China MEE Released the Regulations on the Management of Ozone Depleting Substances (ODS) and HFCs (draft) for Public Comment

Background:

The Kigali Amendment to the Montreal Protocol is an international agreement to gradually reduce the consumption and production of hydrofluorocarbons (HFCs) and it was agreed upon in October 2016. The Amendment sets two different timelines for the developed countries and the developing countries respectively:

Developed countries should take the initiative to cut down the production of greenhouse gases. These countries must ensure that for the twelve-month period commencing on 1 Jan. 2019, their calculated levels of the production of greenhouse gases shall not exceed 90% of annual average of the calculated levels of the production of greenhouse gases in 2011, 2012 and 2013; and from 2036, the production shall not exceed 15%.

Developing countries are divided into 2 groups. Group One covers most of the developing countries, including China and Africa countries. Group One developing countries shall freeze the consumption of HFCs in 2024 and reduce the consumption of HFCs from 2029; Group Two developing countries shall freeze the consumption of HFCs in 2028 and reduce the consumption of HFCs from 2032.

HFCs under the management of Kigali Amendment cover: R134, R134a, R143、 R245fa, R365mfc, R227ea, R236cb, R236ea, R236fa, R245ca, R43-10mee, R32, R125, R143a, R41, R152, R152a and R23. Besides, some HFC mixtures, including R404A and R410A are also subject to the management of Kigali Amendment.

In accordance with the requirements of Kigali Amendment, China will cut down the production of the above HFCs from 2029 at the latest. For this reason, China MEE has published the Regulations on the Management of Ozone Depleting Substances (ODS) and HFCs (draft for public comment). MEE will also prepare and release the Inventory of ODS and HFCs subject to Import & Export Control.

In accordance with the requirements of draft Regulations, ODS and HFCs will be managed separately. Activities regarding the production, use, sales, import and export of the ODS and HFCs are subject to the management of the Regulations.

The aim of this regulation is to gradually eliminate the production and use of ODS in refrigerants, foaming agents, fire extinguishing agents, solvents, cleaning agents, processing aids, pesticides, aerosols and swelling agents; and gradually reduce the production and use of HFCs in refrigerant, foaming agent, extinguishing agent, solvent, cleaning agent, aerosol, etc.

Enterprises must apply for Quota License for the following activities:

• The production of ODS and HFCs;
• The use of ODS and HFCs in controlled uses exempt from total quantity control;
• The import and export of ODS and HFCs;

Enterprises must apply for record under the Regulations for the following activities:

• The sales of ODS, HFCs and their mixtures;
• The use of ODS and HFCs in controlled uses and raw materials (except controlled uses exempt from total quantity control);
• Activities regarding the maintenance of refrigeration equipment, refrigeration system as well as fire extinguishing system containing ODS and HFCs;
• Activities regarding the recycling, reusing or destroying of ODS and HFCs.
  

Related enterprises shall submit quota application to MEE before 31 Oct. each year; MEE will review the applications before 20 Dec. and issue the Quota License for the next year to the qualified enterprises.

Enterprises importing and exporting substances listed in the Inventory of ODS and HFCs subject to Import & Export Control shall apply for quota to the competent authority in accordance with the requirements of the Regulations.

Enterprises subject to record (use and sales) shall conduct record with the competent authority before 30 Nov. each year.

The draft Regulation is open for public comments before 22 Jun. 2020.

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