies to be accrued and better help to ensure the
availability of auditors. The saving to each company has been
267
Policy Measure Scenario Number of
companies
Days/Year
per
Company
Total Days
(Annual)
Total
Days
(One-off)
Total
Annual
Cost
(EUR,M)
Total One
Off Cost
(EUR, M)
Explanation
based upon expert understanding of the system.
Obligation to provide
NIL reports for quota
holders
All Options Total: 300
Large: 3
Medium:12
Small:285
Large:0.25
Medium:
0.25
Small:0.25
75 - 0.02 - The impact upon administrative costs is expected to be very small
as the obligation to provide a NIL report will be a straightforward
and simple task. Based upon expert judgement and the current
number of quota holders this is expected to impact approximately
300 companies.
Require Member
States to use
electronic reporting
systems for collection
of F-gas service
intervention,
technicians, sale of
non-hermetic
equipment and
emissions data
Only Option
3
Total: 65,717
Large: 5915
Medium: 13,143
Small: 46,559
The reduction of
burden is
assumed to be
similar for large
and small
companies
Large/Me
dium/Sma
ll:
0.25
recurrent/
1 initial
+/- 0 65,717 0 15,1 The policy will have an impact upon all companies which are
required to currently maintain reporting system records. The
requirement to use a common electronic tool at national level will
be expected to lead to an initial implementation cost of
approximately 1 day, based an understanding of the costs to
implement the system in Poland and expert judgment. Upon the
implementation of the new system the ongoing annual
administrative burden is expected to not change significantly, due
to the use of the electronic reporting recording tool vs manual
recording and storage. Based upon stakeholder consultation it is
estimated that approximately one third of Member States already
have some sort of system in place, and therefore no further cost
is expected. The number of companies impacted has been based
upon the number of reporting companies in Slovakia where
detailed data is available and extrapolated across the EU, taking
into account the Member States for which a system is in place.
The breakdown of company size has been based upon a German
industrial survey determining the number of employees at
German service operators.
Require reporting by
companies on new
substances
All Options Total: 100
Large: 10
Medium: 10
Small: 80
Existing
company:
0.2 day
New
company:
1 day
68 - 0.02 - A number of substances which are fluorinated greenhouse gases,
yet are not yet covered by the Regulation. There will be an
increase in administrative costs due to an increase in the number
of companies require to report on these additional substances. .
Reporting requirements will mainly include production, import,
export companies. As a result of the policy option there will be
new companies that have to report and there will also be existing
reporting companies reporting only on additional substances
(lower effort).
268
Table 57. Total additional annual administrative costs to industry (recurrent, in million €)
Option 1 Option 2 Option 3
Objective A - 4.4 4.4
Objective B 0.02 0.02 0.02
Objective C -0.74 5,7 6,2
Objective D -1.1 -2.5 -1.3
Total Cost -1.8 7,6 9,4
The table below shows the aggregated change in one-off administrative costs as a result of implementing the policy measures under each of the three
ambition scenarios.
Table 58. Total additional administrative costs to industry (one-off, in million €)
Option 1 Option 2 Option 3
Objective A - 3 3
Objective B - - -
Objective C - - 3
Objective D - - 15.1
Total Cost - 3 21.1
269
A14.3Costs to authorities – current Regulation
A14.3.1At Member State level
Figure 32 shows the range of financial estimates (€) and
270
Figure 33 presents the range of working day estimates reported by Member States through the
targeted interviews associated with ongoing annual costs, split by measure. The tables below
each figure show numerically the upper and lower range illustrated. For the measures where
only one Member State has provided a value this has been listed as both the upper and lower
range.
Figure 32: Financial estimates of recurrent administrative costs per MS per annum, linked to the
implementation and enforcement of the Regulation
Table 59 Financial estimates of recurrent administrative costs per MS per annum, linked to the
implementation and enforcement of the Regulation
Measure Lower (€) Median (€) Upper (€)
Storing of records in a national database 10,000 25,000 50,000
Detecting non-compliance with respect to POM and use
restrictions
600 600 600
Encouraging the development of producer responsibility
schemes
43,000 43,000 43,000
Adapting certification and training programmes 1,000 5,000 25,000
Checking imports of HFCs 2,000 15,400 29,200
Controlling leak check obligations and record keeping 425 425 425
Guidance and awareness raising 5,000 23,500 100,000
271
Figure 33: Time estimates of recurrent administrative costs per MS per annum, linked to the
implementation and enforcement of the Regulation
Table 60. Time estimates of recurrent administrative costs per MS per annum, linked to the implementation
and enforcement of the Regulation
Measure
Lower
(days/pa)
Median
(days/pa)
Upper
(days/pa)
Storing of records in a national database 1 23 180
Encouraging the development of producer responsibility
schemes for the recovery, recycling, reclamation and
destruction of F-gases
3 25 170
Detecting non-compliance with respect to POM and use
restrictions
2 30 120
Detecting non-compliance with respect quota authorisations
and HFC phase-down
10 10 100
Checking imports of HFCs 5 5 240
Adapting certification and training programmes 5 5 5
Controlling leak check obligations and record keeping 4 50 40
Controlling end-of-life measures 20 50 20
Guidance and awareness raising 3 40 250
In addition to the annual costs outlined, respondents provided estimates for a range of one-off
costs, including: for setting up a database for storing records (Article 6 of the Regulation),
establishing a reporting system for emissions data or a joined database. It should be noted,
however, that the cost of establishing the reporting system for emissions is not unique to the
F-gas Regulation, nor is it fully prescribed, but will also be incurred as a result of the EU
Monitoring Mechanism regulation.
272
In total, €1.5m of one-off upfront costs were reported (figure not extrapolated to all MS). The
table below shows the one-off costs or ranges reported by the respondents. Given that
Member States had the opportunity to report either financial estimates or working days, the
ranges for a measure can vary dependent upon the costs provided by different Member States.
To note:
- Italy reported significant costs (€560,000) for the storing of records in a national
database and establishing reporting systems for emissions data. The costs have not
been included in the table below as it was noted that the costs also included the
ongoing management of the databases.
Table 61: Examples of one-off administrative costs reported by national competent authorities
Measure Cost (Range Reported)
Reporting to the EU Commission (e.g. Articles 9, 10, 25) 320 – 1,000 (EUR)
2 – 50 (days)
Storing of records in a national database 50,000 (EUR)
Establishing training and certification programmes for service
technicians carrying out F-gas related activities
15,000 - 170,000 (EUR)
2.5 – 300 (days)
Establishing reporting systems for emissions data (Article 20) and
national database
20,000 - 200,000 (EUR)
2.5 – 180 (days)
Total costs
To arrive at total costs, the costs from those MS that provided cost data were aggregated and
extrapolated to an overall total using the number of reporting companies in each Member
State104
. This approach considering the total number of reporting companies has been applied
to the majority of measures as this was considered to provide the most accurate basis for
extrapolating the costs. However, where appropriate, in some cases the extrapolation has
been based upon the number of reporting importers within Member States. This results in the
following estimates:
- Using monetary cost data provided, the total yearly costs across all Member State
competent authorities and across all measures is estimated to be €8.8 million.
- Using working days data provided, the total yearly costs across all Member State
competent authorities and across all measures is estimated to be 58,300 working
104
EEA report - Fluorinated greenhouse gases: Data reported by companies on the production, import,
export and destruction of fluorinated greenhouse gases in the European Union, 2007-2019, 2020, 2020,
EEA
273
days to ensure compliance with the Regulation (including small costs associated with
guidance and awareness raising). The latter value would give, based on an illustrative
cost per day of €230 per day, a total cost estimate of €13.4 million. Both estimation
are therefore giving comparable results, but a larger dataset was gathered for the
working days estimations.
Some of the following may be only partially or not included in these totals:
- Environmental inspections. This is one of the most significant costs reported. Such
inspections are rarely just focusing on Fgas requirements alone, but also check other
environmental obligations at the same time. By way of example, the Netherlands
reported around €3million per year with only €0.6 million linked to the activities of
the national Environmental Inspectorate in relation to illegal trade and leakages. The
bulk of the cost is often associated with the need for local authorities to check smaller
companies on leakage-related aspects while undertaking other environmental checks.
Sweden, for example, reported the involvement of 280 local and 20 regional
authorities with a total estimate for inspection work of around 1,450 working days per
year, with Poland also estimating a high cost for this measure. In Sweden, these costs
comprised of implementation and enforcement activities associated with controlling
leak checks obligations, record keeping and controlling end-of-life measures. A
respondent from Bavaria suggested that the equivalent of three full time employees
(person days) is deployed on F-gas related inspections in this German State. The time
requirement per inspection varies by Member State. One of the drivers appears to be
the approach to any legal issues arising. Considering this, and given that some
Member States only included national costs linked to inspections while others covered
local and regional authorities, the enforcement cost category is excluded from the
overview in Figure 24 and 25.
- Existing obligations. Prior to the 2014 Regulation, requirements existed around some
of the measures, such as the controlling leak check obligations, record keeping and
controlling end-of-life measures. As such, where Member States report such costs, it
may be that not all of these are ‘additional’ relative to the activities they had to
undertake under the previous 2006 Regulation. There are also some synergies with
Waste regulation, e.g. with respect to encouraging producer responsibility schemes.
As such, costs reported by Member States in order to encourage the development of
producer responsibility schemes for the recovery, recycling, reclamation and
destruction of F-gases (Article 9) may not strictly be attributable to the F-gas
Regulation specifically.
- Customs checking. Custom costs depend mostly on the risk profiling of the goods,
and thus the controls actually carried out. In theory, illegal imports should already be
dealt with in an effective way – i.e. confiscation and destruction. Such costs relate to
the day-to-day of customs and are likely not fully captured in the numbers above.
274
A14.3.2At the European level
An overview of the administrative costs incurred by the EU Commission is provided in Table 62 below. The costs focus on those borne by
DG CLIMA and do not cover those of other services, e.g. DG TAXUD and others on illegal trade issues and building CERTEX (EU Single
Window for Customs). Also, it does not include the costs of external support to DG CLIMA.
Table 62. Administrative costs incurred by the EU Commission
Measure Working days per year
Derogation decisions (Article 11) /
Calculation of reference values / allocation of quota (Article 16) 30 days
IT-related aspects of the HFC Registry (Article 17)
(including development & set-up, maintenance, hosting)
330 (1.5 person years)
Plus hosting costs (€12.500)
Ensuring smooth functioning of the HFC Registry and the quota system:
 Assessing registrations and declarations
 Exclusion of illegitimate market actors
 Helpdesk (“how do I?” support on using the system)
100
120
60
Enforcement of compliance with bulk quota 80
Enforcement of compliance of equipment importers (authorisations) 20
Publication of reports (Article 21) 20
F-gas Consultation Forum (Article 23) 10
Assuring compliance by EU Member States (e.g. infringement
proceedings, EU pilots)
60
Notifications to EU Member State competent authorities (e.g. cases of
non-compliance)
20
Providing information on the implementation of the Regulation (including
compliance) to stakeholders
230
Illegal Trade incl. Single Window 60
Legal Issues incl. Court cases 160
Reporting 10
Monitoring the phase-down 10
Access to files 20
Committee meetings, implementing acts, 60
Meeting with stakeholders 30
Total 1100 person days
EC: 5+ people: 1100 days + 330 days (IT)
275
An overview of the administrative costs incurred by the EEA is provided in Table 63 below. The costs provided also highlight a spike in
costs for External IT consultancy support in the year 2018. The EEA have noted that after the 2017 reporting round the old MS Access F-gas
database suffered from the increased volume of data from many new companies. It was hence re-developed into MS SQL during 2018, which
required a significant number of extra IT-development days.
Table 62Table 61 below. The data provided from the EEA on their costs are based on EEA time recording and invoice information from EEA’s
contractors. With regard to the BDR helpdesk work, the vast majority of work is related to F-gases (approximately 80 %). The costs provided
also highlight a spike in costs for External IT consultancy support in the year 2018. The EEA have noted that after the 2017 reporting round the
old MS Access F-gas database suffered from the increased volume of data from many new companies. It was hence re-developed into MS SQL
during 2018, which required a significant number of extra IT-development days.
Table 63. Administrative costs incurred by the EEA
Unit 2012 2013 2014 2015 2016 2017 2018 2019 2020
EEA in-house F-gas thematic
project management
pers
on
days
0.25 0.30 0.40 0.50 0.50 0.50 0.50 0.50 0.50
EEA in-house BDR Helpdesk
support (both ODS and F-gases)
pers
on
days
0.10 0.10 0.10 0.20 0.20 0.25 0.30 0.30 0.25
EEA in-house IT project
management
pers
on
days
0.20 0.20 0.20 0.20 0.20 0.20 0.25 0.25 0.25
European Topic Centre (F-gases
thematic consultancy support)
days 85 95 89 135 140 116 100 100 103
External IT consultancy support
(F-gases webform)
days n.a. n.a n.a. 86 133 58 710 121 158
External IT consultancy support
for BDR development and
maintenance
days n.a. n.a n.a. 87 179 191 120 51 148
276
A14.4Costs to authorities – policy options
A14.4.1At the European level
Estimated administrative burden for the European Commission related to the individual measures is given in Table 63. Detail of the calculation
and assumptions
Table 64. Detail of the calculation and assumptions for administrative burden of the European Commission
Policy Measure Scenario Total Days (Annual) Total Days (One-off) Explanation
Increase ambition of the EU HFC phase-down
beyond the requirements under the Montreal
Protocol by tightening reduction steps until
2030 and introducing additional reduction
steps beyond 2030
All Options 28 0 There is a lot of compliance checking also on EC side to ensure
compliance with the phase down, alongside support provided to
and communications with stakeholders to support compliance.
Assume 10% increase in enforcement and support efforts for EC
relative to evaluation baseline (expert judgement).
Additional prohibitions
Introduce a placing on the market prohibition
for small stationary refrigeration hermetic
units for commercial and household use that
contain or whose functioning relies upon
fluorinated greenhouse gases from 1 January
2024
Introduce a placing on the market prohibition
for fire protection equipment containing or
relying on HFCs, except when required to meet
national safety standards from 1 January 2024
Introduce a placing on the market prohibition
for RACHP equipment which use PFCs and
blends containing PFCs from 1 January 2024
Prohibit placing on the market of skin cooling
equipment with F-gases used for purposes that
are not required for strictly medical reasons
and whose functioning relies upon F-gases
All Options 9 0 For each prohibition, CLIMA incurs costs for communicating with
Member States and stakeholders. There will also be additional
costs for additional advice and traffic through the Help Desk. Cost
data was taken from the evaluation for these items under the
existing Regulation, combined with the number of existing
prohibitions to calculate a cost per prohibition. It is assumed that
half of the costs related to these activities from the evaluation are
for prohibitions (expert judgement).
In addition, further derogations are anticipated in the future due
to more complex rules. Time required per derogation is taken from
the ODS IA (40 days per derogation). It is assumed there is roughly
one derogation every 3 years, split across the 9 new prohibition
proposals.
Additional prohibitions
Introduce a placing in the market prohibition
for stationary air conditioning and heat pump
equipment from 1 January 2025
Remove the existing exemption for servicing
Options 2
and 3
36 0
277
Policy Measure Scenario Total Days (Annual) Total Days (One-off) Explanation
and maintenance of refrigeration equipment
with a charge size below 40 tonnes of CO2 eq
with virgin fluorinated gases from 1 January
2024
Introduce a placing on the market prohibition
for personal care products containing
fluorinated greenhouse gases from 1 January
2024
Introduce a placing on the market prohibition
for new medium voltage electrical switchgear
for primary and secondary distribution,
differentiated by voltage level, from 1 January
2030, using SF6 as insulating or breaking
medium; other fluorinated compounds with
GWP > 500 can be used; unless evidence is
provided that no other suitable alternative is
available on technical grounds
Introduce a placing on the market prohibition
for new high voltage electrical switchgear,
differentiated by voltage level, from 1 January
2028 or 2031, respectively , using SF6 as
insulating or breaking medium; other
fluorinated compounds with GWP > 1,000 can
be used, unless evidence is provided that no
other suitable alternative is available on
technical grounds
Introduce a use prohibition for some inhalation
anesthetics containing other fluorinated
greenhouse gases listed in Annex II with GWP >
500 from 1 January 2024
Removal of exemptions and thresholds
Remove exemption from placing on the market
restrictions under the phase-down for HFCs for
use in metered dose inhalers
Remove limit of 100 tonnes of CO2 eq for
producers or importers that place HFCs on the
market
Remove the limit for reporting on production,
import, export and destruction of F-gases and
All Options 23 0 Measures will incur minor additional costs for CLIMA. Some
companies are already receiving quota, but there will be some new
companies that require quota. Additional administrative costs will
be incurred as more companies come under the reporting
requirements. In addition, there will be additional helpdesk traffic
and compliance cases.
Cost estimates are based on expert judgement uplift from baseline
costs calculated in the evaluation.
The main cost increases are linked to the MDI exemption as
exempted sectors (MDIs, military, semiconductors) comprise > 10%
278
Policy Measure Scenario Total Days (Annual) Total Days (One-off) Explanation
other gases listed in Annex II of the total market (with MDIs representing the vast majority of
this exempted proportion). As such it is assumed that phase-down
compliance costs (e.g. calculation of reference values, and
enforcement of compliance with bulk quota) from the evaluation
would increase by around 10%
Removal of exemptions and thresholds
Remove POM exemption for military
equipment
Remove the exemption from placing on the
market restrictions under the phase-down for
HFCs for etching of semiconductor material or
cleaning of chemicals vapour deposition
chambers within the semiconductor
manufacturing sector
Only
Option 3
2.3 0 Measures will incur minor additional costs for CLIMA. Some
companies are already receiving quota, but there will be some new
companies that require quota. Additional administrative costs will
be incurred as more companies come under the reporting
requirements. In addition, there will be additional helpdesk traffic
and compliance cases.
The additional removal of exemptions would add very little
additional admin burden, as quantities and companies are low.
Cost estimates are based on expert judgement – assume 10% of
the costs of other “removals” above.
Implement an EU-wide HFC production phase-
down
All Options 10 10 CLIMA would incur additional costs, but these are anticipated to be
smaller than for the POM phase down. No yearly allocation would
be required. Costs would be driven by compliance with the new
rules, awareness raising and discussion with industry. To calculate
the costs, we have assumed these are 10% of the evaluation costs
of enforcing compliance with the POM phase-down.
There would also be initial one-off costs of communicating the
phase-down obligations to affected stakeholders (expert
judgement – assume same as ongoing cost).
Introduce prohibition for HFC bulk imports
to/exports from the EU to any country not
Party to the Montreal Protocol (Kigali
Amendment)
All Options Without automisation105:
10
With automisation: 248
Without automisation210: 0
With automisation: 667
Several measures imply additional costs for CLIMA if controls are
to be automised and thus require further development of Certex.
There will be additional costs for development and maintenance
(assume 100 days/year), plus external assistance per year (assume
€100,000), plus a one-time costs to develop the expert function
and adjust to the new Regulation (assume €500,000) (all values
based on expert judgement).
In addition, these changes will also imply additional data security
costs. Quantitative estimates (15 days pa) were taken from the
Better control on some special procedures
a) Goods released at particular destination
custom offices
b) Transactions where the minimum of 8-
digit CN codes are indicated by the
All Options
105
I.e. with the CERTEX/European Single Windows for Customs Environment
279
Policy Measure Scenario Total Days (Annual) Total Days (One-off) Explanation
importer or exporter ODS IA).
The costs without automising (which is not necessarily required by
the Regulation) would be significantly more moderate and do not
exceed much current costs (expert judgement suggests 10 days
additional p.a.).
Add requirement for producers and importers
to be registered and hold sufficient quota at
the time of release for free circulation/placing
on the market / physical entry into territory
All Options
Prohibition for (offline and online) sales and
possession of HFCs/F-gases that were illegally
placed on the market
All Options 10 0 Costs will mainly be for MS enforcement, although in practice
some costs may fall on CLIMA (e.g. through OLAF or industry,
consulting or providing advice to MS, potential engagement with
website hosts). Assume implementation of 5-10 days per annum
(expert judgement).
Include minimum penalties to be enforced by
EU Member States for quota exceedance,
quota authorization deficits, illegal issuance of
authorizations, non-compliance with reporting
deadlines and verification obligations and
transport, storage and use of HFCs not covered
by quota
All Options 40 0 Will imply additional costs to CLIMA of around 30-50 days per
annum on an ongoing basis to enforce the Regulation
(infringement procedures).
Limit issuing quota authorizations to
incumbents, i.e. based on reference-based
quota
All Options -1 0 Issuing authorizations to incumbents only may lead to some cost
savings through reduced compliance checks (less undertakings to
check), although savings will be limited (expert judgement
suggests savings of around 5% of 20 days per annum).
Introduction of a registration fee and/or quota
allocation price linked to CO2 equivalents
Options 2
& 3
2,200 2,200 This measure could increase costs significantly. Costs would be
incurred for collection and distribution of funds, in addition to
systems design and construction, registration and tracking, relying
on a suitable IT system. Many of these costs may be outsourced,
and will be fully offset by revenues collected. But these still imply a
significant administrative burden. Expert judgement suggests this
may be equivalent to as many as 10 full-time equivalents (i.e. 2200
person days) on an upfront as well as ongoing (annual) basis plus IT
costs. This would not include additional IT staff for running the
system and ensuring the enhanced data protection and security
needed.
Registration and reporting obligation for
exporters of products and equipment
containing F-gases and other fluorinated
substances
Only
Option 3
7.1 0 Costs will be linked to advising company on legal obligations.
Existing reporting costs for CLIMA are taken from the evaluation
and scaled by the number of new companies that would
potentially fall under the new requirement. In this case, expert
judgement suggests there may be around 1,000 – 2,000 additional
companies (relative to around 2,100 existing companies that are
280
Policy Measure Scenario Total Days (Annual) Total Days (One-off) Explanation
obliged to report).
Reporting obligation for recipients of quota-
exempted HFCs
Options 2
& 3
0.3 0 Reporting costs for CLIMA (i.e. providing guidance) are taken from
the evaluation and scaled by the number of new companies that
would potentially fall under the new requirement. In this case,
expert judgement suggests there may be around 65 additional
companies (relative to around 2,100 existing companies that are
obliged to report).
Reporting obligation for undertakings
performing reclamation of F-gases
Options 2
& 3
0.2 0 Reporting costs for CLIMA are taken from the evaluation and
scaled by the number of new companies that would potentially fall
under the new requirement. In this case, expert judgement
suggests there may be around 50 additional companies (relative to
around 2,100 existing companies that are obliged to report).
Reporting obligation for undertakings
performing recycling of F-gases
Only
Option 3
3.6 0 Reporting costs for CLIMA are taken from the evaluation and
scaled by the number of new companies that would potentially fall
under the new requirement. In this case, expert judgement
suggests there may be around 750 additional companies (relative
to around 2,100 existing companies that are obliged to report).
Reporting obligation for operators of HV
switchgear and electrical equipment (< 52 kV)
with regard to SF6 emissions during lifetime
and for operators in cooperation with certified
personnel of electrical equipment for
decommissioning of such equipment
Only
Option 3
12 0 Reporting costs for CLIMA are taken from the evaluation and
scaled by the number of new companies that would potentially fall
under the new requirement. In this case, expert judgement
suggests there may be around 50-100 additional companies , in
addition to ~50 transmission and 2400 distribution companies
(relative to around 2,100 existing companies that are obligated to
report).
Align reporting and verification thresholds for
placing on the market products and
equipment:
a) Raising threshold to 1000 tCO2e for
equipment
b) Verification obligation for POM of HFCs in
line with reporting
All Options -21.1 0 Measure would result in a saving for CLIMA. Raising the threshold
from 100 to 1000 tCO2e would reduce the coverage from 83% to
either 48% of the 1,500 relevant companies. Analysis scales the
costs from the evaluation covering assessment of registrations and
declarations (assuming half of these costs are relevant for
verification).
Clarify verification obligation to apply to both Art 19 report & DoCs
implies no additional cost
Reporting threshold for product and equipment imports is slightly
lower than in the present F-gas Regulation, should lead to slightly
higher cost for BDR submission of the report. Additional data
collection does not take place as all affected companies are
already under the verification obligation.
281
Policy Measure Scenario Total Days (Annual) Total Days (One-off) Explanation
Add electronic verification process (separately
for bulk and pre-charged products and
equipment)
Options 2
& 3
-25 5 Measure would result in a saving for CLIMA. Analysis scales the
costs from the evaluation covering compliance checking of
verification reports (assuming half of these costs are relevant for
verification). Expert judgement assumes a reduction in verification
costs of 25%
There will also be some costs linked to conceptual development –
assume 5 days (expert judgement)
Align quota authorization with reporting
thresholds for placing pre-charged products
and equipment on the market
All Options -3.5 0 Measure would result in a saving for CLIMA. Changing the
threshold from 100 to 1,000 tCO2e will reduce the number of
companies covered by around 360 (relative to baseline of just over
1,000 companies). Analysis applies this scaling factor to reporting
costs captured in the evaluation.
Obligation to provide NIL reports for quota
holders
All Options -5 0 Measure would result in a saving for CLIMA. Analysis scales the
costs from the evaluation covering assessment of registrations and
declarations (assuming half of these costs are relevant for
verification). Expert judgement assumes a reduction in verification
costs of 5%
TOTAL COSTS for all measures (Option 3) 2338 person days
Plus 238 for automation
through CERTEX/Single
Window
2215 person days
Plus 667 for automation
through CERTEX/Single Window
Estimated administrative burden for the EEA related to the individual measures is given in Table 64. Detail of calculation and assumptions for
administrative burden of the EEA
282
Table 65. Detail of calculation and assumptions for administrative burden of the EEA
Policy Measure Scenario Total Days (Annual) Total
Days
(One-
off)
Explanation
Remove the limit for reporting on production,
import, export and destruction of F-gases and
other gases listed in Annex II
All
Options
2.2 0 EEA’s current F-gas reporting system could fairly easily be adapted at low costs if new
reporting thresholds are applied and new substances are added. This may result in a small
increase in cost through additional traffic for the BDR Helpdesk (Stakeholder feedback).
Expert judgement suggests costs could increase by 5% from costs reported in the
evaluation for in house Helpdesk support.
Implement an EU-wide HFC production phase-
down in addition to the POM phase-down which
would be quantitatively adapted to the Montreal
Protocol (same ambition level), quota allocation at
entity level based on HFC production 2011-2013
plus 15 % CFC/HCFC production 2011-2013
All
Options
0 21 Stakeholder feedback suggests measure would imply additional, one-off costs for making
changes to the web reporting form. Costs were collated in the evaluation for
development of the new form alongside the 2014 Regulation. Expert judgement assumes
costs will be at most 10% relative to these costs.
Registration and reporting obligation for exporters
of products and equipment containing F-gases and
other fluorinated substances
Only
Option 3
157 50 Additional reporting obligations could increase EEA’s costs more substantially E.g. for
exporters of products and equipment containing F-gases, for recipients of quota-
exempted HFCs, and for undertakings performing recycling and reclamation of F-gases,
EEA’s system could be extended step-wise as in the past at an envisaged annual cost
corresponding to the average for 2015-2019.
This captures an expected increase in a range of EEA activities, including: greater traffic to
the BDR helpdesk, more IT troubleshooting, greater project management and external IT
consultancy support.
Total costs for EEA are scaled up from existing costs (from the Evaluation), based on the
number of companies falling under the new obligations (based on expert judgement)
relative to those already reporting to the EEA (around 4,750 in 2019 based on EEA data).
Exporters reporting assumes 1500 additional companies, quota exempted 65 additional,
reclamation 50 additional and recycling 750 additional companies covered.
In addition, there would be a one-off cost associated with the development and
implementation of questionnaires to gather the data. No cost estimate was gathered
from stakeholders, but expert judgement suggests costs may be around 50 days per new
obligation.
Reporting obligation for recipients of quota-
exempted HFCs
Option 2
& 3
7 50
Reporting obligation for undertakings performing
reclamation of F-gases
Option 2
& 3
5 50
Reporting obligation for undertakings performing
recycling of F-gases
Only
Option 3
78 50
Reporting obligation for operators of HV
switchgear and electrical equipment (< 52 kV) with
regard to SF6 emissions during lifetime and for
operators in cooperation with certified personnel
of electrical equipment for decommissioning of
such equipment
Only
Option 3
84 50
Align reporting and verification thresholds for
placing on the market products and equipment:
Align reporting and verification dates (separately
for bulk and pre-charged products and equipment)
Add legal basis for electronic verification process
(separately for bulk and pre-charged products and
equipment)
All
Options
-4 0 Measure could result in cost saving for EEA. Reduced complexity will result in less BDR
helpdesk traffic (Stakeholder feedback). No cost estimates were gathered from
stakeholders. Expert judgement suggests savings will be small, around 10% reduction in
traffic.
283
Policy Measure Scenario Total Days (Annual) Total
Days
(One-
off)
Explanation
Align reporting and quota authorisation thresholds
for placing pre-charged products and equipment
on the market
Obligation to provide NIL reports for quota holders
Include new substances in Annex I
Include new substances in Annex II and require
reporting
All
Options
0 21 EEA’s current F-gas reporting system could fairly easily be adapted at low costs if new F-
gases are added to the current F-gas Regulation (Annex I or II). This would incur a one-off
cost to adapt the BDR questionnaire and the QC rules (Stakeholder feedback). No
quantitative estimates were put forward by EEA. Expert judgement suggests costs could
increase in a similar order of magnitude to measure b3.1.
TOTAL COSTS for all measures (Option 3) 327 292
A14.4.2At Member State level
Estimated administrative burden for the Member States related to the individual measures is given in Table 65.
Table 66. Details of the calculation and assumptions for administrative burden of the Member States
Policy Measure Scenario Total Days (Annual) Total Days (One-off) Explanation
Increase ambition of the HFC phase-down
beyond the requirements under the Montreal
Protocol by tightening reduction steps until
2030 and introducing additional reduction
steps beyond 2030
All
Options
2,134 0 Additional costs for compliance checking of companies. No insights or
estimation provided by stakeholders. Expert judgement – assumes 20%
increase in costs of checking non-compliance with quota authorizations
and phase down (as presented in the evaluation for existing Regulation).
Additional prohibitions
Introduce a placing on the market prohibition
for small stationary refrigeration hermetic
units for commercial and household use that
contain or whose functioning relies upon
fluorinated greenhouse gases from 1 January
2024
Introduce a placing on the market prohibition
for fire protection equipment containing or
relying on HFCs, except when required to
meet national safety standards from 1
All
Options
160 0 Stakeholder feedback suggests costs of new POM prohibitions could
range from ‚slight‘ to ‚very significant‘. This would depend on the
prohibition. Some resources would be needed for awareness raising
alongside compliance. In addition, there may be further costs for
derogations.
Where prohibitions are time-staggered, as older prohibitions establish
themselves, recurrent costs are likely to go down significantly as the
prohibition date passes as most actors will learn to respect the new
rules. Resources can be re-invested in new prohibitions.
No estimation of costs was provided by stakeholders.
284
Policy Measure Scenario Total Days (Annual) Total Days (One-off) Explanation
January 2024
Introduce a placing on the market prohibition
for RACHP equipment which use PFCs and
blends containing PFCs from 1 January 2024
Prohibit placing on the market of skin cooling
equipment with F-gases used for purposes
that are not required for strictly medical
reasons and whose functioning relies upon F-
gases
Analysis takes costs of enforcing prohibitions from the evaluation of the
existing Regulation, plus the costs of awareness raising. Additional costs
are also added for derogations, based on the evidence developed for the
ODS IA (23 days per derogation assumed).
Some prohibitions will be more impactful than others. Costs are then
scaled based on expert judgement, depending on how significant the
application is in the market, relative to existing prohibitions.
Additional prohibitions
Introduce a placing in the market prohibition
for stationary air conditioning and heat pump
equipment from 1 January 2025
Remove the existing exemption for servicing
and maintenance of refrigeration equipment
with a charge size below 40 tonnes of CO2 eq
with virgin fluorinated gases from 1 January
2024
Introduce a placing on the market prohibition
for personal care products containing
fluorinated greenhouse gases from 1 January
2024
POM prohibition for new medium voltage
electrical switchgear
 for primary distribution, differentiated by
voltage level – up to 24 kV from 2026 and
24-52 kV from 2030, using F-gases with
GWP > 2000 as insulating or breaking
medium;
for secondary distribution, differentiated by
voltage level – up to 24 kV from 2026 and 24-
52 kV from 2030, using F-gases with GWP
>2000 as insulating or breaking medium. POM
prohibition for new high voltage electrical
switchgear
 in the range of 52-145 kV and up to 50
kA short circuit current from 2028, using
F-gases with GWP >2000 as insulating or
Options
2 & 3
2,475 0
285
Policy Measure Scenario Total Days (Annual) Total Days (One-off) Explanation
breaking medium;
 in the range of more than 145 kV or
more than 50 kA short circuit current
from 2031, using F-gases with GWP
>2000 as insulating or breaking medium.
Introduce a use prohibition for some
inhalation anesthetics containing other
fluorinated greenhouse gases listed in Annex
II with GWP > 500 from 1 January 2024
Apply requirements for prevention of
emissions of fluorinated gases to substances
listed in Annex II
All
Options
51 0 No insights or estimation provided by stakeholders. Quantification based
on expert judgement. Annex II gases represent around 6% of total supply
in 2019, hence scale up MS compliance costs for enforcing containment
measures from evaluation by this factor.
This measure only relates to Article 3 – data not available for costs of
Article 3 specifically. Expert judgement anticipates that the majority of
the costs for MS are related to leak checks and reporting (Articles 4-6),
with Article 3 presenting only minor costs. Hence assume 10% of
reported costs for containment measures from evaluation relate to
Article 3.
Apply requirements for prevention of
emissions of F-gases to manufacturing,
transport, transfer and storage of bulk gases
also to non-producers
Options
2 & 3
34 0 No insights or estimation provided by stakeholders. Member States
incur additional costs to check and enforce compliance with the
extended requirements. Extension is being considered to equipment
manufacturers & upstream companies (e.g. gas traders). These costs will
be an order far below the number of equipment operators. For industry
admin burden, assume additional 1,000 companies. Number of
producers and equipment operators (covered by existing requirements)
is unknown, estimates for operators suggest this could be around
230,000. Expert judgement, assume 0.4% additional cost for enforcing
compliance with containment measures.
Destruction of HFCs from metal-faced panels
or reuse, from 2024
All
Options
No quantitative estimate No quantitative
estimate
For Member States, costs are expected due to the need for awareness
raising, monitoring and enforcement activities (of thousands of
demolition projects a year).
Destruction (or reuse) of HFCs in laminated
boards in built-up structures and cavities,
unless feasibility is proven by the building
owner / demolition company, from 2024
Options
2 & 3
Remove POM exemption for military
equipment
Option
3 only
20 0 Quota system is run by DG CLIMA, but in practice MS still incur costs of
compliance checking. Stakeholders suggest measure could imply
286
Policy Measure Scenario Total Days (Annual) Total Days (One-off) Explanation
increase in costs, but did not provide estimation. MS spend around
8,000 days pa checking compliance with phase down covering ~2,000
companies – assume 4 days per company. Around 5 military
undertakings currently received quota exempted supply
Remove the exemption from placing on the
market restrictions under the phase-down for
HFCs for etching of semiconductor material or
cleaning of chemicals vapour deposition
chambers within the semiconductor
manufacturing sector
Option
3 only
120 0 Quota system is run by DG CLIMA, but in practice MS still incur costs of
compliance checking. Stakeholders suggest measure could imply
increase in costs, but did not provide estimation. Analysis scales up costs
from evaluation associated with non-compliance with the phase-down.
MS spend around 8,000 days pa checking compliance with phase down
covering ~2,000 companies – assume 4 days per company. Around 60
semiconductors currently received quota exempted supply. Given
activity is concentrated in few MS< expert judgement assumes there
may be efficiencies of scale, so costs would be around half if they were
spread across many MS.
Remove exemption from placing on the
market restrictions under the phase-down for
HFCs for use in metered dose inhalers
All
Options
100 0 Quota system is run by DG CLIMA, but in practice MS still incur costs of
compliance checking. Stakeholders suggest measure could imply
increase in costs, but did not provide estimation. MS spend around
8,000 days pa checking compliance with phase down covering ~2,000
companies – assume 4 days per company. Around 25 MDI undertakings
currently received quota exempted supply
Implement an EU-wide HFC production phase-
down
All
Options
30 0 No insights provided by stakeholders. Production has always been
centered in few countries which have high expenses. Expert judgement
suggests there may be around 5 companies across 2 MS which
undertake production at present. Hence additional burden likely to be
small. Estimate based on existing costs of non-compliance with POM
phase-down, but scaled down by smaller number of companies that will
be covered (5 vs 1,800 under POM phase down).
Introduce prohibition for HFC bulk imports
to/exports from the EU to any country not
Party to the Montreal Protocol (Kigali
Amendment)
All
Options
109 0 No insights provided by stakeholders. Costs for MS will increase
associated with additional import compliance checks. That said, most
countries are anticipated to be signatories to Kigali by 2030. Expert
judgement: assume 1% increase in costs of checking imports (as
reported in the evaluation). Only from 2028 onwards. Can be done
automatically with Single Window, which would reduce these costs very
significantly
Certification requirement for unsaturated
HFCs and H(C)FCs and other F-gas free
alternatives, while F-gas certification
programmes also to include practical training
on all alternatives and add energy efficiency
issues to be part of training (stationary
Options
2 & 3
1,924 0 Stakeholder feedback suggested costs would increase, with a range of
opinions from ‚no change‘ to ‚significant increase (40%)‘. Scheme is
extension of existing programmes. Expert judgement – take mid-point of
stakeholder opinion and assume 20% increase in costs of training and
certification for MS from evaluation.
287
Policy Measure Scenario Total Days (Annual) Total Days (One-off) Explanation
RACHP)
Installation/servicing/repair/maintenance of
equipment that contains fluorinated
greenhouse gases or whose functioning relies
upon those gases for which certification or
attestation is required under Article 10 only
by certified personnel
Options
2 & 3
27 0 This measure will imply additional compliance checking cost for MS. No
feedback or cost information provided by stakeholders. This measure
implies an extension of the requirements of Article 11(4) to include
other substances, in particular HCFOs. However, this extension is
anticipated to be relatively minor, given many HCFOs are used in blends
which are already covered by the Regulation. Pure use of HCFOs is fairly
negligible. Assume 1 day per MS additional effort required.
Include specific requirements for customs
regarding the treatment of products and
equipment illegally placed on the market and
illegal F-gas containers once confiscated
All
Options
2,174 0 Stakeholder feedback suggested this measure would pace additional
administrative burden on customs. Costs estimates by stakeholders
ranged from ‚no change‘ to ‚significant increase‘ (40%).
Costs can be kept low by requiring non-compliant company to cover
destruction (standard procedure under customs law) and by auctioning –
i.e. costs should be put on the illegal importer, but in practice this might
not be possible.
Custom costs depend mostly on the risk profiling of the goods, and thus
the controls actually carried out. In theory, illegal imports should already
be dealt with in an effective way – i.e. confiscation and destruction, but
in practice this does not always happen. Hence these costs in theory
should already be incurred today, and hence are not truly additional to
the option considered here, but are not in practice.
Expert judgement – take mid-point of stakeholder opinion and assume
20% increase in costs of checking imports from evaluation.
Better control on some special procedures
a) Goods released at particular destination
custom offices
b) Transactions where the minimum of 8-digit
CN codes are indicated by the importer or
exporter
All
Options
109 0 Administrative costs for Member States may change at customs offices
as a result of the changes. If implemented in the CERTEX/Single Window,
the SW system may already provide with the procedures that enable
better control. If illegal trade reduces, then this may also reduce the use
of some customs procedures, resulting in a lower cost. Any additional
cost would be associated with follow-up, which would be performed on
the basis of risk profiles. Stakeholder comments suggests costs range
from ‚no change‘ to ‚slight increase‘. On the basis of evidence provided,
a slight increase in costs (1%) has been quantified, scaling up from the
costs presented in the evaluation for checking imports. Costs for
administrations and business could arise due to bottleneck issues in case
transit would, hypothetically, also be limited to certain custom offices.
General prohibition of entry into EU territory
of non-refillable F-gas containers and other
illegal goods under the Regulation and extend
All
Options
544 0 Stakeholder feedback varied around this measure. Some suggested this
measure may lead to a cost reduction (due to the introduction of clearer
Regulations) to a significant cost increase (due to the need for
288
Policy Measure Scenario Total Days (Annual) Total Days (One-off) Explanation
the scope to unsaturated HFCs and
unsaturated HCFCs
complementary awareness raising, and greater checking as well as the
extension to gases that were not covered so far).
Under the existing Regulation, the prohibition relates to placing non-
refillable containers on the market. This extends the prohibition into the
territory, which in theory is a small change with negligible costs. Given
this is a small change, most importers are anticipated to already comply.
But a small number (estimated to be approximately 5% of importers are)
not currently conducting this practice and will therefore incur additional
administrative cost. That said, given these actors should already comply
with the Regulation, these costs are not truly additional and associated
with this measure. Expert judgement – costs for checking imports will
also increase by at most 5%, but generally also depend on risk profiling
The second part of this measure is to extend the requirements to HCFOs.
However, given the majority of HCFOs are used in blends already
covered by the Regulation, these additional costs are anticipated to be
negligible.
Prohibition for (offline and online) sales and
possession of HFCs/F-gases that were illegally
placed on the market
All
Options
364 0 Stakeholder feedback suggested that the costs of this measure could
range from a slight decrease to a significant increase (with the latter due
to the complexity of the checks required, plus additional awareness
raising that would be needed). That said, MS should already be
monitoring the market for illegal goods to a sufficient degree already.
This measure would add more legal certainty around taking
enforcement action, and in that way could lead to cost savings. Only
additional costs would arise only from enforcement of internet sales.
Expert judgement – assume additional (net) cost of around 10 days per
MS per annum, in addition to additional costs for awareness raising (10%
of those reported in the evaluation associated with existing Regulation).
Add obligation for documentation for
downstream sales for bulk HFC/F-gases (e.g.
“declaration of conformity”) and record
keeping
Option
3 only
No additional costs if
implemented with electronic
reporting systems on leakage
data established by Member
States
(without, additional days
required could be around 3,600)
No additional if
implemented with
electronic reporting
systems
Stakeholder feedback suggests costs could range from no change to
significant cost (20-30%). However, expert judgement suggests this
measure will incur no additional costs on top of the electronic reporting
system developed on leakage data.
Add obligation for importers to have quota-
exempted quantities labelled as exempted
during POM
All
Options
109 0 Stakeholder feedback suggests costs could range from no change to
‚increase‘, but predominant qualitative responses was ‚slight increase‘.
No quantitative estimation provided by stakeholders.
Quota-exemptions represent around 10% of current quota. That said,
not all quota is checked, so controls would not increase by the same
amount. Expert judgement assumes costs of checking imports could
289
Policy Measure Scenario Total Days (Annual) Total Days (One-off) Explanation
increase by 1% relative to the baseline (i.e. costs reported in the
evaluation) Costs depend greatly on risk profiling.
Strengthen the obligation on destruction of
HFC-23 by-production
Options
2 & 3
109 0 No stakeholder feedback or estimation regarding this measure. Expert
judgement assumes costs of could be around 1% of overall baseline
customs checks (i.e. costs reported in the evaluation)
Include minimum penalties to be enforced by
EU Member States for quota exceedance,
quota authorization deficits, illegal issuance of
authorizations, non-compliance with
reporting deadlines and verification
obligations and transport, storage and use of
HFCs not covered by quota
All
Options
0 246 Stakeholder feedback suggested costs could range from ‚no change‘ to
‚slight increase‘. No estimation provided. The majority of Member States
should have legislation in place to facilitate the issuance of penalties
under the existing Regulation. As such, it is anticipated that to
strengthen penalties and/or set a minimum level would imply a minor
change to the legislation. Expert judgement suggests could result in one-
off costs to change legislation. Assume 1% of baseline compliance costs
Extend labelling requirement to Annex II gases Options
2 & 3
694 0 Stakeholder feedback suggested costs could range from ‚no change‘ to
‚increase‘ – predominant response was ‚slight increase‘. Annex II gases
represent around 6% of total F-gas supply in 2019. Analysis applies
expert judgement to scale up baseline (i.e. from evaluation) labelling
costs by this factor
Align reporting and verification thresholds for
placing on the market products and
equipment
All
Options
-2,250 0 No stakeholder feedback provided on this measure. In practice, MS incur
costs for follow-up on quota compliance issues. Analysis has applied
expert judgement to scale down baseline (i.e. from the evaluation)
compliance costs for quota authorizations and Phase-down.
Raising the threshold from 100 to 1000 tCO2e would reduce the
coverage from 83% to 48% of the 1,500 relevant companies.
Obligation to provide NIL reports for quota
holders
All
Options
-533 0 No stakeholder feedback provided on this measure. In practice, MS incur
costs for follow-up on ‚NIL‘ reports. CLIMA passes a list to MS to follow-
up. Analysis has applied expert judgement to scale down baseline (i.e.
from the evaluation) compliance costs for quota authorizations and
Phase-down. Costs are scaled down by 5% (expert judgement)
Encourage / require Member States to use
electronic reporting systems for collection of
F-gas service intervention, technicians, sale of
non-hermetic equipment and emissions data
Options
2 & 3
4,140 8,846 The evaluation identified that 4 MS already have electronic reporting
systems in place, each collecting different coverage of metrics. A further
2 MS have data collection systems in place, but it unclear if these are
electronic. Of these MS, only one MS (PL) provided quantitative cost
estimates in the evaluation, both upfront and ongoing. Analysis assumes
costs for MS with existing electronic systems are negligible, and applies
the costs for PL to the remaining 23 MS. However, it is important to note
that implementation costs in PL are generally lower than in other MS,
hence using this as a basis from which to scale could produce an
underestimation of costs.
290
Policy Measure Scenario Total Days (Annual) Total Days (One-off) Explanation
Full cost is only assumed for Option 3, as use of these systems is not
mandated under Option 2. For the latter, costs will scale depending on
the number of MS who take up these systems, which is uncertain (in
particular given only a small sample of MS have unilaterally taken up
systems to date). As such no additional costs are assumed.
TOTAL for all measures (Option 3) 12644 9092
291
A15 Detailed information on foams recovery
A15.1Feasibility of HFC foam recovery and treatment
It is more costly to separate, transport and destroy the HFC contained in the foam than
standard disposal via landfilling without HFC recovery. There are a number of constraints
that make effective recovery and treatment difficult and/or costly. These include:
• Demolition companies may have difficulties to ascertain whether there is HFCs or not
in a panel, and therefore judge how it should be handled (e.g., whether it can be
crushed on-site or not). Building audits are expensive and take time, but are required
to ascertain level of HFCs present.
• Transportation is expensive per tonne of material handled as HFC foams are
considered hazardous materials.106
• Foam material with HFCs cannot be crushed on site without emitting the HFC,
increasing transportation cost for relatively light materials such as laminated boards
panels.
• Costs of waste segregation are high for some materials, especially if contaminated
with bitumen. For some laminated boards, segregation is required to avoid
contamination by other substances or building materials
• The recycling technology may require significant energy input.
• For metal-faced panels, the capacity of nearby recycling facilities may be too limited
to process all metal-faced panels
• National capacity of special waste recycling plants capable of preventing HFC escape
is not evenly distributed across Member States.
• Lack of enforcement is a driver for demolition companies to avoid separation of
CDW fractions and reduce costs.
On the other hand, there are strong synergies with ODS policies, where an identical
measure is considered under the review of the ODS Regulation (Regulation (EC) No
1005/2009). Foams containing both substance groups (ODS and HFCs) can be collected
and destroyed together, without need for separation. For the short and medium-term, most
foams collected may be expected to be ODS foams rather than HFC foams, due to the long
lifetimes. Also, most of the overall emission savings would be expected from the
destruction/recovery of ODS foams. However, an identical measure in the F-gas and ODS
Regulations is desirable to encourage more generic recycling of foams, without the need
to identify the blowing agent during the building audit or in the recycling plant. An
identical measure would also prevent the perverse incentive of mislabelling.
The technical and economic feasibility also strongly depends on the type of foam (e.g.
panels, boards, spray or block), and where it is installed (see table A6.1).
106
Commission notice on technical guidance on the classification of waste (2018/C 124/01)
292
Table 67. Feasibility of building foams recovery by material
Material Current feasibility Justification
Metal-faced
panels
Medium-High
Refurbished recycling facilities that have so
far been treating old refrigeration equipment
can treat metal-faced panels. And new
recycling facilities are already being built
that focus on recycling foam panels, with at
least two examples in the Netherlands.
According to experts interviewed107
, it is
economically and technically feasible to
recover Metal-faced panels. The Metal
component accounts for approx. 50-80% by
weight (depending on panel thickness) and is
easy to segregate and can be treated by
existing refrigerant panel recycling plants. In
this study, the recovery of the metal
component of panels is assumed to already
be economically viable, and only the foam
component is analysed with respect to
additional cost. At the moment, without a
mandate for separation of panels and separate
disposal of the metal and foam elements,
there is low natural demand for the use of
refrigerator panel recycling plants for this
purpose.
Laminated
boards
Medium-Low
Laminated boards are more difficult and
expensive to recover than metal-faced panels.
However, built-up systems108
could be
feasible to recover since they are easy to
segregate and collect, and they can be cut
into smaller pieces to transport and process
without losing much ODS content.
Boards in cavity structures109
could also be
feasible to recover. Costs in some Member
States like Germany, the Netherlands or
Austria, would be lower due to existing waste
regulations in place and favourable building
practices that reduce the contamination level
of the materials. There is a knowledge gap on
the feasibility of this beyond these countries.
Floor insulation boards are not yet
economically feasible to recover since they
are contaminated with concrete, removal of
which requires more innovation. In a board,
the foam is under concrete, hence, it is highly
contaminated and costly to collect and
107
Interview with UK-based recycling facility owning several refrigerant plants refurbished for metal-faced
panels, and expert knowledge from authors of SKM (2012)
108
Type of laminated boards easily demountable system primarily used for roofing insulation.
109
Type of laminated boards that are introduced in empty cavities of existing panels mainly used for wall
insulation
293
segregate.
Spray foam
Low According to the experts interviewed, spray
foam recovery is not feasible in the
demolition phase. Spray foam is mainly
used in walls and roofs. It was often used on
top of existing structures for e.g. roof
insulation, sprayed against surfaces, pumped
into cavity holes. When the walls are
demolished, foams are trapped in the
wreckage and it would require time- and
cost-intensive manual segregation.
Block foam
Low
For block foam, as part of concrete slabs, the
recovery is not feasible in the demolition
phase as no examples have been identified of
successful splitting of this material from the
generic demolition waste stream. For block
foam part of pipe insulation, recovery
opportunities may exist during pipe
replacement activities. In particular, block
foam used in district heating/cooling system
in the pasts is recoverable.
In summary, it is appears feasible to recover about 100% of the waste stream of metal-faced
panels. They are the cheapest option given their valuable metal component and because they
can be cut into smaller pieces without emitting a significant amount of HFC being released.
Thus they can be treated in existing facilities for domestic appliances. It is estimated that
approximately 25% of built-up systems and cavity structures (the two sub-types of laminated
boards) should also be feasible to recover at the current time given the evidence of suitable
construction procedures. Floor insulation boards may still represent too many technical or
economic challenges to be a candidate for mandatory recovery because they are trapped into
the wreckage in the demolition process and, collection and segregation stage is labour
intensive and costly. In floor insulation, the foam is under concrete, hence, it is highly
contaminated and costly to collect and segregate. Spray foam is not efficient to recover as it
is expected to lose most of its HFC already in the use phase, making the cost-benefit ratio of
mandatory recovery very inefficient.
The industry is pro-actively exploring further options to divert end-of-life foam from landfill.
Recycling and recovery solutions have been developed and have proven their technical
feasibility. Raw material prices have been steadily increasing over the past years and are
likely to continue this development. The cost for landfill is also going up. This will contribute
to the economic viability of recycling and recovery options.
294
A15.2Potential emissions
Table 67 gives potential emissions from the insulation foams blown with HFCs that are
presumably taken out of service due to demolition and renovation activities of old buildings.
Before 2045 such potential emissions are very low as most foams will contain ODS, rather
than HFCs. However, there is a significant potential of avoiding emissions after 2050, with
ca. 45 MtCO2e of HFC foams left in buildings. The highest quantities are banked in
laminated boards (about two-thirds of the foams).
Table 68. Potential emissions from insulation foams with HFCs reaching end-of-life
Year Metal-faced
panels
Laminated
boards
Block foam/
pipe section
All foams
2045 0.011 0.011 0.009 0.031
2046 0.025 0.03 0.021 0.076
2047 0.037 0.106 0.032 0.175
2048 0.067 0.215 0.058 0.340
2049 0.094 0.341 0.081 0.516
2050 0.125 0.521 0.107 0.753
Total 0.359 1.224 0.308 1.891
A15.3Economic Impacts
Economic impacts have been assessed for ODS-containing foams in a previous study110
, but
very similar costs may be expected for HFC-foams. Costs are assessed only for metal-faced
panels, built-up system, and cavity structure laminated boards, as these are part of the policy
option assessed. New evidence on the cost of recovery is based on data from two case studies
and an expert interview from stakeholders engaging with waste streams in Netherlands,
Germany, Austria and the United Kingdom. The abatement costs in Table 68 are based on
indicative prices (€/CO2) from the two case studies. The total cost of around 6.4 million are
distributed over a high number of building owners and/or real estate developers. As said
above, there are important synergies with a similar considered measure for ozone-depleting
substances, whose environmental impact is significantly larger as the ones proposed here for
HFCs.
Policy Measure Scenario Costs Explanation
Destruction of HFCs in metal-
faced panels or reuse from 2024
All
Options
EUR
5.37
per
The cost estimation is based upon
the economic assumptions used for
the analysis of the ODS
110
Ricardo et al. (2021). Support study for the impact assessment of the Regulation on ozone-depleting
substances.
295
panel Regulation. The compliance costs
calculated in the ODS have been
amended to take into account only
HFCs.
Destruction (or reuse) of HFCs in
laminated boards in built-up
structures and cavities, unless
infeasibility is proven by the
building owner/demolition
company
Options 2
and 3
EUR
35 per
board
Table 69. Overview of the total costs of foam recovery/destruction as envisaged by the policy options111
Policy
Option
target
Estimate of
abatement
GHG
(kt CO2e)
Total cost
(2045 –
2050)
Abatement
cost
Unaddressed
potential
Estimate of
untargeted
emissions
(2020 - 2050)
EUR EUR/t CO2e GHG (kt CO2e)
Metal-faced
panels
100%
All
options
359 €1.8 MIO 5.1 0% 0
Laminated
boards in built-up
systems or cavity
structures
25% of
total
boards
options 2
& 3
306 €4.6 MIO 15.0 75% 918
Spray & Block
foam
0% 0 100% 308
Total 665 €6.4 MIO 9.6 1,226
Based on evidence from the stakeholder consultation, for those countries with an available
waste treatment stream, technical progress achieved over the last decade resulted in a
significant likely decrease in recovery costs. The final cost of the option will however be
Member State specific, as not only waste treatment practices, but also building practices
differ across the EU Member States. Therefore, these costs may be higher in other Member
States than suggested for the Netherlands or Germany (where existing waste separation
policy means that less additional cost is borne by the recycling plant or incinerator to obtain
foam material, as it is already separated out and classified as a hazardous mono-fraction). As
111
It is assumed that 10% content of blowing agent out of the total foam weight (German Federal
Environmental Agency, 2012) excluding the metal cladding.
296
a way of estimating the absolute worst case scenario and since data for ODS/HFC foams was
very difficult to obtain form other countries than the ones mentioned, data on asbestos
recovery and destruction from building wastes were collected. Given the health implications
of asbestos, there are expensive measures on worker safety to be taken which would not be
the case for ODS/HFC foams, and thus these number would indicate how much the recovery
and destruction of ODS/HFC will most certainly not cost.
A15.4Social Impacts
Research and development
According to interviewed experts the recovery of foam banks can be expected to spur
innovation since it will create an incentive to reduce costs of reclamation via research and
development into demolition and recycling technologies. Based also on the experience related
to the mandatory recovery from domestic refrigeration appliances, such a policy is likely to
result in better and cheaper ways to ensure recovery. Moreover, given that transport costs are
high, research and development is likely to be carried out by domestic companies, creating
added value within the European Union.
Consumer prices
The implementation could potentially increase consumer prices, i.e. for consumers renovating
or constructing a building. If new construction in a building site must be preceded by
incurring in the recovery of ODS/HFC from the decommissioned building, real estate prices
could increase slightly as a result. However, there is evidence in the literature suggesting that
construction prices have a low influence on the evolution of real estate prices (Martins et al.,
2020). New buildings are more expensive on average, and hence mostly bought by
households with high purchasing power or by companies as office space. Thus vulnerable
consumers are less likely to be affected by price increases. Moreover, richer households pay
high premiums (e.g. for “good neighbourhood”) hence the potential increase in consumer
prices due to additional costs of recycling, even if realised, would be very marginal compared
to the final housing price. The higher demolition costs are expected to be borne by the
building owners, as demolition companies would pass these on. However, it is unlikely for
consumer prices to increase in a perceptible way due to additional construction costs resulting
from the implementation of this policy.
Employment
The policy option may increase employment due to the labour-intensive and complex nature
of the demolition and reclamation processes. Currently demolition, segregation and insulation
foam recovery processes are largely mechanised and are not labour-intensive activities,
297
although there are differences among Member States. According to the literature112
it is
unlikely that recycling will add labour time (or cost). In fact, in many cases recycling would
save time spent on waste management.
112
Kameswari (2015). Construction and Demolition Waste Management - A Review. International Journal
of Advanced Science and Technology, Vol 84.


EN EN
EUROPEAN
COMMISSION
Strasbourg, 5.4.2022
SWD(2022) 96 final
PART 1/2
COMMISSION STAFF WORKING DOCUMENT
IMPACT ASSESSMENT REPORT
Accompanying the document
Proposal for a
REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
on fluorinated greenhouse gases, amending Directive (EU) 2019/1937 and repealing
Regulation (EU) No 517/2014
{COM(2022) 150 final} - {SEC(2022) 156 final} - {SWD(2022) 95 final} -
{SWD(2022) 97 final}
Offentligt
KOM (2022) 0150 - SWD-dokument
Europaudvalget 2022
EN EN
i
Table of contents
1. INTRODUCTION: POLITICAL, SECTORAL AND LEGAL CONTEXT ........................................ 1
1.1. EU Climate Ambition, Paris Agreement and Montreal Protocol......................1
1.2. Sectors involved and need to perform a sectoral analysis.................................3
1.3. The EU F-gas Regulation (Regulation (EU) No 517/2014)..............................3
2. PROBLEM DEFINITION .................................................................................................................... 6
2.1. What is the problem?.........................................................................................6
2.1.1. Insufficient emission savings ...................................................................... 7
2.1.2. Long-term compliance issues with the Montreal Protocol ......................... 9
2.1.3. Challenges to implementation and enforcement....................................... 10
2.1.4. Monitoring gaps: Gases and activities covered as well as rules on reporting
process and data verification..................................................................................... 14
2.1.5. Lack of clarity and coherence ................................................................... 15
3. WHY SHOULD THE EU ACT? ........................................................................................................ 15
3.1. Legal basis.......................................................................................................15
3.2. Subsidiarity: Necessity of EU action...............................................................15
3.3. Subsidiarity: Added value of EU action..........................................................16
4. OBJECTIVES: WHAT IS TO BE ACHIEVED? ............................................................................... 16
4.1. General (review) objectives.............................................................................16
4.2. Specific (review) objectives ............................................................................16
5. WHAT ARE THE AVAILABLE POLICY OPTIONS? .................................................................... 17
5.1. What is the baseline from which options are assessed? ..................................17
5.2. Description of the policy options ....................................................................20
5.3. Options discarded at an early stage .................................................................27
6. WHAT ARE THE IMPACTS OF THE POLICY OPTIONS? ........................................................... 27
6.1. Environmental impacts....................................................................................28
6.1.1. Emission savings from quota system and prohibitions............................. 28
6.1.2. Other emission savings ............................................................................. 30
6.1.3. Energy use................................................................................................. 30
6.1.4. Other environmental effects...................................................................... 31
6.2. Cost to business...............................................................................................33
6.2.1. Technological costs and HFC costs for F-gas using industries / equipment
operators 33
6.2.2. Administrative Costs................................................................................. 38
6.3. Macroeconomic effects ...................................................................................41
ii
6.3.1. Effects on GDP ......................................................................................... 41
6.3.2. Effects at sectoral level ............................................................................. 41
6.3.3. Effects on consumption, investment and innovation ................................ 42
6.3.4. Distribution of cost across EU regions...................................................... 42
6.3.5. Impact on consumer prices........................................................................ 43
6.3.6. Distribution of cost across business size................................................... 44
6.3.7. Impact on competitiveness........................................................................ 45
6.3.8. Impact on trade flows (imports and export).............................................. 45
6.4. Social effects ...................................................................................................46
6.4.1. Effects on employment ............................................................................. 46
7. HOW DO THE OPTIONS COMPARE?............................................................................................ 46
8. PREFERRED OPTION ...................................................................................................................... 49
9. HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED?.................................. 52
A1 PROCEDURAL INFORMATION ..................................................................................................... 54
A2 SYNOPSIS REPORT OF STAKEHOLDER CONSULTATIONS.................................................... 64
A3 WHO IS AFFECTED AND HOW?.................................................................................................... 81
A4 ANALYTICAL METHODS............................................................................................................... 86
A5 EVALUATION OF REGULATION (EU) NO 517/2014 ................................................................ 117
A6 INDIVIDUAL MEASURES............................................................................................................. 175
A7 OPERATIONALISING THE HFC PLACING ON THE MARKET (POM) QUOTA
SYSTEM (PHASE-DOWN) GOING FORWARD .......................................................................... 194
A8 SEPARATE PRODUCTION PHASE-DOWN................................................................................. 199
A9 PROHIBITIONS CONSIDERED IN THE IMPACT ASSESSMENT............................................. 203
A10 DETAILED ANALYSIS ON REPORTING AND VERIFICATION THRESHOLDS ................... 207
A11 DETAILED INFORMATION ON EMISSIONS ............................................................................. 212
A12 ANAFGAS COST MODELLING RESULTS.................................................................................. 220
A13 DETAILED MODELLING RESULTS OF GEM-E3 ...................................................................... 251
A14 DETAILED INFORMATION ON ADMINISTRATIVE COSTS................................................... 253
A15 DETAILED INFORMATION ON FOAMS RECOVERY .............................................................. 291
iii
Glossary
Term or acronym Meaning or definition
AC Air conditioning which here is considered to also include heat pumps
AnaFgas model
Detailed bottom-up model for sectors and sub-sectors using F-gases.
AnaFgas = „Analysis of fluorinated greenhouse gases in the EU“
AR (4/5/6)
4th
, 5th
or 6th
Assessment Report of the International Panel on Climate
Change (IPCC)
Bank(s)
The amount of substance (e.g. HFC) contained in existing equipment (e.g.
refrigerators, foams), chemical stockpiles and other products, including after
their end of useful life; or recovered and stored ready for use
BDR
EEA’s “business data repository”, where annual reporting by companies is
received and stored
Bulk (HFC, F-gas)
Refers to HFC gas/F-gases in containers (for transport, storage etc.) as
opposed to already filled into products (e.g. an aerosol spray can) or
equipment (e.g. an air conditioner)
Capex Capital expenditure
CERTEX
IT system that allows to exchange data (“certificates”) on relevant F-gas
shipments between the central EU F-gas Portal & HFC Licensing System and
custom offices in the Member States directly; IT precursor of the European
Single Window Environment for Customs
CDW Construction and demolition wastes
CN
EU Combined Nomenclature; tool for classifying goods to meet the
requirements of common customs tariff and external trade statistics
https://ec.europa.eu/taxation_customs/business/calculation-customs-
duties/customs-tariff/combined-nomenclature_en
CO2e(quivalent)
The CO2 equivalent is the quantity of a gas in metric tonnes multiplied by its
associated global warming potential (GWP). This is used to compare the
emissions from various greenhouse gases based upon their global warming
potential
Consumption
The quantity of HFC produced plus imported, minus exported minus
destroyed. Calculation of consumption under the Montreal Protocol
excludes non-virgin bulk imports and exports, as well as substances intended
for feedstock and process agent use
ECHA European Chemicals Agency
EEA European Environment Agency
EPEE
European Partnership for Energy & Environment. An industry association
that includes inter alia large F-gas producers, large equipment
manufacturers and service personnel representatives
ESR
Effort Sharing Regulation: Regulation (EU) 2018/842 as well as the proposal
for a Regulation amending this regulation (COM(2021) 555 final)
ETS EU’s Emission Trading System
F-gases Fluorinated greenhouse gases
iv
Feedstock use
Use of a substance, e.g. an F-gas, in a process where it undergoes chemical
transformation to synthesise other chemicals and in which the substance is
entirely converted from its original composition
F-gas Regulation Regulation (EU) No 517/2014
GDP Gross domestic product
GHG(s) Greenhouse gas(es)
GWP
Global Warming Potential. It is a metric for determining the relative
contribution of a substance to climate warming. The GWP indicates how
much (solar) energy the emissions of 1 ton of a gas will absorb (and thus
contribute to climate warming) over a given period of time, e.g. 100 years
for GWP100, relative to the emissions of 1 ton of carbon dioxide (CO2).
HFCs Hydrofluorocarbons; F-gases listed in Annex I of F-gas Regulation
HFC-23
Trifluoromethane; an HFC with a very high GWP (14,500 according the IPPC`s
4th
Assessment Report)
HFOs, HCFOs
Unsaturated HFCs that can substitute HFCs in many applications.
Synthetically produced substances that break up quickly in the atmosphere
and therefore have a low GWP. HCFOs are slightly different chemically as
they also include a chlorine atom in the molecule. Both are listed in Annex II,
Section I.
HFEs Fluorinated ethers, listed in Annex II
HV High-voltage
IPCC
Intergovernmental Panel on Climate Change. United Nations body for
assessing the science related to climate change. https://www.ipcc.ch/
ISG
European Commission Inter Service Group accompanying the impact
assessment
Kigali Amendment Added HFCs to the regulated substances under the Montreal Protocol
MAC Mobile air conditioning (in particular as relating to AC in passenger cars)
MDIs Metered dose inhaler used for medical purposes, e.g. asthma sprays
MMR
Monitoring Mechanism Regulation (Regulation (EU) No 525/2013):
mechanism for monitoring and reporting greenhouse gas emissions and for
reporting other information at national and Union level relevant to climate
change
(Montreal) Protocol
The Montreal Protocol on Substances that Deplete the Ozone Layer, an
international treaty governing the protection of stratospheric ozone. It also
regulates the HFCs since the Kigali Amendment (2016).
MV Medium-voltage
NF3 Nitrogen trifluoride (an F-gas listed in Annex II)
v
ODS Ozone-depleting substance(s)
Opex Operational expenditure
Person days Full-time equivalent (working time)
PFAS
Per- and polyfluoro alkyl substances, synthetic organofluorine chemical
compounds that have multiple fluorine atoms attached to an alkyl chain.
They are substances of concern due to the longevity in the natural
environment (“forever chemicals”).
PFCs Perfluorocarbons; F-gases listed in Annex I of F-gas Regulation
PfS Production for sale
POM (Placing on the market)
Supplying or making available to third persons within the European Union
for the first time, for payment or free of charge
RAC Refrigeration and air conditioning (includes heat pumps)
Reclamation
Reprocessing of a recovered ODS in order to meet the equivalent
performance of a virgin substance, taking into account its intended use
Recovery
Collection and storage of ODS from products and equipment or containers
during maintenance or servicing or before disposal
Recycling Reuse of a recovered ODS following a basic cleaning process
REIO
Regional Economic Integration Organisation; The EU is considered a REIO
under the Montreal Protocol
RSB Regulatory Scrutiny Board
RV Reference value
SF6 Sulphurhexafluoride; an F-gas listed in Annex I of the F-gas Regulation
SME Small and medium enterprises
Single Window
European Single Environment for Customs;
https://ec.europa.eu/taxation_customs/general-information-
customs/electronic-customs/eu-single-window-environment-for-
customs_en
SO2F2
Sulfurylfluoride, an F-gas used in pest control currently not listed in the F-
gas Regulation
Switchgear
Switchgear is used to in electric transmission and power systems to
control, protect and isolate electrical equipment
TARIC TARIC = Integrated tariff of the EU
(M)tCO2e (million) tonnes CO2 equivalent
TFA
Trifluoroacetic acid; a persistent chemical that is formed by the breakdown
by some HFCs and HFOs in the atmosphere; accumulates in surface and
vi
fresh waters and has been shown to have phytotoxic effects
Totex Total expenditure
UNFCCC United Nations Framework Convention on Climate Change
VRF system
Variable Refrigerant Flow; an AC system that allows endusers to control
several air conditioned spaces (e.g. rooms) individually
1
1. INTRODUCTION: POLITICAL, SECTORAL AND LEGAL CONTEXT
1.1. EU Climate Ambition, Paris Agreement and Montreal Protocol
Fluorinated greenhouse gases (F-gases) are man-made chemicals that are very strong
greenhouse gases (GHG), often several thousand times stronger than carbon dioxide (CO2).
Together with carbon dioxide, methane and nitrous oxide, they belong to the group of GHG
emissions covered under the Paris Agreement on Climate Change.
F-gas emissions amount today to 2.5 % of EU’s total GHG emissions, but have doubled from
1990 to 2014, in contrast to other GHG emissions which have fallen. This is because F-gases
typically replaced ozone-depleting substances (ODS)1
in areas where the EU prohibited
ODS2
to protect the Ozone layer, as required under the Montreal Protocol on substances that
deplete the ozone layer (hereafter the Protocol). Since 2006 the EU has had policies in place
to reverse this increasing trend of F-gas emissions and the EU Regulation on fluorinated
greenhouse gases3 (hereafter: the Regulation4
) is one of the key instruments at EU level to do
so and contributes to reaching the EU climate targets.
Recently, the EU increased its climate ambition through the European Climate Law5,
adopted in 2021. This law establishes a binding overall net GHG reduction target of at least
55% by 2030 compared to 1990 and climate neutrality by 2050. The law is based on the 2030
Climate Target Plan6
which underlines that achieving this ambition will require action in all
sectors and that all policy instruments relevant for the decarbonisation of our economy
must work in coherence, while setting the agenda to reinforce them. In this context, the
proposed revision of the Effort Sharing Regulation (ESR)7 increases the ambition of the
binding annual greenhouse gas emission targets for Member States from 2021 to 2030 for
sectors not covered by the existing EU Emissions Trading System (ETS). F-gas emissions8
are included in the ESR and represents almost 5% of all GHG emissions covered. Member
States’ individual targets relate to this overall basket of GHGs and there are no sub-targets for
the sectors covered. Consequently, the EU or the Member States do not have any binding
targets specific to F-gas emissions.
1
Note that F-gases themselves are not relevant for ozone depletion
2
Regulation (EC) 1005/2009 on substances that deplete the ozone layer.
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32009R1005
3
Regulation (EU) No 517/2014 on fluorinated greenhouse gases.
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32014R0517
4
The EU started its F-gas policy in 2006 with Regulation (EC) No 842/2006 on fluorinated greenhouse
gases and Directive 2006/40/EC relating to emissions from air conditioning systems in motor vehicles
(MAC Directive). The Current Regulation has applied since 2015.
5
Regulation (EU) 2021/1119. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32021R1119
6
COM(2020) 562 final. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52020DC0562
7
COM(2021) 555 final. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2021%3A555%3AFIN
8
A very small fraction of F-gas emissions is covered by the EU ETS (perfluorocarbons emissions in the
production of primary aluminium). There are also fluorinated GHG not covered by the ESR and the ETS,
e.g. gases listed in Annex II of the F-gas Regulation (except for NF3), and other, as yet unlisted
fluorinated GHG.
2
The Regulation could contribute more to achieving the EU’s climate targets. It is
targeting a number of sectors falling within the scope of the ESR, where EU action has
proven to be particularly well placed to achieve emission reductions in a cost-effective
manner. By reviewing and reinforcing this Regulation, additional F-gas emission savings at
EU level can help Member States achieve their proposed higher ESR GHG emission target
and improve the overall cost-effectiveness, while leaving margin to Member States on how
best to achieve the required overall GHG targets across all sectors and gases in the ESR. For F-
gases Member States can e.g. apply national fiscal measures (see Annex A5.4.2.2 on
additional Member States action).
In addition, there is an urgent need to improve implementation and enforcement (see
section 2.1.3) and to align fully with new obligations under the Protocol (see section
2.1.2), whose initial principal objective was to protect the ozone layer. However, because
hydrofluorocarbons9
(HFCs) emissions were increasing also globally (partly as result of the
ODS phase-out) and knowing that the Protocol had eliminated ODS successfully in similar
applications, the Parties decided in 2016 to contribute to the goals of the Paris Agreement on
Climate Change by imposing the Protocol’s tried and true obligations also for HFCs (“Kigali
Amendment”). Therefore, since 2019 the EU and its Member States must respect mandatory
maximum annual limits for production and consumption of HFCs that are being gradually
reduced over time (“phase-downs”). This is purely a climate protection measure, since HFCs
themselves are not relevant for ozone depletion. Moreover, there are no emission
monitoring or targets under the Protocol. Instead, HFC emissions are monitored under the
Paris Agreement. It has been estimated that the Kigali Amendment alone will prevent, until
2100, climate warming of up to 0.4 degrees. In the latest IPCC report10
, pathways to limit
global warming at 1.5°C require emission decreases for F-gases of up to 90% by 2050
globally compared to the year 2015. In addition to phasing down HFCs, the Protocol requires
Parties to have a trade licensing system and report annually on HFC production and
trade. All Parties must take their own action to fulfil their obligations.
There is general support for fine-tuning the Regulation and many stakeholders and Member
States have signalled that it should be done with urgency. The European Parliament called
“… on the Commission to present an ambitious revision of the F-Gas Regulation by the end
of 2021 in order to accelerate the phasing out of hydrofluorocarbons (HFC); [..] believes
that additional action should also be taken against the use of sulphur hexafluoride (SF6)”11
.
The Commission has therefore decided to propose changes to the Regulation and this report
is an impact assessment of the measures considered. It also includes an evaluation of the
current Regulation in Annex A.5.
9
HFCs are the most commonly used F-gases and contribute most of the emissions of this substance
group
10
IPCC Special Report. Global warming of 1.5 C (August 2021). https://www.ipcc.ch/sr15/
11
Texts adopted - UN Climate Change Conference in Glasgow, UK (COP26) - Thursday, 21 October 2021
(europa.eu), see point 94.
3
1.2. Sectors involved and need to perform a sectoral analysis
The main uses of F-gases are as refrigerants in refrigerators/freezers, air conditioners (AC,
which is hereafter understood to include heat pumps); as blowing agents for foams; as
solvents; and in fire extinguishers, metered dose inhalers (MDIs)12, technical aerosol
spray cans as well as an insulation medium in electrical transmission. Emissions occur
when these appliances are manufactured, used, or taken out of service. Some of them leak
throughout their lifetime (e.g. refrigeration), others can be 100% emissive at the time of use
(e.g. MDIs). As the different F-gases have different climate impacts, it is necessary to
determine F-gas demand/use in the different sectors concerned and the specific gases
used in order to estimate future emissions. Furthermore, emission abatement costs vary
significantly between sectors. For comparability to other GHG emissions, F-gases are
expressed in terms of the warming impact (“climate forcing”) they would have in a 100 years
timespan relative to CO2, referred to as the Global Warming Potential (GWP) 13. Thus, this
report distinguishes between demand for F-gases and emissions of these gases and
expresses both of these quantities in tonnes CO2 equivalent, i.e. tCO2e14 and their weight
in metric tonnes (t). Hydrofluorocarbons (HFCs) are by far the most relevant F-gas
group, as they represent ca. 85% of F-gas emissions (see Annex A5.4.1.4), but use and
emissions from other substances such as perfluorocarbons (PFCs), sulphur hexafluoride
(SF6) and nitrogen trifluoride (NF3) are also relevant.
1.3. The EU F-gas Regulation (Regulation (EU) No 517/2014)
F-gas emissions can be reduced by (i) avoiding that F-gases are used in the first place (i.e.
reduce the demand for F-gases), or (ii) ensuring there are measures to prevent emissions or
leaks when the gases are produced, used and disposed of (“containment”). To this end the
2014 Regulation had the following specific objectives:
 Discourage the use of F-gases with high Global Warming Potential and encourage
the use of alternative substances or technologies when they result in lower GHG
emissions without compromising safety, functionality and energy efficiency;
 Prevent leakage from equipment and proper end of life treatment of F-gases in
applications;
 Facilitate convergence towards a potential future agreement to phase down HFCs
under the Protocol;
 Enhance sustainable growth, stimulate innovation, and develop green
technologies by improving market opportunities for alternative technologies and
gases with low GWP.
12
HFCs used as propellants in aerosol inhalers for medical use, e.g. asthma sprays.
13
Global Warming Potential. It is a metric for determining the relative contribution of a substance to
climate warming. The GWP indicates how much (solar) energy the emissions of 1 tonne of a gas will
absorb (and thus contribute to climate warming) over a given period of time, e.g. 100 years for GWP100,
relative to the emissions of 1 tonne of carbon dioxide (CO2).
14
To obtain these quantities of tCO2e, the metric tonnes of F-gases are multiplied with their respective
GWP
4
It was also intended that the F-gas sector would contribute its fair share to achieving the
EU 2030 climate targets (as per Roadmap 201115
). At the time the Commission prepared its
proposal in 2011, it was estimated that costs would be up to €50/tCO2e abated economy wide
to achieve the old, (less ambitious) climate targets. This threshold was applied to design the
measures in the Regulation. Subsequently, it was estimated that these measures would result
in F-gas emission reductions of 60% in 2030 compared to 2005.
Many F-gas appliances use electricity and lead to indirect GHG emissions related to energy
use, which over the lifetime of the equipment are typically higher than the direct emission of
F-gases. Therefore, climate-friendly alternatives to F-gases in such appliances are only
considered to be more climate-friendly in this assessment if they can reach at least the same
level of energy efficiency as the existing F–gas technology. In parallel, the EU Eco-Design
Directive16
is ensuring progress on indirect emissions by setting minimum standards on
efficiency. The alternatives must also be safe to use.
The current Regulation avoids emissions (by reducing demand and ensuring better
containment, see above) and enables control and oversight through the following measures
(more detail in Annex A5):
 A quota system limits the HFC amount importers and EU producers may place
on the EU market every year (measured in tCO2e). Quota is principally needed for
HFC gases in bulk17
, but HFCs charged into certain equipment also fall under the
quota system. The quota system results in reducing the HFC supply to the EU market.
This (initially) results in higher HFC prices that incentivise a shift towards climate-
friendly alternatives and reduces future HFC demand. It also promotes leakage
prevention, recycling and reclamation of HFCs that can be used without need for
quota. The amounts available each year are meant to only cover the need for HFCs in
those new and existing appliances where the analysis done in 201118
expected it to be
too expensive or infeasible to use climate-friendly alternatives. There are some
exemptions, e.g. HFCs used for MDIs, military and semiconductor manufacture do
not require quota.
 Prohibitions restrict the placing on the market (POM) of specific F-gas products
and equipment (e.g. types of new refrigeration and AC equipment, foams and
aerosols) and some F-gas uses (e.g. servicing (refilling) of larger, existing
refrigeration systems with high GWP HFCs). Prohibitions relating to HFCs
complement the quota system since they prevent that actors that could easily replace
HFCs continue to use them e.g. due to lack of awareness of alternatives (market
failure). This reduces the risk of undue shortages and HFC prices for the sectors that
are depending on HFCs.
15
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0112:FIN:EN:PDF
16
Directive 2009/125/EC
17
“Bulk” HFCs or gases refers to substances in containers (for transport, storage etc.) as opposed to HFCs
or other F-gases already filled into products (e.g. an aerosol spray can) or equipment (e.g. an AC)
18
F-gas Regulation Impact Assessment. SWD(2012)
364https://ec.europa.eu/clima/document/download/4a34340e-9f82-41e7-adcb-5ce4035b764b_en
5
 The measures to prevent emissions where F-gases are produced or used include
requirements to avoid intentional releases or leakage, mandatory leak checks of
equipment, keep company records on F-gas related activities, recover gas at the end of
equipment life, compulsory training and certification of technical personnel, and
producer responsibility schemes (the latter only encouraged). Most of these
“containment” measures were already introduced by the 2006 F-gas Regulation.
 For the purpose of controlling and monitoring the policy as well as anticipating
global rules on HFCs under the Protocol19, licensing of imports and exports, labelling
of F-gas containers and equipment as well as annual company reporting on their F-gas
related activities including independent verification of their data is required.
Furthermore, Member States must have effective, proportionate and dissuasive
penalties; in case a quota is exceeded, the Commission must also impose a quota
reduction.
 While Member States are not required to report directly on emissions under the
Regulation they must establish systems to acquire F-gas emissions data that enable
them to report F-gas emissions under the EU’s GHG monitoring mechanism.20
The Regulation covers F-gases listed in Annex I (HFCs, PFCs and SF6) and Annex II
(H(C)FOs21; fluorinated ethers, alcohols and others). In general, measures only apply to
Annex I gases, except that production, trade and some uses of Annex II gases must be
reported annually by companies. Each F-gas has a designated name (e.g. HFC-134a or R-
134a) and a specific GWP (e.g. HFC-134a has 1430). In many cases the gases are not used in
their pure form but as mixtures (or “blends”, e.g. R-404a, which includes 3 different HFCs
listed in Annex I). On the basis of their composition it is possible to assign a specific GWP
also for mixtures. Because F-gases are used in many types of appliances, many different
actors are affected by the Regulation, and in different ways. This is also because there are
different gas types covered (e.g. HFCs, PFCs, SF6) and/or the activities these stakeholders
carry out are diverse (e.g. import of gas or equipment, production of gas or equipment,
equipment maintenance, equipment or product use).
After a preceding decade of increasing year-on-year emissions of F-gases, they started to fall
from 2015, resulting in a 6% reduction by 2019 (see A5.6.2.1.1). This is a direct result of
the EU F-gas policies which began in 2006 (see A5.2.1.3), lowering the use of (i.e. demand
for) HFCs as well as better containment (and thus less emissions from equipment) in the
major HFC-using sectors (e.g. refrigeration, AC). Conversely, emissions of SF6 and PFCs,
where there are no strong, direct policy drivers at EU level, have been rather constant since
2010 (see A11.1.1). Annex II gases result in smaller amounts of up to 1MtCO2e/year; NF3
and F-gases used as inhalation anaesthetics (i.e. isoflurane, desflurane) being the most
19
Which were agreed in 2016 (Kigali Amendment). Some alignment was achieved via implementing acts,
e.g. Regulation (EU) 2017/1375 and Regulation (EU) 2019/522
20
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32018R1999&from=EN
21
Hydrofluoroolefins (HFOs) and hydrochlorofluoroolefins (HCFOs) have been introduced as climate-
friendly alternatives to HFCs. They break up quickly in the atmosphere and therefore have a very low
GWP.
6
relevant. H(C)FOs are emitted in large metric quantities, but their climate relevance is low
(see 6.1.4). There are also some on-going emission of some F-gases not yet controlled or
monitored (see 2.1.4).
The Regulation has close links to other EU legislation notably Directive 2006/40/EC on
Mobile AC which bans refrigerants with a GWP higher than 150 to be used in the AC of new
passenger cars from 2017. There are also some similarities with the Regulation (EC)
1005/2009 on substances that deplete the ozone layer, which is being reviewed in parallel.
While the two reviews will not impact on each other, they affect similar stakeholders and
sectors, as well as similar activities (trade, equipment use etc.) by using similar control
measures.22
Both industry and authorities have therefore called for them to be closely aligned
on the relevant rules (e.g. regarding custom controls, leakage rules, definitions etc.).
Furthermore, given the relevance of indirect emissions from energy use of F-gas equipment
(see above), there are close synergies with energy policies, in particular the Eco-design
Directive23. Furthermore, there are important links to EU waste and chemical (e.g. REACH,
industrial emissions) legislation as well as to rules for customs, market surveillance,
environmental crime, whistleblowing and the setting of safety standards. More detail is
provided in Annex A5.6.4.2.
2. PROBLEM DEFINITION
2.1. What is the problem?
The evaluation (Annex A5) found that the current Regulation has been mostly effective as
regards its original objectives and that its individual measures are all required and
work well together. Thus, the overall concept and approach of the Regulation is not put
into question. This finding is clearly supported by all stakeholders (industry, authorities and
others) that consider the current F-gas Regulation the gold standard in the world.24
The EU market supply of hydrofluorocarbons (HFCs) has declined by 37 % in metric tonnes
and 47 % in terms of tCO2e from 2015 until 2019. There has been a clear shift to the use of
F-gas alternatives with lower GWP as well as natural alternatives (e.g. CO2, ammonia,
hydrocarbons) in many types of equipment. The quota system had also positive impacts on
equipment leakage rates (declining) and reclamation of HFCs (increasing)25
. There is
consensus that the EU leadership demonstrated through the Regulation was instrumental in
obtaining an international agreement to reduce HFCs. Finally, as a direct result of the
22
While HFCs replaced ODS in the past, this is not anymore the case today since ODS have been
eliminated in the EU in sectors where this took place (in particular refrigeration, AC, foams, aerosols..).
Therefore, changes to the ODS Regulation regulating the few remaining uses of ODS will not affect the
Fgas Regulation.
23
Directive 2009/125/EC. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32009L0125
24
Press Release: EPEE Welcomes the Revision of the F-Gas Regulation: “Fine-tuning the gold standard” is
key | EPEE (epeeglobal.org)
25
The quota system made HFCs significantly more expensive in the EU. Thus, it made reclamation
activities more profitable since no quota is needed for reclaimed gases. This is clearly indicated by rising
reclamation rates each year since 2014 and quantities reclaimed tripling from 2014 to 2019. See
A5.6.1.1Error! Bookmark not defined.
7
legislation, F-gas emissions have decreased year-on-year starting in 2015 after a decade of
rising amounts. Nevertheless, the evaluation concludes that there is a need to revise and fine-
tune the Regulation to address the following issues:
i. In light of the more ambitious EU climate targets and the observed progress on
innovation, there is scope to achieve further emission reductions. .
ii. Long-term compliance with the Montreal Protocol is not ensured.
iii. There are a number of challenges for current implementation and enforcement:
Illegal activities, rogue traders and the lack of skilled technicians.
iv. There are some monitoring gaps (gases and activities covered and the rules on the
reporting process and data verification).
v. There is a need for more internal clarity and coherence concerning some
prohibitions, instructions to customs, containment measures, and definitions.
These issues, their drivers and potential developments are described in more detail below.
2.1.1. Insufficient emission savings
(i) Status quo of the issue
The evaluation shows that the EU F-gas policy could contribute more to saving climate-
relevant emissions and the climate policy ambition has increased:
- The existing F-gas legislation was based on modelling assumptions that aimed at
contributing to the 2011 Low Carbon Roadmap for 205026
, which had an ambition
level in line with reducing greenhouse gas emissions by 80% by 2050 compared to
1990.
- Further emission reductions are possible to support the new climate targets.
Abatement costs for HFC sectors so far have been relatively low (on average
€6/tCO2e abated) and due to recent technological developments there are many
areas where further abatement could happen at costs much below that required in
other sectors27
. The sector has seen huge innovation jumps in recent years (see
evaluation, A5.6.1.4) and more alternatives are available that are not fully incentivised
by the existing rules.
- The EU has in the meantime raised its climate ambition for 2030 by increasing the
2030 target from 40% greenhouse gas reductions to at least 55% net greenhouse gas
emissions reductions compared to 1990. The in-depth analysis in support of the
Commission Communication on ‘A clean Planet for all’28
already included
projections that confirmed that in order to contribute to a credible pathway towards
climate neutrality, also F-gas emissions reductions would have to be stepped up. The
impact assessments in support of the policy initiatives under the Fit for 55 package
proposed in 2021 included an updated Reference projection (which includes the
26
COM (2011) 112. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52011DC0112&qid=1646129502434
27
While significant technological developments have resulted in new climate-friendly alternatives
becoming technically viable, market uptake is slow, for instance for switchgear and air conditioning
(AC).
8
existing F-gas legislation) as well as a number of policy scenarios. Also for these
projections, using the GAINS modelling tool to represent all non-CO2 emissions,
significant additional F-gas emission reductions should be achieved by 2030
compared to the existing policies under Reference projections29
.
- Modelling done in the course of the evaluation indicated that F-gas emission
reductions in the baseline will fall short of what was estimated to be a cost-efficient
contribution to meet the EU greenhouse gas ambition from the 2011 Low Carbon
Roadmap (see Annex A11).
- Furthermore, to reach climate neutrality by 2050, further replacement of F-gases is
already needed in the medium term due to a long lag between the new use of F-
gases and the point in time where such use results in emissions (usually several years
and can be over 50 years in the case of insulation foams and switchgear)30
.
(ii) Drivers
- The fundamental underlying problem is that the market will not deliver the possible
emission savings without policy intervention (market failure), due to a number of
factors including upfront costs (even though there are energy savings during the
project lifetime) and unwillingness to move away from past technologies.
- No quota limits are set after 2030 and the allowed total quota of HFCs is higher than
needed (i.e. too much HFCs are allowed even where alternatives could be used
instead). As the quota system is based on a modelling exercise using existing
technologies in 2011, F-gas appliances that could easily use alternatives today are not
sufficiently forced to do so. HFC uses exempted from quota are not subject to any
limitation (e.g. MDIs).
- The evaluation also identified other areas with potential for reducing F-gas use and
thus emissions, e.g. inhalation anaesthetics as well as SF6 in switchgear (see A5.6.3),
where there is no direct policy driver in place.
- The general obligation to limit F-gas emissions does not cover all relevant F-gases or
actors.
- There is no clear obligation to recover HFCs from insulation foams at the end of life.
(iii) How the problem will evolve
An unnecessarily high use of F-gases will continue and have lock-in effects for a
considerable amount of time due to equipment servicing needs and long equipment lifetimes.
This will lead to future F-gas emissions that could be avoided. Assuming that the quota limit
in 2030 is not exceeded until 2050 (despite the current lack of a legal limit for that time
horizon), the annual baseline emissions will decrease to about 44 MtCO2e by 2030 and 27
MtCO2e by 2050, from 92 MtCO2e in 2020. The emissions will come mostly from
switchgear (ca. 6 MtCO2e), MDIs (ca. 4 MtCO2e), stationary AC (ca. 8 MtCO2e in 2050)
28
See figure 79 of the In-Depth Analysis in support of the Commission Communication COM(2018) 773
29
https://energy.ec.europa.eu/publications-new/excel-files-mix-scenario_en
30
F-gas equipment and products leak during their lifetime and at the end of their useful life. Thus use of F-
gases in new products and equipment is resulting in emissions over a long period of time.
9
and mobile AC (ca. 5 MtCO2e). Refrigeration is the only major sector where emissions
mostly disappear by 2050 (see Annex A11.1).31
2.1.2. Long-term compliance issues with the Montreal Protocol
The evaluation found that the current Regulation is not fully aligned with the rules of the
Montreal Protocol and that for this reason long-term compliance was not ensured (see
A5.6.4.1.1). Irrespective of the need to save more climate-relevant emissions to achieve the
EU Climate targets (2.1.1), non-compliance with the global rules must be avoided, since this
would imply clear reputational losses for the EU, not least since the EU is a clear frontrunner
in setting ambitious F-gas policies that often serve as best practice example for the actions of
many other countries.
(i) Status quo of the issue
The following issues complicate future EU compliance:
- The Protocol’s future targets on HFC consumption.32 The EU consumption is
today safely below the limit set in the Protocol but the quota system as currently
regulated does not continue beyond 2030. Simply extending the current rules beyond
2030 may not be sufficient to meet the future Protocol targets. This is linked to the
fact that the quota system metric used by the Regulation (i.e. “placing on the market”)
uses other parameters than the Protocol’s “consumption” metric. For instance,
“placing on the market” includes some HFC equipment, but exempts some HFCs (e.g.
for MDI or other uses) that are fully counted under the Protocol. Depending on how
these different parameters develop in the future (e.g. if HFCs used in MDIs keep
growing strongly33
), EU compliance on the Protocol’s consumption limit may be
jeopardised. Also, the Regulation’s exemption from the quota system for small
quantities is not aligned with the Protocol where no such exemption exists.
- The Protocol’s separate limits for HFC production: There are currently no
specific production limits in the EU34 and it cannot be guaranteed that a Member
State would not exceed its national production limit (including starting new
production). Several Member States have called on the Commission to include a
separate production phase-down.35
- The Protocol’s reporting requirements: Data are not collected on small trade
transactions while this is prescribed by the Protocol.
31
HFCs in insulation foams is only a modest problem but is relevant due to the synergies with ODS
policies. See 6.1.2.2.
32
e.g. 80% reduction from baseline levels in 2034, 85% reduction from baseline levels in 2036.
33
As the evaluation shows, HFCs used for MDIs have grown by 45% between 2015 and 2019
34
Even though production is one of the relevant parameters of the quota system (“placing on the
market”) and is thus indirectly regulated.
35
Only two Member States maintain HFC production today (France and Germany). 98% of EU production
rights under the Protocol are assigned to five Member States (also ES, IT and NL). The EU has the option
of complying with the production obligation at EU level, but Member States have so far not agreed on
this (see 3.2.).
10
- The Protocol’s prohibition to trade with non-Parties from 2033: This concerns
importers from and exporters to countries that have not yet ratified the Kigali
Amendment. Currently no such provision exists in the Regulation.
(ii) Drivers
- The Regulation does not regulate quotas beyond 2030.
- Some uses of HFCs are only exempted under the EU quota system (not by the
Protocol): The exempted use of HFCs for MDIs represented 10% of the overall EU
HFC market in 2019 and the use has grown by 45% since 2015. The exempted uses
for semiconductors and military represent below 1% of the market.
- The Regulation does not allow direct control of produced HFC quantities.
- There are minimum annual HFC thresholds36 for quota and reporting which
exempts these quantities while such an exemption is not foreseen by the Protocol.
- Trade with non-Parties to the Protocol is allowed under the Regulation.
(iii) How the problem will evolve
- Protocol Consumption phase-down: EU-27 compliance from 2034 onwards is not
automatically ensured (even if the 2030 limit is extended). In a ‘low-consumption’
scenario37
, the calculated consumption would end up below the Protocol limit set for
the EU in 2036, but in a ‘high-consumption’ scenario the EU would exceed the
Protocol’s consumption limits already from 2034. This is mainly due to potential use
for MDIs that could represent 30% of the HFC demand in 2030.
- Protocol production phase-down: The risk that a Member State is not complying
increases over time as the production limits become stricter and the placing on the
market of HFCs for MDIs remains unrestricted.
- Protocol reporting requirements: EU reporting will remain incomplete as regards
small trade transactions.
- Protocol prohibition to trade with non-Parties from 2033: Without specific action,
the EU will not comply with the Protocol. In the meantime, the absence of EU action
will not help incentivise ratification elsewhere.
2.1.3. Challenges to implementation and enforcement
The evaluation highlighted a number of challenges38
related to implementation and
enforcement that are reducing the effectiveness of the Regulation:
36
I.e. companies below the threshold currently do not fall under the obligations to report, have quota, be
registered etc. Industrial stakeholders such as large chemical firms also pointed out that this threshold
facilitated illegal imports (repeated imports).
37
The EU phase-down concerns placing on the market (POM: includes import and EU production)
whereas the Montreal Protocol regulates consumption (slightly different parameters than POM). To
take into account these differences, a “low consumption” and “high consumption” scenario were used
to estimate the low and high end and see what the implications would be for EU compliance in the
future (OekoRecherche et al., 2021).
38
The evaluation also identified other challenges: The issue of possible eco-toxicological consequences of
HFC and H(C)FOs requires further observation (section 6.1.4), but preventing their emissions is part of
the higher ambition objective (section 2.1.1). Barriers to safety codes require remedial action outside of
11
- Illegal imports of HFCs that are not counted under the EU quota system.
- Rogue traders: A multiplication of gas importers that enter the market for
speculative reasons and/or benefit disproportionately from the quota system.
- A lack of skilled technicians for equipment using climate-friendly alternatives.
2.1.3.1. Illegal imports
(i) Status quo of the issue
There is clear evidence that HFCs are being imported without quota39
. Obviously, the amount
is by its very nature difficult to determine40
, but the situation is clearly unsatisfactory and
harming the effectiveness of the quota system and legitimate business interests. More than
half of the respondents in the public consultation considered that certain measures in the F-
gas Regulation were not effectively preventing illegal activities. The measure which was
rated least effective was Member States penalties. It has been a priority for the Commission
to address the issue and while some progress has been made, it has proven to be quite
challenging under the current F-gas rules, notably when imported HFCs are neither reported
under the F-gas Regulation nor declared at customs (i.e. smuggled)41
. Industry and the
European Anti-fraud Office (OLAF) note that perpetrators are exploiting the fact that custom
controls, market surveillance activities and penalties vary widely between Member States42
and that the use of special custom procedures (e.g. “transit”), goods in “temporary storage”,
small customs offices without the relevant know-how and online sales are making
enforcement more difficult43
.
(ii) Drivers
- The quota system results in EU HFC prices that are several times higher than world
market prices and makes it very profitable to sell HFCs in the EU.
the scope of the Regulation. Penalties are discussed in connection with Illegal imports and the issue of
data verification is discussed under “monitoring gaps” (section 2.1.4).
39
Besides a discrepancy of trade statistics (exports to the EU by China and the corresponding EUROSTAT
import statistics), many shipments of illegal gas are increasingly found at the borders. OLAF has
discovered a number of fraudulent activities, and industrial stakeholders at all levels (producers,
importers, distributors, service companies) report that they have come across these activities.
40
https://ec.europa.eu/clima/document/download/8b970e78-c5c3-41fd-b846-c75c1b6b045b_en.
The industry has claimed that illegal trade may be up to 30% of the total quota available in a year, but
this assumes that (i) all discrepancies detected in trade statistics would actually be illegal imports while
there may be other explanations (e.g. export data inaccuracies such as re-routing of trade) and/or (ii)
unexplained higher imports into EU neighbouring countries are automatically assumed to end up in the
EU without concrete evidence of the extent of cross-border smuggling.
41
Data for the quota system (F-gas Reporting) and trade data (EUROSTAT trade statistics) matched very
well.
42
Apparent from the F-gas and custom experts group that met several times between 2019 to 2021 to
discuss illegal HFC trade. The Commission financed the group under the Customs 2020 Programme.
43
The unsatisfactory level of illegal trade and modus operandi has been evidenced by customs and
surveillance authorities, the European Anti-Fraud Office (OLAF), a private investigating firm hired by the
industry. 53 stakeholders sent an open letter to policy makers calling for action against illegal imports
that is harming their legitimate business. Also, the NGO Environmental Investigation Agency published
two reports “Doors wide open: Europe’s flourishing illegal trade in hydrofluorocarbons (HFCs)” (2019)
and “Europe’s Most Chilling Crime – The illegal trade in HFC refrigerant gases” (2021).
12
- The Regulation is not sufficiently clear on the enforcement role of customs and
surveillance authorities (e.g. registration checks; quota limit checks; confiscation of
illegal goods) and the requirements for importers.
- HFC imports under special customs procedures do not require quota and it is difficult
to monitor if the HFCs are suddenly released in the EU without quota;
- It is difficult to monitor imports via on-line sales that are subject to quota;
- Non-EU countries starting later than the EU with HFC restrictions and licensing;
- Very heterogeneous penalties in Member States, some of which may not be
dissuasive. While in some countries criminal sanctions are possible, in others the
perpetrators risk fines that are considerably smaller than the profit made from gas
smuggling.
(iii) How the problem will evolve
The quantities of HFCs circumventing the quota system will remain at an unsatisfactory
level. The incentive to trade illegally will continue or even increase as EU HFC prices may
increase further, when the quota limits become tighter. The situation may improve somewhat
when more and more Parties ratify the Kigali Amendment and CERTEX44
and the EU Single
Window Environment for Customs45
can be used for more systematic controls of HFC
imports. However, this link can only be fully effective with more specific obligations in the
Regulation and it will not address HFCs that are not correctly declared.
2.1.3.2. Rogue traders: Multiplication of gas importers with speculative
motives
(iv)Status quo of the issue
The evaluation shows that the number of quota holders increased by a factor of more
than twenty from 2012 to 2019 and that this type of increase is undesirable. It has happened
for the following reasons. Quota is allocated partly to market participants based on historic
market share, i.e. “grandfathering”, partly from a quota reserve (ca 11%) whose distribution
is based on a declared intention to market HFCs, including to new companies. This electronic
declaration requires a registration process to the electronic registry operated by DG CLIMA,
which was initially a low burden process requiring little more than a VAT number. Many
companies were set up without previous links to the gas trade and company owners with
several affiliates have applied for multiple quota shares. This is undesirable because: (i)
genuine F-gas traders obtain very low quota shares from the reserve, (ii) preventing illegal
imports is more challenging due to the high number of quota holders with small quota
amounts and (iii) there is a higher risk that the gas is not treated appropriately due to lack of
experience of the new players. The Commission clarified the registration rules in the
44
CERTEX is an IT system that allows to exchange data (“certificates”) on relevant F-gas shipments
between the central EU F-gas Portal & HFC Licensing System and custom offices in the Member States
directly; IT precursor of the European Single Window Environment for Customs
45
EU Single Window Environment for Customs: This proposal would make the use of CERTEX for F-gases
mandatory in all 27 Member States. https://ec.europa.eu/taxation_customs/eu-single-window-
environment-customs_en
13
Implementing Regulation (EU) 2019/661 and the number of quota holders fell by one third in
2021 compared to 2019/2020. Still, many quota holders appear to be in the system for purely
speculative reasons given that quotas are easily obtained and gases can be sold for profit on
the EU market. Furthermore, following the change of registration rules, the Commission must
now verify if potential quota holders have the same beneficial owner and this delays annual
quota allocation to companies which in turn is reducing their planning certainty.
(v) Drivers
- The quotas are allocated for free but represent an important economic value because
of an HFC price difference between the EU and world market, which is generated by
the EU quota system.
- New entrants may apply for quota without any links to the gas sector and the
Regulation is not very prescriptive as to who can apply for quotas.
- There is no flexibility in the quota allocation system e.g. to temporarily withhold
quota for future (re-)distribution in cases under investigation and to address major
market disruptions.
(vi) How the problem will evolve
The number of quota holders will most likely remain at a high level (around 2000) or even
increase if the HFC prices increase further due to the quota system. This high number will
make it even harder for genuine traders to sustain their business, as the quota shares will
become smaller when the overall quota limits are being reduced. They will also have
relatively low planning security and market disruptions cannot be addressed. A high risk of
undetected illegal imports will also remain and an excessive and ineffective administrative
effort will persist for Member States and the Commission.
2.1.3.3. Lack of skilled technicians
(i) Status quo of the issue
A Commission report46
from 2016 concluded that there is a lack of skilled technicians that
can handle equipment using climate-friendly alternatives such as naturals (e.g. ammonia,
CO2, hydrocarbons) and H(C)FOs. These alternatives have different properties from HFCs,
e.g. many of them are flammable and therefore require different skills and handling know-
how. While training and skills for Annex I gases are currently ascertained by the extensive
rules in the Regulation, there is notably a lack of training facilities offering practical training
on the alternative substances47
. The stakeholder consultation showed that there have been
some improvements in the meantime, but this challenge has remained a piecework puzzle and
the situation varies greatly between Member States. The lack of qualified technicians can
46
COM/2016/0748. Commission report on the availability of training for service personnel regarding the
safe handling of climate-friendly refrigerants.
http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52016DC0748
47
According to AREA, the European service personnel association, only 3.5-6% of F-gas certified personnel
are trained on CO2, hydrocarbons and HF(C)Os,
14
pose liability issues for equipment manufacturers and a broad range of stakeholders
confirmed that this issue is still preventing a wider roll-out of climate friendly technologies.
(ii) Drivers
The Regulation is not requiring Member States to have mandatory training and certification
programmes covering the climate-friendly alternatives. It is only required for Annex I gases
(since 2006). The legislative framework48
complemented by existing standards at the
European level appears appropriate28
to ensure safe handling of equipment but a mandatory
EU-wide certification scheme does not exist.
(iii) How the problem will evolve
EU-wide availability of training and evidence of skills will not be ensured and a lack of
skilled personnel will continue to persist, at least for the medium term. This will slow down
the introduction of green technologies.
2.1.4. Monitoring gaps: Gases and activities covered as well as rules on
reporting process and data verification
(i) Status quo of the issue
Production, trade activities, destruction and feedstock use of Annex I and II substances needs
to be reported, but there is no monitoring of certain “new” fluorinated greenhouse gases
that also appear relevant (e.g. sulfurylfluoride49
) as pointed out by the evaluation
(A5.6.1.1). Some of these new gases as well as some of the gases already in Annex II (i.e.
H(C)FOs, NF3, F-gases used as anaesthetics) appear to be emitted in relevant quantities (up to
1 MtCO2 annually), but they are not subject to emission prevention measures. MDIs and
containers with relevant Annex II substances do not need to carry a label to identify them as
F-gases with a GWP such as is the case for all containers of Annex I substances, so users may
not be aware of their relevance for climate change. There are also other data gaps on
emissions from the use of switchgear and RAC equipment. The quantities of gases being
reclaimed and recycled (see evaluation, A5.6.1.1) or exported in equipment are unknown and
the reporting on exempted gases50
is incomplete since the recipients of these gases do not
report. Finally, the evaluation found that the requirement to have reporting data linked to
quota use verified by a third party auditor, which is crucial for the ex-post control of
quota use and thus for compliance checking and enforcement, is currently ineffective as
these auditor reports are currently of highly varying quality (see A5.6.1.5). Moreover, 80% of
quota holders in 2021 were not obliged to have a verified report because they had dropped
48
Depending on their respective properties of the alternatives (e.g. flammability, pressure, toxicity) other
EU legislation is relevant (Explosive Atmospheres Directive 2014/34/EU (ATEX); Pressure Equipment
Directive (PED: 2014/68/EU); 97/23/EC Directive 89/391/EEC – Occupational Safety and Health
Framework Directive (OSH).
49
The full list of gases is given in Annex A6.4.
50
Exempted are gases that are (i) imported for destruction, (ii) used as feedstock, i.e. input chemical, in
chemical production processes, (iii) supplied directly for export, (iv) for use in military applications, (v)
for semiconductor manufacture, or (vi) for MDI manufacture.
15
below the verification threshold. The dates and some thresholds for reporting and verification
of bulk and equipment are inconsistent and inefficient.
(ii) Drivers
- Annex II is outdated and Annex I does not list all F-gases with relevant emissions.
- Labelling rules are incomplete (Annex II substances, MDIs).
- The reporting rules do not include leakages, recycling/reclaim activities, recipients of
exempted gases, and HFC use beyond placing on the market and export in equipment.
- There are inefficiencies in threshold levels and dates for reporting and verification,
and too little detail on the verification process and its requirements.
(iii) How the problem will evolve
Monitoring gaps will persist and pose a risk that new issues cannot be spotted. Important
emissions, e.g. of sulfurylfluoride, NF3, inhalation anaesthetics and H(C)FOs, that could be
avoided with prevention measures, will continue to occur. Market surveillance, compliance
checking and emission reporting is less effective due to lack of data. The verification and
reporting process will continue to place a significant burden on compliant companies, but
would remain ineffective in spotting perpetrators.
2.1.5. Lack of clarity and coherence
Ideas on how to improve internal clarity and coherence of the rules have been collected
throughout the implementation period and the stakeholder consultation. Such issues hamper
the effective implementation of the Regulation and should therefore always be addressed.
These clarifications relate to the scope of some of the existing prohibitions and the quota
system, the rules on custom controls and market surveillance, the containment measures, and
definitions in the Regulation (see Annex A6.5).
3. WHY SHOULD THE EU ACT?
3.1. Legal basis
The legal basis for taking action is Article 192(1) of the Treaty on the Functioning of the
European Union, in line with the objective to preserve, protect and improve the quality of the
environment; protect human health; and to promote measures at international level to deal
with climate change.
3.2. Subsidiarity: Necessity of EU action
The evaluation concluded that implementing co-ordinated action at EU level is required
to ensure compliance with the Montreal Protocol. The EU and the EU Member States, as
Parties to the Protocol, have a number of requirements to fulfil (see 1.2). There are also
similar requirements in international trade agreements that the EU has concluded and
reporting obligations on emissions of some F-gases under the UNFCCC. The EU is
considered a regional economic integration organisation (REIO) under the Protocol, and
therefore complies with these requirements at Union level (e.g. reporting, licensing system,
consumption phase-down). This requires relevant legislation at the same level. A hypothetical
16
implementation of these commitments under the Protocol at Member State level is very
difficult to reconcile with the general principles of the EU internal market and the free
movement of goods. The only exception is the Protocol’s HFC production phase-down
schedule, which requires compliance at Member States level.51,52
3. Subsidiarity: Added value of EU action
The Regulation has a clear added value by implementing co-ordinated action at EU level
to facilitate reaching the EU climate goals. A successful reduction of F-gas emissions has
been achieved to date due to the HFC quota system, prohibitions and containment measures
working together. If Member States instead were using different measures and ambition
levels, this would most likely result in lower overall emission reductions for these gases in
these sectors. By way of example, a Union-wide quota system can push for the introduction
of alternatives across all (sub-)sectors, including in the more difficult areas, something that
cannot be achieved by fragmented approaches at national levels.53
Furthermore, a key benefit
of action at EU level is the efficiency improvements and achievement of economies-of-
scale, avoiding unnecessary costs to industry to adapt to different rules in different Member
States. A joint approach across Member States makes it easier to enforce F-gas reduction
policies and allows for lessons learned and knowledge sharing across Member States.
Common legislation has also enhanced the market for new alternatives, benefiting from the
size of the single market and providing an additional incentive for their development and
commercialisation. All types of stakeholders overwhelmingly agree on the EU added value,
in particular the competent authorities of Member States. The progress achieved as a result of
EU policies on F-gases facilitates the task of Member States to reach their own national
targets to reduce a basket of GHGs under the ESR.
4. OBJECTIVES: WHAT IS TO BE ACHIEVED?
4.1. General (review) objectives
The review must ensure that the F-gas Regulation contributes to the ambitious climate
objectives under the European Green Deal. Furthermore, it is paramount to ensure
compliance with rules under the Protocol, and enable good enforcement of the rules in an
efficient, coherent and clear manner.
51
Only two Member States continue to have HFC production (Germany and France).
52
Pursuant to Article 2(8)(a) of the Protocol, an EU-level compliance under REIO on production is possible,
but this is currently not the case as there was no agreement by Member States.
53
In the 2012 impact assessment it was demonstrated that even for EU-wide approaches the
environmental benefit of having prohibitions alone was approximately 25 % inferior to also having am
EU-wide phase-down (quota system), as the latter gradually introduces alternatives from an early date
also in difficult sub-sectors where a prohibition to cover all or most of the sector would not yet be
feasible.
17
4.2. Specific (review) objectives
To reach those general objectives and based on the findings in the evaluation, the review
measures will target the following specific review objectives:
A. Achieve additional F-gas emission reductions to contribute to reaching the 55% of
emissions reductions by 2030 and net carbon neutrality by 2050.
B. Fully align with the Protocol.
C. Facilitate enhanced implementation and enforcement on matters of illegal trade, the
functioning of the quota system and the training needs on F-gas alternatives.
D. Improve monitoring and reporting to fill existing gaps and improve process and
data quality for compliance.
E. Improve clarity and internal coherence to support better implementation and
understanding of the rules.
There is no expected trade-off between these review objectives and therefore also no
hierarchy. The aim is to target all of them. However, whereas the objective to fully align with
the Montreal Protocol does not leave much margin for manoeuvre, the other objectives can be
achieved to a varying extent. As the aim of this review is the fine-tuning of the Regulation
currently in force, its original objectives as listed in section 1.3 remain valid. The only
exception is the original objective to facilitate reaching an international agreement. Since this
was achieved in 2016 (see 1.1), that objective has become obsolete. Instead, the Regulation
must now aim to ensure compliance with those new international rules (objective B above).
In the public consultation, stakeholders were asked to what extent they agreed to the first
three review objectives on a scale from 1 (fully agree) to 5 (strongly disagree). The objective
improving implementation and enforcement, was seen as the most relevant with an average
response of 1.6. This was followed by the objective to ensure EU long-term compliance with
Montreal Protocol (with an average response of 1.8). The objective to raise ambition in light
of the Green Deal and technological progress was also generally supported, albeit to a
slightly lower degree (an average response of 2.2), with some industry organisations
commenting that the key focus needed to be on improving implementation and enforcement
while aligning with the Montreal Protocol in case where such alignment is necessary. The
same organisations added that the Regulation does not need to be aligned "downwards" in
case in-depth analysis would reveal that the Regulation is more ambitious than the Kigali
Amendment.
5. WHAT ARE THE AVAILABLE POLICY OPTIONS?
5.1. What is the baseline from which options are assessed?
The baseline, against which policy options are assessed, assumes that the Regulation remains
in place unchanged. The demand for F-gases (and their resulting emissions) are modelled
taking into account the existing F-gas using applications, their emissions rates and the
amount and type of F-gas used (see section 6 and Annex A4.2.1). F-gas demand is the sum
of quantities of F-gases used in the initial first filling of equipment and the re-filling in the
servicing of equipment during its lifetime. Emissions are the sum of emissions of F-gases lost
18
during the lifetime of equipment (lifetime emissions) and F-gases that are released to the
atmosphere during disposal of old equipment (disposal emissions).54
The ongoing review of the ODS Regulation will not affect the F-gas baseline, as the changes
envisaged do not affect F-gas use (i.e. demand; see also section 1.2 and 1.3). As regards the
proposed higher ESR targets for Member States, any emission savings that are not achieved
by (future) EU legislation, including for F-gases, would have to be picked up by the Member
States themselves to achieve their overall GHG target, by taking additional measures in any
of the sectors regulated by the ESR. This includes additional action on F-gases to achieve
their overall GHG reduction targets, as they have done in the past (e.g. taxes on HFCs, tax
breaks for using alternatives, measures to further encourage better HFC management or waste
practices (see A5.4.2.2)). Whereas existing Member State F-gas actions already form part of
the F-gas baseline, future F-gas actions at Member State level that could increase F-gas
emission savings in the EU are not assumed at this stage, e.g. measures that further prevent
emissions at the stage of use or decommissioning of installations. This is because the degree
to which Member States will pursue further action in this policy area in the future is difficult
to foresee. It is however rather unlikely that Member States will introduce further sectoral
prohibitions or more detail on national reporting rules, while further action on e.g. waste
policies or financial incentives for alternatives are probable. Furthermore, some types of
actions (e.g. national HFC prohibitions) would not reduce EU F-gas emissions further, as
they would rather tend to shift HFC demand and emissions within the EU and/or between
sectors, given that the EU has one common EU HFC quota limit. Finally, even if Member
States are taking additional new F-gas measures at a later stage, the latter are unlikely to have
a decisive impact on the effectiveness of the measures chosen at EU level, given that they
would be rather of a complementary, auxiliary nature (e.g. incentives, waste policies, market
surveillance).
Overall demand for F-gases in tCO2e will decrease until 2030 and increase slightly thereafter
until 2050, see Figure 1. This is driven by a decrease in demand for HFCs from 89 MtCO2e
in 2020 to 25 MtCO2e in 2050, while demand for SF6 increases from 28 to 48 MtCO2e.
Other F-gases (PFCs, H(C)FOs and NF3
55
) are only contributing with less than 1 MtCO2e per
year. The HFC demand is strongly decreasing in refrigeration equipment (elimination of
R404a) and in some AC applications until 203056
(see Annex A11.1.1). Climate-friendly
alternatives to the propellant used in MDIs are also emerging, but industry is expecting a
rather slow market uptake, i.e. only 1% in 2026 going to 50% in 205057
. The increase in SF6
54
Therefore changes to emitted quantities usually follow changes in demand only with several years of
delay.
55
Other gases listed in Annex II are not included but their quantities are very small. F-gases not listed in
the Annex I or II are similarly not included.
56
R32 replacing R410a in stationary AC and HFC-1234yf replacing HFC134a in passenger car AC due to the
Directive 2006/40/EC relating to emissions from air conditioning systems in motor vehicles (MAC
Directive).
57
HFC-134a and HFC-227ea are currently used but in 2025 industry expects HFC152a (GWP 124) to
become marketable after testing, homologation and approval by the European Medicines Agency.
Research is also currently conducted on HFC-1234ze (GWP 7).
19
demand is due to a market growth of 2 % for electrical equipment58
that continue to use SF6,
e.g. for smart grids and infrastructure for renewable energies. Other sectors contribute
relatively little to the overall demand after 2023, e.g. demand for uses such as foams, fire
protection, non-medical propellants and solvents mostly disappears.
As a result of these developments of the demand, emissions will decline from 92 MtCO2e
in 2020 to 44 in 2030 and 27 MtCO2e in 2050 (see A11.1.2)59
. This is mostly related to
declining HFC emissions (highest demand decrease), while the share of SF6 emissions is
growing from 16% to 26% between 2030 and 2050 (even if there is also a decline in absolute
quantities, 7MtCO2e (2030) and 5 MtCO2e (2050)). As regards SF6 emissions, the electrical
transmission industry informs that losses are low and thus emissions are assumed to be
relatively low (EU-wide monitoring data are not available). There are also some persisting
legacy emissions of SF6 (from windows60
, etc.), other SF6 uses and F-gas losses from
production (by-production and fugitive emissions). Due to the long lifetimes of insulation
foams in buildings (e.g. 50 years), emissions of end-of-life losses when these foams are
broken down or landfilled are expected to pick up after 2050.61
The total annual cost of technological change62 in the baseline scenario would on average be
240 Mio €/year in the period 2024-2036. Most costs would be incurred in the refrigeration
and the mobile A/C sector (without the passenger cars). By 2050, costs of technological
change would be strongly negative (i.e. cost savings due to less operational costs, e.g. energy
savings) in refrigeration and stationary AC, while there would still be some costs for mobile
AC. See detail in Annex A12.5. Due to the increasing scarcity of quotas until 2030, higher
HFC gas prices may impact on those users that still use HFCs.63
58
https://www.zvei.org/fileadmin/user_upload/Presse_und_Medien/Publikationen/2020/April/SF_6_Reduk
tion/Szenario-zur-Reduktion-von-SF6-Betriebsemissionen-final-eng.pdf
59
There are also indications that emissions of some F-gases e.g. sulfurylfluoride (SO2F2; not currently
listed in the Regulation) and others used for inhalation anaesthetics exceed 1 MtCO2e per year and
would possibly increase without regulation (see also 2.1.4).
60
Insulation of windows with SF6 is prohibited since 2008.
61
HFCs started to replace ozone-depleting substances in insulation foams from 1995.
62
The cost of technological change is an adjustment cost and is borne by the equipment operators
investing into alternatives to existing F-gas technologies and therefore experience additional capital
costs (e.g. acquiring new hardware) and operational costs (e.g. costs for electricity, fuel, maintenance
costs including leak checking and repairs). See Annex A4.2.10.
63
The average price premium (difference of price to the situation without a quota system, i.e. relative to
2014 or to world market price) in the period 2015-2019 was 8€/tCO2e. Assuming the 2030 quota limit is
maintained until 2050 a worst case simulation gives a €40/tCO2e premium on world market price (see
section 6.2.1.2).
20
Figure 1. Baseline demand of HFCs, SF6 and other F-gases in climate terms (MtCO2e)
A factor in the baseline development is also be the underlining demand for the products that
may make use of F-gases. Other EU policies can impact this. This is for instance the case for
the demand for heat pumps due to energy and climate policies. Recent developments
following the invasion of Ukraine by Russia have increased the call for a faster energy
transition. The REPowerEU Communication64
underlined the role of increased uptake of heat
pumps in the heating of buildings in this specific situation. This can improve energy
efficiency and reduce natural gas consumption. It pointed towards doubling the pace of
deployment of heat pumps, with 10 million newly installed heat pumps over the next 5 years
and 30 million by 2030. With a focus on replacing existing gas boilers, this ambition mainly
relates to the installation of hydronic heat pumps (e.g. air to water or ground to water heat
pumps). Whereas it was not possible for this impact assessment to capture the consequence of
such developments in the baseline, a short assessment was made of what its impacts would be
on the considered options consider in section 6.1.4.
5.2. Description of the policy options
As mentioned above, the overall approach relying on a quota system for placing on the
market HFCs, accompanying prohibitions of use of F-gases and containment measures to
reduce any remaining emissions should be kept. Most stakeholders agree to this and abrupt
changes would result in uncertainty for business. Consequently, this review is fine-tuning
the Regulation with the aim to provide policy responses to the problems identified
64
COM(2022) 108 final
21
(section 2). The relationship between the problems, the specific review objectives and the
required policy responses are visualised in Figure 2.
Figure 2. Relationship between the problems, review objectives and policy responses
To develop policy responses, detailed policy measures (e.g. a specific prohibition, a specific
improvement on custom checks) were collected from stakeholders and external experts
during the consultations, including from F-gas authorities and customs, and/or designed on
the basis of the expertise acquired implementing this policy. Some of the collected measures
were deemed infeasible and discarded from the outset based on different considerations of
feasibility as outlined in Annex A6.6. A detailed description of all the detailed measures is
given in Annex A6.
Three different policy options were then designed by assigning detailed measures to each
of the options. As there is no EU target for F-gas emissions, it is a political choice to how
much the Regulation should contribute to saving emissions, and what the effort should be in
addressing the issues of implementation and monitoring. However, compliance with the
Protocol must be safeguarded in all cases. Thus the detailed measures were assigned on the
premise that all options should do the latter as well as improve internal clarity and coherence,
but that the resulting contribution to the other objectives should give a choice on the
basis of the different expected levels of costs and effort (low-medium-high). The ensuing
assessment then establishes how much the options actually contribute to the other objectives,
and a policy choice can be made on the basis of the balance between achievable benefits and
the cost and effort level involved. The original assigning of measures to the options was done
on the basis of ex ante expected impacts and efforts and/or costs involved. This approach was
considered the most useful, in particular since Option 1 largely reflects the view expressed by
some industry associations in the stakeholder consultations, which maintain that today`s
Regulation is sufficiently ambitious and the review should merely align with global rules and
address the challenges to implementation and control. Option 3 is advocated by other
22
stakeholders, notably the NGOs and by some manufactures that want to invest in innovative
climate-friendly technologies also in niche sectors where this may become expensive and
Option 2 reflects the middle ground. It is therefore politically relevant to explore the impacts
of all three options.
The three options are described in more detail below and an overview of the bundling of
individual measures in the three options are given in Table 1. The individual measures are
mostly compatible and complementary to each other65
and all complementary measures
included in Option 1 are also included also in Option 2, just as all complementary measures
in Option 1 and 2 are also included in Option 3. Moreover, any improvements seeking to
clarify the rules or make them more coherent are included in all three options.
 Option 1: Align with the Protocol & low cost measures
This option is a low cost/low effort option. It includes all measures to ensure long-term
compliance with the Montreal Protocol. It also includes any beneficial measures in the
responses to the objectives that were expected to result in very low costs and effort, if any.
To align with global rules, the sizeable quota exemption for MDIs and the de minimis
thresholds for quota and reporting are removed. The HFC quota levels after 2030 are set to
(just) ascertain that the Protocol consumption phase-down can be met in the long run and
under all circumstances. A separate HFC production phase-down, a ban on trade with non-
parties to the Protocol from 2033 and flexibility to allow further alignment with new
international rules are introduced. To complement the HFC quota system, some low-cost
prohibitions to use F-gases in new cooling and fire equipment and a low-cost measure to
prevent emissions from one specific type of insulation foam (“sandwich panels”) using
HFCs66
is included. Low cost measures to improve control, implementation and
monitoring include that energy efficiency aspects are added to the training curriculum for
equipment service personnel. Furthermore, rules for customs will be clarified and reinforced
and it will be stipulated that importers need to have sufficient quota and appropriate labelling
at the moment of import or physical entry67
. The improvement of the rules concerning
reporting and verification increases efficiency and supports compliance checking. Some new
relevant substances are added.
 Option 2: Achieve proportionate emission reductions and implementation
improvements
Option 2 requires moderate costs and effort. In addition to the measures in Option 1,
Option 2 will seek to reduce emissions further, but only to the point where a sub-sector
would not have to pay more than marginal sectoral abatement costs expected for the
65
Exceptions are the different HFC phase-down schedules for the quota system (A1), the deadline for
non-part trade (B4) and the electronic database of company data relevant for emissions (D3) that is
encouraged in Option 2 and mandatory in Option 3.
66
By requiring HFCs to be recovered during building renovation and demolition activities and destroyed
(or reused). See Annex A15.
67
While currently quota compliance is based on an annual balance, which implies that border controls
cannot be effective and compliance checking must rely on ex-post reporting on verified data only.
23
economy overall to reach carbon neutrality in 2050 (see below). The alignment measures
are essentially the same as Option 1, but the prohibition to trade with Parties that have not
ratified the Kigali Amendment is slightly advanced to 2028, in order to provide an incentive
for timely ratification by remaining Parties and to ensure that the global HFC reduction
measures of the Kigali Amendment provides the envisaged benefit to the climate.
The HFC quota levels are more restrictive than in Option 1. The levels are set to ensure
that HFCs are only available for appliances where it is not yet possible to replace (highly
warming) HFCs. As replacement is undertaken with gradually increasing costs, such
marginal abatement costs at sub-sectoral level should remain below €390/tCO2e until 2050.
This cut-off to exclude difficult sectors was chosen as a benchmark to be comparable to the
effort needed in other areas following the 2050 Roadmap modelling. Additional F-gas
prohibitions with specific GWP limits and dates complement the phase-down. They relate
to stationary AC; smaller refrigeration equipment; personal care products and skin cooling
equipment, inhalation anaesthetics and switchgear. Where prohibitions conflict with safety
rules (e.g. use of flammable substances) or where F-gases are needed in niche applications,
they may still be used. Obligatory F-gas recovery and destruction (or re-use) from insulation
foams will cover also laminated boards (besides sandwich panels) which in this way would
achieve full synergies with a similar measure proposed in the review of the ODS Regulation.
Finally an obligation to prevent emissions during activities such as manufacturing, storage
and transport will be extended to all actors on the Union market and also cover some Annex
II and new gases to be added.
Additional measures at moderate costs to improve control and implementation are
included, e.g. a price to pay for quota to disincentivise speculative behaviour and to limit
the participants to serious gas traders and EU producers. The initial allocation price is set at
3€/tCO2e68
. This measure will also include some flexibility to manage the quota system69
.
Moreover, penalties at Member State level will be subject to more prescriptive
requirements. Labelling will be slightly extended and the type of evidence needed when
placing bulk gases on the market will be specified in more detail. Also, Member States are
required to provide certification and practical training for relevant climate-friendly
alternatives and equipment containing H(C)FOs, and installing, servicing, maintenance or
repair that involves the refrigerant-carrying circuit with H(C)FOs will only be allowed by
certified personnel in analogy to other F-gases. To close monitoring and reporting gaps, a
new obligation to report for recipients of quota-exempted HFCs and some reclamation
facilities not yet covered is also added. To facilitate the mandatory verification of F-gas
reporting, an electronic verification process will be included. Member States are encouraged
68
The allocation price must be below the addition price that quota holders would normally ask when they
sell HFCs to avoid that the quota allocation price in itself increases the price for end-users. Given the
uncertainty about future price developments, a price has been chosen which is very likely to be below
the price increase while still having the effect that unserious traders will not request quota. The quota
price would affect importers and EU-based producers in the same way.
69
In case the quota allocation price is having unintended effects; in case of major HFC market disruptions;
when cases are unsettled at the moment of annual quota allocation or to require certain
skills/characteristics of quota-holding companies.
24
to establish databases on activities such as servicing, leak checking and sales, for better
market control and to derive real-world emission rates.
 Option 3: Maximum feasibility and implementation improvements
Option 3 is a high cost option. In addition to the measures in Option 1 and Option 2, Option
3 will include all measures that seek to achieve the maximum GHG emission reductions
based on today’s technical feasibility while taking into account energy efficiency and
safety aspects. It also includes all measures regarded as feasible to improve control,
implementation, and monitoring, including those proposed by stakeholders, regardless of
the price or effort involved. This option was examined in order to see what price tag would be
necessary to take all feasible measures considered, and what would be the added value of
achieving them.
This option has the steepest quota system that is assuming replacement of high and medium
high GHGs as soon as this is technically possible, even if marginal abatement costs at sub-
sectoral level go up faster, and beyond €390/tCO2e already before 2050. Additionally, it
removes exemptions for military equipment and semiconductors, which both relate to small
amounts being consumed.70
To further improve implementation, measures that come with a
relatively high burden are included, e.g. mandatory certification for importers and online
sellers and a requirement to have a declaration of conformity and record keeping to
prove the origin of the gases for all downstream HFC sellers. Reporting would be extended
to exporters of equipment to better gauge the effect of EU produced goods elsewhere and to
recycling companies (in addition to reclamation). Better estimation of emissions are
obtained by requiring operators of switchgear in electrical transmission to report and Member
States to establish databases on available company data on servicing, leak checking and sales
data.
Table 1 shows the individual measures and their grouping under the review objective they are
targeting, and how they relate to each policy option. A more detailed description of the
measures is given in Annex A6. Mutually exclusive measures are indicated with an ‘*’. All
other measures are complementary and are shown as follows:
- Option 1 includes all measures shaded [white].
- Option 2 includes measures shaded light grey plus [white] (except “* Option 1”)
- Option 3 includes measures shaded dark grey, plus those in [white] and light grey
(except “* Option 1” and “* Option 2”)
Table 1. Individual measures considered under the three options, by objective and policy response
Objective A – Achieving additional emission reductions
A1: Increasing the ambition of the HFC quota system (mutually exclusive)
70
Maintaining these exemptions in Option 1 and 2 does not endanger Protocol compliance as these small
amounts can be compensated by a slightly higher phase-down ambition for all other sectors. Given that
the savings potential is very low while causing possible hardship to two special stakeholder types, e.g.
the military and the semiconductor industry, this measure was not considered in the moderate
cost/effort Option 2.
25
 * Option 1: Steps included after 2030 to ensure long-term compliance with the Protocol, only
 * Option 2: Steeper phase-down with HFC replacement where feasible at proportionate costs
 * Option 3: Steepest phase-down ensuring maximum HFC replacement where feasible at any cost
A2: New prohibitions for F-gases above a certain GWP limit and from a specific date
 Prohibitions related to F-gases in fire protection equipment and small hermetic RAC systems and
PFCs in RAC equipment
 Prohibitions related to stationary AC, smaller refrigeration equipment, personal care products
(e.g. creams, mousses, foams), skin cooling equipment, one inhalation anesthetic and
switchgears. F-gases still allowed if strictly necessary e.g. due to health or safety rules, and lack of
alternatives. Such exemptions will be subject to labelling.
A3: Extend requirements for the prevention of F-gas emissions
 Require emission prevention also for some Annex II and newly added gases, and for all EU actors
during gas production, equipment manufacturing, storage, transfer and transport
A4: Recovery obligation of insulation foams blown with HFCs
 Require destruction or reuse of HFCs in metal-faced panels
 Require destruction or reuse of HFCs in laminated boards in built-up structures and cavities,
unless infeasible and subject to documentation
Objective B – Seeking alignment with the Montreal Protocol
B1 & B2 : Achieve alignment, remove (some) exemptions not foreseen by the Montreal Protocol
 Include HFC use for Metered dose inhalers (MDIs) under the quota system and remove minimum
thresholds for the quota system and reporting
 Include HFC use for military & the semiconductors under the quota system
B3 & B4 Achieve Montreal Protocol alignment production phase down limits and non-Party trade
 Include a separate HFC production phase-down at entity level mirroring the Protocol and prohibit
trade in bulk HFCs from/to any country not Party to the Kigali Amendment (from 2033 in * Option
1; 2028 in Option 2 and 3)
Objective C – Improving implementation and enforcement
C1: Extend certification and training for RAC71
technicians
 Add energy efficiency aspects to the required knowledge for training and certification
 Require that certification/training covers equipment with F-gas alternatives, and require certification
when carrying out certain activities on RAC equipment containing H(C)FOs (now only for Annex I)
C2: Including detailed rules to empower customs and surveillance authorities; C3: Facilitate the use of the EU “Single
Window Environment for Customs” & C4: Limit the quota system to genuine F-gas traders and producers
 Reinforced rules on special custom procedures and physical entry of prohibited goods
 Tighter rules on quota use and availability
 Require minimum penalties for non-compliance
 Require evidence to be provided by EU producers and importers on HFC23 destruction of by-
production and require labelling of some Annex II and new gases as well as labelling MDIs as
containing F-gases
 Introduce an allocation price of €3/CO2e for EU producers and importers. Use the revenue to
cover administrative costs to operate the quota registry and the Protocol licensing systems. Also,
include flexibilities to react e.g. if the quota allocation price is having unintended effects; in case of
71
RAC: refrigeration and air conditioning (including heat pumps)
26
major HFC market disruptions; when cases are unsettled at the moment of annual quota allocation or
to require certain skills/characteristics for quota holding companies
 Require documentation for downstream sales for bulk HFC/F-gases (e.g. “declaration of
conformity”) and record keeping and mandatory certification for bulk importers and undertakings
selling bulk F-gases online
Objective D – Improving Monitoring and Reporting
D1: Reporting scope – substances
 Include new PFCs in Annex I and include new substances in Annex II
D2: Reporting scope - F-gas related activities
 Include recipients of quota-exempted HFCs and all undertakings performing reclamation of F-gases
 Include exporters of products and equipment containing F-gases and other fluorinated substances
(plus registration obligation and undertakings performing recycling (in addition to reclamation) of F-
gases
D3: Emission reporting
 *Option 2: Encourage Member States to use electronic reporting systems for collection of F-gas
and emissions data (mutually exclusive)
 * Option 3: Require Member States to use electronic reporting systems for collection of F-gas and
emissions data (mutually exclusive) and operators of switchgear and electrical equipment to report
on SF6 emissions
D4: Reporting process and data verification
 Streamline reporting and verification rules, thresholds and dates for EU producers and importers
of bulk and of equipment
 Introduce an electronic verification process (separately for bulk and pre-charged products and
equipment)
Objective E – More Clarity and Coherence
Envisaged improvements to make the Regulation more clear and coherent
Are included in all three options, see Annex A6.5 for details
The different ambition levels for the HFC quota system in Options 1, 2 and 3 are shown in
Table 2, alongside the maximum quota under the baseline. However, the baseline is not
directly comparable to the three options because, contrary to the three options, HFCs used for
MDIs do not require quota in the baseline (exempted) and thus the baseline quota is not
covering any need for HFCs for MDIs.
The quota limits for Option 1 are set to ensure that the Protocol’s consumption limits can be
met. Option 2 is based on the need to supply HFCs for appliances, for which it is not feasible
to use climate friendly alternatives by 2050 below marginal abatement costs of €390/tCO2e
or not feasible at all. Option 3 only ensures supply for appliances where it is infeasible to use
alternatives. The feasibility is based on technologies known today. Thus by the time the
future F-gas Regulation is reviewed, it is highly likely that the quota system schedule can be
further strengthened in line with new technological developments.
27
Table 2. Total annual quota allowances for HFCs (POM) under the three options and the baseline [MtCO2eq]
Years Baseline72
Option 1 Option 2 Option 3
2024-2026 37.54 49.04 41.70 41.04
2027-2029 25.17 36.67 17.69 15.96
2030-2032 19.87 31.37 9.13 6.92
2033-2035 19.87 28.72 8.45 5.79
2036-2038 19.87 20.54 6.78 5.47
2039-2041 19.87 20.54 6.14 5.01
2042-2044 19.87 20.54 5.49 4.54
2045-2047 19.87 20.54 4.85 4.08
2048 and later 19.87 20.54 4.20 3.62
Note: Quantities needed for MDIs are only included in the options but not in the baseline, this explains why all
options have higher initial quota allowances (MDIs are ca. 10 MtCO2 today)
5.3. Options discarded at an early stage
The possibility to repeal the Regulation and rely on voluntary agreements or national
measures was discarded from the outset. Firstly, the current measures have overall been
effective to meet its objectives. The Regulation remains necessary and has clear EU added
value in light of EU climate objectives as well as the EU’s international commitments.
Secondly, voluntary action or national measures would result in lower emission reductions
and would even endanger the progress made so far. Thus the option would be inconsistent
with the EU’s new and more ambitious climate objectives. Thirdly, the existing types of rules
provide a clear signal to industry and are accepted by stakeholders, as clearly shown by the
consultations.
Furthermore, a number of detailed measures that would appear to target the problem drivers
(including measures proposed by stakeholders) were discarded at an early stage because they
did not fulfil certain criteria that were applied to screen the options (See discarded measures
and the reasoning behind eliminating them in Annex A6.6).
6. WHAT ARE THE IMPACTS OF THE POLICY OPTIONS?
A detailed bottom-up stock model of the F-gas using sectors was constructed (AnaFgas
model) in order to calculate demand and emission73 scenarios of F-gases, for the baseline
and the policy options, as well as energy use of the relevant equipment, for the EU27+UK in
the period of 2000 to 205074
. An attached cost module allows quantification of related costs
to the operators of equipment relying on F-gases or their alternatives. In AnaFgas, all
72
MDIs exempted, maintaining of the total annual quota limit after 2030 assumed, remaining at 2030
levels (currently not regulated)
73
See also 1.1 on the relationship between demand and emissions.
74
A detailed description of the model, its validation and modelling scenarios is found in Annex A4.2. The
early years, i.e. before 2015, were used in order to better validate the model with existing emission
data.
28
emission and demand estimates are derived from bottom-up approaches, i.e. by estimating
demand and emissions per sector through the use of underlying drivers.75
Macroeconomic
effects were modelled using the JRC’s GEM-E3 model. The models are described in detail,
including the assumptions behind and any limitations, in the Annexes A4.2 and A4.3.
6.1. Environmental impacts
6.1.1. Emission savings from quota system and prohibitions
The reduction in future emissions is determined largely by the ambition level of the quota
system and accompanying prohibitions. Option 1 will lead to higher emissions compared to
the baseline scenario until 2046, falling slightly below thereafter (Figure 3). The total
cumulative emissions of Option 1 from 2024 to 2050 are 1,050 MtCO2e, which is higher than
the baseline emissions of 1,016 MtCO2e. Annual emissions in 2050 are estimated to be 25
MtCO2 for Option 1, which is 7% below the baseline. The total higher cumulative emissions
in Option 1 is somewhat counterintuitive. It is related to the fact that on the one hand it is not
necessary to impose any additional limitations on the use of HFCs for the sectors already
covered by the phase-down in the early years (the EU consumption is currently well below
the Protocol limit) and on the other hand, the way MDIs are being included under the quota
system. In the initial phase 2024-2026 significantly more quota is allocated to fully provide
the MDIs with HFCs (i.e. starting the ‘phase-down’ with 100%) to allow for a smooth
transition of this sector. This careful approach is likely to give the sector more time initially
than needed in practice, and assumed in the baseline, for starting the technological transition.
As a result, there would be more quota available for other sectors (e.g. refrigeration, AC),
thus slowing down the pace of replacement in these other sectors and leading to higher
amounts of HFCs stored in equipment. This will slightly increase the amount of emissions in
the short to medium term. The HFC demand (i.e. “use”) in Option 1 does fall under the
baseline from 2037 onwards, but emissions only fall below the baseline from the year 2046.
By contrast, both Option 2 and Option 3 will lead to significantly lower emissions
compared to the baseline (and Option 1). Emission savings are achieved starting already in
2025 and continue until 2050. The difference in savings between Option 2 and 3 is
relatively small and is mainly due to further abatement in a few sub-sectors (mobile AC in
buses, metro and trains). The total cumulative emissions until 2050 would be 763 and 736
MtCO2e under Option 2 and 3, respectively. Compared to the baseline (and Option 1), this is
a further drop in cumulative emissions of 25% and 28%, respectively (253 MtCO2 less in
Option 2 and 280 MtCO2 less in Option 3). Annual emissions in 2050 are estimated to be 14
and 13 MtCO2e for Option 2 and 3, respectively (see also Annex A11.1.2). The remaining
emissions for Option 1 in 2050 are almost double that amount (see above).
75
The drivers include annual changes in equipment stock, composition and charge of the equipment,
leakage during equipment lifetime and during disposal. Some of these components are driven by other
factors such as population development, GDP growth or technological changes. Based on these drivers,
annual emissions and banks as well as use can be calculated for each year, sub-sector and EU Member
State. A full list of parameters used to identify these emissions can be found in the external study.
29
Option 2 and 3 are considered to be in line with the objective of reaching climate neutrality
by 2050. They reduce the need for carbon-removal policies to compensate for emissions that
cannot be avoided in 2050 to achieve net climate neutrality. It is likely that even stricter F-gas
policies can be introduced later (before 2050) at lower costs than today in light of new future
technological developments.76
At a sectoral level the differences in emissions relate largely to the stationary AC sector and
MDIs (Table 3). There are significant differences in transition speed between Option 1 (and
the baseline) on the one hand, and Option 2 and 3 on the other. Some further savings are also
achieved in refrigeration and mobile air-conditioning77
by the more ambitious options.
Restrictions on switchgear introduced by Options 2 and 3 would lower demand compared to
Option 1 and the baseline, but emission reductions would happen rather slowly due to the
very long lifetimes of the equipment (50 years). For the remaining sectors78
the differences
between the options (and the baseline) are small.
76 In the modelled scenario for the in-depth analysis supporting Commission Communication COM(2018)
773 (The EU long term strategy for a climate-neutral economy), while using a different set of modelling
tools, less sectoral granularity and less fluorinated substances considered, F-gas emissions were
reduced to as much 5 MtCO2e by 2050, with total non-CO2 emissions reducing to as much as 286
MtCO2e by 2050.
77
Note that for Mobile AC abatement related to new passenger cars is part of the baseline (MAC
Directive).
78
Al and non-ferrous metal production, production of fluorinated gases, semiconductor use, foams,
technical aerosols, solvents, fire fighting, legacy emissions from windows, etc.
30
Figure 3: Modelled emissions of F-gases for the different options in the EU27 (based on reductions from the
quota system and prohibitions only)
Table 3: Sum of modelled cumulative emissions of F-gases in MtCO2e from 2024 (i.e. estimated entry into force
of new Regulation) to 2050 for the different options from important sectors in the EU-27 (based on quota
system and prohibitions only)
Sector Baseline Option 1 Option 2 Options3
Refrigeration 128 134 112 107
Stationary AC 284 311 169 169
Mobile AC 187 187 150 127
Switchgear 78 78 71 71
MDIs 138 138 66 66
Other 200 200 196 196
Total emissions until 2050 1 016 1 050 763 736
Source: AnaFgas modelling
6.1.2. Other emission savings
6.1.2.1. Emission savings from enlarged obligations to prevent emissions
In addition to the savings above, Options 2 and 3 can further reduce emissions by requiring
emission prevention measures for some Annex II and new substances, notably SO2F2 as well
as some inhalation anaesthetics.79
Yearly emission savings from 2024 could be at least 1
MtCO2e each for both SO2F2
80
and the anaesthetics81
. For NF3 the savings potential is
79
Option 2 and 3 also prohibit the use of desflurane from 2026
80
Based on the recent IPCC AR6 report’s GWP for SO2F2 of 4 630, estimated emissions in Europe amount
to 1.16 MtCO2e
81
0.8 MtCO2e in 2020 but use growing rapidly
31
lower.82
Climate relevant emission savings from H(C)FOs are small and prevention is
targeting the avoidance of possible persistent breakdown products (see 6.1.4). Thus Option 2
and 3 could add ca. 54 MtCO2e by 2050 cumulatively to emissions saved by the phase-
down and prohibitions.
6.1.2.2. Emission savings from the recovery of insulation foams
Recovery of HFC insulation foams, when buildings are being renovated or demolished, can
also result in emission savings. About 1.9 MtCO2e could be emitted as a result of
inappropriate end-of-life treatment until 2050 (all in the period 2045-2050), but in the time
thereafter end-of-life emissions will rise further and persist for a long time in the baseline due
to remaining foams in buildings of ca. 45 MtCO2e of HFCs in 2050.83
Option 1 would
recover up to 20% of these emission, while Options 2 and 3 could recover at least 35% of
these emissions84
(see Annex A15). There are strong synergies with the envisaged recovery
of foams containing ozone-depleting substances (where there is a much higher potential to
avoid emissions), as the collection and treatment process would be the same.
6.1.3. Energy use
The technological conversion to more climate-relevant alternatives results in some
energy savings in the refrigeration and AC sector. For Options 2 and 3, average energy
savings are approximately 2-3 GWh per year for the 2024-2036 (i.e. 2030) period (Annex
A12.6), due to the deployment of slightly more energy-efficient low-GWP technologies
(alternative solutions are not accepted if they result in lower energy efficiency). For Option 1
average 2024-2036 final energy use is about 1 GWh per year higher than the baseline. In the
2050 time horizon, all three policy scenarios result in energy savings, ranging from 2 GWh
per year (Option 1) to 8-9 GWh per year (Option 2 and 3). These savings are however
relatively small (about 0.1 % - 0.3 % of baseline energy use in the RAC (i.e. refrigeration, air
conditioning including heat pumps) sectors in the 2024–2036 time horizon, or 0.1 % – 0.5%
in the 2050-time horizon. The energy savings result from the early replacement of older
equipment with new alternative equipment that is more energy efficient. The savings are
therefore higher for the more ambitious options.
6.1.4. Other environmental effects
Impact on H(C)FO emissions
The reduced use of highly warming HFCs is resulting in an increased use and emissions of
the climate-friendly H(C)FOs; e.g. HFO-1234yf being the most frequently used. HFO-1234yf
emissions today come mainly from ACs in passenger cars and are expected to triple between
2020 and 2029 for all policy options and the baseline (mostly due to the MAC Directive).
82
Average emissions in 2010-2019 from the most important use in electronics industry were ca. 80,000
tCO2e
83
HFCs have only been used in foams since 1995 replacing ODS, and due to the long lifetime of foams
(and buildings) most effects will be after 2050
84
Assuming a 25% recovery rate from laminated boards, which may increase in the future as better
separation technologies are developed
32
After 2029, emissions will only be increasing slightly under the baseline and Option 185
,
whereas emissions under Option 2 and 3 will rise more strongly and be 16% higher than the
baseline by 2050 (see graph in Annex A11.2). While they contribute very little to climate
change, H(C)FOs emissions may lead to the formation of trifluoroacetate (TFA) in the
atmosphere86
. TFA is considered as being highly persistent and highly mobile in the
environment and appears to accumulate in surface waters (and groundwater). It is still a
matter of on-going research to what extent higher levels of TFA in the environment would
result in dangerous ecotoxicological consequences in the future.87
Furthermore, a recent
publication has linked some H(C)FOs to the formation of HFC-23, which has a very high
GWP.
Impact of faster role out of heat pumps as envisaged by REPowerEU
To reach the 2030 climate target and climate neutrality by 2050, the Commission has
proposed to increase the share for renewable energy in the energy mix by 2030 to 40%. To
reach that share, a high growth rate for heat pumps is assumed leading up to the installation
of notably around 30 million hydronic heat pumps by 2030. In response to the natural gas
crisis due to recent geopolitical events, the Commission has proposed to advance this roll-out
and achieve a doubling of deployment rates and install 10 million of such heat pumps in the
next 5 years.
While it is necessary to reduce both emissions from energy use and from F-gases, it is crucial
that the quota system includes sufficient quantities of HFCs for those new and existing heat
pumps that still need HFCs.88
Based on AnaFgas modelling, and under the policy option 2,
the total required HFC demand for heat pumps (including air-to-air splits and VRF systems)
for new systems as well as for servicing the existing systems will decrease very rapidly over
the years in CO2e. By 2030 its demand will only be about 25% of that in 2020. Even if
growth rates should turn out to be higher than those assumed in the AnaFgas model, it would
not dramatically alter the total required HFC demand. In the assessed option 2, with a
prohibition for stationary heat pump with a rated capacity of up to 12 kW with F-gases with a
GWP of 150 or more except if required to comply with safety rules, most new heat pumps are
within this category and thus do not need HFCs after 2025.
Even if the ban on some installations would be implemented at a later moment, for instance
from 2027 onwards to allow the market to accommodate the ramp up of initial production to
85
By 2029 most cars on the road will be using HFO-1234yf, so when cars are replaced it no longer results
in additional HFO emissions. Any increases of emissions from 2029 onwards result from other sectors,
i.e. as a result of the F-gas Regulation.
86
See Behringer et al. (2021): Persistent degradation products of halogenated refrigerants and blowing
agents in the environment: type, environmental concentrations, and fate with particular regard to new
halogenated substitutes with low global warming potential, UBA-TEXTE 73/2021.
87
According to the Protocol`s Environmental Effects Assessment Panel (October 2021), TFA has been
recently detected even in beer, tea, herbal infusions and indoor dust, but so far only at levels that are
magnitudes below those that would be considered toxic.
88
The quantities needed is determined by both the growth rate of new equipment and by the existing
stock and its servicing needs, the type of heat pump, its leakage rates and charge sizes, as well as the
refrigerant used and how fast HFCs can be replaced in each appliance.
33
accommodate significant short-term growth in heat pumps in the 5 year period 2022-2026,
impacts on required quota for this additional deployment is very limited. An estimate was
made what the impact would be on demand for F-gases of meeting the increased heat pump
ambition as expressed in REPowerEU, assuming that the prohibition for stationary heat pump
with a rated capacity of up to 12 kW with F-gases with a GWP of 150 or more would only
start in 2027. It was estimated that the additional growth needed would increase the annual
demand for F-gases by around 3.1, 2.7 and 1.4 million tCO2e in the years 2024-202689
. This
is small compared to the 41.7 million tCO2e available as quota under option 2, also
considering that the MDI sectors is allocated a 100% of quota in these years even though
alternatives to replace HFCs are available and quantities of quota authorizations covering
several years of HFC equipment imports90
are currently banked by equipment importers (i.e.
they will not require additional quota in the next years).
The heat pump categories that still need some HFCs in new equipment in 2030 (i.e. medium-
sized heat pumps and VRF systems) can also significantly reduce the GWP of the refrigerant
used91
, which implies that their need expressed in CO2e will decline very rapidly.92
The total demand for heat pumps is small relative to the total HFCs needed for all HFC-using
sectors (12% in 2030 and 5% in 2040). Since the quota system is designed to cover the
required amount for all HFC-using sectors (no earmarking), there is considerable built-in
flexibility for higher consumption than expected in some sectors, as it may be
counterbalanced by lower than expected consumption in other sectors. If the uptake of
alternatives is too slow, this would result in higher HFC prices until the market reacts, but
would in principle not result in gas unavailability.
It should be noted that if the situation should occur that a market disruption is threatening
(which has not been the case in the first six years of the phase-down), all options include the
possibility for the Commission to adjust the quota level.
Thus, the phase-down appears coherent with the targets for renewable energy, even if
the significantly higher heat pump growth needed in the light of the current natural gas
89
Based on the assumption of extra demand compared to the AnaFgas modelling for the period 2024-
2026 of 9.5 million hydronic heat pumps (both packaged and split systems) and 4.9 million single split
air-to-air heat pumps. The refrigerant used is assumed to be R32 (originally) and propane
(increasingly) with an increase over time of the penetration rate (respectively 25%, 50% and 75%
natural refrigerant in the years 2024 up to 2026), in anticipation of the prohibition in 2027.
90
Close to 70 million tCO2e are banked as unused quota authorisations (EEA Report on fluorinated gases,
2021).
91
In Option 2 and 3, 27% of medium-sized heat pumps (12-200 kW) would still require an HFC mixture
with a GWP of at least 466 in 2030, but 73% could go to very low, single-digit GWP; 41% of VRF heat
pumps would require a GWP of at least 675, while 59% could use an HFC mixture with a GWP of lower
than 150. These are significant reductions of the GWP, as conventional technology until recently used
to be R-410A with a GWP of 2088, e.g. even an HFC with a GWP as high as 466 would still only require
only about a fifth of the quota measured in CO2e than does an R410A equipment with the same
charge size.
92
In addition, the transition to climate-friendly alternatives results in significant savings for the end
users in terms of energy efficiency and is another incentive to use heat pumps in larger numbers
34
energy crisis and a resulting slightly slower conversion of small heat pumps to climate-
friendly alternatives is taken into account.
6.2. Cost to business
6.2.1. Technological costs and HFC costs for F-gas using industries /
equipment operators
Business may be faced with changes in costs relating to:
 Technological adjustments resulting in changes in investment costs and operating
expenditures (e.g. energy use, maintenance costs) for users of mainly new equipment
that are shifting to (more) climate-friendly alternatives.
 Higher HFC prices (“HFC price premium”) resulting in higher HFC equipment prices
and maintenance costs for users that continue to rely on equipment using HFCs.
Based on the experience of the last six years, both types of costs are fully passed through to
the end user of the equipment. However, it should be noted that the user costs resulting from
the HFC price premium will benefit the sellers of HFCs, who receive the quota free of charge
mainly based on historic grandfathering. Thus the net effect of higher gas prices on the
economy is neutral (distributional effect). If a quota allocation price is introduced (Option 2
and 3), the effect would similarly be neutral overall, but some of the net costs would result in
revenue for the authorities from the quota allocation price.
To correctly describe the different costs for different stakeholders, we discuss in the
following the (i) technological adjustment costs for users of new alternative equipment, (ii)
related emission reduction costs, (iii) HFC price premiums paid by users relying on HFCs,
(iv) total adjustment costs for all equipment users, and (v) distributional effects of higher
price premiums and the impact of an allocation price.
6.2.1.1. Technological adjustment costs for users that shift to climate-friendly
solutions
Average annual costs that arise from changing to climate-friendly equipment, either new
investment into alternative equipment or operating alternative equipment, e.g. the
technological adjustment costs, will vary between 2, 12 and 116 Mio €/year for Options
1, 2 and 3, respectively, for all sectors combined in the time horizon 2030 (i.e. the 2024-2036
interval93
). At sector level there are large differences (Table 4). The targeted refrigeration and
air conditioning (RAC) users will in fact see benefits because higher investment costs are in
general counterbalanced by lower operating cost (e.g. better energy efficiency). These
savings are highest under Options 2 and 3 where beneficial alternatives are introduced more
quickly. On the other hand, users of new mobile AC (excluding passenger cars94
) and new
93
i.e. the time period that covers the presumed entry into force of the new Regulation (2024) until the
last (lowest) compliance step of the Protocol (2036). Annual costs for these years are determined and
averaged over the period.
94
The options will not target new passenger cars as they are already required to use climate friendly
refrigerants.
35
switchgear without SF6
95
will have higher costs compared to the baseline. Additional costs
for these sectors are estimated to be 3.6 % for switchgear/SF6 under both Option 2 and 3, and
0.4% (Option 2) and 1.0% (Option 3) for mobile AC of the baseline costs.
In the long run (2050) equipment users will overall save costs compared to the baseline,
in particular for the more ambitious Options 2 and 3. Option 2 and Option 3 differ only
slightly. In 2050, these options have savings of just over 1 billion €/year, which is more than
twice the amount resulting from Option 1. The largest savings are achieved in AC
applications including heat pumps as well as commercial refrigeration. The savings achieved
result from replacement of older equipment with new alternative equipment (lower
maintenance costs) and are therefore mostly related to the effects of the quota system and the
accompanying prohibitions. Data at sub-sector level is given in Annex A12.3.
Table 4. Annual adjustment costs due to technological change for the three policy options vs. baseline
between 2024-2036, and in 2050 [Mio €/year]
Sector time horizon
Option 1 Option 2 Option 3
Refrigeration 2024- 2036 average -24.2 -67.5 -124.8
Stationary AC 2024- 2036 average 26.1 -82.6 -82.6
Mobile AC 2024- 2036 average 0.0 109.1 270.6
Propellants,
solvents & fire
protection
2024- 2036 average 0.0 3.1 3.1
Foam 2024- 2036 average 0.0 0.0 0.0
Other HFCs 2024- 2036 average 0.0 0.0 0.0
Switchgear (SF6) 2024- 2036 average 0.0 49.3 49.3
Annual cost for
all sectors
combined
2024- 2036 average 1.9 11.5 115.7
Annual cost for
all sectors
combined
In 2050 -456.1 -1024.6 -1040.1
6.2.1.2. Emission reduction costs
To judge the cost-efficiency of the options, emission reduction costs (i.e. abatement
costs) are calculated. Since new equipment will leak (i.e. emit) over many years, emission
reduction cost compare the cost of technological change for investment in and operation (e.g.
maintenance costs, energy use) of equipment based on low-GWP alternatives during its
lifetime to the emissions saved during the lifetime of the respective equipment. These costs
are determined for new equipment installed (i) each year during the 2024-2036 timeframe
and (ii) in 2050. The HFC price premium (see 6.2.1.3) is not considered here, because it is (i)
a distributional cost, and not a net cost for the economy (see 6.2.1.5), and (ii) these premiums
are paid by the users of HFC equipment, rather than those using alternative equipment as a
95
This concerns only Option 2 and 3, as no mitigation actions for those sectors is expected in Option 1.
36
result of the policy options assessed. The resulting estimated emission reduction costs are
shown in Table 5.
In the 2024-2036 time horizon, Option 2 and 3 will result in cost savings (i.e. negative
costs) of 36€/tCO2e abated and 23 €/tCO2e abated, respectively for the economy as a
whole.96
In the long-term perspective (2050), Option 1 results in cost savings at almost -
178 €/t CO2 abated, since emissions savings would be mostly limited to the cost-efficient
sub-sectors of refrigeration and AC (and the other sectors therefore do not show up in the
calculation). Under Option 2 and 3, the analysis shows average benefits for the economy
as a whole, estimated at 63 €/t CO2e and 52 €/tCO2e, respectively. The cost savings come
mostly from reduced maintenance costs, in particular energy use. This indicates that action in
most F-gas sectors is very cost-efficient. It is therefore also in general more economical
in view of actions taken elsewhere, in other sectors of the economy.
There are however large differences in the marginal abatement costs at the sub-sectoral level
(see Annex A12.4). Costs related to Option 3 (through a stricter phase-down) reach up to
2,111 €/t CO2e abated (train AC), whereas the highest abatement costs under Option 2 are
estimated to be 334 (buses AC) and 336 (switchgear) €/tCO2e. Thus, Option 3 will have, in
a few sub-sectors (e.g. AC in trains, buses and metros), marginal abatement costs that
are significantly higher than what is being estimated as necessary (390 €/t CO2e abated
by 2050) for the economy as a whole in modelling until 2050.
Table 5. Emission reduction costs (i.e. abatement costs) per sector and in total for all sectors.
Sector
time
horizon
for new
installed
equipme
nt
Option 1 Option 2 Option 3
total
emission
reduction
s vs.
baseline*
Cost of
technol
ogical
change
emission
reduction
cost+
lifetime-
integrat
ed
emission
reductio
ns
compare
d to
baseline
Cost of
technologi
cal change
of lifetime-
integrated
emission
reductions
Calculated
emission
reduction
cost+
lifetime-
integrat
ed
emission
reductio
ns
compare
d to
baseline
Cost of
technologi
cal change
of lifetime-
integrated
emission
reductions
Calculated
emission
reduction
costs +
Mt CO2e Mio € € / t CO2e Mt CO2e Mio € € / t CO2e Mt CO2e Mio € € / t CO2e
Refrigerati
on
2024-
2036
-1.9 -5.5 NA+
1.7 -120.8 -72.5 2.1 -188.6 -91.6
Stationary
A/C
2024-
2036
-3.0 196.9 NA 7.3 -559.4 -76.3 7.3 -559.4 -76.3
Mobile
A/C
2024-
2036
0.0 0.0 NA 1.7 96.2 57.9 2.9 303.9 106.4
Propellants
Solvents
Fire fight.
2024-
2036
0.0 0.0 NA 2.5 3.3 1.3 2.5 3.3 1.3
Foam
2024-
2036
0.0 0.0 NA 0.0 0.0 NA 0.0 0.0 NA
Other
HFCs
2024-
2036
0.0 0.0 NA 0.0 0.0 NA 0.0 0.0 NA
SF6
2024-
2036
0.0 0.0 NA 0.7 79.5 115.8 0.7 79.5 115.8
For all
sectors
2024-
2036
-4.9 191.4 NA 13.8 -501.1 -36.3 15.4 -361.2 -23.4
96
This is not relevant for Option 1 since there are no emission savings compared to the baseline.
37
For all
sectors
In 2050 4.4 -781.1 -178.1 16.1 -1005.2 -62.7 16.3 -841.2 -51.7
Source: AnaFgas cost modelling
*negative values indicate emission increases vs. baseline
+ NA: not applicable: no emission reduction costs can be calculated as emissions increase
n.b. The emission reduction costs shown relate to new equipment installed in the period 2024-2036 (average)
and in 2050
6.2.1.3. HFC price premium for users that rely on HFCs
From 2015-2019 the phase-down system resulted in an increase in HFC prices on the EU
market compared to the prices before the phase-down started. While EU prices have been
fluctuating97
, on average the price increase (premium) is estimated to be around 8 €/t CO2e at
gas distributor level (see Annex A5.6.1.1 and A4.2.10.1). Thus, new HFC equipment and
products and the servicing of such equipment (e.g. refilling supermarket refrigeration or old
passenger cars with virgin HFCs) became more expensive for users. To determine the future
impact on users it is necessary to understand how this premium would change under each
option compared to the HFC price development that would occur under the baseline.
Temporarily higher prices are required to drive replacement in the more difficult sectors with
high marginal abatement costs. However, significant uncertainty exist about HFC price
developments over 30 years when estimating price effects related to the options.98
Still, for the purpose of illustrating the potential distributional impacts of the HFC premium,
some assumptions about the potential development have been made in Table 6. It has to be
underlined that these price assumptions are not predictions. They may however be assumed to
represent a conservative scenario, or so called worst-case scenario, as regarding long-term
price developments, as it is expected that over 30 years many new technological
developments will take place that allow the replacement of F-gases also in the sectors where
abatement is difficult, which would result in lower demand. This, in turn, would lower the
price premium resulting from the decrease in HFC supply. These demand effects are not
factored into the assumed prices in Table 6.
Table 6. Worst case assumptions about the HFC price premium vs 2014 pre-phase-down price levels
Scenario Unit 2025 2030 2035 2040 2045 2050
Baseline €/t CO2e 28 37 38 39 40 40
Option 1 €/t CO2e 27 29 33 41 46 50
Option 2 €/t CO2e 37 68 95 119 138 161
97
C(2020) 8842 final. REPORT FROM THE COMMISSION on the availability of hydrofluorocarbons on the
Union market. https://ec.europa.eu/clima/document/download/11f89677-c97e-420d-97b7-97b9ad14618a_en
98
A comparative analysis is difficult because on the one hand, options with a stricter phase-down have
lower HFC supply and therefore HFC prices would tend to be higher. On the other hand, a stricter
phase-down promotes technological change, which in turn will decrease demand for HFCs and thus
prices. Also, HFC prices may be lower for options with additional prohibitions since prohibitions reduce
HFC demand. Since 2015, prices were stable in the first two years of the quota system, shooting up very
strongly in 2018 and then coming back down in 2019 and 2020 (See evaluation, Annex A5.6.1.1).
38
Option 3 €/t CO2e 38 74 112 141 159 180
Source: AnaFgas cost modelling
In Option 1, the sectors that are covered by the phase-down will first have lower HFC
premium until 2040 and then slightly higher HFC premium, compared to the baseline. For all
options, the users of pharmaceutical MDIs that continue to use HFCs will have to pay these
HFC price premium costs over time. This is contrary to the baseline where these users do not
pay the premium, as MDIs are exempted from the phase-down in the current Regulation.
However, the higher HFC premium compared to the total product price is very low in this
case (less than 0.1%) and a smooth introduction of alternatives is thus promoted. The new
quota system will start with an allocation of HFC quotas that covers 100% of the MDI sector
needs.
In Option 2 and 3, higher HFC prices are assumed to impact on all users that are still
buying new HFC equipment (including MDIs) or need to refill existing equipment. For
all operators collectively the higher HFC premium compared to the total product price is very
low, at 0.1%. However, some sectors will see bigger reductions in HFC content in equipment
than the increase in HFC premium price, resulting in a net decrease in costs for HFC prices
paid. In absolute terms, the stationary AC sector for instance sees the biggest net cost
decrease in HFC price paid, because the cost associated with increasing HFC price premiums
are more than compensated by the reductions in remaining HFC demand. For more sectoral
detail see A12.3.
6.2.1.4. Total adjustment costs to users of equipment and products
In the 2024-2036 time horizon, total adjustment costs for users (e.g. equipment owners),
taking into account both technological change and HFC price premium, range from about 210
Mio €/year in Option 1 to 410 Mio €/year in Option 2 and 442 Mio €/year in Option 3 (see
Annex A12.3). In the long-term perspective (2050), users are expected to benefit overall, as
costs related to technological adjustments are negative in all policy scenarios (see 6.2.1.1),
with costs to those users that still rely on new HFCs in 2050 ranging between 115-190 Mio
€/year for the 3 options. However, in all options, the user costs are linked to HFC price
premium assumptions99
which are uncertain and deemed worst-case scenarios. Moreover, the
quota holders and other companies in the HFC supply chain benefit from a higher price
premium as they are able to sell the HFCs at a higher price (see next section below).
6.2.1.5. Distributional effects between equipment operators and undertakings
of the HFC supply chain and impact of the quota allocation price
The cost to F-gas using industries (e.g. equipment operators) due to the price premium
are revenues for other operators in the HFC supply chain and profit bulk gas importers,
producers/distributors and service companies. In the baseline scenario, the quota system
could generate, if taking the high price premium as assumed in 6.2.1.3, revenue at about 2.1
99
Of total costs in 2024 -2036 price increases account for approximately 99% in Option 1, 95% in Option 2
and 80% in Option 3.
39
billion €/year on average in the period 2024-2036. In the 2050 time horizon, the
costs/revenue would decline to 1.4 billion €/year. The experience of the quota system so far
shows that the revenue gain is split 60% to 40% between the importers, EU producers and
distributers on the one hand and the service companies on the other.
A quota allocation price measure (Option 2 and 3) would provide for a more evenly
distributed sharing of the burden between industry players as it reduces the revenue for
the actors (EU gas producers, importers, distributors, service companies) in the F-gas supply
chain. Due to the high uncertainties about the HFC price development resulting from the
phase-down, it is proposed to keep a relatively low quota allocation price to avoid any risk
that an unnecessary higher allocation price is passed on to end-users. If the allocation price is
set to 3 €/tCO2e100, the revenue would be around €125 million initially (2024) and that
revenue would decline over time as the quota allocated is being reduced. It would be
important to have flexibility to adjust the quota allocation price in case it appears to be too
high (pass on) or too low (insufficient limitation to genuine traders). See Annex A7.3 for
more details on this measure.
6.2.2. Administrative Costs
Industrial stakeholders were asked to provide information on additional administrative
costs of the measures included in the policy options. Given that the Regulation affects many
different types of companies (gas producers, distributors, importers, equipment
manufacturers, service companies, end users etc.) and in many different ways (different
measures affect different company types), the data collected needed to be complemented by
further analysis, in particular also for data regarding company size. This detailed analysis,
assumptions made and data considered are given in Annex A14).
For the EU Commission the costs were estimated by DG CLIMA. The data for the EEA are
based on EEA time recording and invoice information from EEA’s contractors. The 27
Member States competent authorities were asked to fill out a questionnaire related to the
administrative costs associated with the implementation and enforcement of the Regulation.
The respondents were not able to provide answers to all the questions and the figures
obtained include a combination of time effort and monetary expenditure estimates. The level
of certainty ranges from ‘definitive’ to ‘rough estimates.’ Nonetheless, a good base of data
was collected from the competent authorities on which an estimate of administrative costs
could be made. In total 13 Member States provided information on administrative burden101
,
with six noting upfront costs.
100
€3/tCO2e would be below recent market levels on the HFC price premium (6 €/t CO2e as OEM
purchasing prices from 2015-2019) and thus the ‘allocation price’ would normally decrease benefits in
the HFC supply chain whereas it would not be passed on and result in an additional burden to end-
users.
101
13 Member States provided data based on time effort required, and 9 Member States provided data on
financial costs.
40
6.2.2.1. Additional administrative costs for industry
Some measures will result in one-off administrative costs whereas others will entail costs
every year. Table 7 gives the expected additional administrative costs for each policy option
by review objective.
Table 7. Additional recurrent administrative costs expected for industry stakeholders by the three policy
options and by review objective (in million € per year)
Option 1 Option 2 Option 3
Net Costs Objective A - 4.4 4.4
Net Costs Objective B 0.02 0.02 0.02
Net Costs Objective C -0.8 5,7 6,2
Net Costs Objective D -1.1 -2.5 -1.3
Net Total Cost -1.8 7.6 9.4
Option 1 results in some cost savings for undertakings (-1.8 million € per year). Option 2 and
3 result in total costs of €7.6 and €9.4 million € per year, respectively, in addition to one-off
costs of €3 and €21 million, respectively. As regards individual measures, “certification
programmes to include alternatives”102
and “additional requirements for prevention of
emissions” result in the highest recurrent costs (both measures are only in Options 2 and 3).
High one-off costs are linked to the measure of a “Member States electronic tool to register
emission-relevant company data” (Option 3 only). Relevant cost savings for companies are
achieved by “having new entrant declarations only every 3 years, instead of annually” (all
Options), “relaxing the verification thresholds for equipment” (all Options), and “enabling an
electronic verification process” (Option 2 and 3). The detailed costs per measure are given in
Annex A14.2. Some of the measures resulting in additional costs are needed to align with
international rules or achieve better implementation by reducing illegal activities (€1.9
million in total).
6.2.2.2. Additional administrative costs for authorities
At European level
The European Commission is responsible for implementing the quota system and the
company registry EU-wide. This is already a considerable task and a number of measures
would increase the burden on the Commission, in particular the introduction of a quota
allocation price, which would result in significant resource and budget implications (ca. 10
annual full-time equivalents (i.e. 2200 person days) plus IT costs, in addition to 2200 person
days one-off staff and IT costs). However the price will also generate a revenue and could be
used to outsource some of the activities on a permanent basis, e.g. to an agency such as the
European Chemicals Agency (ECHA). In addition, the implementation of a tighter phase-
down including on production and a more comprehensive and complex legislation on
prohibitions will also increase administrative costs. Option 1 would increase the resource
effort for the EC by only ca 100 person days, while Options 2 and 3 would require more than
102
In addition, there are 20.8 million € costs estimated for attending additional training courses which is
considered an additional adjustment cost for service companies.
41
2,300 person days in addition to similar one-off costs, mainly due to introducing the quota
allocation price (2200 person days by itself). In addition, there are one-off costs of 12 (Option
1) and 2,215 (Option 2 and 3) person days. These costs do not include efforts of further
developing the CERTEX/EU Single Window for Environment.
The European Environmental Agency (EEA), which has been entrusted with collecting and
analysing the annual reporting data, would have additional costs due to slightly extended
and/or modified reporting obligations, as well as enabling the electronic verification system.
Option 1 may result in slight overall savings for EEA, Option 2 would slightly increase the
current effort (430 person days) by 10 person days, while Option 3 would increase the effort
significantly by 327 person days, mostly due to enabling the reporting on exports of
equipment, switchgear and recycled gases. There are also one-off costs of 42, 142, and 292,
respectively, for Options 1, 2 and 3. Detailed costs are given in Annex A14.4.1.
At national level
Member States can expect higher costs for enforcing the quota system, e.g. requirements for
customs and importers103
(all options) and new prohibitions (mostly Option 2 and 3); for
updating certification and training programmes (Option 2 and 3) and for setting up national
databases (Option 2: encouraged and 3: required). Further costs may relate to other new
measures, e.g. the requirement to recover foams at end of life (all options). Cost savings are
expected due to the alignment of reporting and verification thresholds and the obligation to
submit nil reports (all options). Overall, Option 1 will add few costs, while the recurrent costs
for Option 2 and particularly Option 3 are somewhat larger (An average of 310 (Option 2)
and 468 (Option 3) additional person days per year and per Member State). Option 3 also
adds some upfront costs, see Table 8 and Annex A14.4.2.
Table 8. Additional administrative costs expected for authorities as a result of the three policy options in
person days (EC: European Commission, EEA: European Environmental Agency, MS: Member States)
Person days Option 1 Option 2 Option 3
EC Upfront (one-off) 10 2,215 2,215
Ongoing (per year) 102 2,313 2,338
EEA Upfront (one-off) 42 142 292
Ongoing (per year) -2 10 327
MS (total) Upfront (one-off) 246 246 9,092
Ongoing (per year) 3,101 8,364 12,644
6.3. Macroeconomic effects
The effects of the three policy options on the EU economy were modelled using the JRC-
GEM-E3 model. The policy scenarios were assessed in comparison to the EU reference
scenario 2020 of Fit for 55104
. As the latter includes the (unchanged) measures of the current
103
Benefits related to automatic controls through the Single Window for Customs are in the baseline and
saved payments to the EU Budget due to the quota price revenue transfer in Option 2 and 3 are not
included.
104
European Commission (2021). EU Reference Scenario 2020: Energy, transport and GHG emissions -
Trends to 2050.
42
F-gas Regulation, it is comparable to the baseline used in the current work. In the JRC-GEM-
E3 model the analysis focuses on modelling the economic consequences of additional
abatement cost, cost savings (e.g. from lower energy use or reduced equipment expenditure)
and increased user cost (in end user cost due to the value of the HFC quota). A description of
the model and of the setup of the scenarios are given in Annex A4.3.
Overall the economic implications of the more ambitious options 2 and 3 are slightly
positive in the long run (2050). There are a number of industries that will profit, in
particular linked to equipment manufacture and its supplying industries. There may be some
very small inhibitive effects until 2030 in Options 2 and 3.
6.3.1. Effects on GDP
Overall, the GDP impacts are very small (see Annex A13), as the changes included in the
different options concern only limited areas of the EU economy. For the more ambitious
options (2 and 3), the GDP would slightly increase in the long run (0.005-0.006%), which
reflects that cost savings (e.g. from energy use; see section 6.2.1.1).) lead to an increase in
GDP, as the same goods can be operated with less input and thus less expenditure is needed
for the same purchases. These savings can be used to purchase other goods and services, thus
increasing GDP. Conversely, option 1 shows very small positive effects until 2030 (0.002%)
as there are less initial adjustment costs, but no positive effects in the longer timeframe (as
e.g. energy savings are not achieved).
4. Effects at sectoral level
Different industries could be affected in different ways depending on their role in F-gases
abatement. Some providing goods and services used for abatement would benefit while
others may face reduced demand or increased costs from abatement efforts.
At sectoral level, changes are observed for the electricity sector and fossil fuel supply
sectors (output reductions). Option 1 leads to higher electricity use in 2030 (0.06%) and
some savings by 2050 (-0.09%). These savings are significantly larger for Options 2 and 3
(-0.07 and -0.14% in 2030, -0.35 and -0.37% in 2050, respectively). There is also an increase
in output for the equipment goods sector (e.g. production of cooling equipment including
AC and heat pumps) for Options 2 and 3 (0.13 and 0.15% in 2030, 0.19 and 0.20% in 2050,
respectively). Option 1 leads to lower output from the equipment sector in 2030 (-0.14%),
and a moderate increase by 2050 (0.09%) (see Annex A13). Sectors that deliver input to
equipment manufacture also show positive effects for options 2 and 3, e.g. metal sectors,
electric goods. There are small positive effects also on chemical industry from an increase
in demand. Conversely, there is a small decline in the transport sectors (commercial land
transport and water transport) as these face a net cost from the policy in case of Option 2 and
3 (maximally -0.01 and -0.02%, respectively in 2030). The overall service sector in the
model includes too many different activities to show any noticeable effect attributable to the
F-gas maintenance sector. Other sectors that are not directly affected show very small
impacts.
43
6.3.3. Effects on consumption, investment and innovation
For Options 2 and 3 there may be some very small initial inhibitive effects on investment
until 2030, but EU27 investment is changing positively in response to the increased GDP
in the long run, by up to 0.002% (Option 2) and 0.003% (Option 3). Investments in the
power sector decline due to lower demand for electricity, while there are increases in some
other sectors (mainly equipment manufacturing) that benefit from increased demand for
replacing equipment. Similarly, Options 2 and 3 lead to higher consumption in the long
run (2050: 0.007 to 0.009% in 2050), especially in the EU South (up to 0.011%) (see Annex
A13), as savings from energy are invested in other goods and services. These positive effects
materialise after 2030, when the cost savings from early abatement start bearing fruits.
Consumption increases in appliances and equipment, which become cheaper to operate, while
cost savings also lead to increases in household consumption of other services.
The evaluation found that R&D and innovation were positively affected by the quota system
and the prohibitions, in particular in the refrigeration and air conditioning equipment
manufacturing sector. The quota system raises prices for HFC gases and therefore
incentivises that end-user convert to lower GWP or non-F-gas technologies more quickly.
Prohibitions provide end-points in certain sub-sectors and a clear signal as well as business
opportunities for innovators and manufacturers of alternative equipment. Stakeholders
generally supported this finding. Further incentives for investment in R&D and
innovation are to be expected in particular for Options 2 and 3 due to a steeper phase-
down and more prohibitions, while little additional impact on R&D and innovation is
expected from Option 1. This is supported by the JRC-GEM-E3 modelling results which
points to additional investment in particular in the ‘other equipment goods sector’ in Option 2
and 3 (approximately +0.15% in 2030, and + 0.2% in 2050) (see Annex A13).
6.3.4. Distribution of cost across EU regions
No strong regional differences between Northern and Southern European countries
were found. F-gas using equipment is not equally distributed over the EU, due to climatic
differences, that fact that natural alternatives are already more frequently used in the North
and different structure of the relevant sectors105
. Hence, investments in replacement
technologies and the types of equipment used could be expected to show some variations (see
Annex A4.2.8). An analysis of these patterns between northern and southern EU countries as
to their relevance on costs shows that, for Option 1, the cost distribution is almost
proportional to the population. In the more ambitious Option 2 and 3, costs rise more for the
EU North relative to population. These small differences are mostly due to a shift away
from HFC technologies in small stationary AC systems that are prevalent in the South,
resulting in cost savings for operators in comparison to the baseline, both for the HFC charge
and re-fill and for other technical cost. Regional patterns were also assessed for the
macroeconomic indicators GDP, consumption, investment and employment. As overall
105 E.g. in the South smaller shops are comparatively more relevant, requiring different types of
equipment.
44
effects for those indicators were found to be very small, no strong regional patterns could be
established. Regional patterns were also assessed with GEM-E3 for the macroeconomic
indicators GDP, consumption, investment and employment and overall effects for those
indicators were found to be also very small (< 0.01% changes in comparison to baseline
developments).
Figure 6: Regional distribution of EU F-gas using industries' 2024-2036 compliance cost
Note: EU South: Bulgaria, Croatia, Cyprus, France (25% of FR population), Greece, Italy, Malta, Portugal,
Romania, Spain; EU North: other EU27 MS, including 75% of the French population.
“MP alignment” is Option 1, “proportionate action” is Option 2, “maximum feasibility” is Option 3
Source: AnaFgas cost modelling
6.3.5. Impact on consumer prices
Private consumers are not expected to bear any significant costs. Private consumers are
endusers (i.e. equipment operators) only in a few sub-sectors (e.g. small AC units, AC in
passenger cars106
or MDIs). Users of small AC (e.g. heat pumps, single-split) benefit from
energy efficiency savings, which lead to cost savings already in the 2024-2036 timeframe
(Table 39 in Annex A12.3). Owners of older cars will have to pay more for the HFC gas if
the AC system needs refilling. The relative cost increases for these sectors are very small and
thus are not expected to impact on consumer prices significantly. Patients using MDIs for
asthma and other conditions will practicably not be affected as the propellant gas costs is a
very small fraction of the total price of inhaler and the medicinal agent (<0.05% of total
costs). The JRC-GEM-E3 model confirmed that consumption price increases for the ‘medical
care and health’ sector overall are only about 0.04% - 0.05% for 2030 and about 0.03% for
2050, compared to the baseline. Finally, electricity network operators warned that higher
prices due to replacing SF6 switchgear would be passed on to customers through higher
network tariffs.
In most other cases, private consumers are not affected directly, because the operators of
equipment are companies which use such equipment in order to provide other goods or
106
There a no technical adjustment costs linked to mobile AC in passenger cars except that higher HFC
prices may increase costs of maintaining AC in some cars dating before 2017.
61% 60%
68% 70%
39% 40%
32% 30%
0%
20%
40%
60%
80%
100%
Population cost,
MP aligment
cost,
proportionate
action
cost,
maximum
feasibility
Regional distribution of EU F-gas using industries'
2024-2036 compliance cost
EU south
EU north
45
services to consumers, e.g. refrigeration in food retail, air-conditioned office space or
transport or IT services relying on fire-protected servers. Whether or not cost changes for
companies will have any significant effect on consumer prices of the good or service they
provide will depend on the relative change compared to other costs and the ability to set
higher prices for the consumer good. In cases where there are costs, they will be low
compared to the total costs related to the consumer good or service. Moreover, in many cases
these low costs can be distributed over many different goods. For instance, additional costs
for refrigeration or air conditioning on ships are small compared to other operative costs on
the ship and can be dispersed on the many products transported over the life time of the
equipment. For those applications that exhibit negative adjustment costs (e.g. commercial
refrigeration, split air conditioning, see Annex A12), no price effects are expected on the
relevant consumer goods. Thus none of the options are expected to impact on consumer
prices in a significant way.
6.3.6. Distribution of cost across business size
The impacts on SMEs should be moderate. In the public consultation, 37% expected only a
slight burden or no burden at all for SMEs, while a similar number (38%) of industry
stakeholders107
expected a significant burden as a result of the policy options of the review.108
A high share of SMEs is found among equipment importers and the service companies.
Equipment importers face essentially the same HFC price premiums when they acquire quota
authorisations to import as the EU manufacturers that buy HFCs at high prices in the EU109
.
Price premiums increase from Option 1 to 3 (see 6.2.1.2). Service companies profit from
higher HFC prices as they can pass them on (and more) to their customers. On the other hand,
service companies will bear some costs linked to training needs (see 6.2.2.1), while the
acquiring of new skills also offers business opportunities. SMEs are also found among
equipment operators, where adjustment costs expressed in relation to baseline expenses are
very low (Annex A12). Accordingly, industry stakeholders expected, related to SMEs, higher
staff and training costs due to the need for skilled personnel and some feared a possible
disruption of investment plans for smaller end-users, while others saw increased business
opportunities for providers of green technologies.
6.3.7. Impact on competitiveness
6.3.7.1. Competitiveness of fluorinated gas producers
EU producers and importers are not expected to suffer competitiveness losses. As
regards the production of HFCs, the production levels in tCO2e must be phased down due to
the Protocol and the inclusion of a separate HFC production phase-down is designed to
ensure that producers will be at least as well off as under a scenario where the Montreal
107
These answers were obtained from 168 respondents from industry, of which 122 (73%) describe
themselves as SMEs.
108
The remaining percentage (25%) could not say or did not answer.
109
The quota authorisations price has been developing similar to the HFC price premium. It has been at a
low levels since 2019 and many importers have already acquired a substantial authorisations for future
use.
46
Protocol production phase-downs are implemented at national level (by Germany and France)
(See Annex A8). Furthermore, producers and importers profit from the quota system, as free
quotas and scarcity of HFC gas on the EU market allow to charge higher prices for the gas
(see e.g. Annex A4.2.10).
6.3.7.2. Competitiveness of businesses active in the manufacture and
maintenance of equipment using F-gases or alternatives
There may be positive effects for competitiveness of equipment manufacturers under
the higher ambition policy options in the future. The Kigali Amendment will lead to a
world-wide increase in demand in climate-friendly technologies. Options 2 and 3 will
incentivise R&D and innovation related to equipment operating with low GWP alternatives
more than Option 1 and hence more likely increase export opportunities. While some industry
stakeholders expected an increase in R&D (39 respondents) and higher competitiveness,
including in the field of alternative technologies to SF6 (17 respondents), other industry
stakeholders feared that the competitiveness of export-oriented EU business may be
negatively affected by higher HFC prices. JRC-GEM-E3 modelling results show that in
monetary units the gains in output of the “other equipment goods” sector to be expected
under Options 2 and 3 are by far larger than the losses in exports. Moreover, as mentioned
above, EU companies will more and more produce climate-friendly technologies also for
export, as the global market will be moving in that direction.
6.3.8. Impact on trade flows (imports and export)
As regards HFC bulk gases, future exports will go down as EU production (and
consumption) will have to decline compared to 2011-2013 levels as internationally agreed.
This is therefore the case for all three options as they all intend to ensure compliance with
Protocol rules. This does not apply to SF6 gas (or SF6 equipment)110
exports, as no
restrictions on exports of this gas apply in any of the three policy options. European
companies are also world leaders for the alternative equipment replacing SF6.
For products and equipment containing HFCs, manufacturing costs will increase due to
higher HFC prices depending on the ambition level of the policy options. From an isolated
perspective those additional costs may reduce exports, as outside markets are not as advanced
as the EU as pointed out by some industry associations. However, as all countries will have to
comply with their declining HFC consumption limits under the Montreal Protocol, there will
be a growing demand for climate-friendly equipment, which should consequently affect
exports of such equipment favourably in the long run.
Imports will increase on balance. While imports of bulk F-gases will continue to fall, their
economic value will go up as the replacement H(C)FOs are considerably more expensive
than HFCs. Imports related to equipment will likely increase. The main drivers are an
additional demand for such equipment and its supplying sectors, both of which are more
significant for Options 2 and 3. According to the JRC-GEM-E3 results, the increased value of
110
The respective prohibitions for SF6 equipment under Options 2 and 3 apply for placing on the EU market
and installation only.
47
imports in the ‘other equipment goods’ sector (comprising cooling equipment) is far more
relevant than the import trends for bulk fluorinated gases, as the import share of the higher
EU demand for such equipment under Options 2 and 3 is worth about four times the
increased value of bulk fluorinated gas imports.
6.4. Social effects
6.4.1. Effects on employment
Employment effects, like GDP, are very small but positive in the long run depending on
the ambition level of the option. By 2030, there is essentially no noticeable effect at EU
level. By 2050, all options have positive effects, which is higher for Option 2 (a gain of ca.
6800 jobs) and 3 (gain of ca. 8500 jobs) and in the EU South. Most of these jobs gains are
related to the equipment goods sector and related industries.
Figure 5: Employment effects
Note: EU South: Bulgaria, Croatia, Cyprus, France (25% of model results for France), Greece, Italy, Malta,
Portugal, Romania, Spain; EU North: other EU27 MS, including 75% of model results for France.
“MP alignment” is Option 1, “proportionate action” is Option 2, “maximum feasibility” is Option 3
Source: JRC-GEM-E3 modelling
7. HOW DO THE OPTIONS COMPARE?
Table 9 provides an overview of the main impacts of the three policy options. Option 1
effectively ensures compliance with the Protocol and improves, to some degree,
implementation, enforcement and monitoring. However, since it turns out that Option 1
results in higher cumulative emissions over the period until 2050 compared to the baseline
(Figure 6), and even though its emission levels in the year 2050 are lower than the baseline,
thus Option 1 is not considered to be sufficiently coherent with the European Climate
Law. Even if Option 1 were adjusted to generate at least the same level of cumulative
emission reductions as the baseline (e.g. a slightly steeper phase-down going beyond what
would safeguard compliance with the Protocol), the option would be a missed opportunity
-0.001%
0.000%
0.001%
0.002%
0.003%
0.004%
0.005%
0.006%
0.007%
MP alignment proportionate action maximum feasibility
Percentage
change
vs
baseline
Employment effects at EU and regional levels
EU27 - 2030 EU North - 2030 EU South - 2030
EU27 - 2050 EU North - 2050 EU South - 2050
48
considering that it would not at all contribute to the first review objective to achieve more
emission savings while noting that there is a high potential to further reduce emissions as
demonstrated by Options 2 and 3. In other words, taking Option 1 would mean that the
necessary emission savings to achieve at least 55% reductions by 2030 and climate neutrality
in 2050 would be considerably more difficult and costly to achieve at the Member State level
(as they have to fulfil their GHG targets under the Effort Sharing Regulation), either by
taking less effective, disparate measures in the F-gas sector and/or by taking additional, thus
more costly, measures in other sectors to compensate for any EU action on F-gases that was
feasible and cost-effective but not taken under this option.
Option 2 and 3 are rather similar in terms of cumulative emissions saved (difference of 27
MtCO2e) until 2050 (Figure 6), achieving reductions of 16% and more compared to the
baseline in 2030 and halving them by 2050 compared to the baseline (Table 9), with Option 3
representing the savings that are technically feasible with today’s technologies. While both
options are effective and coherent with the objectives of the European Green Deal, the
relatively small emission gains of Option 3 compared to Option 2 come at significantly
higher additional costs, which do not appear to be justified by the limited additional
savings. The annual technological adjustment costs per year in the period 2024 - 2036 are 10
times higher in Option 3 (€113 million compared to €12 million in Option 2) and the highest
marginal abatement costs in the few additional sub-sectors concerned (e.g. switchgear, AC in
buses, metros and trains) will be six times higher in Option 3 (cost up to of 2,111 €/t CO2e
abated compared to maximally 336 €/tCO2e abated by 2050 in Option 2). Moreover, by
reducing supply under the HFC quota system to the extent that no HFCs are available for a
few difficult sub-sectors with very high abatement costs, the risk of HFC shortage would
increase with significantly higher HFC prices and thus increase costs for all end-users that are
still relying on HFCs. However, Option 3 (as well as Option 2) also delivers cost savings in
the long run (and small employment benefits), in particular benefitting the sector of
equipment manufacturing and its supply industry, while the impacts of Option 1 are rather
neutral compared to the baseline.
Both Option 2 and 3 provide effective responses to the issues of implementation, enforcement
and monitoring. However, the additional implementing measures included in Option 3 would
add to the additional administrative burden and costs for stakeholders and authorities.
For these reasons it appears that Option 2 is having the most appropriate cost-benefit
balance, achieving a very substantial amount of additional emissions at a modest price
tag and avoiding undue hardship for any affected sectors. It is therefore most coherent
with the objectives of the Green Deal. Furthermore, it is likely that even stricter F-gas
policies can be introduced later (before 2050) at lower costs than today in light of new future
technological developments.
49
Figure 6: Total additional emission savings vs. the baseline (cumulative) achieved by the three options in the
period until 2050.
N.B. Not counted are any emission savings from better implementation, enforcement, monitoring and
clarification improvements.
Table 9. Comparison of the impacts of the options
Option 1 Option 2 Option 3
Achieved Emission reductions vs. Baseline (annual)111
In 2030 [MtCO2e] ([change as % of baseline])
In 2050 [MtCO2e] ([change as % of baseline])
+2 (+5%)
-2 (-7%)
-7 (-16%)
-13 (-48%)
-8 (-18%)
-14 (-52%)
Effectiveness on Protocol compliance, implementation,
enforcement and monitoring + ++ +++
2024-36 Technological Adjustment costs [Mio €/year] 2 12 113
2024-36 Total Adjustment costs (includes distributional
costs due to HFC price premium) [Mio €/year]
212 421 557
2024-36 Emission reduction costs, (all sectors, based on
technological adjustment) [€/tCO2e]
N/A -36 -23
Highest marginal abatement costs in sub-sectors (2050)
[€/tCO2e]
-48 336 2,111
Net administrative costs for undertakings [MIO €/year] -1.8 7.6
+ 3 one-off
9.4
+ 21 one-off
Administrative costs for authorities [person days/year]
3,200
+300 one-off
10,700
+2,600 one-off
15,300
+11,600 one-off
Long-term macro-economic effects (GDP, consumption,
investment, innovation) +/- + +
Long-term effects on employment +*
+ +
Long-term effects on the equipment sector and its
supply industry
+*
++ ++
+++/++/+ positive, +/- neutral, -/--/--- negative; N/A not applicable (since no emission savings vs baseline)
*these long-term effects are very small
111 For total cumulative emission savings see Figure 6.
50
8. PREFERRED OPTION
The preferred Option 2 will ascertain a significant amount of additional savings while
stimulating green technologies and setting the scene for a better application of the rules and
monitoring. In the 2030 context, savings of cumulatively 40 MtCO2e between 2024 and
2030 will complement the efforts taken in Member States to reach their targets under the ESR
in a cost-effective way. These savings will come on top of the 430 MtCO2e estimated to
result from the current Regulation (baseline vs counterfactual until 2030, see A5.6.2.1.1). By
2050 the additional savings of Option 2 will be ca. 310 MtCO2e. This means that the
residual annual F-gas emissions in 2050 are estimated to be only 14 MtCO2e (see Annex
A11.1.3). Option 2 is thus considered to be compatible with reaching net climate neutrality
by 2050, reducing the need for carbon-removal policies to compensate for emissions that
cannot be avoided in 2050 to achieve net climate neutrality.
The Option will also fully align the EU with international rules and ensure better control at a
moderate increase in admin burden for industry and authorities. The changes to the rules
should allow for an effective enforcement, tackling the identified existing challenges, in
particular those linked to illegal trade. The efficiency of the monitoring rules will be
improved at the same time as extending the rules to cover new aspects that have become
relevant. The necessary technological adjustment leads to cost savings overall and in many
sub-sectors, due to lower energy costs for the users. However, there are some costs for end-
users that are not switching to alternatives as a result of higher prices of HFCs under a
reinforced quota system. Nonetheless, in the longer run some sectors of the economy will
profit from the technology conversion, leading to higher output, innovation and employment.
As confirmed by stakeholders the types of measures in Option 2 have EU added value.
Consequently, the level of benefits achieved could not have been achieved as cost efficiently
for industry and Member States by introducing 27 different additional F-gas policies in
Member States. The administrative costs at the level of the individual measures retained in
the preferred option are given in Table 11 and Annex A3.
51
Table 10. Detailed impacts of the preferred Option 2.
Measures Environment Economic impacts – cost increases or savings
(per year unless stated otherwise)
Macro-
economic
effects
Social effects
Business Member States EC/EEA
A
RAISING AMBITION:
Phase-down,
Prohibitions,
Emission prevention
Recovery obligations
++(+)
From phase-down & prohibitions: Savings of
27 MtCO2e by 2030;
253 MtCO2e by 2050
In addition: At least 55 MtCO2e savings by 2050 from
expanded emission prevention measures and foam
collection (13 MtCO2e by 2030)
Some energy savings
(+) Abatement:
Overall €-36/tCO2e technology change
cost savings (2024-2036 average);
(--)
Admin: 4,850
additional days
Plus increased
inspection/
enforcement efforts
needed
(-)
Admin: 73 days
Long term:
(+)
GDP/output/
consumption
(+) R&D,
innovation
(++)
Equipment
manufacture
for domestic
market and
supplying
industries
(+)
Employment
(-) Conversion costs up to 336 €/tCO2e
(2050) in some sub-sectors (some
mobile AC, switchgear);
Costs for HFC equipment users due to
rising HFC gas prices;
Admin costs of €4.4 MIO plus one-off €3
MIO
(-)
Scientific discussion on potential increases of
persistent breakdown products of synthetic
refrigerants
B
PROTOCOL ALIGNMENT:
MDIs in phase-down,
Removal of thresholds,
Production quota,
No non-Party trade
Included in phase-down/prohibition effects above
(0/-) Cost increases on MDIs minimal
(<1%)
Admin costs: €0.02 MIO
(-)
Admin: 239 days
(-)
Admin: 48 days plus 31
days upfront
Possible cost for production reduction
(international obligation)
C
BETTER CONTROL:
More certification and
more extensive control
provisions
(++)
reduced illegal trade;
more competence on using alternatives
(--)
Admin: €5,7 MIO;
€125 Mio €/year distributional profits
collected from quota holders by
allocation price (initially)
(--)
Admin: 6,055 days;
246 days upfront
MS benefit from
quota price revenue
(--)
Admin:
2,248 days; 2,200 days
upfront.
Costs partly covered by
quota price revenue
D
MONITORING:
new substances,
reporting & verification,
encourage emission DB
(+)
Better knowledge on potential emissions; better
compliance checking
(+)
Admin savings of
-€2.5 MIO
(+)
Admin savings of
-2,780 days/year
(+)
Admin savings 46 days
costs of 126 days
upfront
E CLARIFICATIONS (+) (0/+) (0/+) (0/+)
Total effects (++) (-) (-) (-) (+) (+)
Legend: Scale applied is +++,++,+,0,-,--,--- (very high/positive to very low/negative); Corresponding colour codes are dark/medium/light green, white (neutral),
light/medium/dark red
52
Table 11. Detailed information of the total administrative costs expected for the
undertakings for each of the individual measures retained under the preferred option.
Policy Measure Annual Cost
(million €)
One-Off Cost
(million €)
Objective A
Apply requirements for prevention of emissions of fluorinated gases to some
substances listed in Annex II and some new substances
- 3
Apply requirements for prevention of emissions of F-gases to manufacturing,
transport, transfer and storage of bulk gases also to non-producers
4.4 -
Objective B
Remove the limit for reporting on production, import, export and destruction
of Annex I and II gases (HFCs only) *
0.02 -
Objective C
F-gas certification programmes also to include HCFOs and F-gas free
alternatives and practical training on all alternatives and add energy efficiency
issues to be part of training (stationary RACHP)
5.8
General prohibition of entry into EU territory of non-refillable F-gas containers
and other illegal goods under the Regulation and extend the scope to
unsaturated HFCs *
0.05 -
Add requirement for producers and importers to be registered and hold
sufficient quota at the time of release for free circulation/placing on the
market / physical entry into territory *
0.39 -
Add obligation for importers to have quota-exempted quantities labelled
during POM/physical entry into territory and that gases must be explicitly
labelled as “exempted from quota” *
0.02 -
Strengthen the obligation on destruction of HFC-23 by-production * 0.1 -
Align the establishment of the annual declaration-based quota allocation with
the frequency of the quota allocation based on reference values
-1.2 -
Introduction of a registration fee and/or quota allocation price linked to CO2
equivalents *
0.5
Labelling requirements for H(C)FOs, NF3, SO2F2, anesthetics; as well as MDIs * 0.01
Objective D
Reporting obligation for recipients of quota-exempted HFCs * 0.04 -
Reporting obligation for undertakings performing reclamation of F-gases * 0.02 -
Lower the threshold for verification of bulk HFCs placed on the market * 0.5 -
Add obligation to submit verification reports for bulk HFCs * 0.2 -
Align reporting and authorization thresholds for placing pre-charged products
and equipment on the market
-0.09 -
Align reporting and verification dates between bulk and pre-charged products
and equipment
Negligible -
Relax the verification threshold for placing pre-charged products and
equipment on the market
-1.7 -
Add legal basis for electronic verification process (separately for bulk and pre-
charged products and equipment)
-1.5 -
Obligation to provide NIL reports for quota holders * 0.02 -
Require reporting by companies on new substances 0.02 -
Total net costs 7.6 (12.1-4.5) 3
(*) required by international rules or to reduce illegal activities (total of 1.9 million €)
53
9. HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED?
Future monitoring and evaluation of the Regulation can rely on the Regulation’s annual
company reporting data that is collected and aggregated by the EEA each year112
. A
confidential report on F-gas related activities is drafted by the EEA for Member State
representatives and DG CLIMA, which includes inter alia data on imports, exports,
production, destruction, and reclamation relevant to bulk fluorinated gases and equipment
containing such gases. The background study and this document relies heavily on these data
for its analysis. The data reported on HFC production, feedstocks, destruction, imports and
exports are presented to the Protocol’s Ozone Secretariat to comply with the EU’s annual
reporting obligation. In addition, there is a public version in the form of a web-based F-gas
indicator published and updated regularly by the EEA. The measures considered on reporting
and monitoring in this document would improve this data basis further in the future.
In addition, the European Commission has been closely monitoring prices, the workings of
the quota system and other market developments of the sector since 2015, which would be
continued on the basis of contracts with external experts. Member States regularly update on
relevant activities carried out such as (i) the collection and use of data to determine
emissions, (ii) producer responsibility schemes, (iii) enforcement and other measures taken
on illegal activities including penalties to the Implementation Committee established in the
Regulation.
The changes to reporting scope (new substances; recipients of exempted quota; reclamation
facilities) will complete the picture on relevant gases and uses. The emission reporting
databased encouraged by Option 2 will improve the knowledge on emissions and thus the
impact of the F-gas sector as well as better data quality reported to the UNFCCC. The
streamlining of reporting and verification rules should also help in achieving better data
quality more efficiently.
In addition, to benchmark the Regulation’s performance the following can be used:
 Objective A: For emission savings the modelled quantities as described in this
document for Option 2 vs the actual emissions as reported under Regulation (EU) No
525/2013 (EU GHG monitoring mechanism;
 Objective B: Any decision by the Implementing Committee of the Montreal Protocol
regarding compliance of the EU and its member States with rules regarding HFCs;
 Objective C: Data collected on the workings of the quota mechanism (see above) as
well as industry and Member States feedback;
 Objective D: EEA’s feedback on the reporting process and DG CLIMA experience
with compliance checking;
 Objective E: Stakeholder and Member States feedback.
A good performance of the Regulation would mean that:
112
https://www.eea.europa.eu/publications/fluorinated-greenhouse-gases-2020
54
 Emissions of F-gases should fall as predicted by the modelling carried out under this
assessment, i.e. in 2030 annual emissions should be 37 MtCO2e.
 There should be no compliance issues with the Montreal Protocol regarding
obligations on HFCs.
 Smooth implementation of the quota system and reduction of illegal trade to avoid
harm in environmental, economic or reputational terms.
 The monitoring and reporting supports policy evaluation and compliance checking in
a more effective but also efficient way.
An evaluation of the Regulation on the basis of these data may be envisaged for 2033.
55
A1 Procedural information
A1.1 Lead DG, Decide Planning/CWP references
 Lead Directorate-General (DG) of the European Commission: DG Climate Action (DG
CLIMA).
 Decide Planning reference: PLAN/2021/11035 “Review of rules on fluorinated
greenhouse gases”.
 An evaluation of the current Regulation was carried out in parallel with the impact
assessment.
A1.2 Organisation and timing
 As per the Better Regulation Guidelines, an Interservice Group (ISG) was set up in
April 2020 to follow and steer the assessment process as well as the evaluation of the
current Regulation. The ISG ensured coherence and comprehensiveness with the
Commission’s overall responsibilities and activities in related policy areas, such as
environment, economic growth and customs.
 The ISG for this evaluation involved staff from the following Commission’s departments
in addition to DG Climate Action: DG ENER, DG ENV, DG GROW, DG TAXUD, DG
TRADE, Legal Service, and Secretariat-General. Also invited to meetings and receiving
the background information, but not attending, was DG MOVE.
 The ISG met four times (per videoconference): 14 July 2020, 1 December 2020, 17
March 2021 and 28 October 2021. In addition, there was a short update meeting on 15
July 2021. Through these meetings and several written exchanges, the ISG participated
in the whole impact assessment and evaluation process leading to the finalisation of the
external study and this Staff Working Document. Prior to submission to the RSB, the
final document, after comments from DGs following the meeting on 28 October 2021
had been integrated, was circulated again on 9 December. SG and TAXUD had a few
additional comments that were taken into account.
 The Commission signed a contract for a support study on the impact assessment
(contract ref. 340201/2020/826738/ETU/CLIMA.A.2) on 18 March 2020. The final
impact assessment report of the support study was received on 15 December.
 An inception impact assessment was published on 29 June 2020 on the Commission's
Europa web site113
. The feedback period was open until 7 September 2020.
 A public consultation ran from 15 September 2020 to 29 December 2020 (16 weeks,
extended because of the pandemic). The results have been published online.114
113
https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12479-Fluorinated-
greenhouse-gases-review-of-EU-rules-2015-20-_en
114
https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12479-Fluorinated-
greenhouse-gases-review-of-EU-rules-2015-20-/public-consultation_en
56
 The meeting with the Regulatory Scrutiny Board (RSB) took place on 19 January 2022
A1.3 Consultation of the Regulatory Scrutiny Board
The Regulatory Scrutiny Board was consulted on 19 January 2022. A request to resubmit the
impact assessment was received on 21 January 2022. The document was revised and sent to
the ISG and a subsequent ISG meeting was held on 4 February 2022. The other services had
no comments on the revised version (present: BUDG, ENER, ENV, GROW, SG, TAXUD,
TRADE; also invited: AGRI, MOVE, REGIO, SANTE, SJ). The updated document was re-
submitted on 8 February 2022 on which a positive opinion with reservations was issued on 25
February 2022.
The Board’s main comments received on 21 January were addressed in the following way:
(1) The Board commented that the report is unclear about the contribution of this
initiative to the Climate Target Plan and about the coherent articulation between the
F-gas Regulation and the Effort Sharing Regulation (ESR) obligations.
In response, the introduction and problem definition were substantially revised to better
express the relationship of the obligations contained in the Regulation and the ESR. It is
clarified that the Regulation requires a review to inter alia contribute to increased climate
ambition, that it as such contributes to Member States efforts to achieve their own greenhouse
gas reduction targets, but that it does not define as such F-gas targets at Member State level,
nor does the ESR have specific targets on F-gases per Member State (rather an overall target
on a basket of GHGs).
(2) The Board commented that the report does not sufficiently explain the relationship
between the objective to fully align with the existing and long-term Montreal Protocol
targets against ozone layer depletion and the objective to increase additional F-gas
emission reductions to further contribute to European climate targets.
In response, the introduction and problem definition explain better the relationship between
the Montreal Protocol, notably the Kigali Amendment, and the Paris Agreement. The Kigali
Amendment under the Montreal Protocol is putting obligations on Parties to gradually reduce
consumption and production of HFC gases in view of preventing climate-relevant emissions
that will benefit the achievement of the goals of the Paris Agreement, given that HFC gases
do not affect the ozone layer. It also explains better that the Regulation, preceding the Kigali
Amendment, was originally conceived to reduce GHG emissions in the EU, with measures
similar to those aimed at reducing ozone depleting emissions (given that similar sectors and
stakeholders are affected), and was as such an example for global action that resulted in the
later adoption of the Kigali Amendment. It is also better explained why the Regulation
currently does not guarantee that the EU can comply with the new rules on HFCs under the
Kigali Amendment. The F-gas Regulation today remains a tool to reduce EU climate
emissions further, but is also the main instrument to ensure that the EU complies with the
Protocol rules with regard to HFCs.
(3) The Board commented that the report does not explain whether and how changes in
the Effort Sharing Regulation and the Ozone Regulation affect the baseline scenario.
57
In response, the introduction including the section regarding coherence with other legislation
as well as the description of the baseline have been re-written to underline the relationship
with the ESR and the Ozone Regulation. The changes to these two instruments will for the
most part not change the baseline for F-gas emissions. As regards the ESR, the focus is here
on how a strengthening of existing EU climate legislation can assist Member States in
achieving their own greenhouse gas reduction target, while not setting sectoral or Member
States specific F-gas targets, and doing so with F-gas measures that are recognised to
promote cost efficiency at EU level. As explained, any future Member State additional action
on F-gases is not considered for the baseline (as not known presently). Such action may or
may not influence baseline development at EU level depending on the action chosen (e.g.
prohibitions in one Member State may simply shift F-gas use and emissions elsewhere as the
same amount of quota is available, while additional measures to reduce emissions during use
or at end-of-life equipment could contribute to saving emissions also at EU level). The ozone
and F-gas Regulations have similar measures and target similar sectors but the changes
proposed in the Ozone Regulation will not impact on the use/emissions of F-gases that are
not ozone depleting. Furthermore, while F-gases have replaced ODS in the past, this is no
longer the case as all relevant ODS have been eliminated in the EU, so regulating the
remaining uses of ODS further does not affect the F-gas baseline.
(4) The Board commented that the report does not explain how the ‘fair’ level
contribution figure was arrived at, which sectors it would apply to, and how it relates
to abatement cost figures in other ‘Fit for 55’ initiatives.
In response, the review objectives were clarified and it is underlined that the assessment of
options regarding environmental ambition, and the resulting emission reductions, focusses on
what the cost and benefits are related to increased abatement efforts. These costs and benefits
are not limited to 2030 but are projected up to 2050. Overall it also allows to conclude if
options are in-line with a trajectory that achieves climate neutrality by 2050.
(5) Not all options appear to be realistic and compatible with the objective to achieve
additional F-gas emission reductions to contribute to the climate targets in a fair and
cost-efficient way.
In response, the review objectives and the options were improved. Additional explanations
were added to explain why all three options are relevant and self-standing options, supported
each by a different sets of stakeholders. Furthermore, it was explained why some measures
targeting a specific review objective, like the need to ensure compliance with the Montreal
Protocol, see limited variation between the options. The eventual selection of the preferred
option is based on the impacts assessed and the related results as included in the impact
assessment. This is the purpose of the options: Examining a low-cost option that is favoured
by conservative industry players, examining a medium-cost option that avoids high costs for
niche applications and a high cost option that considers only technical feasibility as possible
today, which is what some stakeholders such as NGOs would be asking. In the end, a
political choice can be made on what should be the right contribution to the climate
goals, on the basis of emissions achievable by these 3 options, and the costs and efforts
that will be needed to do so.
58
The Board also had the following comments for improvement, which were addressed as
described below:
(1) The report should explain the relationship between the objective to fully align with the
Montreal Protocol and the objective to achieve additional F-gas emission reductions
for climate purposes.
The text was adjusted to reflect the need to align with the Protocol which is a self-standing
objective as the EU cannot afford to risk compliance with global rules, since this would entail
a significant reputational damage and threaten the EU’s current role as front-runner
implementing best practice policies in this field. The Protocol puts limits on consumption and
production of hydrofluorocarbons that result in emission reductions that count under the Paris
Agreement on Climate Change. The review objective to achieve additional emission saving
in the EU is related to the EU objective of achieving the 2030 and 2050 climate targets, to
which this sector can make an important contribution. Any additional F-gas emission savings
can contribute to Member States’ efforts to reach their national targets on a basket of GHGs
under the Effort Sharing Regulation. While the Protocol’s rational for imposing measures on
HFCs is climate protection, the two objectives are not contingent on each other. This is better
explained in the introduction and the problem definition.
(2) The report should explain to what extent the revision of the F-gases Regulation
contributes to the EU climate targets. It should clarify the interaction and
complementarity between this Regulation and the inclusion of targets on F-gases as
part of Member States’ targets under the Effort Sharing Regulation. The report
should be more specific on the level of emission reductions targeted by the revision. It
should clarify whether the objective to achieve further emissions reduction in a fair
and cost-effective manner is a binding obligation deriving from the Climate Target
Plan.
In the new adjusted version, the contribution is given as the total amounts saved by the
options (comparison of options & preferred option). Also, for scale, the introduction now
refers to the F-gases constituting 5% of ESR emissions. The complementarity to ESR is
further explained in the introduction. The main factor is that there is no specific F-gas target
for Member States. There is also no binding target for F-gases in the Climate Target Plan.
Rather, the F-gas Regulation will help Member States achieve their Effort Sharing target in a
cost effective way. Measures at all levels (e.g. EU, national, regional) must be taken, as
appropriate. Like other EU legislation (e.g. CO2 in cars and vans, emissions from heavy-duty
vehicles), the measures in the F-gas Regulation are very effective and efficient to achieve
some savings from this sector. This EU added value is established by the evaluation and
shortly explained in the relevant section in the main impact assessment report. The level of
emission reduction targeted is a political choice based on the balance between costs and
benefits and is thus resulting from the preferred option.
59
(3) The report should develop the baseline and its evolution in more detail, explaining
what would happen if the F-gases Regulation is not revised, taking into account the
revisions of the Effort Sharing Regulation and the Ozone Regulation.
It was further clarified in the baseline section that the Ozone Regulation has no impact on the
development of the baseline, as HFCs and other F-gases today do not replace any ODS uses
anymore. As for the ESR, it was explained that additional actions in the field of F-gases that
Member States have taken so far (e.g. fiscal policies, waste management, etc.) are part of the
baseline. Future action cannot be included as we do not know if Member States will, and if
so, what action they will take in this sector, or in other sectors, to reach their overall GHG
targets, as Member States have flexibility to choose the additional tools needed to reach their
own target. Some F-gas related actions may contribute to further emission savings at EU
level, others (e.g. some prohibitions) may only help achieve Member State level targets, but
not the EU target (as there is an EU-wide quota system and if a sector is pushed harder in one
Member State could mean that there is quota available elsewhere, i.e. other Member States or
other sectors).
(4) The report should present a set of policy options that can tackle all the objectives.
The report should bring out clearly the credible policy choices. If the revision is
bound by the objective to achieve additional emission reductions in a fair and cost-
efficient manner, the report should acknowledge that options 1 and 3 are not realistic
or fair options and thus appear not to be compatible with that objective. The report
should better justify the composition of the remaining option and why this would be
the optimal set of measures.
We acknowledge that the review objective on savings emissions could be interpreted as being
a sort of compulsory target on F-gases, while there is no such target. Rather, what is needed
under the current political circumstances is a contribution of this Regulation, given that action
seems cost-effective and have EU added, to the overall 2030 and 2050 climate objectives.
Therefore, the review objective (A) on saving emissions has been adjusted in this way. The
amount of emissions that can be saved depends on technical feasibility on one hand, and
willingness of paying the price and effort needed on the other hand. To give a sensible
political choice on the matter, the options were constructed so that it could be assessed what a
low, a medium, and a high cost/effort scenario would deliver and what it would cost. Thus
there is a real political choice to be made between the options on the basis of the costs and
benefits they can generate. The assessment of the options show that Option 1 does not deliver
meaningful emission savings and therefore a low cost scenario is not recommended. On the
other hand Option 3 only delivers slightly more than Option 2 and therefore it is not
recommended to impose a high cost scenario. Furthermore, the three options correspond to
preferences expressed by different stakeholders groups and it is therefore useful in the public
debate to have clarity about what all three options would imply. More information on this
matter is provided in the section on the policy options including how the different measures
were grouped into options.
(5) When presenting the options, the report should also better explain the basis and
reasoning behind selecting a level of marginal abatement costs of up to EUR 390 /
60
tCO2e, which sectors this applies to, and how this relates in fairness terms to
abatement costs for other greenhouse gases or other sectors in the Fit for 55 package.
As further explained in the description of the options, this cut-off amount is used to
distinguish between Options 2 and 3, namely to exclude sub-sectors with high abatement
costs that exceed costs asked in 2050 modelling in other sectors. In effect, this eliminates the
need to go to some alternatives in the areas of AC in buses, trains and metros. The relation to
the Fit for 55 goals is now addressed in the introduction and the problem definition. The 2050
horizon was chosen as a benchmark because most emission reductions will happen in the
longer term and not by 2030 because there is a long lag between gradually reducing the use
of these gases in new equipment and the emissions saved over the life of time of that
equipment.
(6) The report should improve the overall narrative and reader friendliness, given the
technical complexity of the topic. The report should describe in more detail what the
underlying problem is and what the evidence for it is, including information on the
problems, their scale and the sources of evidence. The report should make links
between the problems and the results of the evaluation and any other relevant sources
of information. The main report should present briefly the methodology and the main
assumptions underpinning it, even if the details are in the annexes.
The main part has been largely re-written with narrative and reader friendliness in mind. In
particular the problem section has been improved by bringing forward evidence, scale etc.
from the Annexes, in particular the evaluation, and giving the links. Short descriptions of the
methodology was added in the main part, where relevant.
(7) The impact analysis should highlight the main conclusions of the analysis and
explain which factors influence its main findings. It should clearly present the
expected impacts on the main variables and the average marginal abatement cost for
each option. It should explain what is behind the expected changes in the
macroeconomic variables, why consumption increases in the long term, why
investment does not increase and what are the main conclusions of the analysis on
exports and imports.
The sections on comparison of options was improved by a detailed discussion of the relevant
parameters that distinguish the options. A graph on emissions and a detailed table
summarising the major findings of the impact analysis has been added in this section (Figure
6, Table 9). The section on economic impacts was improved by highlighting the main
findings and take-aways, as well as better explaining the reasons behind, including on
consumption, investment, exports and imports.
(8) The report should specify how and when implementation will be monitored and
evaluated in the future. It should clearly set out what success would look like, clear
monitoring arrangements and specific indicators and timescales.
61
Concrete evidence to be used for future benchmarking was added on all review objectives. A
review date was indicated.
(9) The report should include, and better engage with, stakeholder views throughout
the report. It should clearly reflect diverging stakeholder views.
This was added throughout the main part.
In addition, the whole document was improved by addressing all technical comments
received from the RSB in advance of the meeting of 19 January 2022.
The Board’s final comments received on 25 February were addressed in the following way:
(1) The choice of a static baseline ignores the measures that would be taken by the
Member States under their Effort Sharing Regulation targets. The report does not
convincingly identify the remaining gap between the Kigali Amendment and other
GHG targets that justifies more ambitious emission reduction under the initiative.
What to improve:
- The report should justify its choice of a static baseline given the wide range of other
initiatives aimed at GHG reduction and Member States’ action. It should justify why
it considers that the Effort Sharing Regulation would be ineffective.
- The report should explain clearly the problem and remaining gap it seeks to address
given the Kigali Amendment to the Montreal Protocol and other EU greenhouse gases
reduction measures and commitments. It should demonstrate the need to go beyond F-
gases reductions required by the Kigali Amendment, given that there is no gap under
the EU’s climate targets with the current greenhouse gases reduction measures.
Regarding the choice of a static baseline, which does not assume further Member State action
beyond what is already in place, the report explains that the assessment focuses on estimating
what EU legislation can contribute to achieve further F-gas reductions and what the
associated costs and benefits of EU action are. As such it allows for a political choice to
enhance an existing EU policy instrument to contribute to increased EU climate ambition
including beyond what an alignment with the obligations under the Montreal Protocol would
deliver. Moreover, the report explains that it is impossible to foresee what F-gas measures the
Member States would decide to take in the future.
The fact that some measures are proposed at EU level does not mean that the Effort Sharing
Regulation is expected to be ineffective. It is rather that this impact assessment assesses what
cost-efficient action could be taken at the EU level to contribute to assist Member States in
achieving their Effort Sharing Regulation targets. As with all other EU legislation targeting
emissions counted under the Effort Sharing Regulation, the proposed measures are not filling
a gap, they are reducing the gap that Member States face when planning how they can meet
their national target. If cost-effective action is not taken in the sector of F-gases, it will be
more difficult and likely more costly for Member States to reach their targets in the Effort
Sharing Regulation. EU action on F-gases has been identified in the evaluation, clearly
supported by almost all stakeholders including the Member State competent authorities
62
consulted, as a more cost-efficient and effective way of achieving F-gas emission reductions.
This was clarified further in the problem section 2.1.1. The EU added value and the cost-
efficiency of such EU action is clearly demonstrated throughout sections 3.3 and 6.2./6.3.
The report explains further that achieving compliance with the Kigali Amendment is only one
of the review objectives. It is therefore a self-standing review objective to achieve additional
emission reductions to do more in the EU in order to reach our targets of at least 55% net
greenhouse gas reductions by 2030 and climate neutrality in 2050. Option 1 turns out to be
ineffective in this regard.
(2) The report does not bring out clearly enough the trade-offs and political choice
between providing emission reduction flexibility to Member States under the
alignment option and more prescriptive EU level measures under the emission
reduction options. The feasibility of the most ambitious option remains questionable.
What to improve:
- The report should explain why the least ambitious option alone is not sufficient, as it
would seem to comply with the EU’s commitments under the Kigali Amendment. It
should also justify and assess the political feasibility of maintaining the most
ambitious option given the very high costs involved.
The report explains that the option that would ensure that the EU simply complies with the
Kigali amendment would not see significant further F-gas emission reductions compared to
the baseline (see Figure 3). While this would ensure that the EU complies with its obligations
under the Kigali amendment, this would be a lost opportunity given that further cost-effective
emission reductions are possible as clearly established by this assessment. This was clarified
in the discussion of the options (section 7). To give more insight into the quantitative
projections in support of this finding, section 2.1.1 was further elaborated with references to
greenhouse gas projections made in support of the recent updates in EU climate ambition and
the reviews of other EU climate legislation under the Fit for 55 policy package.
In the light of what was stated under (1) above, a trade-off would rather be the case if we
chose not to take further EU action beyond aligning with Kigali in this case, given the
demonstrated EU added value and cost efficiency. The “alignment option” (option 1) was
found in this assessment to fail to deliver more emissions reductions than the current
Regulation. Taking this option would mean that the necessary emission savings would have
to be achieved by Member States is a considerably more difficult way, either by taking less
effective, disparate measures in the F-gas sector or additional action in other sectors to
compensate for any EU action on F-gases not taken. This point was added to the discussion
of the options (section 7).
The most ambitious option is clearly feasible in technical terms because it is based on
existing, mature technologies taking safety and energy first considerations into account. But it
can indeed lead to high abatement costs in a few sectors, as was demonstrated though the
analysis. This is why the in the end the option was not retained, but it was a realistic and valid
option to pursue given that there are alternative technologies available.
63
(3) The report does not explicitly set out the assumptions and data limitations
underpinning the environmental and economic impacts. It also does not clearly
present the administrative costs of the preferred option.
What to improve:
- The report should give a clearer account of the methodology underpinning the
assessment of impacts. It should provide a clearer presentation of the overall costs
and benefits of the options and compare them in terms of effectiveness, efficiency and
coherence. It should clearly present the administrative costs for all elements of the
preferred option and explain the basis for the calculations. It should also better
present the main assumptions and limitations of the AnaFgas and GEM-E3 models
used in assessing the impacts.
- The report should clarify the differences between the previous modelling results (EU
long-term strategy for a climate-neutral economy) and the current estimates.
- The report should more explicitly explain what success would look like as regards
specific objectives on implementation, monitoring and coherence. It should specify
whether the review in 2033 will be an evaluation.
The assumptions and limitations of the models are now also referred to in the main text in the
beginning of section 6. Furthermore, text was added on the data collection process and
analysis on administrative burden in 6.2.2. The comparison of options was reinforced in
section 7. The admin burden linked to each individual measure (where relevant) of the
preferred options was added as Table 11.
Additional text was added to show what success would look like as regards the specific
objectives in section 9. An evaluation is envisaged for 2033.
A1.4 Evidence, sources and quality
This impact assessment draws on a support study carried out by an external consultant
including an extensive consultation of the relevant stakeholders and experts as well as on the
internal expertise of the Commission.
The evidence used for the evaluation comes from several data sources, in particular the
annual reports on fluorinated greenhouse gases by the European Environment Agency and the
consultation with stakeholders, including Member States authorities and undertakings (see
Annex A2). The Commission has also previously published a number of technical reports on
(i) barriers posed by safety standards, (ii) availability of training of technical personnel, (iii)
the quota allocation method, (iv) the availability of HFCs on the EU market as well as
alternatives available in (v) split air conditioning systems, (vi) switchgear and (vii)
commercial refrigeration systems, which all have provided useful data for this work (see also
footnote 128). The support study is the source for data in cases where no particular external
source is mentioned. Two models were used to support the analysis: AnaFgas, which is a
64
detailed bottom-up stock model of the relevant sectors and was used for modelling of demand
and emissions, as well as costs of switching to alternatives. The JRC’s GEM-E3 model was
used to derive macro-economic effects and other relevant economic parameters. More
information is provided in the Annex on methodology below (Annex A4).
65
A2 Synopsis report of stakeholder consultations
A2.1 Introduction
This report provides a synopsis of the stakeholder consultation activities carried out for the
evaluation of the Regulation as well as the development of policy options and their impacts
for its review.
A2.2 Objectives and stakeholder groups covered
The key objectives of the consultation process were:
 To ensure that all relevant stakeholders were identified and provided with an
opportunity to engage with the consultation process;
 To provide the opportunity for stakeholders to inform the evaluation, in particular,
offering an opportunity to identify elements of the Regulation which could be
improved;
 To gather stakeholder opinion on potential policy options, including where possible
collecting data and qualitative evidence regarding their impacts.
The consultation strategy115
developed contained the following main consultation activities:
 Online public consultation (OPC);
 Targeted stakeholder engagement through interviews;
 Targeted stakeholder engagement through a stakeholder workshop.
The consultation activity is complemented by consultations on the Roadmap and broader
stakeholder engagement (including in the Consultation Forum set up by the Regulation)
which are also directly relevant for this review. Notably, extensive consultations were made
as preparation to the following Commission reports on:
 the availability of hydrofluorocarbons on the Union market (2020)116
;
 the availability of refrigerants for new split air conditioning systems that can replace
fluorinated greenhouse gases or result in a lower climate impact (2020)117
;
 the availability of alternatives to fluorinated greenhouse gases in switchgear and
related equipment, including medium-voltage secondary switchgear (2020)118
;
 the 2022 requirement to avoid highly global warming hydrofluorocarbons in some
commercial refrigeration systems (2017)119
;
 the quota allocation method in accordance with Regulation (EU) No 517/2014
(2017)120
;
115
https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12479-Review-of-EU-rules-
on-fluorinated-greenhouse-gases/public-consultation
116
https://ec.europa.eu/clima/sites/default/files/f-gas/docs/20201216_c_2020_8842_en.pdf
117
https://ec.europa.eu/clima/sites/default/files/news/docs/c_2020_6637_en.pdf
118
https://ec.europa.eu/clima/sites/default/files/news/docs/c_2020_6635_en.pdf
119
https://ec.europa.eu/clima/sites/default/files/f-gas/legislation/docs/c_2017_5230_en.pdf
66
 barriers posed by codes, standards and legislation to using climate-friendly
technologies121
;
 the availability of training for service personnel regarding the safe handling of
climate-friendly technologies122
.
In addition, the Commission has been assisted by an external consortium of experts that have
been in close exchange with relevant industry stakeholders and experts for many years.
Table 11 shows the stakeholder groups mapped to each consultation activity covered by this
report.
Table 12. Coverage of different stakeholder groups under each consultation activity
A2.3 Consultation activities and other information sources
The consultations gathered views on the achievements of the Regulation to date with respect
to its relevance, effectiveness, efficiency, EU added value and internal and external
coherence. In addition, feedback was also gathered on potential measures and their likely
environmental, economic and social impacts, taking into account the European Green Deal
and its more ambitious targets and the obligations on hydrofluorocarbons under the Montreal
Protocol.
The responses related to the main objectives for the reviews and (potential changes to) the
main measures in the Regulation that include: a quota system for hydrofluorocarbons (HFC
phase-down) and prohibitions to market or use F-gases in certain equipment, taking into
account exemptions from these provisions; containment/leakage prevention measures for F-
gas equipment (e.g. in form of mandatory leakage checks) and training and certification of
technicians; as well as well as labelling of and reporting on gases and F-gas equipment.
The consultation on the review roadmap from 29 June 2020 to 07 September 2020 and the
online public consultation (OPC) from 15 September 2020 to 29 December 2020 provided
an opportunity for all stakeholders to contribute views on the Regulation, irrespective of the
120
https://ec.europa.eu/clima/sites/default/files/f-gas/legislation/docs/com_2017_377_en.pdf
121
http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52016DC0749
122
http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52016DC0748
Stakeholder type Consultation Strategy Activity
OPC/Roadmap Interviews Workshop
EU Institutions (DG CLIMA and EEA) X X
Citizens X
EU Member States’ competent authorities
and customs authorities
X X X
EU Businesses and trade associations X X X
Consumers and consumer organisations X X X
Non-governmental organisations X X X
International organisations X X X
67
respondents’ level of familiarity with the Regulation. These activities received 76 and 241
responses respectively. For the OPC, respondents comprised: individual company/business
organisations (124, 51.5%), business associations (44, 18.3%), EU citizens (28, 11.6%), non-
governmental organisations (NGOs) (14, 5.8%), public authorities (8, 3.3%),
academic/research institutions (6, 2.5%), consumer organisations (3, 1.2%), one respondent
identifying as a trade union (0.4%) and several who identified as ‘other’ (13, 5.4%).
Respondents to the OPC also had the opportunity to upload supporting documents. A
summary of the OPC results is available on the ‘Have your say’ website123
.
As a part of the targeted consultation, 34 semi-structured interviews were undertaken. The
targeted interviews covered a broad range of stakeholders including: 16 competent
authorities, two customs authorities, one Non-Governmental Organisation (NGO), 16 EU
business associations and organisations, and several individual companies. In addition, two
competent authorities and two customs authorities provided written response to the interview
questions (rather than participating in a telephone interview). The selection of interviewees in
the case of competent authorities and customs authorities was based on their interest and
availability. In the case of industry organisations, interviewees were selected to achieve a
comprehensive sector coverage and depending on the open issues and evidence gaps, which
needed to be discussed. The interviews followed a pre-set proforma, whilst also keeping in
mind the respective expertise of the stakeholders interviewed and the availability of data on
present and future administrative, implementation and enforcement costs. Stakeholders were
given the opportunity to check and complement the interview notes and submit additional
information after the interview.
A full-day, online stakeholder workshop was held on 6 May 2021. At the workshop
preliminary results of the evaluation were presented, alongside the draft set of options being
considered in the impact assessment and preliminary analysis of the options. The workshop
was attended by 355 participants. Participants were given two and a half weeks to provide
additional feedback (to 24 May 2021). 69 participants provided written feedback after the
workshop. The agenda124
, presentations125
and briefing material126
for the workshop are
available online.
A summary of the results of the consultations related to the functioning of the existing
Regulation is in Section 4 and views on the future Regulation are provided in Section 5.
123
https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12479-Review-of-EU-rules-
on-fluorinated-greenhouse-gases/public-consultation_en
124
https://ec.europa.eu/clima/sites/default/files/f-gas/legislation/docs/20210506_agenda_en.pdf
125
https://ec.europa.eu/clima/sites/default/files/events/docs/20210506_presentation_en.pdf
126
https://ec.europa.eu/clima/sites/default/files/f-gas/legislation/docs/20210506_briefing_en.pdf
68
A2.4 Results of consultation activities – Evaluation
A2.4.1 Effectiveness
Achievement of Objective 1: Discourage the use of F-gases with high GWP in the EU and
encourage the use of alternative substances or technologies when they result in lower GHG
emissions without compromising safety, functionality and energy efficiency
There is consensus among stakeholders that the Regulation has had a positive impact with
respect to discouraging the use of F-gases with high-GWP in the EU, and promoting the use
of alternative substances, positioning the EU as a frontrunner in this area. Industry and NGO
stakeholders also described that the energy-efficiency of home appliances and RACHP
equipment has improved over the implementation period leading to energy savings. Energy
efficiency where alternatives are used is considered to be at least equivalent (or often better)
than the best HFC systems. The use of alternative refrigerants was generally not considered
to have resulted in a trade-off in terms of lower energy efficiency, and synergies with linked
legislation (e.g. Eco-design) have been broadly exploited.
With regard to the individual measures in the Regulation, stakeholders agreed that the HFC
phase-down has been an effective measure, especially in combination with prohibitions.
Some stakeholders suggested that the HFC phase-down has been the most important measure
of the Regulation as it provides flexibility and clarity, whilst also driving efficient change.
Stakeholders also broadly agreed that the prohibitions to market or use F-gases has been
effective. Stakeholders agreed that labelling has been effective in contributing to the
achievement of the Regulation objectives, and in fact identifying incorrect or incomplete
labelling has been one important way of identifying illegal shipments by customs.
There are mixed opinions amongst stakeholders with respect to reporting and verification.
Industry, business associations and citizens tend to consider that reporting has been generally
effective (although there is variation within these groups). The overall opinion is more neutral
amongst NGOs, whereas a slight majority of competent authorities consider that these
obligations have not been effective in supporting the Regulation in achieving its objectives
and noted that reporting alone is insufficient, and that more and better verification is needed.
Achievement of Objective 2: Prevent leakage from equipment and proper end of life
treatment of F-gases in applications
Stakeholders noted that containment has clearly improved and leakage rates have reduced
drastically over the period of implementation. Data on trends of leakage rates was provided
by only one competent authority: Poland (this was complemented in the evaluation by data
gathered from the literature for DE, SK and FR). The data for Poland demonstrated that the
annual average leakage of F-gases from RACHP equipment (that is subject to mandatory
leakage checks) dropped for every equipment category from 12.6% to 3.12% in the period
2016 to 2019.
The evidence provided by industry stakeholders was helpful in elaborating the actions that
industry has taken (in particular in the switchgear industry in some countries) in response to
the Regulation to demonstrate the reduction in leakage rates achieved. Examples include: use
69
of more compact equipment, use of state-of-the-art sealed gas-compartments, with end-of-life
handling of the equipment undertaken professionally by specialized industry partners.
Stakeholders also provided feedback on areas for improvement. It was highlighted that the
collection of data on refrigerant containment and F-gas emissions was not comprehensive and
that compliance with containment/leakage obligations could be further promoted, e.g.
through electronic databases recording the data related to leakage checks. Although
stakeholders agreed that the Regulation has had a positive effect overall with respect to
recovery and reclamation, stakeholders highlighted that there is little data available on
reclamation due to no self-standing reporting obligation for recycling and reclamation
undertakings, and a better understanding and monitoring would help promote these activities.
Regarding effectiveness of training and certification, stakeholders were able to provide data
on numbers of certified persons in each MS and the training activities undertaken by different
industry representatives (although precise data are missing for certain sectors). The positive
performances of the training and certification measures were reaffirmed by stakeholders who
strongly agreed that these measures had been effective regarding their objectives. However,
some stakeholders noted that a lack of technicians who can handle climate-friendly
alternatives was a barrier to a more widespread use in some Member States.
Stakeholders reported a range of additional actions in Member States that were going beyond
the requirements of the Regulation in particular with respect to producer responsibility
schemes, which have been implemented in some, but not all Member States. Where these
have been implemented, they are considered to be working well by most stakeholder groups.
However, NGOs are more sceptical as to whether these schemes have been effective or not.
This comment may however relate to the fact that some Member States did not have any
scheme at all. With respect to emissions reporting systems, stakeholders provided evidence
on the existence of such systems through interviews: Only few of the interviewed Member
States currently have such a reporting system in place (BG, EE, FI, DE, IT, MT, PO, PT).
Overall, stakeholders were generally neutral on whether these had or had not been effective.
Competent authorities were marginally more inclined to suggest these had been effective, but
NGOs and industry stakeholders were slightly inclined to believe they had not.
Achievement of Objective 3: Facilitate convergence towards a potential future agreement
to phase down HFCs under the Montreal Protocol
There was an overwhelming agreement amongst all respondents that the Regulation has been
effective in achieving this objective. In particular, all competent authorities emphasised this
positive role. The fact that the EU had an HFC phase-down in place was considered to have
greatly contributed to the development of the global HFC phase-down proposal: it helped the
EU Member States to adopt a common position and it served as a convincing example of best
practice for non-EU countries and encouraged others to adopt binding obligations at the
global level. In addition, the fact that key provisions of the Kigali Amendment were already
reflected in the Regulation subsequently helped EU industry to better understand the new
requirements of the international regulation.
70
Achievement of Objective 4: Enhance sustainable growth, stimulate innovation and
develop green technologies by improving market opportunities for alternative technologies
and gases with low GWP
Overall, stakeholders believed that the Regulation has had a positive impact with respect to
stimulating innovation and developing green technologies. It was noted the Regulation has
provided certainty for companies, has stimulated the development of green and more energy-
efficient technologies and has improved market opportunities for lower or zero GWP
alternatives whose prices have decreased over time. Indeed, some industry and NGO
stakeholders suggested that EU manufacturers are now world-leaders in the development and
manufacture of several technologies (e.g. use of natural refrigerants). Stakeholders
highlighted that low numbers of personnel trained on alternatives remains a major challenge
for the introduction of alternatives to F-gases (noted by all stakeholder types, but this was
stressed in particular by service personnel and NGOs). Furthermore, stakeholders (all-types,
but particularly NGOs) reaffirmed that unjustified barriers in safety standards and codes still
present a very serious challenge to the implementation of the Regulation.
What factors have contributed to or hindered the achievement of the objectives of the
Regulation? What have been the unintended/unexpected effects?
In general, stakeholders (all-types) considered illegal imports were the most serious challenge
to implementation. An industry stakeholder noted that illegal imports may have been one of
the drivers behind the reductions in HFC prices observed following the peak in 2018.
Stakeholders, notably industry and NGOs, noted that enforcement was hampered by: a lack
of coherence between the Regulation and customs rules; transit procedures being vulnerable
to misuse; diverse and too low penalties in Member States); online sales subject to
insufficient checks by authorities; and insufficient market surveillance activities.
The fact that the number of HFC importers has increased by 20 times and that some entities
appear to be getting several quota shares from the reserve (as some new entrants may have
close links to existing quota holders) was seen as a significant issue by NGOs and Member
States, as it makes effective enforcement more difficult. Industry views were more mixed on
this issue. Quota holders (gas producers and importers) found it to be a serious issue, whereas
other industry stakeholders were less concerned.
Some stakeholders also highlighted in the early years of the quota system that stockpiling of
gases and price fluctuations (‘low’ prices for two years followed by a subsequent sharp rise in
prices to very high levels, before prices then fell again in 2018) had been an issue.
Some stakeholders, in particular NGOs, suggested focusing on natural alternatives to F-gases
and avoiding promotion of synthetic alternatives to F-gases because the latter are being
analysed together with a large group of chemicals (including F-gases) under REACH for their
potentially harmful effects on the environment. On the other hand, several industry
stakeholders recalled that the analysis was not yet concluded and that they had invested very
large amounts of money in research, innovation and production capacity and that it would be
premature to exclude the use of these climate friendly substances. Instead, as a precautionary
measure, more could be done to prevent emissions of such substances.
71
A2.4.2 Efficiency
As noted above, stakeholders believe that the Regulation has achieved substantial
environmental benefits through reducing the use of F-gases and increasing the uptake of
alternatives. Stakeholders also highlighted wider benefits of the Regulation such as energy
efficiency gains (see above).
Although stakeholders did not present much detail regarding the overall costs of compliance,
they did comment on how these had been distributed across different stakeholder types and
supply chains. Industry stakeholders explained that costs had not fallen proportionately across
industry sectors nor company size, and that this variance had predominantly been driven by
the price increases observed over the period. Indeed, some industry stakeholders offered a
mixed opinion as to whether the Regulation had created a level playing field or not, pointing
out that the costs were borne by equipment importers/manufacturers (need to acquire quota
authorisations or pay higher gas prices) and the equipment end-users, while others profited
from the quota system, in particular the bulk gas producers and importers as well as service
companies.
Stakeholders also offered insights to the relative costs imposed by different measures.
Respondents suggested: ‘Restrictions on use and equipment’ and ‘HFC quota system’, which
are the most effective measures in reducing emissions, had presented the highest costs for
business, while training and certification also incurred high or very high costs, but similarly
was considered useful on balance (see above under leakage reductions). Labelling rules were
perceived as the lowest cost measure. Stakeholders did not signal that the costs outweighed
the benefits for any of the individual measures.
Stakeholders provided some information on estimating administrative costs associated with
the Regulation (although often in qualitative terms). A total of 13 industry stakeholders
provided some level of information on the working days required to ensure compliance with
the Regulation. In total 12 competent authorities provided information on administrative
burdens, with three noting upfront costs.
Stakeholders also highlighted wider potential effects. One industry representative noted the
Regulation could have increased the volume of waste as a consequence of incentives that
resulted in early replacement of equipment.
Overall, stakeholders generally reported that the Regulation was cost-effective. Stakeholders
added that the Regulation has had a neutral impact on competitiveness, although some
industry stakeholders noted a slightly negative impact on exports to third countries due to
higher EU HFC prices affecting the price of exported equipment.
A2.4.3 Relevance
Stakeholders were asked to consider the ambition level of the Regulation in light of the new
EU climate targets in the European Green Deal and the inclusion of obligations on
hydrofluorocarbons under the Montreal Protocol. Most Member States authorities, all NGOs
and some business associations signalled that more ambition would be required, whereas
other industry stakeholders found that the current level up until 2030 was sufficient.
72
Furthermore, the majority of industry and NGO stakeholders signalled that adaptations are
needed to ensure compliance with the Montreal Protocol, in particular post 2030.
Although many stakeholders believe that the current Regulation covers all relevant sectors
using F-gases and substances (in particular amongst industry), others do not believe this is the
case (in particular NGOs and competent authorities) and they identified substances and
applications that are not currently covered by the Regulation nor by specific measures. For
example there are no measures incentivising climate friendly propellants in Medical Dose
Inhalers (MDIs) although pharmaceutical companies are already exploring such solutions.
NGOs highlighted the need for stricter requirements for certain sectors currently exempted,
such as medical applications, military applications, transport and SF6 use in switchgear. Other
examples of proposals included requirements beyond reporting for gases listed in Annex II of
the Regulation (e.g. HFOs, SO2F2), for instance; expanding obligations related to
reclamation, certification and training to such gases.
A2.4.4 Coherence
Stakeholders believed there is a need for stronger coherence with customs activities. The lack
of which was viewed by industry, in particular, as a key facilitator of illegal imports.
Stakeholders proposed a range of options to tackle illegal trade, including: a clearer link
between the Regulation and the Union Customs Code Regulation (EU) No 952/2013, more
harmonised and dissuasive penalties, tackling online trade and enforcement by local
authorities as well as improved market surveillance activities.
Many industry stakeholders also affirmed the persistence of the barriers posed by national
safety standards to the uptake of alternatives. That said, stakeholders did note that progress
has been made recently, citing the examples of Italy and Spain who, since 2015 have been
working on amending their national building codes and fire prevention rules in buildings to
allow installation of some flammable refrigerants (especially A2L) in certain types of public
buildings. However, the situation in France was reported to still pose a barrier to the use of
any flammable F-gas alternatives (e.g. targeted interview with industry). The current national
laws covering public buildings (CH35) and covering high-rise buildings (GH37) prevent the
installation of equipment with A2L and A3 refrigerants.
There are synergies regarding energy efficiency and the Eco-design Directive, in particular
through Article 11(2) of the Regulation that includes an exemption from the placing on the
market bans (set out in Annex III) if the equipment with HFCs would achieve lower overall
lifecycle GHG emissions. Despite this alignment, there is a perception among a number of
stakeholders that there is a lack of coherence with the Eco-design Directive. Some
highlighted that there are examples where there is trade-off relationship between reducing the
level of GWP and energy efficiency, e.g. in the category of R410A alternatives. However,
when prompted, these stakeholders struggled to find good examples of applications of where
such trade-offs actually occurred.
One industry stakeholder highlighted that, whilst the Regulation pushed to reduce the HFC
charge size of heat pumps, the Eco-design Directive pushed for lower sound power level. The
latter is generally achieved by increasing the evaporator size and as a consequence the
73
refrigerant charge size, which disadvantages the use of some natural alternatives. Similar
concerns have been raised in the F-gas Consultation Forum by industry players with
hydrocarbon technologies in the past. Eco-design requirements continue to be refined as
technologies develop. In this way, Eco-design requirements have an impact on the charge
amount needed, with higher efficiencies typically needing more refrigerant. Since
hydrocarbon refrigerants are more limited in potential refrigerant charge size by existing
standards, their scope regarding energy efficiency improvements continues to be more limited
unless existing barriers in standards are addressed.
Although not directly conflicting, it appears that the complexities of the interaction of the
Regulation with waste legislation have created uncertainty for market players. This is
particularly the case around the classification of what is waste: e.g. should an F-gas recovered
from old equipment be treated as waste? This uncertainty has resulted in cases of sub-optimal
outcomes highlighted by industry and competent authorities. This presents a case where
further consistency or guidance could be useful. Legislation around the transboundary
shipments of waste is viewed by some competent authorities and industry stakeholders (but
not all – some industry stakeholders disagreed) to present a barrier to reclamation.
The general perception amongst stakeholders is that coherence with REACH is high, but that
there are a number of issues that warrant further consideration. REACH registration for
importers needs to be better enforced and current lack of enforcement creates a disadvantage
for EU-based F-gas businesses. Several industry stakeholders pointed out that there is
currently a REACH PFAS127
restriction proposal being prepared by some EU Member States
that could potentially lead to a number of synthetic, low GWP alternatives being prohibited
(with potential exemptions). On the same issue, other stakeholders, especially NGOs, felt that
the Regulation and REACH has failed so far to systematically identify and manage the
potential harmful effects of some F-gas alternatives.
Concerning internal coherence overall, stakeholders generally agreed that the Regulation is
clear and consistent. That said, several minor areas were identified for further consideration
and adaptation, including: the clarification of some definitions as well as making new
definitions, in addition to a number of clarifications in individual provisions.
A2.4.5 EU-added value
Stakeholders of all types generally agree that the Regulation has delivered EU value-added,
however opinions are mixed between stakeholders as regards the value provided. The greatest
value added provided by the Regulation perceived amongst stakeholders is that it has
achieved a higher level of ambition than what would have occurred at individual Member
State level. Competent authorities consistently stated that the EU approach of the Regulation
has been clearly advantageous compared to action at Member State level. One competent
authority stakeholder noted specifically that common elements such as definitions, labelling,
etc. would be complicated to agree at national level. Another competent authority also
stressed the low administrative burden at Member State level, as the F-gas Portal is managed
127
Poly- and perfluorinated alkyl substances
74
exclusively by the Commission. The EU-wide quota system also ensures a fair and equal
quota distribution between applicants. Furthermore, common legislation has also enhanced
the market for new alternatives. NGOs and competent authorities also believe that the
Regulation has provided a level playing field across the EU, whereas the sentiment among
industry players was more mixed.
A2.4.6 Impact of COVID-19
Opinions were mixed on the impact of COVID-19. Across most stakeholder types, the
perception was that F-gas sectors were not (yet) significantly affected by the pandemic, with
the exception of the business association/organisation stakeholder group, who more often
stated COVID-19 had had a negative impact. It was signalled that the majority of sectors may
have been negatively affected. Closer inspection revealed that this perception also varied by
sector, indicating that some sectors had been affected more negatively than others. Those
most frequently noted by stakeholders as being negatively affected were: the mobile AC
sector, transport refrigeration, fire protection and electronics manufacture. In addition,
servicing and maintenance as well as leak checks at installed equipment and installation of
new air conditioning systems in hotels and offices were also negatively impacted by the
pandemic. In contrast, for one sector, the switchgear and related equipment sector, the
majority of respondents felt this sector was not negatively impacted by COVID-19. Indeed
for some sectors, business has increased during the pandemic (food production and retail
sector, cold storage sectors – including for cooling of vaccines, and increased demand for air
circulation in public and commercial buildings) and/or remained consistent (use in the
medical sector). From these responses, it is unclear what the impact on use and emissions of
F-gases (and hence on the effectiveness of the Regulation) has been.
Business associations also elaborated on the type of impacts the COVID-19 pandemic has
placed on the EU F-gas supply and equipment market. Short-term impacts mentioned
included: shutdown of production facilities, delays and shortages in supply of material and
equipment components, and reduction in revenue. Other industry stakeholders reported
impacts on innovation activity, such as reducing discretionary funding for R&D and
postponement or cancellation of projects. Effects have also been felt in market-supporting
activities, such as delays and closure of training centres, limitations in access for service
technicians, and delayed compliance testing of products in test labs due to limited capacities
and unavailable prototypes. Again although the overall effect on the impact of the Regulation
is difficult to deduce, certainly the curtailment of R&D and slow-down in training run
contrary to the objective of the Regulation.
75
A2.5 Results of consultation activities - Impact Assessment
A2.5.1 Objectives for the amended F-Gas Regulation
Stakeholders generally agreed with all three review objectives specified in the Inception
Impact Assessment128
: to ensure EU long-term compliance with the Montreal Protocol; raise
ambition in light of the Green Deal and technological progress; and improve implementation
and enforcement including monitoring, with the latter objective gaining the most support.
Given that the use of F-gases in new equipment and applications locks away or ‘embeds’
emissions for the future (when the lifetime of that equipment or application comes to an end),
NGOs stressed the importance to act now.
Furthermore, the majority of stakeholders reaffirmed that the objectives of the F-gas
Regulation would not be best achieved by action at Member State level (rather than EU-
level). That said, the response was mixed, with industry stakeholders in particular less
unanimous in their response that EU-level legislation would deliver value added.
A2.5.2 Measures proposed for the amended F-Gas Regulation
Objective A: Raising ambition in line with the EU Green Deal
The responses on HFC phase-down and prohibitions are strongly linked to the stakeholder
type and the sector concerned. However, NGOs and all industry expressed that there is a need
to take into account differences and specific limitations of the different types of equipment.
While many industry and businesses stakeholders commonly working with F-gases in the
RACHP sector did not want to raise the ambition level of the current F-gas Regulation
further, manufacturers of equipment using alternative refrigerants and NGOs strongly
supported higher ambition. It was confirmed that a switch to low-GWP alternative
refrigerants is ongoing and one industry stakeholder highlighted the important role that the
HFC phase-down had played, given it provides flexibility and clarity whilst also driving
efficient change. One NGO stakeholder highlighted that the phase-down alone would not be
sufficiently effective, and further bans would be needed to provide stronger signals to market
players.
It was also pointed out that new solutions need to be fully in line with the Eco-design and
energy labelling rules and studies. Furthermore, GWP limitations should not result in the
marketing of less efficient products and that differences related to the same category of
equipment, e.g. different types of heat pumps, would have to be taken into account. An
association of manufacturers of natural refrigerant alternatives underlined that the highest
potential for replacing highly warming gases was in the sector of stationary AC. Smaller AC
systems are already being produced with carbon dioxide [R744] and propane [R290], and
larger air conditioning systems can rely on water [R718] chillers. Alternatives, notably R290,
are also well established in the case of factory-sealed small hermetic appliances (e.g. ice
128
https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12479-Fluorinated-
greenhouse-gases-review-of-EU-rules-2015-20-_en
76
cream makers, heat pump tumble driers, washer driers, double-duct air conditioning units).
As for refrigeration equipment below the charge of 40 tCO2e, a major industry association
confirmed that HFC alternatives are widely used so that no exemption would need to be
maintained for this range of equipment. One NGO stakeholder highlighted that more
emphasis is needed on transport refrigeration given that this is a growing sector and that
leakage rates are high.
Concerning fire protection equipment, it was highlighted that alternatives such as
fluorinated ketones (FK 5-1-12) and inert gases (e.g. CO2, nitrogen) are commonly used
throughout the EU.
For MDIs, industry stakeholders such as gas producers and some MDI manufacturers pointed
out that lower-GWP alternatives are being developed and will be introduced to the market
from 2025 onwards. Other manufacturers and patient organisations pointed to the fact that
sufficient time is needed to introduce the alternatives, also due to the need of following the
regulatory processes, and that the interest of the patient should be kept in mind.
As for inhalation anaesthetics, medical experts confirmed that the emissive use of certain
high-GWP gases could be avoided by increased use of lower-GWP options and/or special
recovery technology which, however, is not yet widely introduced. Also, the emissive use of
SO2F2 as a fumigation agent could be avoided by alternative methods and/or containment
measures.
With respect to electrical switchgear, industry stakeholders highlighted that their significant
investments in SF6 alternatives had been fruitful. However a clear regulatory framework
would be needed to market these solutions, promote continued R&D and maintain EU
technological leadership in this area. Switchgear users such as network operators highlighted
that the key factor would be to allow sufficient time to ensure a smooth transition and to not
disrupt ongoing processes. This was underlined by a consensual scenario developed by
German switchgear stakeholders129
.
Among competent authorities, mixed opinions were found: Most supported the notion of
raising ambition in line with the EU Green Deal, while certain concerns were raised that
further raising of ambition of the HFC phase-down could lead to adverse effects, such as
stimulating illegal trade and smuggling.
Objective B: Seeking alignment with the Montreal Protocol
Most competent authorities stated that the Regulation needs to be aligned with the Montreal
Protocol after 2030 to ensure future coherence and compliance. However, one competent
authority saw no need for further alignment as additional restrictions on industry should be
avoided. Of those competent authorities that generally highlighted the need for greater
129
VDE, FNN, Verband der Industriellen Energie- und Kraftwirtschaft, ZVEI 2020: Scenario for reducing SF6
operating emissions from electrical equipment through the use of alternative insulating gases, March
2020.
https://www.zvei.org/fileadmin/user_upload/Presse_und_Medien/Publikationen/2020/April/SF_6_Red
uktion/Szenario-zur-Reduktion-von-SF6-Betriebsemissionen-final-eng.pdf
77
alignment, two went further to emphasize that alignment of exemptions and thresholds would
also be required and expected at international level (e.g. threshold for HFC POM), as the
Montreal Protocol is above the Regulation in the hierarchy of legislation. A third competent
authority stated that the general exemptions for military equipment, semiconductors and
MDIs (Article 15 (2)(d)-(f)) should be removed, but exemptions for specific uses should be
maintained if no alternatives are available (e.g. medical sector, military sector, possibly
switchgear), as it has been done for critical uses of halons under the Ozone Regulation).
One industry association was concerned that the removal of phase-down exemptions would
result in more acute shortages of HFCs for the industries already covered by the phase-down.
Also, registration procedures would become more complex due to the increased number of
actors that use smaller quantities. Reducing the scope of the exemptions rather than
completely removing them may be an alternative option for bulk gases.
On the potential removal of the MDI exemption, one industry association representing MDI
manufactures pointed out that it could lead to shortages and thus supply disruptions of MDIs,
as companies have little flexibility in choosing their suppliers. With the first lower GWP
MDIs expected to enter the market in 2025, the current exemption should remain in place for
at least another five years.
On the possible removal of the exemption for semiconductor manufacturing, one industry
association of semiconductor manufacturers noted that the financial impact would depend
upon the extent to which the price of HFCs would increase. This in turn would depend on the
extent to which additional quantities of HFCs would be included under the phase-down to
take into account future demand for HFCs for MDIs. A significant increase in the price of
inputs to the semiconductor manufacturing process will be detrimental to the overall
competitiveness of the EU industry.
As regards the possible removal of the phase-down exemption for placing on the market
below 100 tonnes of CO2 equivalents, ten competent authorities confirmed that this minimum
threshold may have been exploited for illegal activities. Although it was introduced primarily
to reduce the administrative burden especially for private individuals, some competent
authorities stated that this threshold should clearly be abolished to avoid illegal activities in
the future and to ensure full compliance with the Montreal Protocol.
On the need to include a separate HFC production phase-down to mirror the separate
production phase-down under the Montreal Protocol, one competent authority explicitly
supported its inclusion to ensure compliance with the Protocol. According to the feedback
from an industry stakeholder (gas producer), it is essential that any HFC production phase-
down replicates the timetable of the Kigali Amendment. Implementing faster phase-down
schedules could potentially prevent the manufacture of new lower GWP alternatives within
the EU and create an economic disadvantage for EU companies.
Objective C: Improving implementation and enforcement
Across all consultation activities, stakeholders showed a high level of support for additional
training and certification of technicians on F-gas alternatives, mirroring opinions expressed
78
through the questions related to the evaluation that this is a key barrier to the uptake of
alternatives. The extension of the current training and certification programmes to low GWP
alternatives was considered useful by all competent authorities. One competent authority
stated that it would be rather beneficial to have all information and requirements on F-gases
and their alternatives in one single piece of legislation, otherwise authorities and companies
might lose track of the different requirements. That said, some stakeholders also highlighted
some concerns with this measure. While the general consensus was that an extension of the
current minimum requirements of the existing certification scheme to alternatives could be
useful, one competent authority raised concerns that such requirements might go beyond the
scope of the Regulation. Another competent authority stated that this requirement could lead
to an increase in training costs that were considered to be very high already (especially for
SMEs), and that there is a wide range of different alternatives which would be difficult to
cover.
Stakeholders also showed high support for various measures aimed at tackling illegal trade,
reflecting that they consider this a key challenge to the Regulation. However, different
measures received different levels of support. Stakeholders expressed greatest support for:
strengthening the role of customs and facilitate the link with the EU Single Window
Environment for Customs; to strengthen obligations of economic operators to prevent illegal
trade; and setting minimum requirements for penalties at Member State level. An industry
stakeholder and an NGO also specifically asked whether revisions to the T1 transit custom
procedure were being considered. Although overall positive, support for measures limiting
the market to legitimate participants and more comprehensive monitoring was less vocal. As
for obligations on economic operators, some competent authorities pointed out that the
Regulation should not only focus on the placing on the market (i.e. making available for the
first time), but should also cover subsequent sales along the supply chain, while referring to
the approach used in the Ozone Regulation.
Several industry stakeholders stressed the importance that any changes to the Regulation
should be made coherently with wider EU legislation. In particular, industry stakeholders
noted that some applications (e.g. heat pumps in households and industry) using F-gases will
be critical for meeting broader climate change targets and that energy consumption from such
appliances is the main source of GHG emissions not F-gases.
As for evidence on destruction of HFC-23 by-production, one NGO noted that Article 7(2)
could be operationalised based on a technical advice paper prepared by Öko-Recherche on
behalf of the EU Commission. It was considered that this paper already contained a clear
approach on traceability of evidence, which could then be strengthened by third-party
verification and a reporting obligation. In addition, reference was made to the EU Renewable
Energy Directive II and EU Timber Regulation, which provide for a product certification
scheme with rather low administrative burden, which could also be considered for application
to the HFC-23 by-production issue. According to one industry association (representing gas
manufacturers), a template for a declaration of conformity could be useful. However, third-
party verification would be difficult and could be disproportionate, especially for buyers of
small quantities.
79
Objective D: Monitoring
Mixed opinions were found among competent authorities regarding an extension of the
labelling requirements to Annex II gases. While eight competent authorities generally
supported the measure, two competent authorities questioned the purpose of this measure,
stating that the majority of F-gases were already covered by Annex I of the Regulation.
According to one customs authority, a template for labelling of bulk gases and pre-charged
products and equipment would add value as there is significant non-compliance.
The role of further data collection, monitoring and reporting for better understanding of
environmental impacts was underlined as regards production, containment, recovery,
recycling, reclamation and destruction of F-gases and end-of-life treatment of equipment, as
well as in view of alternatives to conventional F-gases, which might also feature high GWP
values and are being introduced to the EU market in various applications (e.g. electrical
switchgear).
An auditing company suggested the introduction of an electronic verification process of the
annual reports to facilitate checking compliance with the verification obligation and thereby
reducing costs. On the company side, stakeholders had some doubts if the administrative
burden would actually decrease, as the underlying verification processes would remain
unchanged.
On extending Annex II, adding fluorinated gases with very low GWP (<10) to the list was
criticized by stakeholders, especially from the switchgear sector.
A2.5.3 Impacts of the amended F-Gas Regulation
A2.5.3.1Environmental impacts
Stakeholders agreed that some measures could reduce emissions further, in particular
increasing the HFC phase-down ambition in line with technological development and
prohibiting F-gas use in applications, where they are no longer needed. Links to energy
efficiency requirements and the need for continued alignment with decarbonisation targets
were emphasized, especially by industry and with respect to the important role heat pumps
are expected to play to meet broader climate targets. A business organisation for natural
alternatives to F-gases pointed out that the current phase-down schedule does not take into
account the demand reduction resulting from the 2020 ban for servicing of existing
refrigeration installations. This association also noted that further alignment with recent IPCC
mitigation scenarios should result in a reduction of HFC phase-down steps already before
2030 and that the GWP20 metrics should be included to present more accurate information in
terms of climate-friendly refrigerants.
Industry stakeholders underlined the need to consider energy efficiency requirements and
impacts on indirect emissions from energy use. The future energy efficiency provisions set
out by the Eco-design Directive and under the Energy Performance of Buildings Directive
(EPBD) should not be compromised. Stakeholders, in particular NGOs but also some
competent authorities and certain industry, reiterated the need to consider the potential for
wider environmental effects beyond the reduction of F-gas use and emissions. This referred
80
especially to by-products during manufacture as well as persistent degradation products of
fluorinated chemicals.
A2.5.3.2Economic impacts
As regards administrative costs, stakeholders, in particular industry and competent authorities
noted that some measures would result in an increase. However, the perceived level of
increase varied across measures and many stakeholders noted that it is difficult to gauge more
precise impacts without a detailed description of the measures. Higher administrative costs
were expected by a larger number of stakeholders for the options of: more comprehensive
monitoring (e.g. adding new substances, filling gaps in obligations), strengthening obligations
to prevent illegal trade, increasing HFC phase-down ambition and technicians training on
non-F-gas alternatives. Generally, higher costs were more often expected by industrial
stakeholders compared to other stakeholders. For three measures, the response was more
mixed, with stakeholders unable to agree whether there would be an increase or decrease in
administrative costs: adding flexibility to align with future Montreal Protocol decisions,
removing some exemptions and thresholds not foreseen by the Montreal Protocol, and
limiting the market players to legitimate participants.
As regards technical adjustment costs, stakeholders (again industry and competent
authorities) also recognised a potential for increase in costs for some of the proposed
measures. Most stakeholders saw increased costs for the options: increasing HFC phase-down
ambition, technicians training on non-F-gas alternatives, adding new HFC phase-down steps
beyond 2030, more comprehensive monitoring and a separate HFC production phase-down.
Increased adjustment costs were linked to deploying alternatives to SF6, increased training
requirements and increased R&D specifically. The adaption and development of facilities is
expected to lead to a particularly high initial cost. Higher end user costs could result from the
flammability of alternative refrigerants in the cooling sector and from using more costly
alternatives in energy transmission.
More broadly, stakeholders have also reflected that the measures proposed could have wide-
ranging economic effects, particularly on R&D and innovation, but also on EU
competitiveness, trade with non-EU countries and consumer prices. Stakeholders highlighted
they would expect an increase in R&D and higher EU competitiveness, not least in the field
of SF6 alternative technologies. A concern expressed was that non-EU markets were not
mature enough to absorb alternative technologies, so that EU companies would not be able to
market their innovative equipment and may have to design different products for different
markets. There were differing opinions on the impact on SMEs, as some expected higher staff
and training costs due to the need for skilled personnel, while others increased business
opportunities for providers of green technologies.
Concerning increased HFC phase-down ambition, one end-user association would expect
significant additional costs. The stakeholder believed that this could in turn lead to end-users
taking additional risks with regards to technical choices, switching to alternative technologies
which may not be sufficiently mature. It is also generally expected that there would be a price
increase associated with the development of new solutions, alongside an eventual increase in
81
the general energy consumption of the facilities. It was suggested that any additional
prohibitions and restrictions should consider not only the GWP but evolve to an analysis
based on the Total Equivalent Warming Impact (TEWI) or possibly the Life Cycle Climate
Performance (LCCP).
For training of technicians, additional costs to industry, especially for SMEs, were
highlighted by individual companies and also include the required absence from work to
undergo training.
Industries currently covered by exemptions pointed out cost increases in case these
exemptions would not be maintained. As for semiconductor manufacture, concerns related to
the competitiveness of the EU market were stated.
A2.5.3.3 Social impacts
Stakeholders generally observed that any social effects of proposed measures would be less
significant than the potential economic and environmental effects. Some noted the potential
for impacts on public health and safety, although it was deemed to be small.
Several industry stakeholders pointed out increased safety risks related to flammable
refrigerant use during installation, service and at end-of life. This risk was perceived to be
elevated due to a lack of technician certification, which could also encourage do-it-yourself
installations by unqualified individuals.
Concerning employment, one industry association related to natural alternatives to F-gases
highlighted the opportunities for market growth within the EU in manufacturing, design,
R&D, customer service, marketing etc. but also regarding exports to the North American
market. Without the move to natural refrigerants, the EU market would face significant
competition from outside the EU, in particular from Southeast Asia.
82
A3 Who is affected and how?
A3.1 Practical implications of the initiative
A number of different industry stakeholders are affected by changes to the Regulation.
(i) EU bulk gas producers and gas importers are, as quota holders, affected by changes
to the quota system (ambition levels, quota price) as well as stricter measures on
economic operators to achieve better custom controls and enforcement. Compliant
companies are pushing strongly for the latter even though these measures would
increase their burden, since they feel disadvantaged towards entities involved in illegal
activities such as imports without quota. Gas producers and importers are also affected
by the prohibitions reducing the use of F-gases, but have business opportunities in
importing the higher-value climate-friendly alternatives. They are affected by changes
to the reporting and verification measures, but would also profit from many of the
efficiency measures made in that area.
(ii) Gas distributors are affected by higher gas prices (due to the quota system), but the
last six years have shown that the full price increase is passed on to their buyers. Gas
distributors will also increasingly use more climate-friendly gases as a result of the
quota system and the prohibitions. Today’s best practice of handling F-gases is also
reinforced for distributors with the need to reduce emissions during storage, transfer
and transport.
(iii) EU equipment manufacturers and importers are affected by the ambition of the
quota system, as gases inside this equipment must be covered by quota, and
prohibitions leading to the use of more friendly gases inside the equipment. The
modelling has shown that equipment manufacturing and related sectors will profit from
the policy-driven technology conversion. Equipment importers will benefit from some
of the efficiency measures on the reporting and verification rules, in particular a
relaxation of the minimum threshold for independent verification.
(iv) Gas and equipment exporters. There are no direct restrictions on exports until 2028
when trade with Parties that have not ratified the Kigali Amendment will be prohibited.
HFCs filled into products and equipment in the Union may be more expensive than on
the world market. In order to be able to provide a quota balance in real time in the
future via CERTEX/Single Environment for Customs, exporters will be asked to
provide the CO2e of HFCs exported in equipment in their export declaration. Exporters
are mostly unaffected by the changes to the reporting rules, except for a few substances
added that could also be exported in small amounts.
(v) Equipment and product operators (end users). A number of different products and
equipment use F-gases in addition to RAC appliances. The most relevant of the former
in terms of remaining emissions are switchgear (electricity providers, utilities and
network operators) and MDIs (patients). End users experience higher prices due to the
quota system or replacement of the gases (technology conversion). These costs are very
low compared to baseline costs in most cases and are distributed over a large number of
83
end users. In addition end-users often profit from savings in running costs due to e.g.
energy efficiencies (RAC sector) so that abatement costs are negative in the long run
(i.e. cost savings).
(vi) Service companies. Service companies perform activities such as installation,
maintenance, leak checking or decommissioning of equipment. Higher prices due to the
quota system are routinely passed on to end users. Service companies and their
personnel will be required to have more comprehensive certification to include skills on
the climate-friendly alternatives and energy efficiency, which is something that their
representatives have strongly advocated for.
(vii)Gas reclamation and destruction companies should have good business
opportunities due to a stricter quota system and the incentive to reclaim gases (no quota
needed!) or replace older equipment and the need to avoid emissions. Reclamation
companies will be asked to report in the future, so that this monitoring gap can be
closed.
(viii) Private persons. Some private persons can be operators in the case of e.g. AC used
in cars or homes and may experience higher gas prices in the future, but could benefit
from lower operating costs in the long run. Home owners that are renovating houses
may have to ensure that old foams installed in their houses are appropriately treated to
avoid losses of F-gases. Patients using MDIs will not experience any noteworthy cost
increases as the cost component of the HFC in the MDI is less than 1%. Citizens are of
course benefiting from fewer climate change effects as the emission of these highly
warming greenhouse gases will be reduced.
A3.2 Summary of costs and benefits
Table 13. Summary of costs and benefits of the preferred option (Option 2)
I. Overview of Benefits (total for all provisions) – Preferred Option
Description Amount Comments
Direct benefits
Reduced climate
emissions
Additional savings of direct emissions:
40 MCO2e by 2030
308 MtCO2e by 2050
Indirect emissions:
Energy savings 2.5 GWh/year (2024-2036
average; ~0.3% of baseline energy use),
2050: 8.2 GWh/year savings (~0.5% of
baseline energy use)
Emission savings mostly come
from the quota system and the
accompanying prohibitions as
well as the emission avoidance
measure (A3); many other
measures contribute small
savings. The technology
conversion also leads to small
energy savings
84
Saved indirect CO2 emissions 2030 ~ 0.3
Mt CO2/a ; 2050: ~0.3 Mt CO2/year
Reduction of
administrative
costs for
businesses
Savings of €4.5m per year Delivered by inter alia relaxing
thresholds for placing on the
market of products and
equipment, quota application in
3-year cycle rather than annually
and an electronic verification
process
Reduction of
administrative
costs for
authorities
Savings of ca 2,850 days per year across
Member State competent authorities, DG
CLIMA and EEA.
Driven by savings to MS
competent authorities from
aligning reporting and verification
thresholds and requirement for
specification of ‘NIL’ reporting.
Reduction of
adjustment costs
to end-users
(mostly
businesses)
~-835 Mio € per year by 2050 Cost savings in adjustment costs
to end-users (sum of capex &
opex) in the long-term
perspective,
(in 2024-2036 time horizon
additional costs primarily due to
higher investment expenditures)
Revenue from
quota allocation
price
~125 Mio € per year initially The quota allocation price
reduces profits in HFC supply
chain without increasing cost to
end-users. To cover admin cost
at EU level and residual amount
to be transferred to the EU
budget.
Indirect benefits
Job creation ~400 by 2030, ~6,800 by 2050 In particular in the EU
manufacture of equipment and
supplying industries
Research and
development
+ Incentive in R&D in the EU
equipment manufacturing sector
Competitiveness + Strengthened competitiveness of
EU equipment manufacturing
sector; however: drawback for
export-oriented equipment
manufacturing
85
GDP increase + 0.005 vs baseline by 2050 GDP increase in the long-term
perspective. In 2030 horizon:
GDP loss of ~0.001% of baseline
II. Overview of costs – Preferred option
Citizens/Private Consumers Businesses Administrations
One-off Recurrent One-off Recurrent One-off Recurrent
Direct costs
Adjustment costs:
Increased HFC refill
cost until ~2030 for
EU car owners of
ACs in old vehicles
(new cars not
affected due to MAC
Directive)
Admin
burden:
€3 million
Admin burden:
€12.1 million
per year (plus
€20.8 million
for training
costs) (the
cost savings
of €4.5 million
130 are not
subtracted
here, see
benefits
above)
Thereof: €1.9
million relate
to alignment
with
international
rules and/or
improving
enforcement
to reduce
illegal
activities.
Adjustment
costs to
business end-
users (sum of
capex & opex)
~421 Mio €
per year
(2024-2036
average),
Admin
burden:
2,600 days
Admin
burden:
13,500
days per
year (does
not include
savings of
2,850, see
benefits
above)
130 According to Annex A14.2 the individual measures result in total gross savings of €4.5 million and
additional gross burden of €12.1 million. These numbers cancel each other out when deriving
summary costs and are therefore not apparent in the summary tables in e.g. section 6.2.2
86
turning into
cost savings
of ~835 Mio €
per year by
2050.
Also,
distributional
costs linked to
HFC gas
prices
Indirect costs Adjustment costs:
Potential pass-
through to
consumers (e.g.
ACs, heat pumps) of
higher compliance
cost for businesses
not significant in
most sectors as
additional cost <1%
of total operating
cost (including for
MDIs where the HFC
propellant gas costs
a very small fraction
of the total price)
87
A4 Analytical methods
A4.1 Data sources
Data sources included
 Referenced literature as per the support study;
 EEA’s yearly reports on fluorinated gases131
;
 Recent technical reports published by the EC (see footnote 128);
 The extensive stakeholder consultations carried out for this study;
 Previous expertise including past and current projects of the external consultants.
The following impacts were examined making use of the above information as well as
modelling based on AnaFgas and the JRC’s GEM-E3 model (see below for information on
these modelling activities).
Table 14. List of impacts examined
Environmental impacts
Direct F-gas emissions
Energy use / indirect emissions
Ecotoxicity
Economic impacts
Operative adjustment costs of F-gas using industries
Administrative costs
- to businesses
- to Member State competent authorities
- to the EU Commission and the European Environmental Agency (EEA)
Distribution of costs
- across business size
- across EU regions
Macroeconomic impacts on the EU
Distributional effects between equipment operators and undertakings of the
HFC supply chain
Impact on consumer prices
Impact on trade flows (imports and exports)
Impact on R&D and innovation
Impact on competitiveness
Social impacts
Employment effects
Public health & safety and health systems
131
https://www.eea.europa.eu/publications/fluorinated-greenhouse-gases-2020
88
A4.2 AnaFgas: Modelling F-gas demand and emissions
A4.2.1 Overview of the model
AnaFgas calculates demand and emissions of fluorinated greenhouse gases (F-gases) in
the EU27+UK in the period of 2000 to 2050, based on a bottom-up stock model. An
attached cost module allows quantification of related costs to the operators of
equipment relying on F-gases or their alternatives.
The model AnaFgas was designed as a detailed bottom-up stock model to derive demand and
emission scenarios for F-gases used in the most relevant sectors and sub-sectors (Figure 8)
for the EU Member States. The original model set up for the 2011 preparatory study for the
impact assessment of the current Regulation includes the UK, while Croatia was not yet a
Member State of the EU and thus not included. However, Croatia was added in a later update
of the model in the period 2017 to 2020. The current model represents a thoroughly updated
version of the original model, with the latest available data and assumptions as described
further below.
The AnaFgas model is designed to calculate demand and emissions of F-gas gases under
different scenarios and was used to derive a baseline, as well as a counterfactual scenario for
relevant sectors in the EU. Demand is the sum of quantities of F-gases used in the initial first
filling of equipment and the re-filling in the servicing of equipment during the lifetime.
Emissions are the sum of emissions of F-gases during the lifetime of equipment (lifetime
emissions) and F-gases that are released to the atmosphere during disposal of old equipment
(disposal emissions). In AnaFgas, all emission and demand estimates are derived from
bottom-up approaches, i.e. by estimating demand and emissions per sector through the use of
underlying driving factors. These include annual changes in equipment stock, composition
and charge of the equipment, leakage during equipment lifetime and during disposal. Some of
these components are driven by other factors such as population development, GDP growth
or technological changes. Based on these drivers, annual emissions and banks as well as use
can be calculated for each year, sub-sector and EU Member State.
AnaFgas makes use of market information to build an inventory of the in-use stocks of the
equipment in each of the end-uses in each country. This includes the percentage of the
equipment stock that contains each F-gas. These modelled stock inventories are maintained
through the annual addition of new equipment/new F-gas quantities and the retirement of
equipment after an appropriate number of years. Annual leak rates, servicing emissions, and
disposal emissions are estimated for each of the end-uses. The AnaFgas cost module is based
on model installations per sector and respective assumptions investment and operating
expenditures for available options of used F-gases or F-gas alternatives. Specific cost at
model installation level can be recalculated into total sectoral cost in the EU27+UK AnaFgas
scope by means of AnaFgas data on equipment stocks. AnaFgas can be used to quantify the
effects and costs of policy interventions to reduce emissions of fluorinated greenhouse gases
by comparing different scenarios (e.g. policy options, baseline and counterfactual).
89
Figure 8: Overview of the sectors and subsectors covered by the AnaFgas model
Source: OekoRecherche et al. (2021), based on Schwarz et al. (2011)
Certain sub-sectors in Figure are represented in more detail in the model:
 Commercial refrigeration
o Central systems
o Condensing units
o Hermetic units
 Industrial refrigeration
o Food industry
 Beer production
 Wine production
 Meat production
 Dairy industry
 Chocolate production
 Frozen food
 Fruit juice / Gaseous drinks
 Milk farms
o Other industry
 Cold storage
 Ice rinks
 Other industry (50 % chemical)
 Transport refrigeration
o Vans
o Trucks and trailers
o Fishing vessels
 Room air conditioning
o Moveable (portable) units
o Small split units including reversible air-to-air heat pumps (average charge of 1.5 kg)
 Commercial air conditioning
o Large split and variable refrigerant flow (VRF) systems
o Packaged equipment (incl. rooftop units)
 Chiller
o Displacement compressor type
 Mini-chiller
 <100 kW chiller
 >100 kW chiller
o Centrifugal compressor type
End use category
Refrigeration
Domestic
Commercial
Industrial
Transport
Stationary AC
(incl. heat
pumps)
Room AC (incl.
air/air heat
pumps)
Commercial AC
Chiller
Heat pumps
Mobile
AC
Road
Ship
Rail
Foam
One component
foam (OCF)
Polyurethane
(PU)
Extruded
polystyrene
(XPS)
Propellants,
solvents and
fire protection
Technical
aerosols
Metered dose
inhalers (MDIs)
Solvents
Fire
extinguishers
SF6
Electrical
equipment
Emissions from
soundproof
windows
Aluminium and
magnesium
casting
Production
Semiconductors
and
photovoltaics
Primary
aluminium
production
Halocarbon
production
90
 Heat pumps
o Small (average charge of 2.6 kg) and medium (average charge of 26 kg) heat pumps (95% small and 5% medium
units)
 Air/water (heating only and reversible)
 Water/water (heating only)
 Brine/water (heating only and reversible)
 Direct exchange
 Exhaust air
 Sanitary hot water
o Large commercial heat pumps (average charge of 750 kg)
 District heating
 Industrial
 Road mobile air conditioning
o Passenger cars
o Commercial transport vehicles
 Trucks N1
 Trucks N2
 Trucks N3
o Buses
o Ships
 Cruise ships
 Passenger ships
 Container ships
 Cargo ships
o Rail
 Trams
 Metros
 Trains
In the current model, the heat pumps sector was extended to cover medium and large
equipment. All sales data for heat pumps were gathered from data provided by the European
Heat Pumps Association (EHPA132
) and the German Bundesverband Wärmepumpe (bwp133
).
For small and medium heat pumps, the sales data was identical, since data grouped by charge
size was not available. A share of 95 % of sold units for small heat pumps and 5 % for
medium heat pumps was assumed. For all heat pumps, an annual increase in sales of 5 % was
assumed from 2020 to 2050.
For electrical equipment (including switchgear), the assumed saturation of the growth in the
market in Schwarz et al. (2011) for Western and Eastern European countries in 2015 and
2020, respectively, was replaced by an assumed growth rate of 2 % per year until 2050 for all
EU countries based on ZVEI (2020)134
and expert opinion.
The latest model version features AnaFgas calculates demand and emissions individually for
33 different F-gases and 12 different blends, including HFCs, H(C)FOs, PFCs and SF6, for
the period 2010 to 2050 based on market data and estimates of the quantity of equipment or
products sold each year containing these substances, and the quantity of substances required
in the EU to manufacture and/or maintain equipment and products over time.
132
https://www.ehpa.org/
133
https://www.waermepumpe.de/
134
https://www.zvei.org/fileadmin/user_upload/Presse_und_Medien/Publikationen/2020/April/SF_6_Redu
ktion/Szenario-zur-Reduktion-von-SF6-Betriebsemissionen-final-eng.pdf
91
Projections by EU Member States and IPCC/TEAP SROC Report 8 and the recent TEAP
reports are included in the growth assumptions for the model scenarios until 2050. For the
projections of activity data including charges and F-gas split, and emission factors until 2050,
AnaFgas generally distinguishes between three different time periods:
 Near past (5-10 years) is calculated by adjusting the stock model using data reported
under Article 19 of the F-gas Regulation (reporting on supply of F-gases) and the
National Inventory Reports (NIRs) submitted by the EU under the United Nations
Framework Convention on Climate Change (UNFCCC, reporting on emissions and
partially on first fill quantities). It must be noted, however, that the reported data is
not equivalent to the modelled metrics. Under the F-gas Regulation, supply of F-gases
is reported, which does not directly translate to demand. Further, the NIRs only
contain data based on estimates that are not frequently changed to reflect market
developments. Thus, deviations between the reported and modelled data are to be
expected.
 Near future (5-10 years) is modelled on known policies and measures, technological
changes, substitution patterns and expected changes in use patterns.
 Distant future (until 2050) is based on a continuation of trends observed, external
projections of driving forces such as GDP and population and follows a business-as-
usual trend as the model does not consider changes in technologies which are likely to
happen within such a long timeframe.
Underlying assumptions for each sector in the model AnaFgas are outlined in detail in the
model description in Annex III to the preparatory study (Schwarz et al. 2011). The model is
limited by the fact that (i) it assumes yearly re-fillings of emitted quantities not necessarily
reflecting common practice, which may cause deviations from actual demand in the short
term (i.e. at annual level) while accurately predicting medium and longer term trends, (ii)
each modelled sector is represented by one typical installation size to represent the whole
sector, and (iii) assumptions on parameters affecting investment and operating costs rely on
expert judgement and industry input. Specific information on each sector for the EU is
summarized in the Annex to the support study.135
These sector sheets cover economic
assessments of standard and F-gas substitution technologies and allow the calculation of
abatement cost for substitution technologies and thus the generation of cost curves and cost-
driven abatement scenarios, for example in response to economic interventions like the EU
HFC phase-down. These data were updated as relevant in the current version of the model.
Figure 9 gives a simplified overview of the general logic behind AnaFgas. In the model, each
sector has unique adaptations that add to the logic outlined below. The result, however, is
always the calculation of the demand and emissions in metric tonnes for each gas in each
sector/subsector for each year. Based on the GWP of the different gases, the demand and
emissions can then be easily converted into tCO2e. In its latest version, 33 different gases and
12 blends are covered by the model. Those include the most relevant HFCs, PFCs and SF6
and blends of HFCs.
135
Oeko-Recherche (2021)
92
Figure 9: Simplified overview of the AnaFgas logic to project demand and emissions of F-gases in the EU
Source: Oeko-Recherche et al., 2021
In the model structure of AnaFgas, it is assumed that emissions from leakage during a year
are replaced in the same year, irrespective of the age of the equipment. In reality, it can be
assumed that leakage rates increase over the course of the lifetime of equipment. AnaFgas
uses the average leakage rate over the entire lifetime of equipment for each year. This can
lead to deviations from observed emissions for specific years but should even out when
looking at longer time periods.
The AnaFgas cost module is based on model installations per sector and respective
assumptions investment and operating expenditures for available options of used F-gases or
F-gas alternatives. Specific cost at model installation level can be recalculated into total
sectoral cost in the EU27+UK AnaFgas scope by means of AnaFgas data on equipment
stocks.
Input and parametrization
Key inputs used for the model.
 Lifetime emission rates
 Disposal emission rates
 Sales of equipment
 Disposal of equipment
 Market penetration rate of F-gases and blends in new equipment
93
 Prices for F-gases and their alternatives
 Investment cost for model installations
 Operating cost for model installations (energy and servicing)
Main output
Key outputs produced by the model.
 Yearly demand for 33 different F-gases in the EU27/EU27+UK from 2000 to 2050
 Yearly emissions of 33 different F-gases in the EU27/EU27+UK from 2000 to 2050
 Equipment operators’ total expenditures under different scenarios / policy options
Spatial - temporal extent
Parameter Description
Spatial Extent / Country
Coverage
EU Member states 27 and UK
(Spatial) resolution National
Temporal extent Long-term (more than 15 years)
Temporal resolution Years
94
A4.2.2 Emission rates used in the AnaFgas model
Although leakage rates can be used to estimate the emissions over time, lifetime emissions go
beyond leakage rates since they also include emissions that are not covered by refill, e.g.
during recovery and decommissioning at end of life. The table below shows the annual
emission factors applied in the AnaFgas model for the period since 2010 for lifetime, disposal
and manufacturing emissions by sector and sub-sector. Lifetime emission rates decreased for
many, but not all, sectors following the application of the Regulation in 2015. Disposal
emission factors have also decreased since 2015 in several applications since collection and
recycling of both bulk and equipment containing F-gases has been improved. For many
sectors, a reduction in emission rates is also expected under the counterfactual scenario, albeit
not always as pronounced. This is because technological developments are also expected to
occur in the absence of the Regulation.
The assumptions provided in Table 14 have been developed based on previous modelling as
well as national emission reporting to the UNFCCC, literature and input from industry
experts. There are no emission rates assumed for the sector “PFC and other halocarbons”. For
this sector, emissions are directly taken from the UNFCCC data (National Inventory Reports,
NIRs). The table shows annual emission factors for lifetime (LE), disposal (DE) and
manufacturing (ME) for the baseline and the counterfactual scenario in 2015 and 2019 used
in the model, while differences between scenarios are highlighted.
95
Table 15: Annual lifetime, disposal and manufacturing emission factors for all scenarios from 2020 used in the
model
Sectors and subsectors
Emission rates from 2020
LE = lifetime emissions, DE = disposal
emissions, ME = manufacturing emissions
LE (%) DE (%) ME (%)
Refrigeration
Domestic 0.3 29
Central systems 9 18
Condensing units 6 25
Hermetic units 1 35
Industrial (food) 4 30
Industrial (other) 5 30
Vans 25 30
Trucks and trailers 18 30
Fishing vessels 30 30
Stationary air conditioning (incl. heat pumps)
Moveable units 3 35
Small split units incl. air/air heat pumps 5 35
Large split and VRF units 5 20
Packaged equipment (incl. rooftop units) 3 20
Chillers 2.4 20
Heat pumps (small) 3.5 35
Heat pumps (medium) 4.5 35
Heat pumps (large) 6 20
Mobile air conditioning
Passenger cars 10 40
Buses 15 30
Trucks (N1) 10 70
Trucks (N2, N3) 15 70
Rail (trams, metros and trains) 7 30
Ships 40 30
Foams
One-component 100
Extruded polystyrene (XPS)
HFC-134a, HFC-1234ze(E) 0.75 30
HFC-125 25 100
Polyurethane (spray and non-spray) 1 10
Other HFC
Aerosols and solvents 100
Fire extinguishers
HFC-227ea, HFC-125, HFC-23 2 9
HFC-134a 4 9
HFC-236fa 5 9
SF6
Electrical equipment 1 5 4
Soundproof windows 1 100 33
Aluminium and magnesium casting 3
A4.2.3 Validation of the AnaFgas model
Validating the results from the AnaFgas baseline model is crucial but there only exist very
limited data for comparison. In the following, demand and emissions are contrasted with
supply, as calculated by the EEA based on reporting data under the Regulation, and emissions
96
data extracted from the National Inventory Reports (NIR) for the EU under UNFCCC.
However, some systematic differences between the compared data set should be noted:
 Supply as defined and calculated by the EEA [EEA 2020 public report] is not the
same metric as demand used in the AnaFgas modelling. The AnaFgas demand covers
the gases which are needed for the operation of equipment in the EU. In the supply
metric, additionally, those gas amounts are accounted for which are charged into
equipment in the EU and subsequently exported for use outside the EU. Furthermore,
some interannual discrepancies may occur due to stocks. The EEA supply metric is
cleared of amounts stockpiled at the end of the year by producers or importers of gas.
However, gases stockpiled further downstream e.g. by distributors and also gases
contained in stockpiled imported equipment are contained in the supply of the year of
import rather than for the year of actual use.
 UNFCCC data on emissions of F-gases are estimated values only, and Member States
use very different methods to obtain this data, from databases of actual emissions, to
surveys or the use of very generalised emission factors as per UNFCCC methodology.
This data therefore also carries an inherent amount of uncertainty.
When comparing demand and supply, the metrics align closely for certain years but deviate
for others (Figure 10 and Table 15). Especially in 2014, the supply is substantially higher
than the modelled demand, while in 2019 the reverse is the case. In 2014, large quantities of
F-gas supply were reported that most certainly were not actually used in equipment in that
year. These quantities were very likely stockpiled in anticipation of shortages anticipated
because of the phase-down that started the following year. Stocks are not part of the
derivation of demand, however, and this is the reason why 2014 shows no increase in the
modelling. Some of the differences can also be explained by yearly carry-over effects. The
modelling is not designed to accurately predict single years, or outliers, but rather the general
development over time.
In general, a very good fit is obtained between model and reported data, with the
exception of the special year 2014 (see explanation on stock building above).
97
Figure 10: Comparison between the reported F-gas supply for the EU-28 and the results from the AnaFgas
baseline modelling for F-gas demand
Sources: AnaFgas modelling, Data from EEA 2020
Table 16: Comparison of the modelled baseline F-gas demand and the reported F-gas supply in the EU-28
Mt CO2 eq 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
F-gas supply (F-gas reporting) 231 208 204 200 286 212 214 210 153 122
F-gas demand (AnaFgas) 221 224 227 216 206 206 198 176 157 145
Difference 5% -7% -10% -7% 39% 3% 8% 19% -2% -16%
Source: AnaFgas modelling, EEA 2020
Regarding emissions, the AnaFgas model consistently calculates higher quantities in tCO2e
than stated in the UNFCCC NIR (Figure 11 and Table 16), but the deviations are very small
(on average 3 %). Since the UNFCCC data is based on estimations, the methodology of
collecting this data is very different for different member States (surveys, estimations, actual
emissions databases). Possible explanations could be differences in the assumed emission
rates for different sectors and subsectors or charge sizes for different equipment where these
are used to determine the emissions reported to the UNFCCC. In any case, the deviations are
small and are likely within the uncertainties.
0
50
100
150
200
250
300
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Mt
CO
2
equivalents
Baseline F-gas reporting
98
Figure 11: Comparison between the results from the AnaFgas baseline modelling and the reported emissions
under UNFCCC (NIR) for the EU-28
Source: AnaFgas modelling, UNFCCC (https://unfccc.int/documents/275968)
Table 17: Comparison of AnaFgas baseline modelling output with the NIR reported EU-28 F-gas emissions
Mt CO2 eq 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
UNFCCC 110 114 117 120 122 116 117 116 111 106
AnaFgas 119 121 122 122 122 123 122 120 112 109
Difference 8% 6% 4% 2% 0% 6% 4% 3% 1% 4%
Source: AnaFgas modelling, UNFCCC (https://unfccc.int/documents/275968)
For single gases or gas groups, the modelled emissions show similar trends to the UNFCCC
data (Figure 12). Both data sources show a decline in emissions of high-GWP gases in recent
years, especially for HFC-134a, HFC-125 and HFC-143a. The UNFCCC data shows an
increase in emissions until the F-gas Regulation took effect in 2014, followed by a rather
sharp drop with a second stronger decline from 2017 to 2019. The AnaFgas model, at first,
shows a more gradual effect of the F-gas Regulation that picks up speed from 2017 to 2018,
due to the second phase-down step starting in 2018, cutting the placing on the market
quantities by 30 %. From 2018 to 2019, the decline in emissions shows a more moderate
reduction compared to the previous years.
99
Figure 12: Comparison of the AnaFgas baseline modelling output with the UNFCCC reported EU-28 F-gas
emissions by gas/gas group
Source: AnaFgas modelling, UNFCCC (https://unfccc.int/documents/194921)
A4.2.4 Continuation of baseline scenario until 2050
To assess any impact on demand and emissions of F-gases due to further policy action, a
hypothetical reference scenario must be constructed that describes the unchanged
continuation of current policy. In the Evaluation report (Annex A5), the baseline scenario
from the AnaFgas modelling represents the effect of the current Regulation until and
including 2019. For assessment of the impact of further policy action, this baseline scenario
was projected until 2050, under the assumption that there are no future policy changes. As
such, compliance with the HFC phase-down schedule is assumed and the final 2030 phase-
down step to 21 % maximum quantity of HFCs on the market, compared to the reference
period of 2009 to 2012, is continued until 2050 (even though not regulated).
A4.2.5 Assumed reclamation of HFCs
For the modelling exercise, future potential reclamation rates are being assumed for relevant
HFCs with the help of expert input. The goal is to project reasonable rates per gas that are
informed by the modelled quantities of available HFCs in end-of-life (EoL) equipment in any
given year.
100
Table 17 shows the assumed reclamation rates of HFCs for the EU-27 that were used in the
modelling for the different scenarios. Further, the share of reclaimed gas from the available
quantities from EoL equipment and the share of the demand for the respective year are
shown. While the baseline and Policy Option 1 show the highest absolute reclamation
quantities in Mt CO2 eq, the more ambitious scenarios (Option 2 and Option 3) show a higher
share of reclamation in relation to the demand. Higher ambition leads to a quicker
replacement of high GWP gases in new equipment, which in turn limits the available
quantities for reclamation at end of life. This is why the share of reclamation of the demand
decreases also for the more ambitious scenarios in the long run.
Table 18. Assumed reclamation quantities of HFCs in the EU-27
Mt CO2 eq % of gas in EoL equipment % of demand
Year BL O1 O2 O3 BL O1 O2 O3 BL O1 O2 O3
2015 3 3 3 3 10% 10% 10% 10% 2% 2% 2% 2%
2020 8 8 8 8 16% 16% 16% 16% 10% 10% 10% 10%
2025 8 8 8 8 19% 19% 19% 19% 15% 14% 19% 21%
2030 6 6 5 6 22% 22% 21% 22% 20% 16% 31% 40%
2035 6 6 3 3 32% 31% 17% 24% 20% 20% 23% 40%
2040 4 4 2 2 40% 28% 37% 43% 20% 19% 21% 25%
2045 3 3 1 1 38% 28% 39% 42% 14% 17% 18% 20%
2050 3 3 1 1 33% 35% 34% 45% 12% 16% 16% 21%
Generally, an estimation of future reclamation rates is difficult and deviations from the
assumed rates are possible, especially in the long-term. However, reclamation plays a pivotal
role for the restriction of placing on the market (POM) quantities. Since reclaimed quantities
are exempted from the phase-down, an increase in reclamation allows for an increase in
virgin HFCs on the market. Following market logic, in the model it is assumed that with
increasing non-virgin HFC quantities (reclamation), more virgin HFCs are placed on the
market.
A4.2.6 Validation of the baseline HFC phase-down scenario
To ensure that the HFC demand (excluding MDIs and semiconductors), calculated under the
baseline scenario, does not exceed the placing on the market restrictions set out by the
Regulation, the demand was adjusted to conform as closely as possible to the POM metric.
Since the modelled demand includes reclaimed quantities that are not covered by the HFC
phase-down, the reclamation quantities listed for specific years in Table 17 were subtracted
from the demand. Figure 13 shows the adjusted baseline HFC demand in comparison to the
HFC POM limit under the Regulation. From 2020 to 2050, the area under the curve for the
adjusted demand (or the sum over all yearly values) exceeds the area for the POM limit by 38
Mt CO2 eq. This difference can be flexibly compensated by the approximately 69 Mt CO2 eq
of authorisations that are still available as of 2020 (EEA 2021).
101
Figure 13. Adjusted HFC demand under the baseline and HFC POM limit under the Regulation
Source: AnaFgas modelling
A4.2.7 Modelling scenario definitions
Policy option 1: Montreal Protocol alignment
The Protocol defines consumption and production limits for HFCs that differ from the HFC
POM restrictions set out in the Regulation and extend beyond the year 2030. This scenario
has the goal to ensure the long-term EU-compliance under the Protocol under all
circumstances.
The ambition level of the POM phase-down of the current Regulation is not sufficient to
ensure EU compliance with the Protocol’s HFC consumption phase-down after 2033 in the
case that EU HFC consumption of HFCs outside the scope of the Regulation’s POM phase-
down remains high. This relates in particular to the HFC demand for use in the quota-
exempted MDI sector. To address this issue, Option 1 removes the MDI exemption from the
phase-down (as do the other two options).
Like the baseline, Option 1 has been modelled in AnaFgas so that the HFC demand meets an
externally set limitation of HFC POM (placing on the market), considering corrections for
quota-exempted HFC use, HFC reclamation, and use of banked quota authorisations. The
POM schedule for Option 1 was calculated by adding a high estimate of HFC demand for
MDIs to account for lifting the MDI exemption and introducing additional POM reduction
steps for 2033 and for 2036 (to keep the 3 year cycle) and allow meeting the consumption
ceilings set by the Protocol for the EU for 2034 and 2036.
102
As HFC demand for MDIs may be lower than the ‘worst case’ HFC demand for MDIs
considered in Option 1 (to ensure compliance under all circumstances), the pressure to reduce
HFC use by other sectors may be lower in the years 2024-2032 under this scenario if HFC
need for MDIs is less than the “worst case”. In consequence, overall EU HFC demand 2024-
2030 in Option 1 is modelled as higher than in the baseline, leading to sustained higher
emissions. After 2033, however, overall HFC demand in Option 1 is below the baseline and
safely meets the MP HFC consumption limits from 2034 onwards which were found to be at
risk under the baseline scenario.
Policy option 2: Proportionate costs
For the design of the phase-down all sub-sectors were included to replace highly warming
HFCs as soon as technically feasible, as long as their marginal abatement costs at sub-
sectoral level remained lower than €390/CO2e up to 2050. This excludes the sectors AC in
trains, metro and buses.
Policy option 3: Maximum feasibility
For the design of the phase-down all sub-sectors were included to replace highly warming
HFCs as soon as technically feasible, without considering the abatement costs.
A4.2.8 Assumptions on regional distribution of equipment in sectors that use F-
gases
There may be differences how policy measures on F-gases affect the EU North and EU
South. This may be the case because
 Natural refrigerants are already used more commonly in northern Europe, so a higher
rate of replacement is needed in the South.
 The choice of equipment type may differ, e.g. in the South small shops are more
common than it the North and refrigeration and air conditioning systems for small
spaces are different to those used in large supermarkets or shopping malls.
 The climatic situation are different. As a result, stationary AC units are more
frequently used in the south. For these subsectors adjustment costs or benefits will
occur to a larger extent in southern European countries. Conversely, heating-only
heat pumps are more frequently used in the northern EU.
These and possibly other factors could potentially lead to a different cost burden between
North and South. To examine such possible regional effects between Southern and Northern
EU states, the different equipment types were divided for these two regions (EU28 for
evaluation (Table 19) and EU27 for the purpose of the impact assessment (Table 18)).
103
Table 19. Regional distribution of equipment stocks EU27 south vs EU 27 north
AnaFgas sector
EU 27 south
(39% of
population)
EU 27 north
(61% of
population)
Domestic Refrigeration 39% 61%
Commercial refrigeration - Hermetics 60% 40%
Commercial refrigeration - Condensing units 39% 61%
Commercial refrigeration - Central systems 39% 61%
Industrial refrigeration - small 39% 61%
Industrial refrigeration - large 39% 61%
Transport refrigeration - Vans 39% 61%
Transport refrigeration - Trucks & Trailers 39% 61%
Transport refrigeration - Ships 39% 61%
Room AC - Moveables 63% 38%
Room AC - Single split (includes small multi-split <12 kW & reversible air-
to-air heat pumps)
60% 40%
Room AC - Packaged systems (rooftop units), cooling only 70% 30%
Room AC - VRF cooling only (includes Single-split >3kg VRF Multi-Split) 39% 61%
Minichillers 39% 61%
Displacement chillers - small 39% 61%
Displacement chillers - large 39% 61%
Centrifugal chillers 39% 61%
Heat pumps - small (<20 kW, excluding small reversible air/air heat
pumps covered in the single split subsector)
39% 61%
Heat pumps - medium (20-200kW) 35% 65%
Heat pumps - large (>200kW, district heating & industrial) 28% 73%
Mobile AC - Passenger cars 39% 61%
Mobile AC - Buses 39% 61%
Mobile AC - Trucks N1 39% 61%
Mobile AC - Trucks N2 39% 61%
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AnaFgas sector
EU 27 south
(39% of
population)
EU 27 north
(61% of
population)
Mobile AC - Trucks N3 39% 61%
Mobile AC - Passenger ships 39% 61%
Mobile AC - Cargo ships 39% 61%
Mobile AC - Tram 39% 61%
Mobile AC - Metro 39% 61%
Mobile AC - Train 39% 61%
Aerosols - technical 35% 65%
Aerosols - MDIs 39% 61%
Fire extinguishers 39% 61%
Solvents 25% 75%
Foam OCF (one component foam) 39% 61%
Foam XPS (extruded polystyrene) 39% 61%
Foam PU (polyurethane) spray 39% 61%
Foam PU (polyurethane) non-spray 39% 61%
Switchgear MV 39% 61%
Switchgear HV 39% 61%
Notes: EU 27 south: Bulgaria, Croatia, Cyprus, southern France (25% of FR population), Greece, Italy, Malta,
Portugal, Romania, Spain; EU28 North: other EU 27 MS, including 75% of French population
Table 20. Regional distribution of equipment stocks EU28 south vs EU 28 north 2015-2019
AnaFgas sector
EU 28 south
(35% of population)
EU 28 north
(65% of population)
Domestic Refrigeration 35% 65%
Commercial refrigeration - Hermetics 55% 45%
Commercial refrigeration - Condensing units 35% 65%
Commercial refrigeration - Central systems 35% 65%
Industrial refrigeration - small 35% 65%
Industrial refrigeration - large 35% 65%
Transport refrigeration - Vans 35% 65%
Transport refrigeration - Trucks & Trailers 35% 65%
Transport refrigeration - Ships 35% 65%
Room AC - Moveables 60% 40%
Room AC - Single split (includes small multi-split <12
kW & reversible air-to-air heat pumps)
55% 45%
Room AC - Packaged systems (rooftop units), cooling 65% 35%
105
only
Room AC - VRF cooling only (includes Single-split
>3kg VRF Multi-Split)
35% 65%
Minichillers 35% 65%
Displacement chillers - small 35% 65%
Displacement chillers - large 35% 65%
Centrifugal chillers 35% 65%
Heat pumps - small (<20 kW, excluding small
reversible air/air heat pumps covered in the single
split subsector)
35% 65%
Heat pumps - medium (20-200kW) 25% 75%
Heat pumps - large (>200kW, district heating &
industrial)
20% 80%
Mobile AC - Passenger cars 35% 65%
Mobile AC - Buses 35% 65%
Mobile AC - Trucks N1 35% 65%
Mobile AC - Trucks N2 35% 65%
Mobile AC - Trucks N3 35% 65%
Mobile AC - Passenger ships 35% 65%
Mobile AC - Cargo ships 35% 65%
Mobile AC - Tram 35% 65%
Mobile AC - Metro 35% 65%
Mobile AC - Train 35% 65%
Aerosols - technical 25% 75%
Aerosols - MDIs 30% 70%
Fire extinguishers 35% 65%
Solvents 15% 85%
Foam OCF (one component foam) 35% 65%
Foam XPS (extruded polystyrene) 35% 65%
Foam PU (polyurethane) spray 35% 65%
Foam PU (polyurethane) non-spray 35% 65%
Switchgear MV 35% 65%
Switchgear HV 35% 65%
Notes: EU 28 south: Bulgaria, Croatia, Cyprus, southern France (25% of FR population), Greece, Italy, Malta,
Portugal, Romania, Spain; EU28 North: other EU 28 MS, including 75% of French population
A4.2.9 Modelling energy use
The revision of the Regulation can also have an impact on energy efficiency and consumption
as it incentivises the technological change in energy-using equipment, in particular in the
RAC sector. In the AnaFgas modelling framework, final energy consumption of RAC
equipment was calculated both for the baseline scenario and the three policy options
scenarios. The assumptions on energy efficiency characteristics of the different technology
options are documented in the support study.
A4.2.10Determination of technological conversion costs and compliance costs
A4.2.10.1 Cost 2015-2019 (Evaluation)
Businesses directly affected by the 2014 revision of the Regulation and addressed in the cost
assessment for the evaluation were:
 EU F-gas using industries, i.e. the operators of equipment usually relying on F-gases
(or low-GWP alternatives), and
106
 Businesses involved in the supply chain of the gases, i.e.
o Producers and importers of gases
o Gas distributors
o Service companies.
Capital expenditure (capex) and operational expenditure (opex) incurred by F-gas using
industries in the evaluation period 2015 -2019 have been calculated in the AnaFGas
modelling framework. Capex and opex can be added to result in total expenditure (totex) and
compared between both scenarios for all sectors of F-gases use. The spread between totex
calculated for the baseline scenario, the counterfactual scenario (evaluation) and the three
policy option scenarios (impact assessment) are the ‘operative compliance costs’. These can
be averaged over the evaluation period and divided by the average totex of the counterfactual
scenario/baseline to provide a relative increase or decrease in totex for F-gas using sectors
looking backwards (evaluation) and forwards (impact assessment).
Capex includes the equipment operators’ investment in new hardware. In all F-gas
application sectors where the gases are not directly emitted on application, the cost of the first
fill of F-gases is also considered as capex, e.g. the first fill of refrigerants into a refrigeration
equipment. Opex includes the cost of refill of gases into equipment (to balance losses from
leakage), the cost for electricity or fuel needed to operate the equipment and maintenance
cost affected by the Regulation (i.e. additional cost for leak checks and repairs as imposed for
HFC installations by the Regulation, and for installations using CO2, NH3 or hydrocarbons as
refrigerants instead of HFCs).
For a meaningful assessment of F-gas using industries’ compliance cost it is crucial to
differentiate compliance cost between costs related to:
a) technological change and
b) HFC price increases induced by the HFC phase-down supply limitations.
The cost of technological change is borne by those equipment operators which invest in
alternatives to the established HFC-based technologies and thus possibly experience a
difference in capex and/or opex.
Cost experienced by equipment operators for the first fill or refill of gases/refrigerants are
split into a:
 (Counterfactual) reference price [€/kg] which does not take into account HFC price
increases induced by the HFC phase-down, and
 HFC premium [€/t CO2 eq] induced by the HFC phase-down and as observed on the
EU HFC markets. Based on the EU HFC price monitoring conducted by Öko-
Recherche, an average HFC premium of 8 €/t CO2 eq at gas distributor selling price
level, or 16 €/t CO2 eq at service company selling level, is estimated as an average for
the 2015-2019 evaluation period. Note that HFC taxes as charged in some EU
Member States have not been considered for the analysis as such taxes are not directly
related to the 2014 revision.
107
The counterfactual reference prices of used gases are considered for the calculation of the
cost of technological change. The cost for the HFC premium, however, is allocated to the cost
for the HFC price increase.
The cost of the HFC price increase is borne by:
 operators of existing (HFC-based) equipment which needs to refilled subject to
increased HFC prices,
 operators of new installations still based on established high-GWP HFC-based
technologies or on substitution technologies relying on alternative medium-GWP
HFC substitution technologies.
The cost for operators of such medium HFC substitution technologies (e.g. AC equipment
relying on HFC-32 (GWP 625) instead of the previously established R410A (GWP 2088)) is
thus partly allocated to cost of technological change and partly to cost of increased HFC
prices.
It should be noted that the HFC price increase borne by the equipment operators and F-gas
users is being ‘offset’ (in cost-benefit analysis terms) by equivalent additional profits in the
businesses in the supply chain of HFCs:
 On one hand, it is the producers and importers136
of HFCs that can sell the gases to the
gas distributors at considerably higher prices than they could have done without the
Regulation. Given the free allocation of quota under the Regulation, these additional
revenues come without associated cost137
.
 On the other hand, service companies usually charge their customers (i.e. operators of
equipment in need of refill) a levy in proportion to bulk prices (e.g. a fixed mark-up
on bulk prices) and thus fully hand down and additionally add to any upstream price
increase. The same principle holds for gas distributors, situated between producers/
importers in the HFC supply chain. On average, prices per kg of gas sold at service
level are approximately twice the price of gases sold by distributors at bulk level138
.
Thus, when considering both the equipment operators and the gas supply chain as the
affected industries in the cost assessment, equipment operators’ cost for the HFC price
increases is fully offset by respective profits in the HFC supply chain, and the overall net
compliance costs are limited to the equipment operators’ cost of technological change. Only
cost of technological change, i.e. the net cost, are directly linked emission reductions.
Emission reduction costs for the evaluation (and the impact assessment) are therefore limited
to the cost of technological change.
136
Importers of bulk HFCs receive quota for free. However, importers of pre-charged RAC equipment do
have to acquire quota authorisation from quota holders. Thus, equipment importers are basically in the
same situation as the EU original equipment manufacturers (OEMs): Both have to pay GWP-based a
premium on the HFCs charged / to be charged into equipment. Findings of the Öko-Recherche HFC
prices management support that authorisation cost have been approximately at the same level as HFC
prices increases experienced by EU OEMs.
137
Except for small admin cost related to quota management.
138
Source: EU HFC price monitoring conducted by Öko-Recherche
108
For a meaningful comparison of the change in operative cost to equipment operators against
reductions in the demand and/or emissions of F-gases the involved data sets have to be
recalculated to comparable annual amounts: In most of the F-gas sectors, a switch from an
established (HFC-based) technology to a low-GWP substitution technology for a new
installation implies that the demand of F-gases (measured in tCO2e) is strongly reduced in the
first year of operation due to the avoided or reduced first fill. In subsequent operation years of
such a new installation the annual demand reduction is much lower as only the refill to
compensate for leakage losses is reduced. For actual emissions avoided from such a new
installation the distribution over the operation lifetime is different: Emission (and thus
emission reductions) occur first in usually low quantities during the first fill of the equipment,
and then as leakage emissions during the whole lifetime. The largest single emission event
over the equipment lifetime, however, occurs with the disposal of the equipment as usually
not the complete remaining charge of F-gases is recovered at that point in time. For a
thorough assessment of emission reduction cost, the emission reductions of a single model
installation (compared to a counterfactual reference installation) thus needs to be averaged
over the complete equipment lifetime.
The observed emission reductions in the 2015-2019 evaluation period cover the reductions
observed in the first few operational years of new equipment installed in 2015-2019. The
observed emission reductions thus logically cannot cover the emission reductions to be
expected in the future for the remaining years of use and at the time of disposal. Therefore,
the average annual emission reductions observed for 2015-2019 are significantly below the
‘implied’ annual emission reductions from those new installations if averaged over the
complete lifetime of the installations. Typical lifetimes in the RAC sector are 10-15 years, for
other equipment such as foams this may be up to 50 years. For demand reduction it is the
other way around: Due to the avoided/reduced first fill, the average annual demand
reductions observed for 2015-2019 are disproportionally high compared to ‘implied’ annual
demand reductions from those same new installation if averaged over the complete lifetime
of the installations. Recalculations from observed 2015-2019 emission reductions to implied
lifetime-averaged lifetime-integrated annual emission reductions from equipment
installed in 2015-2019 were made in the AnaFgas modelling framework. Recalculation
factors are sector-specific and are influenced mostly by assumptions for equipment lifetime,
lifetime emission factors and emission factors at disposal.
Next to emissions, costs also need to be recalculated to annual amounts in order to merge
Capex and Opex in a meaningful way for a calculation of emission or demand reduction cost:
For that purpose, Capex are annualised over equipment lifetime using a discount factor of
4%139
. Annualised Capex and average Opex are then added to derive average annualised
compliance cost for the installations operated in the 2015-2019 evaluation period.
Based on this approach, operators’ emission reduction cost for technological change are
calculated by dividing the annualised cost for technological change of new equipment
installed in the 2015-2019 evaluation period by the implied average annual emission
139
A value of 4% is suggested in the EU Better Regulation Guidelines.
109
reductions of that new equipment installed in the 2015-2019 evaluation period. In order to
allow for aggregation across sectors, lifetime-integrals of emission reductions and cost are
used rather than annual averages. The emission reduction cost for technological change are
methodologically comparable to GHG abatement cost usually calculated for GHG emission
reduction measures in other sectors.
A4.2.10.2 Costs for the baseline and options (2024-2036 and 2050)
In analogy to the analytic approach taken for the evaluation of the Regulation (see
immediately above), operative compliance cost of the users (= operating equipment relying
on F-gases or alternatives) are separately analysed for cost of technological change and cost
incurred due to HFC price increases induced by the HFC-phasedown: Cost of technological
change are based on investment and operating expenditures of equipment, assuming pre-
phase-down price levels (2014). The impact of HFC prices on F-gas users, that has risen in
the past and may be expected to further rise in the future due to the quota system, are
captured as HFC-price related cost increases. Future HFC prices are discussed in 6.2.1.2.
Total compliance costs are expressed € per year and as percentages of total equipment
operators’ expenditures in the baseline scenario, and are further differentiated into
 costs of additional HFC price increases to be expected under respectively modified
HFC reduction schedules, to be borne by those users which continue to operate or
invest in equipment relying on HFCs, (such costs are reflected as profits in the HFC
supply chain, or as state income related to revenues from the sale of quota);
 costs of technological change for investment in and operation equipment relying on
low-GWP alternatives.
Emission reduction costs compare the cost of technological change for investment in and
operation of equipment based on low-GWP alternatives to the emissions saved during the
lifetime of the respective equipment. In line with the methodology applied for the evaluation,
equipment operators’ cost for increased HFC prices are not considered for the calculation of
emission reduction cost as those HFC-price related costs are borne by those operators which
do not (fully) replace high-GWP HFCs and thus do not contribute to emission savings. Cost
due to further increases of the HFC-price are thus not directly linked to actual emission
reductions and lead to distributional effects (see 6.2.1.4). As for operators’ total compliance
cost, the time horizon is on equipment installed in the 2024-2036 timeframe, as well as an
outlook to 2050.
A4.3 Macroeconomic modelling (JRC-GEM-E3 model)
A4.3.1 JRC-GEM-E3 Model Overview
JRC-GEM-E3140
(General Equilibrium Model for Economy-Energy-Environment) is a
recursive dynamic Computable General Equilibrium model operated at the European
Commission’s Joint Research Centre. It is a global model, covering the 27 EU Member
140
https://joint-research-centre.ec.europa.eu/gem-e3/gem-e3-model_en
110
States, alongside 15 other major countries or world regions. With a detailed sectoral
disaggregation of energy activities (from extraction to production to distribution sectors) as
well as endogenous mechanisms to meet emission constraints, the JRC-GEM-E3 model has
been extensively used for the economic analysis of climate and energy policy impacts.
Divided into 35 sectors of activity, firms are cost-minimizing with Constant Elasticity of
Substitution (CES) production functions. Sectors are interlinked by providing goods and
services as intermediate production inputs to other sectors. Households are the owner of the
factors of production (skilled and unskilled labour and capital) and thereby receive income,
used to maximize utility through consumption. Household consumption follows a linear
expenditure demand system, translating production outputs by industry into 14 final
consumption categories via a consumption matrix, while government consumption is
considered exogenous. Bilateral trade-flows are allowed between countries and regions using
the Armington trade formulation where goods from different goods are imperfect substitutes.
In 5-year steps, an equilibrium is achieved at goods and services markets, and for factors of
production through adjustments in prices.
Figure 14. A schematic representation of the JRC-GEM-E3 model
Source: JRC-GEM-E3 model
The JRC-GEM-E3 model is normally applied to compare (various) policy options against a
baseline scenario, representing the evolution of the global economy under current energy and
climate policies. The model can be used to assess the impacts of the energy and climate
policies on macroeconomic aggregates such as GDP and employment. Further relevant
results by JRC-GEM-E3 include sectoral output, investment, employment, exports, imports,
and GHG emissions.
A4.3.2 Description of the baseline
The starting point of the analysis is the EU Reference Scenario 2020, the common baseline
developed for the Fit for 55 impact assessments. It provides projections for energy demand
and supply, as well as GHG emissions in all sectors of the European economy under the
current EU and national policy framework. It embeds in particular the EU legislation in place
to reach the 2030 climate target of at least 40 % compared to 1990, as well as national
contributions captured in the National Energy and Climate Plans to reaching the EU 2030
energy targets on energy efficiency and renewables under the Governance of the Energy
111
Union. Projections for GDP, population and fossil fuel prices take into account the impact of
the COVID-19 crisis and are aligned with the 2021 Ageing Report141
. A more detailed
description can be found in the impact assessment covering the revision of the ETS
Directive142
.
The JRC-GEM-E3 baseline integrates inputs from energy system models (generally PRIMES
for EU Member States and POLES-JRC for the rest of the world) on a number of variables of
interest, such as a detailed use of energy products by consumers, global fuel prices, etc. The
implementation of the EU Reference scenario into JRC-GEM-E3 is using the Piramid
methodology143
, reproducing the energy balances of the PRIMES model for the EU
Reference scenario and being fully harmonized with the macro data used to drive PRIMES
for the EU (and UK). For non-EU regions (except UK), energy balances were taken from
POLES-JRC, in particular the model runs produced for the Global Energy and Climate
Outlook 2020144
. These also take into account the macroeconomic consequences of COVID-
19 and likely (persistent) changes in the transportation sector.
A4.3.3 Implementation of the F-gas reduction scenarios in JRC-GEM-E3
The JRC-GEM-E3 model is used in this impact assessment to determine the macroeconomic
implications of the three scenarios, incorporating the cost implications derived from the
AnaFgas model as an input. Under this set-up, the JRC-GEM-E3 model’s own representation
of f-gases is not used, instead only the economic consequences arising from additional
abatement cost, cost savings (e.g. from lower energy use or reduced equipment expenditure)
and increased user cost (due to cost increases in end user cost due to the value of the HFC
quota) are represented in the model.
In this impact assessment (and contrary to the set-up chosen in the 2012 impact
assessment145
), an end user perspective is taken. The modelling allocates the burden of
abatement and the changes in costs on end users. Compared to an upstream modelling
approach which models the cost of f-gas abatement on the chemical sector, this approach
better targets the limited number of specific downstream sectors that are affected.146
Further,
this approach better represents the situation with respect to trade of f-gases.147
The end user
141
Potentially need to add a reference: The 2021 Ageing Report: Underlying assumptions and projection
methodologies https://ec.europa.eu/info/publications/2021-ageing-report-underlying-assumptions-
and-projection-methodologies_en
142
SWD(2021)601
143
See https://joint-research-centre.ec.europa.eu/global-and-eu-macroeconomic-baselines-policy-
assessments_en
144
Keramidas, K., Fosse, F., Diaz-Vazquez, A., Schade, B., Tchung-Ming, S., Weitzel, M., Vandyck, T.,
Wojtowicz, K. Global Energy and Climate Outlook 2020: A New Normal Beyond Covid-19, doi:
10.2760/608429, JRC123203.
145
SWD(2012) 364
146
The chemical sector in JRC-GEM-E3 is relatively broad and chemicals leading to F-gas emissions only
contribute a small fraction of the sector. However, in the upstream approach, all users of chemicals are
equally affected; the effects are concentrated in the chemical industry sector. Other implications, e.g.
energy savings on end users are difficult to implement under the upstream approach.
147
In the upstream approach, imported chemicals are a substitute to domestic chemicals. However, both
imports and domestic products are covered by the F-gas regulation.
112
approach sheds light on the effects of various industries and households, taking advantage of
the endogenous demand adjustments of the JRC-GEM-E3 model, which determine changes
to demand for intermediate and final products. The JRC-GEM-E3 top-down modelling
therefore complements the bottom-up analysis carried out in the AnaFgas model by providing
a macroeconomic view, calculating effects on GDP, employment etc. Through the
interlinkages between sectors, JRC-GEM-E3 further reports results on upstream sectors, such
as supplies to the equipment sectors. Consistent with this approach, changes in the user cost
due to a change in the value of the HFC quota are also modelled at the level of the end user,
assuming a full pass through of the cost to the end user.
The end user approach facilitates the implementation handshake between the AnaFgas model
and JRC-GEM-E3 model, as the costs provided by AnaFgas are in categories of end users.
The allocation of costs (or savings) to the end users in JRC-GEM-E3 is performed in two
steps. First, end-users of the technologies covered by AnaFgas inputs are mapped to the
various agents (sectors, households) in the JRC-GEM-E3 model. Second, the costs are
allocated across the EU-27 Member States using population, or alternative indicators when
available. This downscaling of EU aggregate numbers allows reporting impacts for the EU
North and South regions. Cost increases (or decreases) for each category are reported by
AnaFgas in five categories (chemicals, equipment, services, energy, and user cost due to the
HFC quota) which are mapped to the corresponding JRC-GEM-E3 sectors.148
The additional
purchases (savings) required for abatement are then available in a two-dimensional variable
capturing the provider and end user of abatement, which can be readily used in the JRC-
GEM-E3 model equations.149
Additional purchase requirements increase the demand from
sectors providing abatement and increase the cost of the end use products while the opposite
holds true for cost reductions.
148
Energy is allocated to electricity for stationary air conditioning and heat pumps, while for mobile air
conditioning, the fuel mix of the commercial transport sector of JRC-GEM-E3 was used (no energy
saving was reported for private vehicles). Energy savings for households are allocated to the household
consumption category “Fuels and Power”. This reflects the modelling of durables and related non-
durables purchases in JRC-GEM-E3.
149
See Weitzel, M., Saveyn, B., & Vandyck, T. (2019). Including bottom-up emission abatement
technologies in a large-scale global economic model for policy assessments. Energy Economics, 83, 254-
263.
113
Table 21. Mapping of AnaFgas model sectors to JRC-GEM-E3 sectors and regions
AnaFgas sector Equipment
operators / end
users
Correspondence with JRC-GEM-E3
end users
Indicator used for allocation to Member States Source for indicator
Domestic Refrigeration Private
Households
Households (purchase of appliances) Population European Commission 2021
Ageing Report
Commercial refrigeration -
Hermetics
Commerce: Sale of
food to customers
Market Services Population European Commission 2021
Ageing Report
Commercial refrigeration -
Condensing units
Market Services Population European Commission 2021
Ageing Report
Commercial refrigeration -
Central systems
Market Services Population European Commission 2021
Ageing Report
Industrial refrigeration -
small
Cold storage in
food industry and
by retailers
Consumer goods (50%) & Market
Services (50%)
Population European Commission 2021
Ageing Report
Industrial refrigeration -
large
Consumer goods (50%) & Market
Services (50%)
Population European Commission 2021
Ageing Report
Transport refrigeration -
Vans
Distribution &
delivery of food
Market Services Population European Commission 2021
Ageing Report
Transport refrigeration -
Trucks & Trailers
Market Services Population European Commission 2021
Ageing Report
Transport refrigeration -
Ships
Fishing vessels Livestock Distribution of fishing vessels by number (weight
50%) and size (weight 50%)
Eurostat [fish_fleet_alt]
Room AC - Moveables Private homes &
offices,
Households (purchase of appliances) Energy use for cooling in residential buildings EU Reference 2020
Room AC - Single split equipment under
control of
inhabitants
Households (purchase of appliances) Energy use for cooling in residential buildings EU Reference 2020
Room AC - Rooftop Larger residential
or commercial
buildings, centrally
operated
equipment
Services (Market and non-market) Energy use for cooling in commercial buildings EU Reference 2020
Room AC - VRF Services (Market and non-market) Energy use for cooling in commercial buildings EU Reference 2020
Minichillers Commercial &
industrial
buildings, centrally
operated
equipment
Services (Market and non-market) Energy use for cooling in commercial buildings EU Reference 2020
Displacement chillers -
small
Services (Market and non-market) Energy use for cooling in commercial buildings EU Reference 2020
Displacement chillers -
large
Services (Market and non-market) Energy use for cooling in commercial buildings EU Reference 2020
Centrifugal chillers Large commercial
& industrial
buildings, centrally
operated
Services (Market and non-market) Energy use for cooling in commercial buildings EU Reference 2020
114
equipment
Heat pumps - small Private homes,
equipment under
control of
inhabitants
Households (purchase of appliances) Energy use for heat pumps in residential buildings EU Reference 2020
Heat-pumps - medium commercial
buildings
Services (Market and non-market) Energy use for heat pumps in commercial
buildings
EU Reference 2020
Heat pumps - large Larger residential,
commercial or
industrial
buildings, centrally
operated
equipment
All industrial and services sectors,
households through district heat
Use of steam EU Reference 2020
Mobile AC - Passenger
cars
Private &
commercial
owners of
passenger cars
Households (purchase of private
vehicles)
Stock of private cars EU Reference 2020
Mobile AC - Buses Bus transport
undertakings
Land transport Stock of buses EU Reference 2020
Mobile AC - Trucks N1 Operators of road
vehicles for
commercial
transport of goods
Land transport Stock of light-duty vehicles EU Reference 2020
Mobile AC - Trucks N2 Land transport Stock of heavy-duty vehicles EU Reference 2020
Mobile AC - Trucks N3 Land transport Stock of heavy-duty vehicles EU Reference 2020
Mobile AC - Passenger
ships
Water transport
undertakings:
Ferries / cruise
ships etc
Water transport Activity (pkm) of passenger ships EU Reference 2020
Mobile AC - Cargo ships Water transport
undertakings:
transport of goods
Water transport Activity (tkm) of freight ships EU Reference 2020
Mobile AC - Tram Public transport
operators
Land transport Activity (pkm) of trams and metro EU Reference 2020
Mobile AC - Metro Land transport Activity (pkm) of trams and metro EU Reference 2020
Mobile AC - Train Land transport Activity (pkm) of trains EU Reference 2020
Aerosols - technical Domestic &
industrial
applications
Chemicals Output of chemical sector JRC-GEM-E3 baseline
Aerosols - MDIs Domestic use
(pharmaceutical
products)
Households (medical and health
expenditures)
Population European Commission 2021
Ageing Report
Fire extinguishers Special
commercial &
Other equipment manufacturing Population European Commission 2021
Ageing Report
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industrial sectors
Solvents Special industrial
applications
Chemicals Output of chemical sector JRC-GEM-E3 baseline
Foam OCF Insulation of
buildings and
equipment
(fridges, freezers
etc)
Market Services Population European Commission 2021
Ageing Report
Foam XPS Market Services Population European Commission 2021
Ageing Report
Foam PU spray Market Services Population European Commission 2021
Ageing Report
Foam PU non-spray Market Services Population European Commission 2021
Ageing Report
Switchgear MV Operators of
electrical
transmission &
distribution grid
Electricity supply Output of electricity supply sector JRC-GEM-E3 baseline
Switchgear HV Electricity supply Output of electricity supply sector JRC-GEM-E3 baseline
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A4.3.4 Relevant closure rules and key assumptions
Alternative model assumptions can be made about a number of model parameters and
closure rules of the JRC-GEM-E3 model. In this assessment, it was assumed the labour
market is imperfect, i.e. no full employment is assumed. The implementation is based on
a wage curve where increasing real wages lead to increased labour supply while
decreasing real wages lead to increased unemployment. The policy scenario can therefore
lead to increases or decreases of employment.
The modelling of the increased user cost arising from the value of the HFC quota is
implemented as a tax faced by the respective end user. This assumes a full path through
of cost to the end user. As government expenditure is held constant in the policy
scenarios relative to the baseline, any additional revenue is recycled lump sum to
households. Therefore, this implementation has an influence on the consumption choices
of households and input choices of firms due to altered product prices, but no direct
influence on income of the representative household. As there is only one representative
household per region, this modelling approach is equivalent to modelling free allocation
of quota rights to firms, which in turn would include the value of the quota allocation in
the final price of their product, leading to windfall profits. Under both a tax and free
allocation with windfall profits, user prices would change in the same way and in both
cases the representative household would ultimately obtain the revenues (either via lump
sum transfers from the government or in the form of capital rents/dividends paid by
firms).150
Obviously, the modelling outcome therefore would also be the same for any
combination of a quota allocation price and free allocation to industry.
The main limitation of the GEM-E3 model is the ability of the model to pick up very
small impacts on macro-economic parameters, that may result for some variables from F-
gas policies, as the latter only affect specific sectors and stakeholders of the overall
economy.
A4.4 Determination of administrative costs
For administrative costs to industry, industrial stakeholders were asked to provide
information on costs for any relevant policy options. The Regulation affects many
different types of companies (gas producers, distributors, importers, equipment
manufacturers, service companies, end users etc.) and in many different ways (different
measures affect different companies (types)). The data collected was therefore
necessarily incomplete. This required further analysis based on the data collected taking
these issues into account. The cost for each measure is therefore based upon a
combination of expert judgement and feedback received from stakeholders. Table 55 in
Annex A15 provides the details of the methodology used to calculate the impact upon
administrative burden for each policy option. This includes the approach used to
determine the number of companies impacted by the proposed measure, and the change
150
If the modelling would include more than one representative household, the two options would
lead to different distributional consequences.
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in administrative cost per company as a result. For a number of measures the
administrative cost is expected to be consistent across different sized companies. For
others an adjustment that had to be made due to the fact that the stakeholder consultation
focussed primarily upon interviews and feedback from large business organisations.
From the data provided by stakeholders, average days per measure was used in
preference to monetary costs per measure since it was considered there was a risk that the
monetary estimates could include costs which are rather adjustment costs – e.g. for costs
associated with the phase-down. The final number of estimated working days was
calculated based upon the aggregated working days for each company. A cost of EUR
230 per day was applied to calculate a total estimated cost (based on an assumed average
annual salary of around EUR 50,000, and annual days worked around 220).
At European level, the costs were estimated by the DG CLIMA and the EEA. Table 63.
Detail of the calculation and assumptions for administrative burden of the European
Commission and Table 64. Detail of calculation and assumptions for administrative
burden of the EEA in Annex A14.4.1 give the details of the assessment approach and
assumptions made.
For Member States’ costs, all 27 Member States were asked to fill out a questionnaire
related to the administrative costs expected for relevant policy options. Evidence and data
regarding the potential costs was somewhat scarce, given the nature of the exercise:
future not yet incurred needed to be estimated, and administrative burden typically
depends on the detailed implementation of the future measure. The assessment is
therefore based on qualitative sentiment provided by the stakeholders, coupled with the
administrative burden estimates from the evaluation for related measures and expert
evaluation. Table 65 in Annex A14.4.2 gives the details of the assessment approach and
assumptions made.