Proposal for a Council Regulation (EC) on substances that deplete the ozone layer
Date: 1998-08-14
Institutions: European Commission
Subjects: halogen, ozone, pollution control measures, stratospheric pollution, substitute product

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  14.08.1998 

COM(1998) 398 final 

98/0228 (SYN) 

Proposal for a 
COUNCIL REGULATION (EC) 
on substances that deplete the ozone layer 

(presented by the Commission) 

EXPLANATORY  MEMORANDUM 

This  proposal  for  a  new  Regulation  on  substances  that  deplete  the  ozone  layer 
would  replace  Council  Regulation  (EC)  No  3093/94.  It  reflects  the  rapid  increase 
in  availability  of  alternatives  to  ozone  depleting  substances  such  as  HCFCs 
and  methyl  bromide.  There 
the 
European Community  for  further  action  to  reduce  the  production  and  use  of 
ozone depleting substances to provide additional protection for the ozone layer. 

strong  political 

throughout 

support 

is 

SUMMARY 

This proposed revision of Council Regulation (EC) No 3093/94 was requested by the 
Council  following  the  Vienna  Meeting  of  the  Parties  to  the  Montreal  Protocol  on 
substances that deplete the ozone layer in December  1995. The new Regulation would 
implement  further  amendments  and  adjustments  to  the  Protocol  agreed  at  the Ninth 
Meeting of the Parties in September  1997. Furthermore, the proposal reflects  progress 
in  the  development  and  the  market  availability  of  alternatives  to  ozone-depleting 
substances, and experience made with the operation of Regulation  (EC) No 3093/94. 
In  some respects, the  proposed  measures  go  further  than  the  obligations  imposed  at 
present  under  the  Montreal  Protocol  for  industrialised  countries.  This  is  already  the 
case  with  the  existing  Regulation,  under  which  in  particular  the  production  of 
chlorofluorocarbons  (CFCs)  was  phased  out  by  January  1995,  one  year  ahead  of 
Montreal  Protocol obligations. The phaseout included an exemption  for production  for 
limited  "essential uses" and to satisfy  basic domestic needs of developing countries. 

Although  a  lot  has  been  achieved  at  international  level  and  in  terms  of  the 
Community's  contribution  to  protecting  the  ozone  layer,  the  task  is  far  from 
accomplished.  Recent  measurements  indicating  record  low  levels  and  extent  of 
ozone depletion  show that further  protection  of the ozone layer  is essential  especially 
within  the  next  ten  years  when  ozone  depletion  is  expected  to  peak.  The  Scientific 
Assessment  Panel  of  the  Montreal  Protocol  concluded  that  the  most  effective 
measures  capable  of reducing the extent  of ozone  depletion,  next  to phasing  out  the 
use  of  CFCs,  are  tighter  controls  on  hydrochlorofluorocarbons  (HCFCs)  and 
methyl bromide. There are also strong political arguments for the Community to take 
the  lead  in  this  decisive  final  phase  towards  the  total  phaseout  of  ozone-depleting 
substances,  a  result  to  which  both  industrialised  and  developing  countries  are 
committed under the Montreal Protocol. The measures proposed here have been based 
on thorough  evaluation  of the  availability  of  alternatives  to both  HCFCs  and  methyl 
bromide.  They  are  shaped  in  a  way  to  provide  a  balance  between  environmental 
impact and costs for the economic operators concerned and to give them enough time 
to make the transition. They should enable Europe to take the lead  in developing and 
implementing  alternatives  in  a  context  where  global  phaseout  of  ODS  has  already 
been agreed under the Montreal Protocol. 

The main elements of the proposal are as follows: 

(i) 

Further action on hydrochlorofluorocarbons  (HCFCs) 

-  reduction  of  the  HCFC  cap  placing  on  the  market  "cap" from  2.6% 

to 2% 

The Council of Environment Ministers agreed to a 2% cap as a negotiating 
mandate  for  the  1995 Meeting  of  the  Montreal  Protocol,  and  repeated  its 
call  for  a  2% cap  in the  mandate  for  the Ninth  Meeting  of  the  Parties,  in 
September  1997 in Montreal. 

-  tighter HCFC end use controls in Article 5 of the Regulation 

The  proposal  is  to  phaseout  HCFCs  where  alternatives  exist.  This  would 
give  effect  to Article  2F  (7) of the Montreal  Protocol,  to  limit  "the use of 
[HCFCs] to those applications where other more environmentally suitable 
alternative substances or technologies are not available ". 

-  production freeze and production phaseout schedule for HCFCs 

The  introduction  of production  controls  for  HCFCs,  as  is already  the  case 
for  all  other  controlled  substances,  is  a  measure  the  Community  strongly 
supports under the Montreal Protocol. The proposed schedule is designed to 
avoid  imposing  unfairly  disadvantages  to  European  producers  on  the 
international market. 

(ii) 

Phaseout  for  the  production  and  consumption  of  methyl  bromide  by 
1 January 2001, with exemptions for "critical uses" 

The  proposed  phaseout  date  2001  is  based  on  the  availability  of  good 
alternatives  to  replace  methyl  bromide,  while  providing  the  necessary 
flexibility  of  a  "critical  use  exemption"  to  respond  to  those  situations  where 
particular problems are encountered by farmers in making this transition. 

(iii)  General  prohibition  of  the  placing  on  the  market  and  use  of  CFCs  and 

other fully halogenated substances 

Given  that  the  production  prohibition  for  CFCs  has  been  in  place  in  the 
Community  since  1995, and  that  for  halons  since  1994,  and  that  numerous 
alternatives  exist,  it  is  now  appropriate  to  prohibit  the  marketing  of  these 
substances,  subject  to  the  possibility  of  'essential  uses',  and  some  limited 
exemptions to ease transition. 

(iv)  Controls of trade 

The  proposal  includes  provisions  for 
the  authorisation  of  exports  of 
ozone-depleting  substances,  in  order  to  implement  the  export  licensing 
requirements introduced into the Montreal Protocol in September  1997. This is 
an  important  measure  to  allow  cross-checking  of  information  with  other 
Parties,  and  ultimately  contribute  to  eliminating  the  risk  of  illegal  trade  in 
ozone-depleting substances. 

1. 

NEED FOR AND OBJECTIVE OF THE PRESENT PROPOSAL 

1.1 

Legal considerations 

1. 

The purpose of the present proposal  is to replace the existing Regulation (EC) 
No 3093/94 in order to take into account: 

* 

changes  to  the  Montreal  Protocol,  the  international  convention  on 
ozone depleting substances (ODS), to which the Community is Party, 

2. 

3. 

4. 

5. 

* 

* 

technical  progress,  particularly  by  EC  industries,  in  the  development 
and  implementation  of  alternatives  to  substances  which  damage  the 
ozone layer, 

experience with the operation of Regulation  (EC) No  3093/94 and the 
fact that some existing provisions have become redundant. 

As  significant  changes  are  being  proposed  to  the  existing  Regulation,  it  is 
appropriate  to replace  it by this new proposal. This will  enhance  legal  clarity 
and transparency. 

The  proposed  regulation  is  based  on  Article  130s(l)  of  the  EC  Treaty,  as  is 
Regulation  (EC)  No  3093/94.  The  aim  of  the  Regulation  is  the  phaseout  of 
ozone-depleting substances. The main content of the proposal is to prohibit, as 
a rule, the production, placing on the market and use of controlled  substances 
according to the fixed  schedule and modalities. It also contains provisions on 
exports, the recovery of used controlled substances, the control of leakages and 
reporting. The present  proposal  reinforces  existing control  measures, but does 
not enlarge the scope as compared to Regulation (EC) No 3093/94. 

The  depletion  of  the  ozone  layer  being  one  of  the  most  serious  global 
environmental  issues, the international community considers ozone depletion a 
threat  to  warrant  completely  phasing  out  the  production  and 
sufficient 
1987 
consumption 
Montreal Protocol  on  substances  that  deplete  the  ozone  layer,  and  its 
subsequent adjustments and amendments. 

ozone-depleting 

substances, 

through 

the 

of 

The  new  Regulation  is  necessary  to  implement  the  commitments,  which  the 
Community  has  accepted  under  the  1995  Vienna  adjustment  and  the  1997 
Montreal  adjustments  and  amendments  to  the  Montreal  Protocol.  These 
include  a  final  phaseout  date  and  reduction  schedule  for  methyl  bromide 
and  the  introduction  of  a  licensing  system  for  imports  and  exports  of 
ozone-depleting  substances,  which  requires  additional  measures  on  export 
authorisation  and  notification  to  be  established  within  the  Community.  A 
number  of  other  decisions  of  the  Meetings  of  the  Parties  also  require  to  be 
implemented, inter alia on reporting requirements. 

In some aspects, the present proposal  goes further  than the Montreal  Protocol 
as  last  amended,  or  contains  more  detailed  provisions.  The  possibility  for 
Parties to adopt more stringent control measures is recognised  in the Protocol, 
and  applied  by  a  numbe.  of  Parties.  For  example,  the  Community  phaseout 
date  of  CFCs  was  oae  year  ahead  of  the  'industrialised  countries'  obligation 
under  the  Protocol  (1995  as  compared  to  1996).  The  overall  approach 
followed  by the Protocol  is expressed  in its preamble:  "Determined to protect 
the  *Krone  layer  by  taking precautionary  measures  to  control  equitably  the 
total global emissions of substances that deplete it, with the ultimate objective 
of  the ir  elimination  on  the  basis  of  developments  in  scientific  knowledge, 
taking  into  account  technical and  economic considerations and  bearing  in 
mind the developmental needs of developing countries.  " For the  Community, 
tr  s precautionary  \ r  iciple is defined  as a basis of its environmental  policy in 
it  measurerr "  ' • in-r\<-?ing  record  levels  and  extent  of 
/  rticie  130r(2).  R= 

6. 

ozone  depletion  show  that  further  protection  of  the  ozone  layer  is  essential 
(see below). Furthermore, technical  and economic developments in the market 
availability  of  alternatives  in particular  to  HCFCs  and  to  methyl  bromide  put 
the  Community  in  a  position  where  the  proposed  measures  can  be  taken  at 
reasonable cost. 

In relation to HCFCs, the proposed  measures should  be seen in the context  of 
Article  2F  (7)  of  the  Montreal  Protocol,  which  requires  each  Party  to 
endeavour to ensure that  "the  use of [HCFCsJ is limited to those  applications 
where  other  more  environmentally  suitable  alternative  substances  or 
technologies are not available ". In implementing this Article, the Community 
has  agreed  controls  on  the  use  of  HCFCs  in  Article  5 of  Council  Regulation 
3093/94.  In  order  to  be  able  to  take  account  of  the  development  and 
availability  of  alternatives,  already  the  existing  Regulation  foresees  the 
possibility  of this  Article  to  be  modified  'in the  light of  technical progress '. 
Since  the  adoption  of  this  Regulation,  there  has  been  considerable  progress 
and a number of alternatives have come on the market quicker than expected at 
that  moment,  and  the  present  proposal  responds  to  this  situation 
in 
implementation  of Article 2 F (7). This is directly the case with the  reinforced 
use  controls  proposed  in  Article  5, and  by  consequence,  also  reflected  in  the 
proposed reduction of the cap for the placing on the market of HCFCs. 

1.2 

Environmental considerations 

7. 

8. 

Ozone  levels  in  the  stratosphere  have  decreased  by  6  to  10%  compared  to 
1980.  The  World  Meteorological  Organisation  (WMO)  has  reported  that  in 
1996  the  Antarctic  ozone  hole  covered  20  million  km2  for  over  40  days  and 
that  depletion  over  Scandinavia,  Greenland  and  Siberia 
reached  an 
unprecedented 45%. 

The following  results obtained by the EC's stratospheric ozone research within 
the  Environment  and  Climate  Programme,  particularly 
through  major 
European  campaigns  EASOE  1991/92,  SESAME  1994/95,  APE  1996/97, 
strongly  support  and  scientifically  endorse  the  need  for  renewed  and  stronger 
action for the protection of the ozone layer: 

* 

* 

* 

Further decreases in the lower  stratospheric  ozone concentrations  have 
been  consistently  observed  during  the  last  decade  not  only  in 
Antarctica, but also in the Arctic polar regions. In the Antarctic spring, 
effectively  all the ozone is destroyed at altitudes between  16 and 20 km 
('ozone  hole'),  while  losses  of  50%  have  been  seen  at  the  same 
altitudes in the Arctic during the last three winters  1994-1997. 

Over the Northern  hemisphere  mid-latitudes, the trend  in total  column 
ozone  are  largest  in  winter  and  spring,  and  current  spring  levels  are 
more than  10% below those in the 1970s. 

The record  low temperatures  in the  Arctic  stratosphere  during the  last 
years are likely to be part  of a longer trend  induced by climate  change 
mechanisms.  These  low  temperatures  can  amplify  the  mechanisms 
behind the ozone depletion in the future. 

* 

UV  radiation  measurements  carried  out  in  Europe  during  the  last 
decade  show  that  spectral  UV-B  levels  continued  to  increase  at  rates 
close to about 2% per year. 

The  1994 UNEP Assessment of the Environmental Effects  of Ozone Depletion 
described  the profound  effects  of increased  UV-B radiation  on human  health, 
animals,  plants,  micro-organisms,  materials  and  air  quality.  A  1996  UNEP 
report noted: 

* 

* 

* 

* 

* 

further  evidence  of  health  effects  (skin  cancers,  cataracts,  immune 
deficiency  defects); 

new  evidence  of  effects  on  terrestrial  ecosystems  (altered  growth  and 
physiological processes); 

additional  evidence  of  widespread  damage  to  aquatic  ecosystems, 
including those supporting food chains; 

effects  on biogeochemical cycles; 

materials damage (reduced tensile extensibility of many plastics). 

Summary of direct and indirect effects of increased UV-B 

Productivity 

Health 

Amenity 

Existence 

Impact on crops, 

Immune system 

Full use of outdoors 

Certain  marine 

phytoplankton, 
plastics, tourism, 
encourages 
monoculture 

disorders, cataract, 

(tourism, sport, 

Organisms and their 

skin cancer 

recreation) 

Food chain 

10. 

The currently  used  ODP  ("ozone-depleting  potential")  values  (suggesting,  for 
instance, an ODP of 0,11 for  HCFC  141b) are calculated  on a very  long time 
scale.  According  to  the  UNEP  Assessment,  however,  HCFC  141b,  for 
example, destroys roughly 2/3 as much ozone as CFC-11 during the ten years 
immediately  after  emission.  Similar  figures  apply  to  other  HCFCs  and 
methyl bromide. Bromine is estimated  to be about  50 times more efficient  than 
chlorine  in destroying stratospheric ozone on a per-atom  basis. On the basis of 
these  calculations,  the  Scientific  Assessment  Panel  concluded  in  1994  that 
elimination  of  global  methyl  bromide  emissions  from  agricultural,  structural 
and  industrial  activities  by  2001  would  reduce  future  ozone  losses  by  13% 
over  the  next  50 years, relative  to  full  compliance  with  the  provisions  of  the 
Protocol  at that time. The Panel  furthermore  concluded  that the elimination  of 
emissions  of  HCFCs  by  2004  would  reduce  ozone  losses  over  the  next 
50 years by 5%, with a significant  share of the benefits  in the near  future. 

11. 

Additional  measures  on  HCFCs  and  methyl  bromide,  which  have  short 
atmospheric  lifetimes  are therefore  the most  effective  way to reduce  the  peak 
chlorine  and  bromine  loading  in  the  stratosphere,  thus  allowing  for  a  less 
severe  ozone  depletion  during  the  next  few  decades.  Moreover,  a  quicker 

7 

phase-out  will  accelerate the recovery  of the ozone  layer and will  shorten  the 
period  of  the  most  serious  ozone  depletion.  It  is  important  to  recognise 
that  only  by  taking  all  the  measures  in  the  present  proposal  can  the  full 
environmental  benefit  be  obtained.  These  steps  would  also  provide 
"secondary effects",  through  the  promotion  of  non-ODS  alternatives,  in 
particular to developing countries. These countries would thus be discouraged 
from  investing in new ozone-depleting industries relying on HCFCs. 

1.3 

Political considerations 

12. 

13. 

14. 

15. 

16. 

including 

In  Vienna, 

twenty-one  Parties, 

The  potential  extent  of  ozone  damage  from  HCFCs  and  methyl  bromide  has 
led  a  number  of  Parties,  including  the  Community  and  Member  States,  to 
commit  themselves  to going  beyond  the  measures adopted  in  Vienna  in  1995 
and  Montreal  1997. 
ten 
Member  States,  signed  a  voluntary  Declaration  on  methyl  bromide, 
encouraging the adoption of alternatives and stating their determination  to take 
all  appropriate  measures  to  limit  methyl  bromide  consumption  to  strictly 
necessary  applications,  and  to  phase  it  out  as  soon  as  possible.  While  the 
Montreal  meeting  advanced  the  phaseout  date  for  developed  countries  from 
2010  to  2005,  and  agreed  upon  2015  as  a  phaseout  date  for  developing 
countries,  large users  of methyl  bromide  provide  for  more  advanced  dates  in 
their  domestic  legislation.  Faced  with  the  lack  of  progress  in  Montreal  on 
tightening  HCFC  controls, the  European  Community  and  all  Member  States, 
together with 22 other Parties, signed a declaration calling for further  action on 
HCFCs under the Protocol. 

A number  of Member  States have already introduced  more advanced  national 
legislation  on  methyl  bromide  and  HCFCs  as  compared  to  Regulation  (EC) 
No 3093/94  and  considerable  pressure  is  resulting  for  the  revision  of 
Community legislation in this direction. 

The  present  proposal  responds  to  the  Council's  request  to  strengthen 
the  Regulation,  expressed 
the 
Vienna Meeting of the Parties: " ...that after the Vienna meeting,  the conditions 
exist  to further  strengthen  the regulation taking into account inter alia the 
results of that meeting" . 

its  conclusions  adopted 

following 

in 

The proposals are consistent with the Community's position agreed since long 
on the HCFC cap of 2%: negotiating position already for the Seventh  Meeting 
of the Parties to the Montreal Protocol  in Vienna in  1995, this was  confirmed 
for the Montreal Protocol's "Tenth Anniversary" meeting. 

The  proposal  complements  the  phaseout  of  the  HCFC  use  in  Europe  by 
providing progressive phaseout  of HCFC production  in the perspective  of the 
global  consumption  phaseout  stipulated  by  the  Protocol.  This  is  an  effective 
step  in  encouraging  the  greater  take-up  of  the  alternatives  already  available, 
not  only  within  the  Community  but  in  particular  also  with  a  view  to 
developing  countries.  At  the  Montreal  Ninth  meeting  of  the  parties,  the 
European  Community  advocated  HCFC  production  controls  to  be  introduced 

17. 

18. 

19. 

20. 

into  the  Protocol.  Given  the  non-success  of  these  proposals,  the  Community 
and  all  the  Member  States  have  placed  their  determination  on  record  to 
continue  leading  the  way  on  HCFCs  and  on  production  controls  more 
specifically. 

In relation  to  methyl  bromide, the  Community  needs  to  respond  to  the  2001 
phaseout already agreed in USA/Canada and a number of Member  States. The 
proposed phaseout will not endanger European farming which might still need 
methyl  bromide  because  it  provides  a  flexible  procedure  for  critical 
use exemptions. 

In addition, in the light of illegal imports of CFCs into the Community, there is 
strong political  argument  to take further  measures  in relation  to removing the 
market  for  CFCs,  the  production  of  which  is  already  phased  out  in  the 
Community. The proposed  ban on the placing on the market  and use of CFCs 
is  an  effective  means  to  this  end,  which  has  also  been  advocated  by  the 
European Parliament, in a Resolution in September 1997. 

Lastly,  the  present  proposal  is  fully  consistent  with  the  proposal  for  a 
the 
European Parliament  and  Council  Decision  on 
European Community  Programme  of  policy  and  action  in  relation  to  the 
environment  and  sustainable  development  ("Towards  Sustainability")  which 
stipulates, in relation to ozone layer depletion, the need for  the Community to 
give particular attention to "strengthening its control measures on HCFCs and 
methyl bromide,  as well as on CFCs and halons.... '. 

review  of 

the 

the  development  of 

The  proposal  contributes  to  triggering 
long-term 
environmentally  sustainable  production  among  European  companies.  A wide 
range  of  alternatives  to  ozone  depleting  substances  has  been  developed  in 
recent  years,  not  least  by  European  industry.  The  Community  should  act  as 
quickly as possible to realise its environmental commitment under the Protocol 
to  foster  the  application  of these  new technologies, and  to  set  an example  to 
the  international  community,  particularly  to  developing  countries,  in  the 
protection  of  the  ozone  layer.  A  recent  policy  on  funding  adopted  under  the 
framework  of  the  Montreal  Protocol,  discouraging  the  conversion  to  HCFC 
technology  in developing  countries, will provide  further  market  opportunities 
to  Community  producers  of  non-HCFC  technologies  for  sales,  servicing  and 
technical advise. 

2. 

MAIN ELEMENTS OF THE PROPOSAL 

2.1  General economic considerations 

21. 

In view of the environmental  urgency, the objective  of the present  proposal  is 
to  advance  some  of  the  dates  to  reflect  technical  development.  When 
addressing the costs and  benefits  of the proposal,  it is necessary  to recall  that 
phaseout  is  already  agreed  for  the  substances  concerned  and  for  HCFCs,  the 
phase-out  date  in  Regulation  (EC)  No  3093/94  (2015)  would  remain 
unchanged.  For  methyl  bromide  a  phase-out  date  is  introduced  somewhat 
earlier than in the Montreal  Protocol. The cost/benefit justification  of phasing 
out the substances concerned is already implicit in the Montreal Protocol itself. 

For  HCFCs,  the  environmental  assessment  under  the  Montreal  Protocol  has 
resulted in their unambiguous listing as controlled transitional  substances. The 
questions  of  the  availability  of  alternatives  and  cost  considerations  are  dealt 
with below in relation to the individual measures proposed. 

22.  With  respect  to  the  investment  costs, which  will  be  incurred  in  changing  to 
alternatives, it is important to stress the following facts in general terms: 

* 

* 

Changes  which  incur  costs  for  some  sectors  of  the  Community's 
industry  will  produce  profits  for  other  sectors  such  as  producers  of 
alternative  substances.  Producers  of  ODS  and  equipment  or  products 
using these substances are frequently  also producing alternatives. 

Up-front  costs for  conversion  to  alternatives  may  be  higher  but  such 
costs  only  represent  a  minor  part  of  the  total  costs.  Benefits  from 
reduced  energy  consumption,  lower operating  costs and  other  benefits 
resulting from  the replacement of old techniques with newly developed 
ones may in many cases offset  the investment costs. 

23. 

Limited  evidence  is  however  available  to  illustrate  the  overall  economic 
benefits  of controlling ozone-depleting substances. Although no precise  figure 
can be attached  to the effects  caused  by increased  amounts of UV-B reaching 
the  Earth's  surface,  the  impact  of  such  radiation  increases  is  becoming 
the  environmental  and  economic 
increasingly  well  understood  and 
implications becoming increasingly clear. 

* 

* 

* 

Each% increase in UV-B radiation  has produced  a 2% increase  in skin 
cancer  in  light-skinned  populations,  resulting  in  significant  medical 
costs. Those costs are not confined to skin cancer, but are also linked to 
other health  effects. 

Damage  to  aquatic  ecosystems  strikes  at the  heart  of  the  human  food 
chain, and alterations in plant growth disturb the proper functioning  of 
terrestrial ecosystems. 

Accelerated  weathering of outdoor materials (degradation  of a number 
of  common  polymers  by  increased  UV-B  radiation)  will  give  rise  to 
significant  expense on a worldwide basis. 

We know that the costs of not taking further  action would be high. A number 
of studies have shown that the benefits of phasing out ODSs are clearly greater 
than  the  transition  costs.  For  instance,  in  1993,  the  US  Environmental 
Protection  Agency conducted  an extensive  review of the costs and  benefits  of 
its final  action on methyl bromide. It estimated, for the United  States, the total 
cost of phaseout  from  1994 to 2010 to be  USD  1.7  - 2.3 billion,  compared  to 
the  benefits  calculated  to  be  between  USD 14 and  56  billion  for  that  period 
(in total  between  USD 244  and  USD 952  billion).  These  benefits  result 
primarily  from  avoided  cases  of  non-melanoma  skin  cancer  (the  range  in 
values  resulting  from  different  estimates  for  the  value  associated  with 
human life). 

10 

2.2 

HCFCs 

24. 

25. 

26. 

27. 

The  proposed  measures  on  HCFCs  are  based  on  the  market  availability  of 
alternatives  for  present  HCFC  uses.  These  additional  use  controls  have 
consequences  for  the  quantities  of  HCFCs  which  will  be  needed  on  the 
Community  market  and hence for the  "cap". While the final  phaseout  date of 
2015  for  the  placing  on  the  Community  market  remains  unchanged,  the 
proposed  interim  cuts  reflect  the  use  bans.  Furthermore,  the  proposed 
production  controls  should  draw  the  political  consequence  of  the  availability 
of alternatives to HCFCs. 

(i) 

Availability of alternatives/End  use controls 

The main uses of HCFCs are in the refrigeration  and air conditioning, solvents 
*  and  foams  sectors as a substitute  for  CFCs. The proposed  end-use controls in 
Article  5 are  based  on  the  fact  that  environmentally  suitable  and  technically 
viable  alternatives  to  HCFCs  for  almost  all  HCFC  applications  are  now 
available at reasonable cost throughout the Community  (see Technical annex). 
Most  of them  are  produced  by EC  firms  (see Business impact assessment on 
individual sectors). The availability of HCFC alternatives has repeatedly been 
demonstrated  (e.g.  in  UNEP  reports  and  its  "OzonAction  newsletter",  in 
studies on specific  sectors by the environment agencies of Member  States and 
at  conferences).  Recently,  the  results  from  a  study  on  alternatives  to 
ozone-depleting substances, carried out by 'Prospect Consulting and Services' 
for  the  European  Commission,  provided  further  evidence  that  alternatives  to 
HCFCs exist for almost all uses. 

for 

study 

the  European  Commission, 

undertaken-  by 
Another 
"March Consulting  Group"  on  HCFCs  and  their  alternatives  ("the  March 
study"), also supports the feasibility  of introducing new end use controls: "// is 
reasonable  to  modify  the  current  regidation providing  that  the  measures 
proposed provide  a  balance between environmental impact  and  cost"  The 
authors of the study state that they favour a number of new end use controls as 
compared to the existing Regulation, arguing that  "such controls will ensure a 
faster phaseout  of HCFCs, will provide  a greater degree of fairness  between 
competing end  user companies and will help  chemical manufacturers  define 
their future  investment programmes. " 

Notwithstanding  the  availability  of  alternative  substances,  the  shift  to  non 
HCFC-technologies  has  not  yet  taken  place  in  many  European  markets  and 
industries and additional  regulatory incentives to cease HCFC use are needed. 
The  proposed  end  use  controls  in  Article  5  set  out  to  achieve  this  while 
reflecting  variations in the availability of alternatives for different  applications. 
The dates proposed  are to a large extent congruent  with the dates identified  in 
the  study  by  March  referred  to  above.  They  provide  reasonable  time  for 
HCFC-using industries to change to alternatives. The provisions also take into 
account  specific  problems  in  switching  to  non-ozone  depleting  substances, 
which  might  be  encountered  for  certain  applications  (see  Business  impact 
assessment and Technical Annex). 

It 

28. 

29. 

30. 

(ii) 

Economic implications 

As regards the costs for the transition,  some investment costs are unavoidable 
when making a change to non HCFC-technology. However, in many cases, the 
main reason  for  choosing an HCFC is that  it is essentially  a low cost  drop-in 
replacement  allowing  companies  to  postpone  the  capital  investment  required 
for  a  longer  term  change  of  process.  Hence,  amortisation  of  HCFC  costs 
should not pose a serious problem to HCFC-users. 

The March study in  1997 endeavoured to assess the direct conversion costs for 
a total ban on HCFC use by 1999 (2000 for  refrigeration),  However,  savings 
due to lower operating costs, particularly  likely to occur in the solvents sector, 
have  not  been  taken  into  account,  nor  have  the  increased  market  shares  of 
producers of alternatives been addressed. The costs in the refrigeration sector 
were  estimated  to  be  less  than  ECU 100 million  (or  under  2% of  the  annual 
turnover  of the  sector). The  costs  in the  solvents sector were  expected  to  be 
around  ECU  150 million  (<5% of  annual  turnover).  The foams  sector would 
face a conversion cost of about ECU  160 million or  15% of annual turnover. 

To  respond  to  this  assessment,  the proposal  provides  significantly  more  time 
for  phaseout  for those industries, where particularly high conversion  costs are 
likely to occur. For example the March  study suggested  that a phaseout  in the 
foams sector largely in line with the current proposal would cut costs to around 
ECU 40 million  or  around  4% of annual  turnover.  Furthermore,  essential  use 
exemptions  are  foreseen  for  specific  end-use  areas  where  phaseout  may  be 
particularly problematic and costly. It should be mentioned that a questionnaire 
to companies in an important  sub-sector of the foam  industry (sandwich panel 
production),  which  have  already  made  the  transition  away  from  HCFCs 
showed  that the  conversion  costs may be  lower  than  estimated  by the  March 
study.  Conversion  costs  below  2%  of  annual  turnover  were  reported  by  a 
majority of those responding. 

(iii) 

Placing on the market limits on HCFCs 

31. 

The  Regulation  proposes  a  cap  of  2.0%  for  the  placing  on  the  market  of 
HCFCs,  to  apply  from  the  1  January  2001, rather  than  the  existing  2.6%. 
Setting the cap at 2.0% would  provide more than  enough  HCFCs  where they 
are  still  required  while  reflecting  the  widespread  availability  of  alternatives. 
There is strong political  support for  reducing the cap to 2.0% (see above  1.3). 
As a consequence  to the proposed  use controls, the reduction  schedule  for  the 
placing  on the  market  of HCFCs will  be adjusted,  without  however  changing 
the final phaseout date of 2015. 

(iv) 

Production controls 

32. 

The  progressive  phaseout  of  HCFC  production,  along  with  the  proposed 
reductions in the placing on the market, is an effective  means to encourage the 
greater take-up of alternatives already available. It would set an example to the 
international  Community  and  help  prevent  HCFCs  from  being  overly 
promoted  in  developing  countries.  As  the  production  of  all  other  ozone 
depleting  substances  is  already  controlled  under  the  Montreal  Protocol  and 

12 

Regulation  (EC) No  3093/94, there is no reason why HCFCs should  continue 
to  be  an  exception,  particularly  as they  are  only  transitional  substances.  The 
European Community  proposed  production  controls  for  introduction  into  the 
Montreal  Protocol  at  the  Ninth  meeting  of the  parties  in  Montreal  1997  and 
there is a strong political argument for taking this measure at Community level 
(see  1.3). 

The  proposed  schedule  would  allow  Community  producers  to  retain  their 
level  until  2008.  Thereafter  cuts  would  reflect  the 
current  production 
phase-down  of consumption within the Community, in industrialised  and  later 
in Article  5 countries, with a total  production  phaseout  in 2025. The proposal 
should therefore  have no adverse economic impact on producers. In the case of 
HCFC-production  most  producers  also  produce  alternatives.  A  shift  of  their 
production  towards these alternatives  may  induce  some  initial  costs but these 
should  be  offset  in  the  longer  term  by  increased  marketing  possibilities 
for alternatives. 

is 

that 

foreseen 

the  Commission 

It 
the  situation  before 
31 December 2002, to decide whether production  cuts ahead  of the year 2008 
should be proposed  for the Community. This review will  be made in the light 
of the technical  and  economic  availability  of alternatives, the development  of 
HCFC consumption worldwide and HCFC exports from  the Community. 

reviews 

2.3  Methyl bromide (MBr) 

33. 

The  1994  UNEP/WMO  Report  of  the  Montreal  Protocol's  Scientific 
Assessment Panel concluded that phasing out the production and consumption 
of  methyl  bromide  by the year  2001  was the  single  most  effective  additional 
step  the  Parties  could  take  to  reduce  ozone  depletion  during  the  next 
few decades. 

34. 

The proposed Regulation would: 

* 

phaseout  the  production  and  consumption  of  MBr  in  2001, with  an 
exemption for  critical uses. 

This would be earlier than the 2005 phaseout agreed in Montreal  for developed 
countries, but consistent  with the 2001  phaseout  recommended  by the  Science 
Assessment  Panel.  Other  countries  which  have  already  agreed  to  phaseout 
MBr by 2001  include USA (the world's largest user of MBr), Canada, Austria, 
Denmark,  Finland,  Germany,  Netherlands,  Norway,  Sweden,  Indonesia  and 
Colombia. 

* 

provide  a  critical  use  exemption  such  that  methyl  bromide  would 
continue to be  available  where  no technically  or economically  feasible 
alternative substance or technique had been  identified. 

This reflects the  fact that not all current uses of methyl bromide are likely to be 
replaced by 2001. The Montreal Protocol's M3r Technical Options Committee 
estimates that  good alternatives already exist for around 90% of current methyl 
bromide use. The proposed  Regulation  provides a flexible  procedure  whereby 

13 

critical  use  exemptions  can be  authorised  by the competent  authorities  of the 
Member  States, applying  criteria  laid  down  in the regulation.  This  recognises 
that Member States will be in the best position to know what alternatives work 
successfully  in their local circumstances. 

(i)  What is methyl bromide? 

35.  Methyl  bromide  is  an  extremely  efficient  broad-spectrum  pesticide  gas.  In 
addition to being a serious ozone-depletor, it is classified  by the World Health 
Organisation  as  "highly  toxic".  Following  several  poisoning  incidents,  most 
countries  now  have  strict  controls  on  its  use  and  require  it  to  be  applied  by 
licensed fumigators.  Many countries have also introduced  measures to prevent 
contamination  of  the  surrounding  air  and  water  during  fumigation.  For 
example  Italy  has  banned  the  use  of  MBr  in  intensive  horticulture  around 
Lake Bracciano  following  concerns  about  contamination  of  the  lake.  When 
applied  to  soil,  MBr  kills  all  soil  organisms,  including  those  favourable  to 
maintaining  the health  of the  soil. The  possibility  of  residues  has  led  several 
supermarket  retailers  to  require  that  their  suppliers  use  Integrated  Pest 
Management  (IPM)  to  control  soil-borne  pests  rather  than  MBr.  This  is 
the 
consistent  with 
Environment,  which  includes  provisions  for  conversion  to  IPM  and  a 
significant reduction in pesticide use by the year 2000. 

the  Community's  Fifth  Action  Programme  on 

36. 

37. 

38. 

(ii) 

Uses of methyl bromide in the European Community 

The  European  Community  is the  world's  second  largest  consumer  of methyl 
bromide.  It  is  used  primarily  for  soil  fumigation  (90%),  but  also  for 
commodity fumigation  (3%), space fumigation  of buildings such as  flour-mills 
(3%)  and  as  a  chemical  feedstock  for  pharmaceuticals  and  other  products 
(4%).  The  total  quantity  which  may  be  placed  on  the  Community  market  is 
limited  by  Regulation  (EC)  No  3093/94  to  16 472  tonnes  in  1997  to  be 
reduced by 25% to  12 353 tonnes in 1998. 

The use of MBr for soil fumigation  is limited to high-value monoculture crops 
such  as  tomatoes,  strawberries,  melons,  cucumbers  and  cut  flowers.  Italy 
consumes over 50% of the Community's MBr, but use has varied  significantly 
over  recent  years,  falling  by  48%  in  Belgium,  73% in  Denmark  and  100% 
phaseout  in Netherlands and Germany. By contrast, use has increased  by 50% 
in  Spain,  and  even  more  in  Sicily,  which  now  accounts  for  over  20% of  the 
Community's total MBr consumption. 

(iii)  Options for methyl bromide control 

The proposal  is to phaseout the production  and consumption of MBr in 2001, 
with  an  exemption  for  critical  uses.  This  approach  is  consistent  with  the 
Montreal  Protocol,  under  which  emissions  of ozone  depleting  substances  are 
eliminated  by  phasing  out  their  production  and  consumption (defined as 
production  + imports - exports). The proposal  is also  consistent  with  current 
Regulation  (EC)  No  3093/94  which  controls  production  and  placing  on  the 
market of MBr. 

14 

39. 

An alternative  approach has been  suggested  by the fumigation  industry. They 
propose  simply to reduce emissions through  the use of virtually  impermeable 
plastic  film  and  reduced  doses,  leaving  production  and  consumption 
untouched.  This  proposal,  while  welcome  as  a  means  to  limit  emissions, 
would  not  meet  the  Community's  obligations  under  the  Protocol  which  has 
recognised  from  the beginning that  reductions  in emissions  are  impossible  to 
monitor and therefore  an insufficient  basis on which to protect the ozone layer. 
Where  MBr  continues  to  be  used,  for  example  under  the  critical  use 
exemption,  reducing  emissions  will  be  important.  The  proposed  Regulation 
would require fumigators  to take precautionary measures to prevent  leakage of 
methyl  bromide during  fumigation,  and  to report  to the Commission  on these 
measures and estimated emissions. 

(iv)  Alternatives to methyl bromide 

40.  While there is no single alternative which could replace methyl bromide in all 
its  current  applications,  a number  of  alternative  approaches  to  the  control  of 
soil  pests  have  been  successfully  introduced  into  commercial  horticulture. 
These include crop rotation, use of combined pesticides, the use of natural and 
artificial  substrates,  steam  sterilisation,  solarisation,  biological  controls, 
change of cultivar and deep ploughing. These have been successfully  used in a 
number  of  Member  States  in  place  of  methyl  bromide,  with  no  reduction  in 
yield, economic return or employment. Similar experiences have been reported 
from  the  USA,  Canada  and  Latin  America.  Technically  and  economically 
feasible  alternatives  now  exist  for  the  majority  of  current  MBr  uses  so  it  is 
now possible to envisage phaseout  in  2001  with the  important  safeguard  of a 
critical  use exemption  for  the few  remaining  uses for  which alternatives  have 
not yet been identified. 

(v) 

The effects  of early phaseout with a critical use exemption 

41. 

A phaseout  of  MBr  in  2001  will  encourage  the  rapid  take  up  of  alternatives 
which  are already available, while the exemption  for  critical  uses will  ensure 
that no farmer  will be deprived of MBr before  a good alternative  is available. 
The  exemption  will  be  authorised  by  the  Member  States  to  reflect  different 
crops  and  local  conditions  such  as  climate  and  soil  type.  These  critical  use 
exemptions  will  be  limited  to  certain  well-defined  applications  and  areas 
within  a  particular  Member  State  and  thus  have  no  potential  impact  on  the 
functioning  of  the  Internal  Market.  While  these  derogations  might  be  more 
important in the beginning, they will be regularly assessed and reduced  in line 
with  progress  in  the  development  and  economic  availability  of  alternatives. 
Each  Member  State  will  report  to  the  Commission  on  the  exemptions  it 
authorises  and  the  criteria  for  determining  critical  uses  will  be  reviewed 
regularly in the light of these reports, technical progress and the availability of 
alternatives. 

15 

(vi) 

Economic  implications of replacing methyl bromide 

42. 

The  methyl  bromide  industry  has  claimed  that  phasing  out  MBr  will  reduce 
yields, damage profitability  and increase unemployment.  While it is possible to 
create a scenario  along these  lines, assuming  for example that methyl  bromide 
is removed suddenly without there being technically and economically  feasible 
alternatives  available,  this  is  not  what  is  being  proposed.  The  encouraging 
results seen in many cases where MBr has already been replaced, together with 
the  safety-net  of the critical  use  exemption,  make  it possible  to phaseout  MBr 
without damaging the farmers who currently use it. 

43. 

A  study  for  the  European  Commission  on  the  costs  and  implications  of 
phasing  out  MBr  in the  Community  was  completed  in  May  1997.  It describes 
many examples of the successful  replacement of MBr with alternatives without 
damaging yields or profits: 

strawberries  grown  in natural  soil  substitute  in  Italy  produce  yields  of 
4.8  kg/m  compared  to  an  average  of  3.0  kg/m 
in  Italy  and  Spain 
using MBr; 

solarisation of  open-field  pepper crops  in Italy  gave  a 20% increase  in 
yield compared with MBr; 

moving  from  MBr to  artificial  substrates  in  the  Netherlands  increased 
yields of tomatoes by  10% to 52 kg/m ; 

at Ragusa in Italy, replacing  MBr by a combination  of  solarisation  and 
IPM resulted in increased profit of USD 2000/ha. 

44. 

Experience  shows  that  these  alternatives  work  best  when  they  are  integrated 
into the farming system and directed at specific  pests and specific  crops.  While 
MBr  will 
indiscriminately  kill  everything  on  any  kind  of  crop,  using 
alternatives  demands  a  more  informed,  intelligent  approach  to  find  the  best 
local 
treatment  for  a  particular  pest  on  a  particular  crop  in  a  specific 
circumstance.  In this  way,  using  alternatives  may  require  more  highly  skilled 
agricultural  workers  than  MBr.  While  this  has  cost  implications,  it  also  has 
employment  and  training  possibilities  which  would  be  beneficial  to  the 
the 
agricultural  sector.  Rapid  adoption  of  alternatives  could  benefit 
competitiveness  of Community agriculture by: 

* 

* 

* 

contributing 
agriculture; 

to 

the 

longer-term 

sustainability  of  Community 

creating  export  markets  for  environmentally  friendly  pest-control 
technologies; 

meeting the growing demand for pesticide-free  agricultural produce. 

16 

45. 

46. 

2.4 

47. 

48. 

49. 

It  has  been  argued  that  the  Community  should  not  phase  out  MBr  while  it 
remains in use in North African  countries. There are fears that produce grown 
with MBr in Morocco and Tunisia would replace home-grown produce on the 
Community  market.  This  fear  is  based  on  the  belief  that  using  alternatives 
inevitably leads to higher-priced or lower quality produce than using MBr, but 
this  is not  supported  by the facts.  It is much  more  likely  that  the  adoption  of 
alternative  systems  which  improve  profitability  could  allow  Community 
farmers  to  undercut  competitors.  For  example  the  Netherlands,  after  phasing 
out  MBr,  successfully  developed  the  use  of  high-yield  substrates  and 
maintained  its  predominant  position  in  crops  such  as  tomatoes.  This 
experience  and  similar  techniques  could  be  adapted  for  use  throughout  the 
Community on crops which are being grown using methyl bromide. 

In recognition of the particular problems faced  by Southern  European  farmers, 
the  Commission  organised  a  workshop  "Alternatives  to  methyl  bromide  for 
Southern  European  Countries"  in  Tenerife  in  April  1997.  The  conclusions 
state: '''The  existence  of a great  many alternatives to the use of MBr for soil 
fumigation was amply demonstrated,  both from presentations and from visits 
to  producers'  fields.  Many  of  these  methods  are  directly  applicable  to 
Southern European Countries. " 

Phaseout  of  placing  on  the  market  and  use  of  CFCs  and  other  fully 
halogenated substances 

Under the existing Regulation (EC) No 3093/94, the Community has achieved 
the  general  phaseout  of  the  production  of  CFCs  and  other  fully  halogenated 
controlled  substances. However, while CFCs were phased out already in  1995 
(and  halons  in  1994), there  are  still  too  many  cheap  CFCs  on  the  European 
market,  a  situation  which  is  delaying  the  switch  to  alternatives.  CFCs from 
existing  stocks and  from  recycling explain  the continued  availability  to  some 
extent. Also illegal imports are believed to contribute  significantly. 

In light of the overall objective of the Montreal Protocol and the Regulation to 
eliminate  ozone-depleting  substances,  and  with  a  view  to  the  time  span  that 
has  already  passed  since  the  production  prohibition,  it  is  now  justified  to 
prohibit  the  sales  and  use  of  CFCs,  halons  and  other  fully  halogenated 
controlled substances. The term "use" is defined to cover their utilisation  in the 
production  or  maintenance  of  products  or  equipment  (e.g.  refilling  of 
refrigeration  equipment), or  in processes. The proposed  prohibition  is  subject 
to  some  limited  exemptions  to  ease  transition,  and  the  possibility  of 
"essential uses". By this measure, the market for the substances concerned will 
be removed, which is the most efficient  means to cut illegal imports. 

In relation to essential uses of CFCs, the Commission is at present  developing 
a  transitional  strategy  for  the  reduction  of  those  uses  for  medical  inhalers, 
following 
the  Montreal  Protocol.  A 
"strategic plan"  is  at  present  being  finalised,  with  the  involvement  of  the 
Member  States  and  all  the  operators  concerned,  to  work  towards  a  rapid 
changeover to non-CFC products in the medical sector. 

to  Parties  under 

the  mandate 

17 

2.5 

Trade in ozone-depleting substances - licensing requirements 

50. 

51. 

The Montreal Protocol was amended at the Ninth Meeting of the Parties by the 
new requirement  for  Parties to establish a system  for  licensing the import and 
export of ozone-depleting substances. Proper monitoring through licensing and 
reporting  requirements  on trade  in controlled  substances  is  an  important  tool 
for  Parties  to  evaluate  their  performance  in  eliminating  ozone-depleting 
substances.  It  furthermore  significantly  enhances  the  efforts  to  curb  illegal 
trade in these substances, in particular as these obligations are now incumbent 
upon all Parties to the Montreal Protocol. 

Under  Regulation  (EC)  No  3093/94,  the  Community  already  has  an  import 
quota  and  licensing  requirement  which  has  been  maintained  in  the  current 
proposal.  This  licensing  requirement  also  extends  to  "inward  processing 
operations",  i.e.  controlled  substances  which  enter  the  Community  for 
reprocessing/repackaging,  following  which  there  are  to  be  re-exported.  In 
addition  to  the  existing  system  for  imports,  it  is  proposed  also  to establish  a 
system  providing  for 
the  authorisation  of  exports  of  ozone-depleting 
substances, completed by more adequate reporting requirements for companies 
trading  in  ozone-depleting  substances.  As  compared  to  the  import  licensing 
requirement  for  each  individual  shipment, the proposal  provides  for  a general 
authorisation  of  exports  on  application  to be  made  to the  Commission  at the 
beginning  of  the  year.  The  system  is  shaped  in  a  way  to  fulfil  the  Montreal 
Protocol requirement, in particular to allow cross-checking of information  with 
other  Parties,  without  imposing  unnecessary  administrative  burden  on  the 
operators and control authorities. 

Annex 1 

Business impact assessment with particular reference to SMEs 

Title of proposal:  Draft  proposal  for  a  Regulation  on  substances  that  deplete  the 

Document: 

ozone layer 
Kef. No: 98003 

1.  Who will be affected  by the proposal? 

The proposal will  affect: 

I. 

Producers 

A. 
B. 

of ozone-depleting substances (ODS) and their alternatives 
of  equipment  and  products  using  these  substances  and/or  their 
alternatives, 
refrigeration 
including  manufacturers  of  foam  and 
equipment 

II. 

Users 

A. 
B. 

of ozone-depleting substances as solvents and in agriculture (MBr) 
of refrigeration  and solvent equipment and insulation products 

III.  Methyl bromide  fumigators 

The eight  European  producers  of  ODS  are  all  large  companies  or  their  subsidiaries. 
This proposal restrictsjheir  possibility to increase overall  sales in the near future  and 
could  eventually  cause their  HCFC  sales to fall.  However,  as HCFC  consumption  in 
any  case  is  already  controlled  under  the  Montreal  Protocol,  any  negative  impact  on 
producers  is likely to be minor. The proposal will  also have a positive  impact  on the 
sales  of  alternatives.  As  most  producers  also produce  the  alternative  substances, the 
overall implications for them may even be positive. 

The proposal will have advantages for  Community  producers and consumers  of non-
ODS technologies  and  substances  by stimulating  their  markets. Any negative  effects 
on  producers  of  equipment  or  on  users  of  ODS  (HCFCs  and  methyl  bromide  in 
particular) should be limited because: 

there is a large number of reasonably priced alternatives available; 
further price reductions can be expected with economies of scale; 

i 
3.  the  proposal  deliberately  provides  more  time  to  move  to  alternatives  where 
particular  difficulties  exist,  for  example  in converting  certain  foam  manufacturing 
facilities; 

4.  the initia  conversion costs of production facilities will in many cases be offset  over 
time  by  lower  operating  costs,  for  example  using  aqueous  cleaning  instead  of 
HCFC-solvents; 

D.  .he  proposal  includes  scope  for  further  exemptions  in  specific  cases  where 

alternatives have not bef P identified  or do not work  successfully. 

2. 

What will business have to do to comply with the proposal? 

Compliance  will  require  both  producers  and  users  of  refrigeration,  solvent  and 
insulating  equipment  and  products  to  change  to  an  ozone-friendly  alternative. 
Companies will have to: 

1.  acquire information  on the availability of alternatives; 
2.  decide which solution is most suitable to their business; 
3.  make certain investments in new ODS-free  technology; 
4. 

in  some cases adapt  facilities  and  practises  to handle the alternatives  (which  are 
sometimes flammable or toxic) properly. 

A familiar  problem for  SMEs in moving out of ODS is insufficient  information  about 
alternatives. This need not be a problem: UNEP's office  of Industry and  Environment 
in Paris issues regular newsletters on alternatives, and the information  is also available 
on a computer database. In addition, the Commission is currently preparing a database 
of information  on alternatives available in Europe. 

3. 

What economic effects  is the proposal likely to have? 

Under  existing  legislation,  investment  in  alternatives  to  ODS  has  to  occur  anyway. 
The effect  of this proposal  will  be to accelerate  these changes  in certain  sectors. For 
ODS  producers,  the  economic  impacts  are  expected  to  be  limited  or  even  positive 
where sales of alternatives  pick up strongly. 

Foam manufacturers  and producers of refrigeration  equipment and products will have 
to move to  alternative  substances,  but much  of the  work  to  develop  alternatives  has 
already been done. Costs are therefore  likely to be limited. The March study estimated 
the immediate costs to the refrigeration  sector as less than 2% of annual turnover. For 
the  foams  sector,  the  same  study  concluded  that  total  conversion  costs  would  be 
approximately  15% of annual turnover if all ODS were phased out by 2000. However 
the current proposal allows a significantly  longer time for conversion for those parts of 
the  foams  sector where a very quick phaseout would incur relatively high costs. Thus, 
the  costs  can  most  likely  be  cut  to  around  4% of  annual  turnover.  It  should  also  be 
noted  that  most  of  these  costs  would  be  passed  on  to  users,  thus  spreading  the 
investment costs among a large number of users. 

The  proposal  may  also  enhance  export  opportunities  for  companies  that  are 
developing  alternatives  when  the  phase-out  starts  to  raise  demand  for  alternative 
substances  and  technology  overseas.  This  would  benefit  in  particular  producers  of 
alternatives to HCFC-using equipment  as Europe would be taking the world  lead. As 
alternatives  will  have  been  commercialised  for  the  European  market  under  the 
Regulation,  EU-producers  would  have  a  competitive  advantage  when  demand  for 
non-HCFC products begins to rise elsewhere. This can already be seen in the cases of 
hydrocarbon  refrigerators  with  hydrocarbon-blown  foams  being  exported  from 
Germany  and  Sweden,  hydrocarbon  and  ammonia  air-conditioning  (UK  and  Italy), 
insulated  district  heating  pipes  (Denmark,  Sweden),  and  ammonia 
non-ODS 
commercial  refrigeration  systems  (Denmark).  SMEs  may  also  find  additional 
opportunities in ODS recovery and recycling operations. 

20 

As  regards  methyl  bromide,  it  is  clear  that  the  careful  use  of  properly  chosen 
alternative  substances  and  techniques  can  produce  yields  and  profits  equal  to  or 
greater  than  using  MBr.  For  example, the  Italian  Fumigators'  Association  has  noted 
that solarisation  is cost-effective  for certain crops. They state that using crop rotation 
would reduce the number of soil-borne pathogens, allowing the use of lower doses of 
alternative  fumigants.  Their  report  suggests  solarisation  in  combination  with 
biological  controls/low  doses  of  fumigants  as  good  alternatives  to  chemical  soil 
disinfestation  with MBr, particularly in southern Italy and this could apply throughout 
the Mediterranean area. 

4. 

Does  the  proposal  contain  measures  to  take  account  of  the  specific 
situation of SMEs? 

The  proposal  applies  specifically  to  SMEs  in  that  many  producers  and  users  of 
alternatives  are  SMEs rather  than  large firms, although  the  majority  of  producers  of 
ODS-technology  are  large  companies.  In  the  case  of  commercial  air-conditioning 
equipment,  most of the equipment using ODS originates from larger producers based 
outside Europe, whereas the alternatives mostly originate from small companies based 
within the Community. 

Products containing  HCFCs are currently  used  by many SMEs, but the proposal  does 
not  require  that  existing  equipment  is  converted.  When  new  HCFC-free  equipment 
needs to be purchased,  its cost  in most cases will  not be significantly  higher than  for 
HCFC- products. In parts of the foams sector where most producers are SMEs. and for 
solvents users (many of which also SMEs), the proposal allows a relatively  long time 
to  complete  the  phase-out  of  HCFCs.  In  addition  where  particular  economic  or 
technical  difficulties  remain,  SMEs  will  be  assisted  by  the  essential  use  or  critical 
use  exemptions. 

Most  of  the  firms  supplying  MBr  fumigation  treatment  in  the  EU  are  SMEs.  These 
firms,  through  their  associations,  have  stated  that  they  expect  to  suffer  economic 
damage  from  an  accelerated  phaseout  of  MBr.  This  could  be  true,  but  only  where 
fumigators  specialise  in  methyl  bromide  and  do  not  offer  other  solutions  to  control 
particular  pests or diseases. Methyl bromide  fumigators  who  fail  to  diversify  will  in 
any case go out of business  in a few years because  of international  phaseout  of MBr 
under  the  Montreal  Protocol.  An  earlier  phase-out  date  in  the  Community, 
accompanied  by a  flexible  exemption  system, could  help encourage  these  companies 
to diversify  and therefore  stay  in business. At the same time, a move away  from  MBr 
will  create  employment  opportunities  for  SMEs  providing  services  such  as 
solarisation and steam treatment, and for manufacturers  of substrates. 

The  proposal  provides  that  the  use  of  methyl  bromide  can  continue  for  critical 
agricultural  uses.  Therefore  some  fumigation  with  methyl  bromide  will  continue, 
using  the  new  emissions  reduction  technologies  such  as  thicker  plastic  sheets.  This 
will  make  methyl  bromide  fumigation  a  more  specialised  activity,  for  which  the 
fumigators  may well be able to charge a premium. 

5. 

Views of companies affected  and business organisations 

There  are many different  views on what  impact  this proposal  will  have  on business. 
This  is  not  surprising  given  the  wide  range  of  sub-sectors  affected.  Business 
associations in particular have claimedjhat  advancing the phaseout of HCFCs  further 
ahead  than  the  current  proposal  would  have  adverse  economic  effects  on  them. 
However,  a number  of  submissions  from  individual  companies  support  even_stricter 
controls  than  currently  proposed.  National  business  associations  in  Member  States 
which  have  already  phased  out  HCFCs  also  agree  that  a  stricter  proposal  would  be 
realistic and achievable. 

6. 

Ctasmkatioii 

Both  ODS  and  non  ODS  producers  and  consumers  have  been  consulted  through 
regular meetings between  IGPOL and the Commission  services. They  have also input 
directly or indirectly to a study on ODS alternatives for the Commission's  Directorate 
General for the Environment or to UNEP Technical Committee reports. 

These  companies  include:  GIFAS  Aéronautique  and  Aerospatiale,  GITEP,  FIEE 
(Electric  and  Electronics  Industries  Federation),  ORGALINE  (European  Liaison 
Group  of  the  electrical;  electronic;  mechanical  and  metalworking  industries), 
SURCHIM,  GRAINDORGE,  ELF  Atochem, 
ICI,  Rhone-Poulenc,  OASI 
(Italian  Metal  Degreasing  Industries),  Solvay,  ISOPA,  BRUFMA,  Eurovent, 
European  Panels  Federation,  Exiba,  Dehon,  Knaut,  Belgian  Association  of 
Refrigeration,  Acrib,  Eucrar,  RFIC,  CSDF, AREA,  KTG,  CECOMAF,  ASERCOM, 
PANAMA,  Linde  Kaltetechnik,  Dansk  Teknologisk 
Institut,  Danfoss, 
Sabroe  Refrigeration,  A'Gramkow,  Dansk  Ammoniafabrik,  Gram  Refrigeration. 
Soby  Koleteknik,  Danvalve,  Retech  Refrigeration  Technologies,  Calor  Gas, 
University  of  Hannover-Refrigeration  Institute,  Electrolux,  AEG,  Integral,  Siemens, 
Tesco,  Sainsbury,  Cactus,  Migros,  Bosch,  DeLonghi,  York  International,  ABB  Stal. 
Star  Refrigeration,  ALDI,  Liebherr,  Frigoscandia,  Pilkington,  Pittsburgh  Corning, 
Robur,  Thanex,  Zeo-tech,  Birdsall,  Ecozeo,  Whitbread,  Morris  and  Young, 
APV  Baker,  Carrier  Air  Conditioning,  Copeland,  Eaton  Williams,  Mitsubishi. 
Munters  Ltd,  Toshiba,  Armstrong,  BASF,  Bayer,  Lematic,  nmc  Kenmore,  Recticel, 
Rockwool, AKA Kyla, EUROFEU. 

22 

Annex 2 

Technical and economic feasibility of the proposed HCFC-controls 

Producers of HCFCs 

There are 8 HCFC producers in the Community. They are all large chemical  producers 
or their  subsidiaries, supplying a wide range of products  including  major  alternatives 
to HCFCs. Thus, any provision leading to reduction in HCFC production will give rise 
to new markets for other parts/divisions of the same companies. 

HCFC use-bans will force producers to cut down production for the European market. 
This  market,  however,  only  represent  a minor  part  of  the  total  HCFC-market  which 
also  comprises  production  for  feedstock  use  (not  covered  by  the  regulation)  and 
for export. 

Under  the  production  controls  now  proposed,  producers  are  allowed  to  continue 
production  of  HCFCs  at  current  levels  until  2008.  Thereafter  they  could  maintain 
export  at  1997  levels  until  2014. The  important  US market  for  HCFC  141b will  be 
lost  in  any  case  by  2003  due  to  a  US  ban  of  that  substance.  Japan  is  also  banning 
HCFC  141b  by  2004.  The  "March  Study",  based  on  an  assessment  of  the  market 
demand,_has  stated  that  "it  may be possible  to  maintain  HCFC  export  levels  on  the 
1993  level  until  2009". The  1993  level  is  35% below  the current  export  level.  This 
clearly suggests that restricting HCFC production as proposed will have no impact on 
the competitiveness of Community HCFC producers. 

HCFC product and equipment producers and end users 

The  1996 European HCFC use in the three main sectors is depicted in the table below. 

I 1996 HCFC use (ODP-tonnes) 

1996 HCFC use (%) 

Refrigeration 
Solvents 
Foams 

2 350 
650 
| 4 220 

Refrigeration 

32% 
10% 
| 57% 

' 

A  major  part  of  the  HCFCs  is  used  for  maintenance,  i.e.  refilling  refrigeration 
equipment due to leakage. 

The  use  of  HCFCs  in  several  types  of  refrigeration  and  air-conditioning  systems  is 
already  banned  by  Council  Regulation  (EC)  No  3093/94.  The  new  Article  5 would 
extend  the  prohibition  from  1  January  2001  to  all  new  refrigeration  and  air 
conditioning systems, except for reversible air conditioning/heat  pump systems where 
HCFCs  would  be  allowed  until  2004  because  suitable  alternatives  are  not 
yet available. 

23 

Existing  refrigeration  equipment  will  be  affected  by the  proposal  only  to  the  extent 
that the use of virgin HCFC will be prohibited for maintenance from 2008. This is not 
expected to pose a problem as recycled HCFCs could still be used and leakages could 
be  significantly  reduced.  There  would  also  be  plenty  of  time  to  develop  new 
alternatives for  refilling. 

Refrigeration  in  a  number  of  applications  (e.g.  in  retail  stores,  shopping  malls, 
restaurants,  food  processing  and  comfort  air-conditioning)  is  now  largely  based  on 
HCFC  22. Prohibition  of  HCFC-use  in réfrigération  would  obviously  rednoe  market 
share  for  any  producer  of  equipment  who  has  not  yet  introduced  or  planned  to 
introduce  alternatives.  At the  same time, however,  it would  benefit  the  producers  of 
alternative  fluids  and  producers  of equipment  designed  for  alternative  substances, of 
which there are many in the Community. 

Hydrocarbon  (HC)  refrigerants  can  be  used  alone  (in  small  systems)  or  as  part  of 
secondary  systems  for  larger  scale  refrigeration  and  air-conditioning.  Low  charge 
requirements,  improved  engineering,  service practices  and better  monitoring  systems 
have  made  HCs  safe  for  use  in  public  places,  despite  their  flammability.  HC 
refrigeration  systems  are  already  used  for  commercial  refrigeration  including  small 
retail  stores, supermarkets, pubs, restaurants, petrol  stations and food franchises. HCs 
are  also  gaining  market  shares  in  air-conditioning  equipment.  According  to 
hydrocarbon  commercial  systems manufacturers  and distributors, the majority  of HC 
users are  SMEs. HCs are energy efficient  and  compatible  with  most  compressor  oils 
and  materials. It has been confirmed  by producers  of refrigeration  equipment  that, at 
least  for  smaller  systems,  a  hydrocarbon  system  rarely  costs  more  than  any  other 
system, both in the short and in the longer term. 

Ammonia  is  a  natural  but  toxic  substance  that  has  been  widely  used  in  industrial 
refrigeration  for  several  decades  with  an  excellent  safety  record  worldwide.  In  both 
the  USA  and  Germany  ammonia  accounts  for  more  than  70%  of  the  industrial 
refrigeration.  Traditionally  the  use  of  ammonia  outside  industrial  refrigeration  has 
been limited, though its use is now increasing in applications such as air-conditioning 
and  supermarkets.  Other  users  include  large  food  processors,  pharmaceutical  firms 
and breweries. Ammonia  in most cases requires the use of a secondary  refrigerant  in 
an indirect system. This makes ammonia suitable for large systems although the lower 
size  limit  for  a technically  and  economically  feasible  ammonia  system  has  recently 
been  reduced.  Prices  for  ammonia  components,  which  have  to  be  based  on  steel 
instead  of  copper,  at  present  range  from  0-50%  higher  than  those  for  HCFC 
components.  The price difference  would  decrease  with  economies of  scale. Over the 
medium  and  long  term,  the  high  energy  efficiency  and  low  operating  costs  of 
ammonia systems should in many cases offset  the higher capital investment. The price 
of ammonia itself is about 20% that of HCFC-22. 

HFC-based  refrigeration  or air-conditioning systems are already available for virtually 
all  applications.  HFCs encompass a wide range of substances (and their  blends) with 
slightly different  properties. Some of the substances require a different  system design 
than  HCFCs.  According  to  equipment  manufacturers,  this  may  lead  to  an  initial 
increase  in  manufacturing  costs  of  the  order  of  5%.  This  initial  cost  increase  is 
unlikely to persist when HFC-based systems become more common. In most cases the 
performance  of  refrigeration  systems  (i.e. cooling  capacity  and  energy  efficiency)  is 
not  affected  significantly  by  using  HFCs  instead  of  HCFCs.  However,  HFCs  are 

24  -•••• 

substances with very long atmospheric  life-times.  This and the fact  that they are also 
potential  greenhouse  gases requires  measures to  control  emissions.  According  to  the 
Kyoto Protocol, agreed in December  1997, HFCs are included in the basket of climate 
gases  for  which  the  EU  is  obliged  to  decrease  its  emissions  by  8%  in  the  period 
2008-2012  compared  to  1990. Thus, any  use  of  HFCs  will  have  to  be  accompanied 
with strict emission control measures. 

Other  refrigerants  including  water  and  water  mixture,  carbon  dioxide,  air  and  other 
types of air-conditioning and refrigeration  systems (e.g. absorption  systems) are being 
developed,  or  are  currently  being  used  to  a  limited  extent.  Indications  are  that  these 
may soon be more widely applicable. 

Notwithstanding the demonstrated widespread availability of alternatives, associations 
of HCFC producers and users, in consultations on this proposal have claimed that HC 
are suitable  only for  domestic  refrigerators,  and ammonia  systems only  for  industrial 
refrigeration.  The  refrigeration  industry  seems reluctant  to  increase  the  use  of  HFCs 
fearing  future  regulatory  measures.  Thus,  different  refrigeration  associations  have 
claimed that the phase-out dates for HCFCs cannot be tightened, while conceding that, 
from  a  technical  point  of  view,  alternatives  are  available  for  new  refrigeration 
refrigeration 
equipment.  However, 
equipment  manufacturers  as  well  as  some  producers  of  equipment  (e.g.  Electrolux, 
Siemens) have indicated that they support a rapid phase-out of HCFCs. 

the  Swedish  Association  of  Commercial 

Solvents 

Major  solvent applications include electronics cleaning, precision cleaning, and metal 
degreasing; a wide range of firms is involved, including many SMEs. 

The  proposed  Regulation  would  prohibit  the  use  of  HCFCs  as  solvents  from 
1  January  2003, with the exception  of precision  cleaning  in the  aerospace-industry, 
where  alternatives  are  not  yet  proven.  Given  that  the  solvents  sector  is  extremely 
diverse and comprises a number of sub-sectors with many different  applications, a few 
exemptions  under  the  proposed  essential  use  regime  may  be  given  for  uses  where 
there are problems in finding technically or economically feasible alternatives. 

A number of alternatives in this sector have been in widespread use in most developed 
countries  for  a long time. They  include aqueous and  semi-aqueous  systems,  no-clean 
technologies,  and  a  number  of  other  solvent  and  non-solvent  cleaning  processes.  In 
their  1995 assessment,  the  UNEP's Solvents Technical  Options Committee  stated  the 
following  about  ozone  depleting  solvents:  "There  is  no  technical  reason  why  any 
company,  large or small, in a developed  or developing  country  should  not be able to 
move  away  from  such  solvents  immediately".  The  committee  also  specifically 
recommended  against  the  use  of  HCFC  141b  for  solvent  use  because  of  its  high 
ozone  depletion  potential  and  its  unsuitability  for  many  cleaning  applications. 
Despite  this,  HCFC  141b  has  been  used  as  a  drop-in  substitute  to  replace  CFC  or 
1,1,1-Trichloroethane cleaning  systems because  investment  costs  for  this  change  are 
low and HCFC  141b has been heavily marketed in some Member States. 

25 

The first  HCFC  141b sales into the solvents sector in Europe were in  1990, with sales 
quadrupling  between  1992-1993  and  more  than  doubling  again  from  1993-1994 
despite  the  substance  being  included  in  the  Montreal  Protocol  in  1992.  The 
"March Study" concluded that about 30% of the current HCFC use is best described as 
"excess  consumption"  and  that  only  10%  is  difficult  to  phase  out.  "Lack  of  a 
clear focus"  in  the  sector  is  mentioned  as  the  reason  why  alternatives  identified  by 
some users are not taken up more widely. 

There  is  ample  evidence  from  Member  States  which  have  already  moved  away 
completely  from  ODS-solvents  that  this  can  be  done  without  adverse  effects  on 
businesses.  Operating  costs  in  many  cases  are  considerably  lower  (e.g.  non-ODP 
alternatives 
investment  costs  are 
therefore  offset. 

in  electronics  cleaning)  and 

initial 

the 

Some companies and industry associations have stated that no real alternatives exist at 
present  for  several  solvent  uses  of  HCFCs.  Industry  associations  have  also  told  the 
Commission,  they  consider  one  of  the  main  alternative  cleaning  methods  available 
(aqueous cleaning systems) requires excessive investment and high levels of technical 
expertise, although  it is widely and  successfully  used  in the USA. For these reasons, 
industry  associations  consider  a  very  quick  phaseout  to  be  unrealistic  and  have 
suggested: 

* 

* 

2015 for the aerospace industry 

2002-2003 for the electronics industry. 

The  proposal  addresses  these  concerns  through  the  exemption  until  2015  for  the 
aerospace  industry  and  the  general  phase-out  of  solvents  by  2003.  Moreover  the 
proposal  provides  a  possibility  of  an  "essential  use"  exemption  for  specific  cases 
where an alternative is neither technically nor economically  feasible. 

Foams 

Under  Regulation  (EC) No  3093/94,  the  use  of  HCFCs  is  already  banned  for  some 
types of foams, such as flexible  foams. The proposed Regulation would  progressively 
ban  the  use  of  HCFCs  in  rigid  insulating  foams  where  HCFCs  are  still  being  used. 
Hydrocarbons  (HCs),  HFCs  and  carbon  dioxide  (CO2)  are  the  main  alternative 
blowing  agents.  In  many  applications,  foams  may  also  be  replaced  by  non-foam 
insulating materials (mineral wool, rock wool, vacuum panels, cellular glass). Overall, 
such not-in-kind alternatives currently dominate the market for insulation material. 

Rigid  insulating  foams  can  be  separated  either  by  chemical  origin.  Polyurethane 
(quantitatively  the  most  important  type), extruded  polystyrene  (XPS), phenolic  foam 
and PIR-foam, or by application (e.g. board-stock, sandwich panels, appliance foams). 

Integral  skin foams  are  not  strictly  speaking  insulating  foams.  They  are  used  for 
steering  wheels,  headrests,  shoe  soles  etc  and  represents  about  2%  of  the  current 
HCFC use in the foams sector. Several alternatives to HCFCs are available (e.g. water 
and CO2). Industry  itself,  in meetings with the Commission  services, has agreed  to a 

26 

quick phase out of HCFCs for this type of foam. It is proposed to ban HCFCs for this 
use by  1 January 2000. The same date would apply to polyethylene foams for which 
the situation is similar. 

For XPS foams, C02 and other (currently available) HFCs have already been adopted 
as blowing  agents  in Germany, The Netherlands  and  Sweden.  These  substances are 
not  flammable  and  provide  sufficiently  good  insulating  value.  However,  the 
conversion  of  production  facilities  is  time-consuming  and  smaller  companies  in 
particular  may  need  a  few  more  years  to  complete  conversion  of  their  production 
facilities. 

For a majority of the Polyurethane  (PU) foam applications, the use of  HCs or other 
alternatives is already common in the European Community. In some Member States, 
manufacturers  are  hesitant  to  move  to  alternatives  because  of  fears  of  reduced 
insulating value, which would lead to a need for thicker insulation. Furthermore, they 
claim  that  the  flammability  of  HCs  would  incur  cost  increases  and  that  national 
building  standards  might  be  an  obstacle  for  their  use  in  certain  applications  in 
some countries. 

However,  PU  foams  are  flammable  even  if  non-flammable  blowing  agents  are 
employed and in general  the use of a flame-retardant  is required.  The use of  HCs or 
C02/water  in  boardstockJflexible faced  laminate sandwich panels  for  construction 
purposes and appliance foam applications is already established. The insulation value 
may be 5-10% inferior to that of HCFC-blown foams. However, such a loss could in 
many  cases  be  made  up  for  by  increasing  the  insulation  thickness  or  other  minor 
design changes. A quick conversion of existing facilities would however be relatively 
costly and consequently it is proposed that HCFC be banned from 1 January 2003 for 
these categories. 

Using C02  or hydrocarbon based foams with slightly inferior insulation performance 
may be somewhat more problematic  in XPS- and PU foams  for insulated transport, 
where traffic  regulations  and sizes  of  European pallets  dictate the wall  thickness  of 
vehicles.  Similar  constraints  apply  to  a  few  other  "specialised"  PU  foams  such  as 
PU-block foams.  Phenolic and PIR foams are marketed as non-flammable  foams and 
are  mainly  used  where  fire  resistance  is  of  paramount  importance.  The  use  of 
flammable  blowing  agents  has  nevertheless  been  considered  but  is  not  yet  well 
established.  A  phaseout  before  non-flammable  blowing  agents  are  available  would 
penalise PIR and phenolic foam  producers disproportionately.  It is therefore proposed 
to  allow  the  use  of  HCFCs  for  these  types  of  foams  until  1 January  2004  when 
alternative  blowing  agents  (liquid  HFCs)  providing  at  least  the  same  insulating 
properties as HCFCs are exp  cteu to be available. 

Liquid  HFCs ^e.g. HFC 245fa) are by many industry representatives  seen as the most 
important  f iture  non-flammable  foam  blowing  agents  for  very  many  foam  types. 
Industry  associations,  which  are  dominated  by  those  who  have  not  moved  to 
alternatives  currently  available  await  the  projected  availability  of  liquid  HFCs  and 
':..a*e  said  that,  consequently,  they  need  to  continue  using  HCFCs  until  2004. 
However,  these  su*" stance  nay  not  be  the  best  option  for  many  foam  types  since 
se gases and the price of the blowing  agents is expected 
IPCs are powerful 
j be up • 3 four times high* t  nan for HCs. 

reenh 

New use bans, HCFCs used and examples of HCFC substitutes 

Use 

Reference text in 
Article 5 of the 
Regulation 

HCFCs used 

Proposed 
HCFC-ban* 

Substitute 

Availability 
of 
substitute 

Cost 
information 
(substitute)** 

Refrigeration 
Commercial and 
industrial systems 

Refrigeration 
Commercial air-
conditioning 

Refrigeration 
Comfort  air-
conditioning 

Refrigeration 
Comfort  air-
conditioning 
(reversible 
systems) 
Foams 
Integral skin/ 
polyethylene 

Foams 
XPS 

Foams 
Polyurethane 

Foams 
Polyisocyanurate/ 
phenolic, special 
applications 
(Polyurethane 
and XPS) 
Solvents 

All other  refrigeration 
and  air-conditioning 
equipment  [..]  with the 
exception of reversible-
All other  refrigeration 
and  air-conditioning 
equipment  [..]  with the 
exception of reversible.. 
All other  refrigeration 
and  air-conditioning 
equipment [..]  with the 
exception of reversible. 
....reversible air-
conditioning/ heat-pump 
systems... 

22,  123, 124 

2001 

Ammonia 
Hydrocarbons 
HFCs 

Wide 
Developing 
Wide 

1,2,3 
1,2,3 
2,4 

*22J23 

2001 

" 

"22 

~20ÔÏ 

Ammonia 
HFCs 
Water 

'wïde 
Established 
Developing 

1,2,3 
2,4,5 

Hydrocarbons 
HFCs 

Established 
Wide 

1.2, 3 
2,4 

22 

2004 

HFCs 

Limited 

2,4 

... integral skin foams and 
polyethylene foams 

22,  141b, 
142b 

2000 

HFC  134a 

Wide 

4 

Hydrocarbons 
C02 

Wide 
Wide 

1.2,3 
2,3 

...extruded  polystyrene 
except where used in 
insulated transport 

...polyurethane foams for 
appliances, [..]  flexible 
faced  laminates and of 
polyurethane sandwich 
panels except where  [..] 
used in insulated 
transport 
...  for the production of 
all  foams 

22,  142b 

2002 

22,  141b, 
142b 

2003 

C02 
HFC134a/HFC 
152 
Hydrocarbons 
Non-foam 
insulation 
(Liquid HFCs) 

Established 
Established 

2.3 
2,4 

Wide 
Wide 

None 

1,2,3 
comparable 
to foams 
4,5 

22, 141b, 
142b 

2004 

Liquid HFCs 
Non-foam 
insulation 

None 
Established 

2-chloropropane 

Limited 

175 
comparable 
to foams in 
some cases 
5 

Global 
Environmental 
effects  of the 
substitute*** 
ODP 0, GWP 0 
ODP0, 
GWP < 10 
ODP 0, GWP 
same range as 
HCFCs 
As above 
As above 
ODP0, (iWPO 

As above 

As above 

ODP-0. GWP 
same range as 
HCFCs 
ODP0. 
GWP<10 
ODP 0. GWP I 
As above 
GWP same range 
as HCFCs 

As above 
ODP 0, GWP 0 

ODP-0, (iWP 
same range as 
HCFCs 

As above 
As above 

Not available 

141b 

2003 

.. in all solvent uses with 
the exception of precision 
cleaning of electrical and 
other components in the 
aerospace and 
aeronautics industries 

No-clean  flux 
Aqueous and 
senn-aqueous 
system.,. 
Hydrocarbons 
HFCs 

Wide 

2.3 

ODP 0. GWP 0 

Wide 
Wide 
Limited 

2,3 
1,2.3 
4 

ODP 0, (iWP 0 
As above 
As above 

Source:  Information  from  International  Institute  of  Refrigeration,  UNEP,  Danish  EPA, 
German  Umweltbundesamt, Nordic Council, industry documentation, March Consulting group 
*  All information  on phaseout dates refer to the  I January oi the year in question. 
** Cost information  as follows: 

28 

1.  Costs incurred due to flammability or changed product properties when engaging new substances. 
2.  Appreciable conversion cost. 
3 .  Possibility of lowered operating costs. 
4.  Possibility  of  double  capital  investment  as  the  result  of  further  international  regulation  of 

greenhouse gases. 
Insufficient  experience for a reliable assessment. 

5. 
***  ODP: Ozone Depletion Potential; GWP: Global Warming Potential. 
Note: The timing of the use bans reflect the technical and economical availability of alternatives. 

Proposal for a 
COUNCIL REGULATION (EC) 
on substances that deplete the ozone layer 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to the Treaty establishing  the European  Community,  and  in particular 
Article  130s(l) thereof, 

Having regard to the proposal from the Commission1, 

Having regard to the opinion of the Economic and Social Committee  , 

Acting  in accordance  with the procedure  laid  down  in Article  189c of the Treaty, in 
cooperation with the European Parliament, 

(1)  Whereas Council Regulation (EC) No 3093/943 must be modified  substantially, 
whereas  it  is  in  the  interest  of  legal  clarity  and  transparency  to  revise  that 
Regulation completely; 

(2)  Whereas effective  measures need to be taken  in order to protect  human  health 
and  the  environment  against  adverse  effects  resulting  from  emissions  of 
substances that deplete the ozone layer; 

(3)  Whereas it is established that continued emissions of ozone-depleting substances 
at  current  levels  continue  to  cause  significant  damage  to  the  ozone  layer; 
whereas it is therefore necessary to take further steps in order to ensure  sufficient 
protection for human health and the environment; 

(4)  Whereas in view of the responsibilities  of the Community  for  the  environment 
and  trade,  the  Community,  pursuant  to  Council  Decision  88/540/EEC4,  has 
become a Party to the Vienna Convention for the Protection of the Ozone Layer 
and  the  Montreal  Protocol  on  substances  that  deplete  the  ozone  layer,  as 
amended by the Parties to the Protocol at their second meeting in London and at 
their fourth meeting in Copenhagen; 

(5)  Whereas additional  measures for the protection of the ozone layer were adopted 
by the  Parties  to  the  Montreal  Protocol  at  their  seventh  meeting  in  Vienna  in 
December  1995 and  at their  ninth  Meeting  in Montreal  in  September  1997, in 
which the Community participated; 

COM(1998) 398 of  1  July  1998. 

OJ  L 333, 22.12.1994, p.  I. 
OJL297,  31.10.1988, p. 8. 

30 

(6)  Whereas it is necessary  for  action to be taken at Community  level to carry out 
the  Community's  obligations  under  the  Vienna  Convention  and  the  latest 
amendments and adjustments to the Montreal Protocol, in particular to phase out 
the  production  and  the  placing  on  the  market  of  methyl  bromide  within  the 
Community and to provide for a system for the licensing not only of imports but 
also of exports of  ozone-depleting substances; 

(7)  Whereas  in view of the  earlier than  anticipated  availability  of technologies  for 
replacing  ozone-depleting  substances,  it  is  appropriate  in  certain  cases  to 
provide  for  phaseout  schedules  which  are  stricter  than  those  provided  for  in 
Regulation  (EC) No 3093/94 and which are stricter  than  those of the amended 
and adjusted Protocol; 

(8)  Whereas  under  Regulation 

(EC)  No  3093/94, 

the  production  of 
chlorofluorocarbons,  other  fully  halogenated  chlorofluorocarbons,  halons, 
carbon  tetrachloride,  1,1,1-trichloroethane  and  hydrobromofluorocarbons  has 
been phased  out; whereas the production  of those controlled  substances  is thus 
prohibited, subject to possible derogation for essential uses and to meet the basic 
domestic  needs  of  Parties  pursuant  to  Article  5  of  the  Montreal  Protocol; 
whereas  it is now also  appropriate  to progressively  prohibit  the placing on the 
market  and use of those  substances  and  of products  and  equipment  containing 
those substances; 

(9)  Whereas  the  growing  availability  of  alternatives to  methyl  bromide  should  be 
reflected  in  an  accelerated  phaseout  of  methyl  bromide  compared  to  the 
Montreal Protocol; whereas such an accelerated phaseout is also provided  for by 
other Parties to the Protocol; whereas there might be specific  critical agricultural 
uses and conditions for which the phasing out of methyl bromide would  lead to 
severe  technical  or  economic  difficulties;  whereas  exemptions  should  be 
foreseen  for those cases for which the production and placing on the market of 
methyl bromide may be permitted after phaseout; 

(10)  Whereas Regulation (EC) No 3093/94 provides for controls on the production of 
all  other  ozone-depleting  substances  but  does  not  provide  for  controls  on  the 
production  of hydrochlorofluorocarbons  (HCFCs); whereas  it  is  appropriate  to 
introduce such provision to ensure that HCFCs do not continue to be used where 
non-ozone depleting alternatives exist; whereas measures for  the control  of the 
production  of HCFCs  should  be taken  by all Parties to the  Montreal  Protocol; 
whereas  a  freeze  on  production  of  HCFCs  would  reflect  that  need  and  the 
Community's  determination  to take  a leading role  in this  respect;  whereas  the 
quantities  produced  should  be  adapted  to  the  reductions  envisaged  for  the 
placing  on  the  Community  market  of  HCFCs  and  to  the  declining  demand 
world-wide  as  a  consequence  of  reductions  in  the  consumption  of  HCFCs 
required by the Protocol; whereas HCFCs controls under the Montreal Protocol 
should  be  considerably  tightened  to  protect  the  ozone  layer  and  to  reflect  the 
availability  of  alternatives;  whereas  the  Community  will  continue  to  press  the 
Parties to the Protocol to accept tighter controls on HCFCs; 

31 

(11)  Whereas  the  Montreal  Protocol,  in  Article  2F  (7)  requires  the  Parties  to 
endeavour to ensure that the use of HCFCs is limited to those applications where 
other  more  environmentally  suitable  alternative  substances  or technologies  are 
not  available;  whereas  in  view  of  the  availability  of  alternative  and  substitute 
technologies,  the  placing  on  the  market  and  use  of  HCFCs  and  products 
containing HCFCs can be further limited; 

(12)  Whereas  quotas  for  the  release  for  free  circulation  in  the  Community  of 
controlled  substances  should  only  be  allocated  for  limited  uses  of  controlled 
substances;  whereas  controlled  substances  and  products  containing  controlled 
substances  from  States  not  Party  to  the  Montreal  Protocol  should  not 
be imported; 

(13)  Whereas the  licensing  system  for  controlled  substances  should  be  extended  to 
include the authorisation of exports of controlled substances, in order to monitor 
trade  in  ozone-depleting  substances  and  to  allow  for  exchange  of  information 
between Parties; 

(14)  Whereas  provision  should  be  made  for  the  recovery  of  used  controlled 

substances, and to prevent leakages of controlled substances; 

(15)  Whereas the  Montreal  Protocol  requires  reporting  on  trade  in  ozone-depleting 
substances;  whereas  annual  reporting  should  therefore  be  required  from 
producers, importers and exporters of controlled substances, 

HAS ADOPTED THIS REGULATION: 

CHAPTER I 

INTRODUCTORY PROVISIONS 

Article 1 

Scope 

This Regulation shall apply to the production, importation, exportation, placing on the 
market,  use,  recovery,  recycling  and  reclamation  of  chlorofluorocarbons,  other  fully 
halogenated  chlorofluorocarbons,  halons,  carbon  tetrachloride,  1,1,1-trichloroethane, 
methyl  bromide,  hydrobromofluorocarbons  and  hydrochlorofluorocarbons  (HCFCs), 
to  the  reporting  of  information  on  these  substances  and  to  the  importation, 
exportation,  placing  on  the  market  and  use  of  products  and  equipment  containing 
those substances. 

Article 2 

Definitions 

For the purposes of this Regulation: 

"Protocol"  shall  mean  the  1987  Montreal  Protocol  on  Substances  that  Deplete 
the Ozone Layer, as last amended and  adjusted; 

32 

"Party" shall mean any Party to the Protocol; 

"State  not  Party  to  the  Protocol"  shall,  with  respect  to  a  particular  controlled 
substance, include any  State or regional  economic-integration  organization  that 
has not agreed to be bound by the control measures applicable to that substance; 

tetrachloride, 
and 

"controlled substances" shall mean chlorofluorocarbons,  other fully  halogenated 
1,1,1-trichloroethane, 
chlorofluorocarbons,  halons,  carbon 
methyl bromide,  hydrobromofluorocarbons 
hydrochlorofluorocarbons 
(HCFCs), whether alone or in a mixture, and whether they are virgin, recovered, 
recycled  or reclaimed.  This  definition  shall  not  cover  any  controlled  substance 
which  is  in  a  manufactured  product  other  than  a  container  used  for  the 
transportation  or  storage  of  that  substance,  or  insignificant  quantities  of  any 
controlled  substance,  originating  from  inadvertent  or  coincidental  production 
during  a  manufacturing  process,  from  unreacted  feedstock,  or  from  use  as  a 
processing  agent which is present in chemical  substances as trace impurities, or 
that is emitted during product manufacture or handling; 

"chlorofluorocarbons"  shall mean the controlled  substances  listed  in Group I of 
Annex I, including their isomers; 

"other  fully  halogenated  chlorofluorocarbons"  shall  mean  the  controlled 
substances listed in Group II of Annex I, including their isomers; 

"halons"  shall  mean  the  controlled  substances  listed  in  Group  III  of  Annex  I, 
including their isomers; 

"carbon tetrachloride" shall mean the controlled substance specified  in Group IV 
of Annex I; 

"1,1,1-trichloroethane"  shall  mean  the  controlled  substance  specified 
Group V of Annex I; 

in 

"methyl bromide" shall mean the controlled  substance specified  in Group VI of 
Annex I; 

"hydrobromofluorocarbons"  shall  mean  the  controlled  substances  listed  in 
Group VII of Annex I, including their isomers; 

"hydrochlorofluorocarbons"  or  "HCFCs"  shall  mean  the  controlled  substances 
listed in Group VIII of Annex I, including their isomers; 

"feedstock"  shall  mean  any controlled  substance that  undergoes  transformation 
in a process in which it is entirely converted from  its original composition; 

33 

"processing  agent"  shall  mean  controlled  substances  used  as  chemical 
processing  agents  in  those  applications  listed  in  Annex  VI,  in  installations 
existing  at  1  September  1997,  and  where  emissions  are  insignificant.  The 
Commission  shall,  in  the  light  of  those  criteria  and  in  accordance  with  the 
procedure  laid down  in Article  17, establish  a list of undertakings  in which  the 
use of controlled  substances  as processing  agents shall be permitted.  It may, in 
accordance  with  the  procedure  laid  down  in  Article  17, amend  that  list  in  the 
light of new information  or technical developments; 

"producer"  shall  mean  any  natural  or  legal  person  manufacturing  controlled 
substances within the Community; 

"production"  shall  mean the amount of controlled  substances  produced,  less the 
amount  destroyed  by technologies  approved  by the Parties  and  less the amount 
entirely  used  as feedstock  or as a processing  agent  in the manufacture  of othe"r 
chemicals.  No  amount  recovered,  recycled  or  reclaimed  shall  be  considered 
as "production"; 

"ozone-depleting  potential"  shall mean  the  figure  specified  in the  final  column 
of Annex I representing the potential  effect  of each controlled  substance on the 
ozone layer; 

"calculated  level" shall mean a quantity determined by multiplying  the quantity 
of  each  controlled  substance  by  its  ozone-depleting  potential  and  by  adding 
together,  for  each  group  of  controlled  substances  in  Annex  I  separately,  the 
resulting figures; 

"industrial  rationalisation"  shall  mean  the  transfer  either  between  Parties  or 
within a Member State of all or a portion of the calculated  level of production of 
one producer  to  another,  for  the purpose  of optimising  economic  efficiency  or 
responding to anticipated shortfalls in supply as a result of plant closures; 

"placing  on  the  market"  shall  mean  the  supplying  or  making  available  to 
third persons,  against  payment  or  free  of  charge,  of  controlled  substances  or 
products  containing  controlled  substances  covered  by  this  Regulation  with  a 
view to their distribution or use on the Community market; 

"use"  shall  mean  the  utilisation  of  controlled  substances  in  the  production  or 
maintenance of products or equipment or in other processes except for  feedstock 
and processing agent uses; 

"reversible  air-conditioning/heat  pump  system"  shall  mean  a  combination  of 
inter-connected  refrigerant  containing parts constituting one closed  refrigeration 
circuit,  in which  the  refrigerant  is circulated  for  the  purpose  of  extracting  and 
rejecting  heat (i.e. cooling, heating), which are reversible in that the evaporators 
and condensers are designed to be inter-changeable in their  functions; 

"inward  processing"  shall  mean  a  procedure  provided  for  in  Article  114(1) 
point (a)  of  Council  Regulation  (EEC)  No  2913/92  of  12  October  1992 
establishing the Community Customs Code5; 

Oj  L302.  19.10.1992, p. 1. 

34 

"recovery"  shall  mean  the  collection  and  the  storage  of  controlled  substances 
from,  for  example,  machinery,  equipment  and  containment  vessels  during 
servicing or before disposal; 

"recycling" shall mean the reuse of a recovered controlled substance following a 
basic  cleaning  process  such  as  filtering  and  drying.  For  refrigerants,  recycling 
normally involves recharge back into equipment as is often carried out on site; 

"reclamation"  shall  mean  the  reprocessing  and  upgrading  of  a  recovered 
controlled  substance through such processes as filtering,  drying, distillation  and 
chemical  treatment  in order  to restore  the  substance  to  a specified  standard  of 
performance, which often  involves processing off site at a central  facility; 

"undertaking" shall mean any natural or legal person who produces, recycles  for 
placing on the market or uses controlled substances for industrial or commercial 
purposes  in  the  Community,  who  releases  such  imported  substances  for  free 
circulation  in  the  Community,  or  who  exports  such  substances  from  the 
Community for industrial or commercial purposes. 

CHAPTER II 

PHASE-OUT SCHEDULE 

Article 3 

Control of production of controlled substances 

Subject  to  paragraphs  5  to  10,  the  production  of  the  following  shall 
be prohibited: 

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

chlorofluorocarbons; 

other fully halogenated  chlorofluorocarbons; 

halons; 

carbon tetrachloride; 

1,1,1-trichlorocthanc; 

hydrobromofluorocarbons. 

In the light of the proposals made by Member  States, the Commission  shall, in 
accordance with the procedure laid down in Article  17, apply the criteria set out 
in Decision IV/25 of the Parties  in order to determine  every year  any  essential 
uses f .>•- which the production  and importation  of controlled  substances  referred 
to in th ; first  subparagraph may be permitted in the Community and those users 
who  may  take  advart ige  of  those  essential  uses  for  their  own  account.  Such 
ition  shall  be allowed  only if no adequate  alternatives or 
P^oduct'on an ! impc 
rec  cled or rec?aime<  ontrolled  substances  referred  to in the first  subparagraph 
au  available  H  >m ar 

f tin1 Parties 

Subject to paragraphs 5 to 10, each producer shall ensure that: 

(a) 

the  calculated  level  of  its production  of  methyl  bromide  in  the  period 
1 January to 31 December  1999 and in each  12-month period  thereafter 
does  not  exceed  75%  of  the  calculated  level  of  its  production  of 
methyl bromide in 1991; 

(b) 

it produces no methyl bromide after 31 December 2000. 

The  competent  authority  of  each Member  State  shall  apply  the  criteria  set  out 
in  Annex V  to  determine  every  year  any  critical  uses  of  methyl  bromide  for 
which the  production, importation  and use may be permitted  in the Community 
after  31 December  2000,  the  quantities  to  be  permitted  and  those  users  who 
may take advantage of critical  uses for  their own account.  Such production  and 
importation  shall  be  allowed  only  if  no  adequate  alternatives  or  recycled  or 
reclaimed methyl bromide are available from  any of the Parties. 

Each Member  State shall report to the Commission  by 31 January  each year on 
the  authorisations  granted  by  its  competent  authority  in  respect  of  the  period 
1 January to 31 December of the preceding year, including the specific  uses and 
quantities  authorised,  the reasons  for  those  authorisations,  efforts  underway  to 
identify  and implement  alternatives, measures taken to reduce emissions and an 
estimate of actual emissions. 

Each  year  the  Commission  shall  review  the  critical  use  exemptions  authorised 
by  the  competent  authorities  of the Member  States. In the  light  of  that  review 
and  of technical  and  other  information,  the  Commission  shall  take  appropriate 
measures including, if necessary, proposing modifications  to Annex V. 

In an emergency, where unexpected  outbreaks of particular  pests or diseases so 
require, and by way of derogation  from  Annex V, the competent  authority  of a 
Member  State  may  authorise  the  temporary  use  of  methyl  bromide.  Such 
authorisation  shall  apply  for  a  period  not  exceeding  60  days.  Member  States 
shall inform  the Commission within one month of any emergency  authorisation 
granted under this procedure. 

Subject to paragraphs 8, 9 and 10, each producer shall ensure that: 

(a) 

(b) 

the calculated level of its production of hydrochlorofluorocarbons  in the 
period  1 January  to  31  December  2000  and  in  each  12-month  period 
thereafter  does  not  exceed  the  calculated  level  of  its  production  of 
hydrochlorofluorocarbons  in 1997; 

the calculated level of its production of hydrochlorofluorocarbons  in the 
period  1 January  to  31  December  2008  and  in  each  12-month  period 
thereafter  does not exceed 35% of the calculated  level of its production 
of hydrochlorofluorocarbons  in 1997; 

36 

(c) 

(d) 

the calculated level of its production of hydrochlorofluorocarbons  in the 
period  1 January to  31  December  2014  and in each  12-month period 
thereafter does not exceed 20% of the calculated level of its production 
of hydrochlorofluorocarbons in 1997; 

the calculated level of its production of hydrochlorofluorocarbons  in the 
period  1 January to  31  December  2020  and in each  12-month period 
thereafter does not exceed  15% of the calculated level of its production 
of hydrochlorofluorocarbons in 1997; 

(e) 

it produces no hydrochlorofluorocarbons after 31 December 2025. 

Before 31 December 2002, the Commission will review the level of production 
of hydrochlorofluorocarbons  in the period 1  January 2003 to 31 December 2007 
with  a view  to  determining  whether  a production  cut  ahead  of  the  year  2008 
should  be  proposed.  This  review  will  take  into  account  the  development  of 
HCFC  consumption  worldwide,  the  HCFC  exports from the  Community  and 
other OECD countries and the technical and economic availability of alternative 
substances or technologies. 

The Commission shall issue licences to those users identified in accordance with 
the  second  subparagraph  of  paragraph  1 and  shall  notify  them  of  the  use  for 
which they have authorisation and the substances and quantities thereof that they 
are authorised to use. 

A producer may be authorised by the competent authority of the Member State 
in  which  that  producer's  relevant  production  is  situated  to  produce  the 
controlled substances referred to in paragraph  1 for the purpose of meeting the 
demands  licensed  in  accordance  with  paragraph  4,  and  to  produce  methyl 
bromide for the purposes of meeting critical uses authorised in accordance with 
paragraph  2.  The  competent  authority  of  the  Member  State  concerned  shall 
notify  the  Commission  in  advance  of  its  intention  of  issuing  any  such 
authorisation. 

The  competent  authority  of  the  Member  State  in  which  a producer's  relevant 
production  is  situated  may  authorise  that  producer  to  exceed  the  calculated 
levels of production laid down in paragraphs 1 and 2 in order to satisfy the basic 
domestic needs of Parties pursuant to Article 5 of the Protocol, provided that the 
additional calculated  levels of production of the Member State concerned do not 
exceed  those  permitted  for  that  purpose  by  Articles  2A  to  2E  and  2H  of  the 
Protocol  for 
in  question.  The  competent  authority  of  the 
Member State concerned shall notify  the Commission  in advance of its intention 
of issuing any such authorisation. 

the  periods 

To  th?  extent  permitted  by  the  Protocol,  the  competent  authority  of  the 
Member State  in  which  a  producer's  relevant  production  is  situated  may 
authork e that producer  to exceed the calculated  levels of production  laid  down 
n order to satisfy  any essential, or critical, uses of Parties 
in paragraphs  1 and 
rmpetent  authority  of the  Member  State  concerned  shall 
a* t! : ir  reque  The 
not  fy  the  Cv.-mnif  •.  i  in  advance  of  its  intention  of  issuing  any  such 
au  torisatior* 

8. 

9. 

To  the  extent  permitted  by  the  Protocol,  the  competent  authority  of  the 
Member State  in  which  a  producer's  relevant  production  is  situated  may 
authorise  that producer to  exceed  the  calculated  levels  of  production  laid  down 
in  paragraphs  1  to  7  for  the  purpose  of  industrial  rationalisation  within  the 
Member  State  concerned,  provided  that  the  calculated  levels  of  production  of 
that Member  State do not exceed  the  sum of the calculated  levels  of  production 
of  its  domestic  producers  as  laid  down  in paragraphs  1 to  7  for  the  periods  in 
question.  The  competent  authority  of  the  Member  State  concerned  shall  notify 
the Commission in advance of its intention of issuing any such authorisation. 

To  the  extent  permitted  by  the  Protocol,  the  Commission  may,  in  agreement 
with the competent authority of the Member State in which a  producer's relevant 
production  is situated, authorise that_producer to exceed  the calculated  levels  of 
production  laid  down  in  paragraphs  1  to  8  for  the  purpose  of  industrial 
rationalisation  between  Member States,  provided  that  the  combined  calculated 
levels  of production  of the  Member  States  concerned  do  not  exceed  the  sum  of 
the  calculated  levels  of  production  of  their domestic  producers  as  laid  down  in 
paragraphs  1 to  8  for  the  periods  in  question.  The  agreement  of  the  competent 
authority of the Member  State in which it is  intended to reduce production  shall 
also be required. 

10.  To  the  extent  permitted  by  the  Protocol,  the  Commission  may,  in  agreement 
with  both  the  competent  authority  of  the  Member  State  in  which  a  producer's 
relevant production  is  situated and the government  of the third Party concerned, 
authorise a producer to combine the calculated levels of production  laid down in 
paragraphs  1 to 9 with the calculated  levels of production  allowed  to a producer 
in a third Party under the Protocol  and that producer's national  legislation  for the 
purpose  of  industrial  rationalisation  with  a  third  Party,  provided  that  the 
combined  calculated  levels  of  production  by  the  two  producers  do  not  exceed 
the  sum  of  the  calculated  levels  of  production  allowed  to  the  Community 
producer  under  paragraphs  1  to  9  and  the  calculated  levels  of  production 
allowed  to  the  third  Party  producer  under  the  Protocol  and  any  relevant 
national  legislation. 

Article  4 

Control  of the placing  on the market and use of controlled  substances 

1. 

Subject  to  paragraphs  4  and  5,  the  placing  on  the  market  and  the  use  of  the 
following  shall be prohibited: 

(a) 

chlorofluorocarbons; 

(b) 

other fully halogenated  chlorofluorocarbons; 

(c) 

halons; 

(d) 

carbon tetrachloride; 

38 

(e) 

(f) 

1,1, î -trichloroethane; and 

hydrobromofluorocarbons. 

2. 

Subject to paragraphs 4 and 5, each producer and importer shall ensure that: 

(a) 

the calculated  level  of methyl  bromide which it places on the market or 
uses  for  its own  account  in the  period  1 January to  31  December  1999 
and  in  each  12-month  period  thereafter  does  not  exceed  75%  of  the 
calculated  level  of  methyl  bromide  which  it  placed  on  the  market  or 
used for its own account in  1991 ; 

(b) 

it  does  not  place  any  methyl  bromide  on  the  market  or  use  any  for  its 
own account after 31 December 2000. 

The  total  quantitative  limits  for the  placing  on  the  market  or use  for  their  own 
account by producers and importers of methyl bromide are set out in Annex II. 

3. 

Subject to paragraphs 4 and 5 and to Article 5(5): 

(a) 

the  calculated  level  of  hydrochlorofluorocarbons  which  producers  and 
importers  place  on  the  market  or  use  for  their  own  account  in  the 
period  1  January  to  31  December  1999  and  in  the  12-month  period 
thereafter shall not exceed the sum  of: 

2.6%  of  the  calculated  level  of  chlorofluorocarbons  which 
producers  and importers placed  on  the market  or used  for  their 
own account in  1989, and 

the  calculated 
level  of  hydrochlorofluorocarbons  which 
producers  and importers  placed  on the market  or used  for their 
own account in  1989; 

(b) 

the  calculated  level  of  hydrochlorofluorocarbons  which  producers  and 
importers  place  on  the  market  or  use  for  their  own  account  in  the 
period  1 January to 31 December 2001  shall not exceed the sum of: 

2.0%  of  the  calculated  level  of  chlorofluorocarbons  which 
producers  and importers placed  on the  market  or used  for  their 
own account in  1989, and 

level  of  hydrochlorofluorocarbons  which 
the  calculated 
producers  and  importers  placed  on  the market  or used  for  their 
own account in  1989; 

(c) 

the  calculated  level  of  hydrochlorofluorocarbons  which  producers  and 
importers  place  on  the  market  or  use  for  their  own  account  in  the 
period  1 January  to  31  December  2002  shall  not  exceed  90%  of  the 
level calculated in application of point (b); 

39 

(d) 

(e) 

(f) 

(g) 

(h) 

the  calculated  level  of hydrochlorofluorocarbons  which  producers  and 
importers  place  on  the  market  or  use  for  their  own  account  in  the 
period  1  January  to  31  December  2003  shall  not  exceed  35% of  the 
level calculated in application of point (b); 

the  calculated  level  of hydrochlorofluorocarbons  which  producers  and 
importers  place  on  the  market  or  use  for  their  own  account  in  the 
period  1  January  to  31  December  2004  and  in  each  12-month  period 
thereafter  shall not exceed 30% of the level calculated in application of 
point (b); 

the  calculated  level  of  hydrochlorofluorocarbons  which  producers  and 
importers  place  on  the  market  or  use  for  their  own  account  in  the 
period  1  January  to  31  December  2008  and  in  each  12-month  period 
thereafter  shall not exceed  5% of the level calculated  in application  of 
point (b); 

no  producer  or  importer  shall  place  hydrochlorofluorocarbons  on  the 
market or use any for its own account after  31 December 2014; 

each  producer  and  importer  shall  ensure  that  the  calculated  level  of 
hydrochlorofluorocarbons  which it places on the market or uses for  its 
own account  in the period  1 January to 31 December  1999 and  in each 
12-month  period  thereafter  until  31  December  2002  shall  not  exceed, 
as  a  percentage  of  the  calculated  levels  set  out  in  (a)  to  (f),  its 
percentage market share in 1996. 

Before  1 January 2001, the Commission  shall, in accordance with the procedure 
laid  down  in Article  17, determine  a mechanism  for  the allocation  of quotas to 
each  producer  and  importer  of  the  calculated  levels  set  out  in  (a)  to  (f), 
applicable for the period  1  January to 31 December 2003 and for each  12-month 
period  thereafter. 

The total  quantitative  limits for  the placing  on the market  or use  for  their  own 
account  by producers  and  importers  of hydrochlorofluorocarbons  are  set out  in 
Annex II. 

Paragraphs  1, 2  and  3  shall  not  apply  to the  placing  on the  market  and  use  of 
controlled substances  if: 

(a) 

they  are  destroyed  within  the  Community  by  technologies  approved  by 
the Parties; 

(b) 

they are used for feedstock  or as a processing agent; or 

(c) 

they  are  used  to  meet  the  licensed  demands  for  essential  uses  of  those 
users identified  as laid down  in Article  3(1) and to meet the  demands  for 
critical uses authorised in accordance with Article 3(2). 

40 

Paragraph  1 shall  not  apply to the placing  on the  market  and  use  of  controlled 
substances for the maintenance or servicing of refrigeration  and  air-conditioning 
equipment until 31 December  1999. 

Paragraph  1(c) shall not apply to the placing on the market and use of halons in 
existing fire protection systems until 31 December 2003 or to the placing on the 
market of halons for critical uses as set out in Annex VII. 

Any producer  or  importer  entitled  to place  controlled  substances  referred  to  in 
this Article on the market or use them for its own account may transfer that right 
in respect of all  or any quantities of that group of substances fixed  in accordance 
with this Article to  any other producer  or  importer  of that  group  of  substances 
within  the  Community.  Any  such  transfer  shall  be  notified  in  advance  to  the 
Commission.  The transfer  of the  right  to  place  on the  market  or  use  shall  not 
imply the further  right to produce or to import. 

importation 

and  placing  on 

chlorofluorocarbons, 

the  market 
other 

and 
The 
equipment  containing 
halogenated 
chlorofluorocarbons,  halons,  carbon  tetrachloride,  1,1,1-trichloroethane  and 
hydrobromofluorocarbons  shall  be  prohibited,  with  the  exception  of  products 
and equipment for which the use of the respective controlled substance has been 
authorised in accordance with the second subparagraph of Article 3(1). Products 
and  equipment  shown  to  be  manufactured  before  the  entry  into  force  of  this 
Regulation shall not be covered by this prohibition. 

of  products 
fully 

5. 

6. 

Article 5 

Control of the use of hydrochlorofluorocarbons 

1. 

Subject  to the  following  conditions,  the  use  of  hydrochlorofluorocarbons  shall 
be prohibited: 

(a)  in aerosols; 

(b)  as solvents: 

(i) 

in  non-contained  solvent  uses  including  open-top  cleaners  and 
open-top dewatering systems without refrigerated  areas, in adhesives 
and  mould-release  agents  when  not  employed  in  closed  equipment, 
for  drain  cleaning  where  hydrochlorofluorocarbons  are  not 
recovered, 

(ii) 

from  1 January  2003  ,  in  all  solvent  uses,  with  the  exception  of 
precision  cleaning  of  electrical  and  other  components  in  the 
aerospace and aeronautics industries; 

(c) 

as refrigerants: 

(i) 

in  equipment  produced  after  31  December  1995  for  the  following 
uses: 

41 

in non-confined  direct-evaporation systems, 

in domestic refrigerators  and  freezers, 

in  motor  vehicle,  tractor  and  off-road  vehicle  or  trailer  air 
conditioning systems operating on any energy source, 

in road public-transport air conditioning, 

(ii) 

in  rail  transport  air  conditioning,  in  equipment  produced  after 
31 December  1997, 

(iii)  from 

1  January  2000, 

in 

equipment 

produced 

after 

31 December  1999 for the following uses: 

in public and distribution cold stores and warehouses, 

for equipment of  150 kw and over, shaft  input, 

(iv) 

from  1 January  2001, in  all  other  refrigeration  and  air  conditioning 
equipment  produced  after  31 December  2000, with  the exception of 
reversible  air-conditioning/heat  pump  systems  where  the  use  of 
hydrochlorofluorocarbons  shall  be  prohibited  from  1 January  2004 
in all equipment produced after  31 December 2003, 

(v) 

from  1  January  2008,  the  use  of  virgin  hydrochlorofluorocarbons 
shall be prohibited  in the maintenance  and  servicing of  refrigeration 
and air conditioning equipment existing at that date; 

(d) 

for the production of foams other than integral skin foams for use in  safety 
applications and rigid insulating foams: 

(i) 

from  1 January  2000, for  the production  of  integral  skin  foams  and 
polyethylene  foams, 

(ii) 

from  1 January  2002,  for  the  production  of  extruded  polystyrene 
foams, except where used for insulated transport, 

(iii)  from  1 January  2003,  for  the  production  of polyurethane  foams  for 
appliances,  of  polyurethane  flexible  faced  laminate  foams  and  of 
polyurethane  sandwich  panels,  except  where  these  latter  two  are 
used for insulated transport, 

(iv) 

from  1  January 2004, for the production of all foams; 

(e) 

as carrier  gas for  sterilisation  substances  in  closed  systems, in  equipment 
produced after  31 December  1997; 

(0 

in all other uses. 

42 

2. 

By  way  of  derogation  from  paragraph  1, the  use  of  hydrochlorofluorocarbons 
shall be permitted: 

(a) 

in laboratory uses, including research and development; 

(b) 

as feedstock  in the manufacture  of other chemicals; and 

(c) 

as a processing agent. 

3. 

4. 

5. 

6. 

The  importation  and  placing  on  the  market  of  products  and  equipment 
containing hydrochlorofluorocarbons  for which a use restriction is in force under 
this Article shall be prohibited from  the date on which the use restriction  comes 
into force. Products and equipment shown to be manufactured  before the date of 
that use restriction shall not be covered by this prohibition. 

The  use  restrictions  under  paragraphs  1, 2 and  3  shall  not  apply  to  the  use  of 
hydrochlorofluorocarbons  for the production  of products  for export  to countries 
where the use of hydrochlorofluorocarbons  in those products is still permitted. 

The  Commission  may,  in  accordance  with  the  procedure  laid  down  in 
Article  17, in the light of experience with the operation of this Regulation  or to 
reflect technical progress, modify the list and the dates set out in paragraph 1. 

The  Commission  may,  following  a  request  by  a  competent  authority  of  a 
Member  State  and  in  accordance  with  the  procedure  laid  down  in  Article  17, 
authorise a temporary  exemption to allow the use and placing on the market of 
hydrochlorofluorocarbons  in  derogation  from  paragraph  1  and  Article  4(3) 
where it is demonstrated that, for a particular use, technically  and  economically 
feasible  alternative  substances  or  technologies  are  not  available  or  cannot 
be used. 

CHAPTER III 

TRADE 

Article 6 

Licences to import from third countries 

I. 

The  release  for  free  circulation  in  the  Community  or  inward  processing  of 
controlled  substances  shall  be subject  to  the  presentation  of  an  import  licence. 
Such  licences  shall  be  issued  by  the  Commission  after  verification  of 
compliance  with  Articles 6, 7, 8 and  13. The Commission  shall  forward  a copy 
of each  licence to  the competent  authority  of the  Member  State  into  which  the 
substances  concerned  are  to  be  imported.  Each  Member  State  shall  appoint  a 
competent authority for that purpose. 

43 

',.  The  licence  shall,  when  related  to  an  inward  processing  procedure,  be  issued 
only  if the  controlled  substances  are to  be  used  in  the  customs  territory  of  the 
Community  under  the  system  of  suspension,  provided  for  in  Article  114(2) 
point (a)  of  Regulation  (EEC)  No  2913/92,  and  under  the  condition  that  the 
compensating  products  are  re-exported  to  a  State  where  the  production, 
consumption  or  import  of  that  controlled  substance  is  not  prohibited.  The 
licence shall only be issued following  approval of the competent authority of the 
Member State in which the inward processing operation is to take place. 

».  A request for a licence shall state: 

(a) 

the names and the addresses of the importer and the exporter; 

(b) 

the country of exportation; 

(c) 

the  country  of  final  destination  if  controlled  substances  are  to be  used  in 
the  customs  territory  of  the  Community  under  the  inward  processing 
procedure as referred  to in paragraph 2; 

(d) 

a description of each controlled substance, including: 

-  the commercial  description, 

-  the description and the CN code as laid down in Annex III, 

-  the nature of the substance (virgin, recovered or reclaimed), 

-  the quantity of the substance in kilograms; 

(e) 

the purpose of the proposed  import; 

(f) 

the place and date of the proposed importation, if known. 

4. 

5. 

The  Commission  may  require  a certificate  attesting  the nature  of  substances  to 
be imported. 

The  Commission  may,  in  accordance  with  the  procedure  laid  down  in 
Article  17, modify the list of items mentioned in paragraph 3 and Annex III. 

Article 7 

Imports of controlled substances from third countries 

The  release  for  free  circulation  in  the  Community  of  controlled  substances  imported 
from  third  countries  shall  be  subject  to  quantitative  limits.  Those  limits  shall  be 
determined  and  quotas  allocated  to  undertakings  for  the  period  1  January  to 
31 December  1999  and  for  each  12-month  period  thereafter  in  accordance  with  the 
procedure laid down in Article  17.  They shall be allocated only: 

44 

(a) 

for controlled substances of groups VI and VIII as referred to in Annex I; 

(b) 

for controlled substances if they are used for essential or critical uses; 

(c) 

(d) 

for  controlled  substances if they are used for  feedstock  or as processing agents; 
or 

for  recovered  controlled  substances  if  they  are  used  for  destruction  in  the 
Community by technologies approved by the Parties. 

Article # 

Imports of controlled substances from a State not Party to the Protocol 

The release  for free circulation  in the Community  or inward processing  of  controlled 
substances imported from  any State not Party to the Protocol shall be prohibited. 

Article 9 

Imports of products containing controlled substances from a State not Party 
to the Protocol 

1. 

The  release  for  free  circulation  in  the  Community  of  products  and  equipment 
containing  controlled  substances  imported  from  any  State  not  Party  to  the 
Protocol shall be prohibited. 

2.  A 

list  of  products  containing  controlled  substances  and  of  combined 
nomenclature  codes  is  given  in  Annex  IV  for  guidance  of  the  Member  States' 
customs  authorities.  The  Commission  may,  in  accordance  with  the  procedure 
laid down in Article  17, add to, delete items from  or amend this list in the light 
of the lists established by the Parties. 

Article 10 

Imports of products produced using controlled substances from a State not Party 
to the Protocol 

In  the  light  of  the  decision  of  the  Parties, the  Council  shall,  on  a  proposal  from  the 
Commission,  adopt  rules  applicable  to  the  release  for  free  circulation  in  the 
Community  of products which  were produced  using controlled  substances  but do not 
contain  substances  which  can  be  positively  identified  as  controlled  substances, 
imported  from  any State not Party to the Protocol. The identification  of such products 
shall  comply  with  periodical  technical  advice  given  to  the Parties. The  Council  shall 
act by a qualified  majority. 

45 

Article 11 

Export of controlled substances or products containing controlled substances 

1. 

Exports  from  the  Community  of  chlorofluorocarbons,  other  fully  halogenated 
chlorofluorocarbons,  halons,  carbon  tetrachloride,  1,1,1  trichloroethane  and 
hydrobromofluorocarbons  or  products  and  equipment,  other  than  personal 
effects^  containing  those  substances  shall  be  prohibited.  This  prohibition  shall 
not  apply  to  exports  of  controlled  substances  for  which  production  has  been 
authorised  under  Article  3(6)  to  satisfy  the  basic  domestic  needs  of  Parties 
pursuant  to  Article  5 of  the  Protocol  and  of  controlled  substances  or  products 
and  equipment  containing  those  substances  authorised  under  Article  3(7)  to 
satisfy essential uses of the Parties. 

2. 

Exports from  the Community  of methyl bromide and  hydrochlorofluorocarbons 
to any State not Party to the Protocol shall be prohibited. 

Article  12 

Export authorisation 

1. 

Exports  from  the  Community  of  controlled  substances  shall  be  subject  to 
authorisation.  Such export  authorisations  shall be issued by the Commission  to 
undertakings  for  the  period  1  January  to  31  December  1999  and  for  each 
12-month period thereafter  after  verification  of compliance with Article  11. The 
Commission  shall forward  a copy of each export authorisation to the competent 
authority of the Member State concerned. 

2.  An application for an export authorisation shall state: 

(a) 

the name and address of the exporter; 

(b) 

a description of the controlled  substance(s) intended  for export, including: 

- 

the commercial  description, 

- 

the description and the CN code as laid down in Annex III, 

- 

the nature of the substance (virgin, recovered or reclaimed); 

(c) 

the total quantity of each substance to be exported; 

(d) 

the country/countries of final destination of the controlled substance(s); 

(e) 

the purpose of the exports. 

3. 

Each  exporter  shall  notify  the  Commission  of  any  changes  which  might  occur 
during the period  of validity  of the authorisation  in relation  to the data  notified 
under  paragraph  2. Each exporter  shall  report  to the Commission  in  conformity 
with Article 18. 

46 

Article 13 

Exceptional authorization to trade with a State not Party to the Protocol 

By  way  of  derogation from Articles  8,  9(1),  10 and  11(2),  trade with  any  State not 
Party  to  the  Protocol  in  controlled  substances  and  products  which  contain  or  are 
produced  by  means  of  one  or  more  such  substances  may  be  authorized  by  the 
Commission, to the extent that the State not Party to the Protocol is determined by a 
meeting  of the Parties to be in full  compliance  with the Protocol  and has  submitted 
data to that effect  as specified  in Article 7 of the Protocol. The Commission shall act 
in accordance with the procedure laid down in Article 17. 

Article 14 

Trade with a territory not covered by the Protocol 

1. 

Subject to any decision  taken under paragraph 2, Articles  8,  9 and  11(2) shall 
apply to any territory not covered by the Protocol as they apply to any State not 
Party to the Protocol. 

2.  Where  the  authorities  of  a  territory  not  covered  by  the  Protocol  are  in  full 
compliance with the Protocol and have submitted data to that effect  as specified 
in Article 7 of the Protocol, the Commission may decide that some or all of the 
provisions of Articles 8, 9 and 11 of this Regulation shall not apply in respect of 
that territory. 

The Commission  shall take  its decision  in accordance  with the  procedure  laid 
down in Article 17. 

CHAPTER IV 

EMISSION CONTROL 

Article  15 

Recovery of used controlled substances 

Chlorofluorocarbons, 
carbon  tetrachloride, 
hydrochlorofluorocarbons  contained in: 

other 

1,1,1-trichloroethane, 

fully  halogenated 

chlorofluorocarbons,  halons, 
and 

hydrobromofluorocarbons 

refrigeration equipment and air-conditioning equipment, 

equipment containing solvents, 

fire  protection systems and fire extinguishers, and 

rigid foams 

47 

shall  be  recovered  if  practicable  for  destruction  by  technologies  approved  by  the 
Parties  or  by  any  other  environmentally  acceptable  destruction  technology,  or  for 
recycling or reclamation  during the servicing and maintenance of equipment or before 
the  dismantling  or  disposal  of  equipment.  Member  States  shall  promote,  as 
appropriate,  the  establishment  of  destruction,  recycling  and  reclamation  facilities. 
Member  States shall define  the minimum  qualification  requirements  for the  servicing 
personnel  involved. 

Member  States shall report to the  Commission  by 31 December  2001  on the  systems 
established  to  promote  the  recovery  of  used  controlled  substances,  including  the 
facilities  available  and  the  quantities  of  used  controlled  substances  recovered, 
recycled, reclaimed or destroyed. 

This  provision  shall  be  without  prejudice  to  Council  Directive  75/442/EEC6  or  to 
measures adopted following Article 2(2) of that Directive. 

Article 16 

Leakages of controlled substances 

1.  All  precautionary  measures  practicable  shall  be  taken  to  prevent  leakages  of 
chlorofluorocarbons,  other  fully  halogenated  chlorofluorocarbons,  halons, 
carbon  tetrachloride,  1,1,1-trichloroethane,  hydrobromofluorocarbons 
and 
hydrochlorofluorocarbons  from  commercial  and  industrial  air-conditioning  and 
refrigeration  equipment,  from  fire-protection  systems  and  from  equipment 
containing  solvents  during  manufacture,  installation,  operation  and  servicing. 
Member  States  shall  define  the  minimum  qualification  requirements  for  the 
servicing personnel. They shall report to the Commission  by 31 December 2000 
on the schemes established concerning such qualification  requirements. 

The  Commission  shall  promote,  as  appropriate,  the  preparation  of  European 
standards relating to technical requirements with respect to the leakproofhess  of 
refrigeration  systems. 

2.  All  precautionary  measures  practicable  shall  be  taken  to  prevent  leakages  of 
methyl  bromide  from  fumigation 
in  which 
methyl bromide  is used.  Member  States shall  define  the minimum  qualification 
requirements for the servicing personnel  involved. 

installations  and  operations 

3.  All  precautionary  measures  practicable  shall  be  taken  to  prevent  leakages  of 

controlled  substances used as feedstock  and as processing agents in chemicals. 

4.  All  precautionary  measures practicable  shall be taken to prevent  any  leakage of 
controlled substances inadvertently produced  in the course of the manufacture  of 
other chemicals. 

OJL  194, 25.7.1975, p. 39. 

48 

CHAPTER V 

COMMITTEE, REPORTING, INSPECTION AND ENFORCEMENT 

Article 17 

Committee 

The Commission  shall be assisted by a committee composed of the representatives  of 
the Member States and chaired by a representative of the Commission. 

The  representative  of  the  Commission  shall  submit  to  the  committee  a  draft  of  the 
measures  to be  taken. The  committee  shall  deliver  its  opinion  on  that  draft  within  a 
time-limit  which the chairman  may lay down according to the urgency  of the  matter. 
The  opinion  shall  be  delivered  by  the  majority  laid  down  in  Article  148(2)  of  the 
Treaty  in the  case  of decisions  which  the  Council  is required  to  adopt  on  a  proposal 
from  the  Commission.  The  votes of the representatives  of  the  Member  States  within 
the  committee  shall  be  weighted  in  the  manner  laid  down  in  that  Article.  The 
chairman shall not vote. 

The  Commission  shall  adopt  measures  which  shall  apply  immediately.  However,  if 
these measures are not in accordance with the opinion of the committee, they shall be 
communicated  by  the  Commission  to  the  Council  forthwith.  In  that  event,  the 
Commission  may defer  application  of the measures which it has decided  for  a period 
of not more than one month from the date of such communication. 

The  Council,  acting by a qualified  majority,  may take  a different  decision  within  the 
time-limit referred to in the previous paragraph. 

Article 18 

Reporting 

1. 

Every year before  1 March, each producer,  importer  and  exporter  of  controlled 
substances  shall  communicate  to  the  Commission,  sending  a  copy  to  the 
competent authority of the Member State concerned, data as specified  below  for 
each controlled  substance, in respect of the period  1  January to 31  December of 
the preceding year. 

(a)  Each producer shall communicate: 

- 

its total production of each controlled substance, 

-  any  production  placed  on  the  market  or  used  for  the  producer's  own 
account  within  the  Community,  separately  identifying  production  for 
feedstock, processing agent and other uses, 

-  any  production  to  meet  the  essential  uses  in the  Community,  licensed 

in accordance with Article 3(4), 

49 

-  any production  authorised  under Article  3(6) to  satisfy  basic  domestic 

needs of Parties pursuant to Article 5 of the Protocol, 

-  any  production  authorised  under  Article  3(7)  to  satisfy  essential,  or 

critical, uses of Parties, 

-  any  increase  in production  authorised  under  Article  3(8), (9) and  (10) 

in connection with industrial rationalisation, 

-  any quantities recycled, reclaimed or destroyed, 

-  any stocks. 

(b)  Each 

importer, 

including  any  producers  who  also 

import,  shall 

communicate: 

-  any  quantities  released  for  free  circulation 

in  the  Community, 
separately  identifying  imports for  feedstock  and processing  agent uses, 
for  essential  uses  licensed  in  accordance  with  Article  3(4),  for  use  in 
quarantine and pre-shipment applications and for destruction, 

-  any quantities  of controlled  substances  entering the  Community  under 

the inward-processing procedure, 

-  any  quantities  of  used  controlled  substances  imported  for  recycling 

or reclamation, 

-  any stocks. 

(c)  Each  exporter, 

including  any  producers  who  also  export,  shall 

communicate: 

substances  which 

-  any quantities of controlled  substances exported  from  the  Community, 
including 
the 
inward-processing procedure, separately identifying  quantities exported 
to each country of destination and quantities exported for feedstock  and 
process agent uses, essential uses, quarantine and pre-shipment uses, to 
meet  the  basic  domestic  needs  of  Parties  pursuant  to  Article  5 of  the 
Protocol and for destruction, 

re-exported 

under 

are 

-  any  quantities  of  used  controlled  substances  exported  for  recycling 

or reclamation, 

-  any stocks. 

2. 

Every  year  before  the  31  December,  Member  States'  customs  authorities  shall 
return to the Commission the stamped used licence documents. 

50 

3. 

4. 

5. 

6. 

Every year before  1  March, each user who has been authorised to take advantage 
of  an  essential  use  exemption  under  Article  3(1)  shall,  for  each  substance  for 
which  an authorisation  has been received,  report to the Commission,  sending  a 
copy  to  the  competent  authority  of the  Member  State  concerned,  the  nature  of 
the use, the quantities used during the previous year, the quantities held in stock, 
any  quantities  recycled  or  destroyed,  and  the  quantity  of  products  containing 
those substances placed on the Community market and/or exported. 

Every year before  1 March, each undertaking  which has been  authorised  to use 
controlled  substances  as a processing  agent  shall  report  to  the  Commission  the 
quantities used during the previous year, and an estimate of the emissions which 
occurred during such use. 

The Commission shall take appropriate steps to protect the confidentiality  of the 
information  submitted to it. 

The  Commission  may,  in  accordance  with  the  procedure  laid  down  in 
Article  17, modify  the reporting requirements laid down in paragraphs  1  to 4, to 
meet commitments under the Protocol or to improve the practical  application  of 
those reporting requirements. 

Article 19 

Inspection 

1. 

In carrying out the tasks assigned to it by this Regulation, the Commission  may 
obtain  all  the  information  from  the  governments  and  competent  authorities  of 
the Member States and from undertakings. 

2.  When requesting  information  from  an undertaking  the Commission  shall  at  the 
same  time  forward  a  copy  of  the  request  to  the  competent  authority  of  the 
Member  State  within  the  territory  of  which  the  undertaking's  seat  is  situated, 
together with a statement of the reasons why that information  is required. 

3. 

4. 

The  competent  authorities  of  the  Member  States  shall  carry  out 
investigations  which 
this Regulation. 

the  Commission 

necessary 

considers 

the 
under 

Subject  to the agreement  of the Commission  and  of the competent  authority  of 
the  Member  State  within  the  territory  of  which  the  investigations  are  to  be 
made, the officials  of the Commission  shall  assist  the officials  of that  authority 
in the performance  of their duties. 

5. 

The  Commission  shall  take  appropriate  steps  to  protect  the  confidentiality  of 
information  obtained under this Article. 

51 

Article 20 

Penalties 

The Member States shall lay down the rules on penalties applicable to  infringements 
of  the  provisions  of  this  Regulation  or  of  national  provisions  adopted  in 
implementation  thereof and shall take all measures necessary  to ensure that they are 
implemented.  The  penalties  provided  for  must  be  effective,  proportionate  and 
dissuasive.  The Member  States  shall  notify  those  provisions  to  the  Commission  by 
30 June  1999  at  the  latest  and  shall  notify  it  without  delay  of  any  subsequent 
amendment affecting them. 

CHAPTER VI 

FINAL PROVISIONS 

Article 21 

Repeal 

Regulation (EC) No 3093/94 is repealed. 

References  to  the  repealed  Regulation  shall  be  construed  as  references  to 
this Regulation. 

Article 22 

Entry into force 

This  Regulation  shall  enter  into  force  on  the  twentieth  day  following  that  of  its 
publication in the Official Journal of the European Communities. 

It shall apply from [1 January 1999]. 

This  Regulation  shall  be  binding  in  its  entirety  and  directly  applicable  in  all 
Member States. 

Done at Brussels, 

For the Council 
The President 

52 

ANNEXI 

Controlled substances covered 

Group 

Substance 

Ozone-depleting 
potential (1) 

Group I 

"G^I 
V 

Group III 

CFC13 
CF2C12 
C2F3CI3 
C2F4CI2 
C2F5C1 
~^i 
C2FCI5 
C2F2C14 
C3FC17 
C3F2C16 
C3F3C15 
C3F4C14 
C3F5C13 
C3F6C12 
C3F7C1 

CF2BrCl 
CF3Br 
C2F4Br2 

(CFC-11) 
(CFC-12) 
(CFC-113) 
(CFC-114) 
(CFC-115) 

^7 T 3> 

(CFC-111) 

(CFC-112) 
(CFC-211) 
(CFC-212) 
(CFC-213) 
(CFC-214) 
(CFC-215) 
(CFC-216) 
(CFC-217) 

(halon-1211) 
(halon-1301) 
(halon-2402) 

Group IV 

CC14 

(carbon tetrachloride) 

Group V 

C2H3C13(2)  (1,1,1-trichloroethane) 

Group VI 

CH3Br 

(methyl bromide) 

Group VII 

CHFBr2 
CHF2Br 
CH2FBr 
C2HFBr4 
C2HF2Br3 
C2HF3Br2 
C2HF4Br 
C2H2FBr3 
C2H2F2Br2 
C2H2F3Br 
C2H3FBr2 
C2H3F2Br 
C2M41'Br 
C3HFBr6 

1.0 
1.0 
0.8 
1.0 
0.6 
Zo 
,0 
,0 
]Q 
,0 
.*0 
,0 
. '0 
,Q 
1Q 

3.0 
10.0 
6.0 

1.1 

0.1 

0.6 

1.00 
0.74 
0.73 
0.8 
1.8 
1.6 
1.2 
1.1 
1.5 
1.6 
1.7 
1.1 
0.1 
,5 

53 

(1) 

These  ozone-depleting  potentials  are  estimates  based  on  existing  knowledge  and  will  be 
reviewed  and revised  periodically  in the light of decisions taken  by the  Parties to the  Montreal 
Protocol on Substances that Deplete the Ozone Layer. 

(2) 

This formula does not refer to 1,1,2-trichloroethane. 

(3) 

Identifies the most commercially-viable substance as prescribed  in the Protocol. 

55 

ANNEX II 

Total quantitative limits on producers' and importers' placing controlled 
substances on the market and using them for their own account in 
the Community 
(calculated levels expressed in ODP tonnes) 

j Substance 

Group I 

Group II 

Group III 

Group IV 

Group V 

Group VI (1) 

Group VII 

Group VIII 

|  For 12-month 
I periods  from 
i  1  January to 
31 December 

1999 
2000 
2001 
2002 
2003 
2004 
2005 
2006 
2007 
2008 
2009 
2010 
2011 
2012 
2013 
2014 
2015 

0 

0 

0 

0 

0 

0 

7412 
7412 
0 

8 079 
8 079 
6 678 
6 010 
2 337 
2 003 
2 003 
2 003 
2 003 
334 
334 
334 
334 
334 
334 
334 
0 

( 1 )  Calculated on the basis of ODP = 0.6. 

56 

Groups, Combined Nomenclature  1997 (CN97) codes (1) and descriptions for the 
substances referred to in Annexes I and II 

ANNEX III 

Group 

CN 97 code 

Description 

Group I 

2903 4100 

~  Trichloroftuoromethane 

2903 42 00 

2903 43 00 

2903 44  10 

2903 44 90 

-  Dichlorodifluoromethane 

~  Trichlorotrifluoroethanes 

—  Dichlorotetrafluoroethanes 

—  Chloropentafluoroethane 

Group II 

2903 45  10 

—  Chlorotrifluoromethane 

2903 45  15 

2903 45 20 

2903 45 25 

2903 45 30 

2903 45 35 

2903 45 40 

2903 45 45 

2903 45 50 

2903 45 55 

—  Pentachlorofluoroethane 

—  Tetrachlorodifluoroetlmnes 

—  Heptachlorofluoropropanes 

—  Hexachlorodifluoropropanes 

—  Pentachlorotrifluoropropanes 

—  Tetrachlorotetrafluoropropanes 

—  Trichloropentafluoropropanes 

—  Dichlorohexafluoropropanes 

—  Chloroheptafluoropropanes 

Group III 

2903 46  10 

—  Bromochlorodifluoromethane 

2903 46 20 

2903 46 90 

---  Bromotrifluoromethane 

—  DihroiuolclntlluonictlmncN 

Group IV 

2903  14 00 

-  Carbon tetrachloride 

Group V 

2903  19 10 

—  1,1,1-Trichloroethane 
(methy Ich loroform) 

Group VI 

2903 30 33 

—  Bromomethane (methyl bromide) 

Group VII 

2903 49 30 

—  Hydrobromofluoromethanes, -ethanes or 

- propanes 

57 

Group VIII 

2903 49  10 

—  Hydrochlorofluoromethanes,  -ethanes or 

- propanes 

ex 3824 71 00 

—  Mixtures containing one or more 

substances falling within codes 
2903 41 00 to 2903 45 55. 

ex 3824 79 00 

—  Mixtures containing one or more 

substances falling within codes 
2903 46  10 to 2903 46 90 

ex 3824 90 95 

Mixtures containing one or more 
substances falling within codes 
2903  14 00, 2903  19 10, 2903 30 33, 
2903 49  10 or 2903 49 30. 

(1) 

An  "ex"  before  a  code  implies  that  other  products  than  those  referred  to  in  the  column 
"Description" may fall under that subheading. 

58 

ANNEX IV 

Combined nomenclature (CN) codes for products containing 
controlled substances (1) 

(1) These customs codes are given for the guidance of the Member States' customs authorities. 

1.  Automobiles and truck air-conditioning units 

CN codes 

8701 20 10 - 8701 90 90 
8702 10 11-8702 90 90 
8703 10 11-8703 90 00 
8704 10 11-8704 90 90 
8705  10 00-8705  90 90 

8706 00 11-8706 00 99 

2.  Domestic and commercial  refrigeration  and air-conditioning/heat-pump  equipment 

Refrigerators: 

CN codes 
8418 1010-8418 29 00 
8418 50 11-8418  5019 
8418 61 10-8418 69 99 

Freezers: 

CN codes 

8418  10 10-8418 29 00 
8418 30 10-8418 30 99 
8418 40 10-8418 40 99 
8418 50 11-8418  50 19 
8418 61 10-8418  6190 
8418 69 10-8418 69 99 

Dehumidi  fiers: 

CN codes 

8415 10 00-8415 83 90 
8424 89 80 
8479 60 00 
8479 89 10 
8479 89 95 

59 

Water coolers: 

CN codes 

8419 60 00 
8419 89 95 

Ice machines: 

CN codes 

8418  10 10-8414 29 00 
8418 30 10-8418  30 99 
8418 40 10-8418  40 99 
8418 50 11-8418  5019 
8418 61  10-8418  6190 
8418 69  10-8418  69 99 
8479 89 95 

Air-conditioning and heat-pump units: 

CN codes 

8415  10 00-8415  8390 
8418 61  10-8418  6190 
8418 69 10-8418  69 99 
8418 99  10-8418 99 90 

3.  Aerosol products, except medical aerosols 

Food products: 

CN codes 

0404 90 21-0404 90 89 
1517 90 10-1517  90 99 
2106 90 92 
2106 90 98 

Paints and varnishes, prepared water pigments and dyes: 

CN codes 

3208 10 10-3208 10 90 
3208 20 10-3208 20 90 
3208 90 11 - 3208 90 99 
3209 10 00-3209 90 00 
3210 00 10-3210 00 90 
3212 90 90 

60 

Perfumery, cosmetic or toilet preparations: 

CN codes 

3303 00 10 - 3303 00 90 
3304 30 00 
3304 99 00 
3305  10 00 - 3305 90 90 
3306  10 00-3306  90 00 
3307  10 00-3307  30 00 
3307 49 00 
3307 90 00 

Surface-active preparations: 

CN codes 

3402 20 10-3402 20 90 

Lubricating preparations: 

CN codes 

2710 00 81 
2710 00 98 
3403  1100 
3403 19 10-3403 19 99 
3403 91 00 
3403 99 10-3403  99 90 

Household preparations: 

CN codes 

3405 10 00 
3405 20 00 
3405 30 00 
3405 40 00 
3405 90 10-3405 90 90 

Articles of combustible materials: 

CN codes 

3606  10 00 

61 

Insecticides, rodenticides, fungicides, herbicides, etc.: 

CN codes 

3808 10 10-3808  10 90 
3808 20 10-3808 20 80 
3808 30 11 -3808 30 90 
3808 40 10-3808 40 90 
3808 90 10 - 3808 90 90 

Finishing agents, etc.: 

CN codes 

3809 10 10 - 3809  10 90 
3809 91 00 - 3809 93 00 

Preparations and charges for fire-extinguishers; charged fire-extinguishing grenades: 

CN codes 

3813 00 00 

Organic composite solvents, etc.: 

CN codes 

3814 00 10-3814 00 90 

Prepared de-icing fluids: 

CN codes 

3820 00 00 

Products of the chemical or allied industries 

CN codes 

3824 90 10 
3824 90 35 
3824 90 40 
3824 90 45-3824  90 95 

Silicones in primary  forms: 

CN codes 

3910 00 00 

62 

Arms: 

CN codes 

93040000 

4.  Portable fire extinguishers 

CN codes 

84241010-8424  10 99 

5.  Insulation boards, panels and pipe covers 

CN codes 

3917 2110-3917 40 90 
392010 23-3920  9990 
3921  1100-39219090 
3925 1000-3925  90 80 
3926 9010-3926 90 99 

6.  Pre-polymers 

CN codes 

39011010-39119099 

63 

CRITERIA  TO BE APPLIED IN DETERMINING  CRITICAL  USE 
EXEMPTIONS  FOR METHYL PROMIDE AFTER  PHASEOUT 

ANNEX V 

1. 

The competent  authorities of Member  States shall authorise the critical use of 
methyl  bromide  only  where  it  is  demonstrated  that  all  the  following  criteria 
are met: 

(a) 

(b) 

(c) 

(d) 

(e) 

it  is  necessary  to  safeguard  food  and  commodity  supplies,  or  is 
critical  to the functioning  of certain  types  of production  in  agriculture 
or horticulture  (including economic aspects); 

there  are  no  available 
feasible 
alternatives  or  substitutes  that  are  acceptable  from  the  standpoint  of 
environment  and health; 

technically  and  economically 

work  is  underway  to  investigate,  evaluate,  field  test,  commercialise 
and,  where  necessary,  facilitate  regulatory  approval  for  alternatives 
and  substitutes,  with  a  view  to  phasing  out  methyl  bromide  as  soon 
as possible; 

the methyl bromide  will be applied  using best  available  technology  to 
reduce emissions; 

methyl  bromide  has  been  regularly  used  as  an  integral  part  of 
fumigation  operations  in  the  crop  and  region  concerned  during  the 
previous  five years; 

2. 

Critical  use  exemptions  for  the  continued  use  of  methyl  bromide  after 
phaseout shall: 

(a) 

(b) 

(c) 

specify  the  maximum  quantity  of  methyl  bromide  to  be  used,  the 
maximum  rate of  application,  the minimum  time between  fumigations 
and the precautions to be taken to minimise emissions; 

specify  as  precisely  as  possible  the  particular  use  which  has  been 
exempted,  including  details  of the  crop,  cropping  method,  location(s) 
and the disease(s)  which methyl bromide  is required  to eradicate; 

be  reviewed  by  the  competent  authorities  at  least  every  two  years  to 
determine  whether  or  not  the  use  still  meets  these  criteria,  with  a 
view  to further  stepwise  reductions  in the quantity  of  methyl  bromide 
used  under  the critical use exemption. 

64 

PROCESSES IN WHICH CONTROLLED SUBSTANCES ARE USED AS 
PROCESSING AGENTS 

ANNEX VI 

use  of  carbon tetrachloride  for  the  elimination  of  nitrogen  trichloride  in  the 
production of caustic soda; 

use  of  carbon  tetrachloride  in  the  recovery  of  chlorine  in  tail  gas  from 
production of chlorine; 

use of carbon tetrachloride in the chlorinated rubber process; 

use of carbon tetrachloride in the production of pesticides; 

use of carbon tetrachloride in the production of pharmaceuticals; 

use of carbon tetrachloride in chlorosulfonated polyolefin (CSM) production; 

production  of  poly-phenylene-terephtal-amide  with  the  aid  of  carbon 
tetrachloride in an intermediate raw product; 

use of carbon tetrachloride in styrene butadiene rubber (SBR) production; 

use of carbon tetrachloride in chlorinated parafine production; 

use of CFC-113 in manufacturing a family of fluoropolymer resins; 

use of CFC-11 in manufacture of a fine synthetic fibre sheet structure. 

65 

ANNEX VII 

CRITICAL USES OF HALON 

use of halon 1301: 

in aircraft  for the protection of engine nacelles, cargo bays and dry bays; 

in crew compartments of military  vehicles 

for inerting of occupied spaces where flammable liquid release could occur; 

use of halon  1211: 

in hand held fire extinguishers for use on board aircraft; 

in military and police fire extinguishers  for use on persons. 

66 

ISSN 0254-1475 

COM(98) 398  final 

DOCUMENTS 

EN 

06  12  14  15 

Catalogue  number  :  CB-CO-98-440-EN-C 

ISBN 92-78-37976-X 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg 

67