Commission staff working document reviewing regulation (EC) N° 2037/2000 on substances that deplete the ozone layer "Better regulation building on 20 years of success" - Impact assessment accompanying the proposal for a regulation of the European Parliament and Council on substances that deplete the ozone layer (Recast) [COM(2008) 505 final] [SEC (2008) 2367]
Date: 2008-08-01
Institutions: European Commission
Subjects: Intergovernmental Convention (EU), chemical product, dangerous substance, import restriction, ozone, production quota, stratospheric pollutant

EN 

EN 

   EN 

 
 
COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 1.8.2008 
SEC (2008) 2366 final 

COMMISSION STAFF WORKING DOCUMENT 

Reviewing Regulation (EC) N° 2037/2000 on substances that deplete the ozone layer 
"Better regulation building on 20 years of success" 
Impact Assessment 

Accompanying the Proposal for a Regulation of the European Parliament and Council 
on Substances that Deplete the Ozone Layer (Recast) 

[COM(2008) 505 final] 
[SEC (2008) 2367] 

EN 

   EN 

 
 
 
  
 
 
COMMISSION STAFF WORKING DOCUMENT 

Reviewing Regulation (EC) N° 2037/2000 on Substances that Deplete the 
Ozone Layer  

"Better Regulation –Building on 20 Years of Success" 
Impact Assessment  

Accompanying the Proposal for a Regulation of the European Parliament and 
Council on Substances that Deplete the Ozone Layer (Recast) 

[COM(2008) 505 final] 
[SEC (2008) 2367] 

EN 

ii 

   EN 

 
 
 
TABLE OF CONTENTS 

COMMISSION STAFF WORKING DOCUMENT Reviewing Regulation (EC) N° 
2037/2000 on substances that deplete the ozone layer "Better regulation building on 20 years 
of success" Impact Assessment Accompanying the Proposal for a Regulation of the European 
Parliament and Council on Substances that Deplete the Ozone Layer (Recast) [COM (2008) 
xxx final] [COM(2008) xxx final] [SEC (2008) xxx]................................................................ 1 

COMMISSION STAFF WORKING DOCUMENT Reviewing Regulation (EC) N° 
2037/2000 on Substances that Deplete the Ozone Layer "Better Regulation –Building on 20 
Years of Success" Impact Assessment Accompanying the Proposal for a Regulation of the 
European Parliament and Council on Substances that Deplete the Ozone Layer (Recast)........ ii 

1. 

2. 

2.1. 

2.2. 

2.3. 

3. 

3.1. 

3.2. 

3.3. 

Introduction .................................................................................................................. 6 

Policy Background ....................................................................................................... 7 

The Montreal Protocol –From Environmental Pioneering to Hailed Multilateral 
Environmental Agreement in 20 Years........................................................................ 7 

Remaining Global Challenges Related to Recovery of the Ozone Layer.................. 10 

Regulation (EC) N° 2037/2000 on Substances that Deplete the Ozone Layer –
Leading the Montreal Protocol Implementation ........................................................ 12 

General Problem Definition and Objectives .............................................................. 14 

Defining the Remaining Problems to be Tackled in the EU Based on the 2010 
Outlook....................................................................................................................... 14 

General and Specific Objectives ................................................................................ 16 

Method and Criteria for Assessing the Impacts ......................................................... 17 

3.4.  Who may be affected?................................................................................................ 18 

4. 

Developing Viable Policy Options............................................................................. 19 

4.1. 

Maintaining the Business as Usual Scenario ............................................................. 19 

4.2.  Withdrawing the Regulation ...................................................................................... 19 

4.3. 

4.4. 

5. 

Towards Simpler and Better Regulation .................................................................... 19 

Other Policy Options Initially Considered and Subsidiarity...................................... 19 

Achieving Simpler and Better Regulation ................................................................. 20 

5.1. 

Clarifying and simplifying the Regulation................................................................. 20 

5.1.1.  Definition and Drivers of the Problem....................................................................... 20 

5.1.2.  Description of Options ............................................................................................... 20 

5.1.3. 

Impact Analysis.......................................................................................................... 21 

5.1.4.  Comparison of the Options and Emerging Preferences ............................................. 22 

5.2. 

Streamlining of Reporting and Reducing the Associated Administrative Burden .... 22 

5.2.1.  Definition and Drivers of the Problem....................................................................... 22 

5.2.2.  Description of Options ............................................................................................... 23 

EN 

3 

   EN 

 
5.2.3. 

Impact Analysis.......................................................................................................... 24 

5.2.4.  Comparison of the Options and Emerging Preferences ............................................. 25 

5.3. 

Updating Exemption Regimes and Related Administrative Processes...................... 26 

5.3.1.  Definition and Drivers of the Problem....................................................................... 26 

5.3.2.  Description of Options ............................................................................................... 27 

5.3.3. 

Impact Analysis.......................................................................................................... 28 

5.3.4.  Comparison of the Options and Emerging Preferences ............................................. 30 

6. 

Ensuring Continued Compliance with the Montreal Protocol ..................................... 6 

6.1. 

Implementing Decision XIX/6 on the accelerated phase out of HCFCs ................... 31 

6.1.1.  Definition and Drivers of the Problem....................................................................... 31 

6.1.2.  Description of Options ............................................................................................... 31 

6.1.3. 

Impact Analysis.......................................................................................................... 31 

6.1.4.  Comparison of the Options and Emerging Preferences ............................................. 32 

6.2. 

Adapting the phasing out of the use of HCFCs.......................................................... 33 

6.2.1.  Definition and Drivers of the Problem....................................................................... 33 

6.2.2.  Description of Options ............................................................................................... 33 

6.2.3. 

Impact Analysis.......................................................................................................... 34 

6.2.4.  Comparison of the Options and Emerging Preferences ............................................. 35 

6.3. 

Options for Strengthening Enforcement of the Regulation........................................ 36 

6.3.1.  Definition and Drivers of the Problem....................................................................... 36 

6.3.2.  Description of Options ............................................................................................... 36 

6.3.3. 

Impact Analysis.......................................................................................................... 37 

6.3.4.  Comparison of the Options and Emerging Preferences ............................................. 38 

6.4. 

Options for Avoiding Illegal Imports and Closing Remaining Loopholes ................ 39 

6.4.1.  Problem definition and Drivers.................................................................................. 39 

6.4.2.  Description of Options ............................................................................................... 39 

6.4.3. 

Impact Analysis.......................................................................................................... 40 

6.4.4.  Comparison of the Options and Emerging Preferences ............................................. 41 

6.5. 

Options for Avoiding Exports Harming the Phase Out in Destination Countries ..... 41 

6.5.1.  Problem definition and Drivers.................................................................................. 41 

6.5.2.  Description of Options ............................................................................................... 42 

6.5.3. 

Impact Analysis.......................................................................................................... 43 

6.5.4.  Comparison of the Options and Emerging Preferences ............................................. 44 

7. 

Ensuring future challenges are being addressed ........................................................ 45 

7.1. 

Avoiding Emissions of ODS "Banked" in Products and Equipment......................... 45 

EN 

4 

   EN 

 
7.1.1.  Definition and Drivers of the Problem....................................................................... 45 

7.1.2.  Description of Options ............................................................................................... 47 

7.1.3. 

Impact Analysis.......................................................................................................... 49 

7.1.4.  Comparison of the Options and Emerging Preferences ............................................. 49 

7.2. 

Avoiding the Marketing of New and Short-lived ODS ............................................. 50 

7.2.1.  Definition and Drivers of the Problem....................................................................... 50 

7.2.2.  Description of Options ............................................................................................... 50 

7.2.3. 

Impact Analysis.......................................................................................................... 51 

7.2.4.  Comparison of the Options and Emerging Preferences ............................................. 52 

7.3. 

Avoiding Using Methyl Bromide (MB) for Quarantine and Pre-shipment purposes 52 

7.3.1.  Definition and of Drivers of the Problem .................................................................. 52 

7.3.2. 

Impact Analysis.......................................................................................................... 54 

7.3.3.  Comparison of the Options and Emerging Preferences ............................................. 55 

8. 

9. 

Monitoring and Evaluation ........................................................................................ 56 

Summary and Conclusions......................................................................................... 56 

Appendix I –Glossary............................................................................................................... 59 

Appendix II –Key Principles and Features of Regulation (EC) N° 2037/2000 ....................... 63 

Appendix III –The 2010 Outlook Regarding Controlled Ozone Depleting Substances in the 

EU –the Baseline for Finishing the Job...................................................................... 64 

Appendix IV –Methods and Criteria For Assessing the Impacts............................................. 69 

Appendix V –Stakeholders' Suggested Areas for Further Improvement ................................. 70 

Appendix VI –List of options considered and their impacts.................................................... 72 

Appendix VII –Comments from the Impact Assessment Board.............................................. 77

EN 

5 

   EN 

 
1. 

INTRODUCTION  

Context and Legal Basis 

The European Institutions' commitment to better regulation, combined with the EU's 
20  years'  experience  in  protecting  the  ozone  layer,  have  delivered  a  timely 
opportunity to review the Regulation (EC) N° 2037/2000 on substances that deplete 
the ozone layer (hereafter "the Regulation").1  
The preparations for this review furthermore coincided with the 20th Anniversary of 
the  Montreal  Protocol,  which  was  celebrated  in  the  margins  of  the  19th  Meeting  of 
the Parties in 2007 in Montreal, and which offered ample opportunities for analysis 
and reflection on experience to date and on options for  future improvements to the 
policy and legislative framework that protects the ozone layer.  

As the revised Regulation will pursue the objective to preserve, protect and improve 
the quality of the environment and to ensure the EU's compliance with its obligations 
under an international agreement dealing with a worldwide environmental problem, 
it is appropriate to maintain Article 175(1) of the EC Treaty as legal basis. 

Expert and Stakeholder Consultations  

Preparations  for  the  review  of  the  regulation  started  at  the  end  of  2006  when  the 
Commission  contracted  a  consortium  of  independent  experts  to  conduct  a  review 
study  following  a  competitive  tender  procedure.2  Throughout  the  study,  due 
opportunities were provided for broad stakeholder consultation.  

An advisory group was established comprising representatives from Member States' 
National  Authorities,  other  relevant  agencies,  companies  and  industry  associations, 
and  non-governmental  organisations.  Advisory  Group  meetings  on  10  July  and  7 
November 2007 were well attended and offered stakeholders an opportunity to share 
experiences and expertise and to comment on draft reports circulated in advance by 
the experts contracted by the Commission.  

The review study was based upon an extensive stakeholder survey conducted during 
the first half of 2007. The survey revealed general satisfaction with the Regulation's 
effectiveness  and  cost-efficiency.  It  also  helped  identify  a  number  of  areas  for 
improvement,  notably  related  to  reducing  the  Regulation's  complexity.  A  summary 
of suggested changes is included in Appendix V.  

The  survey  and  other  relevant  reports  (including  the  latest  Reports  of  the  Montreal 
Protocol's  Scientific  Assessment  Panel  (SAP)  and  Technical  and  Economic 
Assessment  Panel  (TEAP))  subsequently  helped  inform  the  development  of 
proposals  for  a  revised  regulation,  including  potential  non-regulatory  options. 
Proposals for changes were short-listed, based on preliminary feasibility and impact 
assessments  and  a  set  of  recommended  options  was  presented  for  consideration  by 
the  Commission.  The  final  study  was  published  on  the  Commission's  website  in 

1 
2 

The present review is included in the 2008 CLWP under the “Simplification Heading”. 
Contract  07010401/2006/454578/MAR/C4  entitled  “Review  of  the  implementation  of  Regulation  EC 
N° 2037/2000 on substances that deplete the ozone layer” awarded to Milieu Ltd and Ecosphere Ltd. 

EN 

6 

   EN 

 
                                                 
January  2008.3  Stakeholders  were  then  offered  another  opportunity  to  comment  on 
the final report.  

The  review  study  and  stakeholders'  comments  served  as  key  inputs  for  the  present 
impact  assessment  and  the  proposed  review  of  the  Regulation  as  contained  in  this 
report. The external study was complemented by in-house environmental and socio-
economic  analysis  (in  accordance  with  the  applicable  Commission  guidelines  for 
conducting  regulatory  impact  assessments),  further  detailing  the  potential  costs  and 
benefits  of  the  recommended  options  in  terms  of  administrative  burden  and  direct 
economic costs. 

Key  stakeholders  were  kept  informed  through  existing  consultation  platforms 
dedicated  to  ozone  protection  policy  areas  (such  as  Meetings  of  the  Management 
Committee established by Article 18 of the Regulation; the March 2007 Meeting of 
the Industry Group on Protection of the Ozone Layer (IGPOL), and the April 2008 
Meeting  of  the  Environmental  Policy  Review  Group  comprising  all  Director 
Generals from Member States Environment Ministries). 

In parallel with the stakeholders' advisory group, an inter-service group was formed 
for the purpose of validating review options within the Commission.  

Comments from the Impact Assessment Board 

A draft of this report was submitted to the Commission’s Impact Assessment Board 
on 30 April 2008. The draft impact assessment was presented and discussed at the 21 
May  2008  meeting  of  the  Impact  Assessment  Board.  On  27  May  2008,  the  Impact 
Assessment  Board  issued  its  opinion  which  is  reproduced  in  Appendix  VII.  All 
recommendations for improvements have been accounted for in the final version of 
this impact assessment, as described in Appendix VII.  

Inter-Service Consultation 

All  services  consulted  (SG,  SJ,  ENTR,  AGRI,  ECFIN,  TREN,  RTD,  SANCO, 
MARKT,  TRADE,  JRC,  COMM,  COMP,  TAXUD)  agreed  to  the  proposed 
documents.  Inter-service  consultation  revealed that  entry of goods into the customs 
territory  was  not  only  to  include  those  for  release  for  free  circulation  in  the 
Community  and  transhipment,  but  also  those  entering  under  other  customs 
procedures  or  for  customs-approved  treatments  and  uses.  Option  3  in  section  6.4.2 
was adapted accordingly.  

2. 

POLICY BACKGROUND 

2.1. 

The Montreal Protocol –From Environmental Pioneering to Hailed Multilateral 
Environmental Agreement in 20 Years 

The stratospheric ozone layer provides a shield protecting life on earth from harmful 
ultraviolet  radiation  from  the  sun.  In  1974,  scientists  predicted  that  emissions  of 
certain  man-made  ODS  might  be  depleting  the  ozone.  During  the  early  1980s, 
scientists  observed  a  very  significant  decrease  in  the  concentration  of  ozone  in  the 
stratosphere over the Antarctic, which became widely known as the "ozone hole". At 
its  peak  –  in  the  late  1990s  –  the  ozone  hole  was  most  severe  around  the  poles  in 

3 

http://ec.europa.eu/environment/ozone/review.htm. 

EN 

7 

   EN 

 
                                                 
spring time, although ozone concentrations were significantly reduced in other places 
as well. Increases in levels of UV radiation have caused adverse impacts on human 
life,  primarily  in  terms  of  increased  incidences  of  skin  cancers  and  cataracts  and 
ecosystems. 

In 1985, Governments agreed upon the Vienna Convention for Protecting the Ozone 
Layer and thus committed to international cooperation to prevent harm from damage 
to  the  ozone  layer.  As  soon  as  1987,  Governments  proceeded  to  establish  the 
Montreal Protocol  on Substances that  Deplete  the  Ozone  Layer,  thereby  mandating 
the phase-out of production of ODS by all signatory Parties according to a specific 
time-table.  

Since 1987, and following further scientific evidence, the Montreal Protocol has been 
amended  five  times  to  include  additional  ODS  and  accelerate  production  phase-out 
time  tables.  Table  1  provides  a  summary  of  the  ODS  currently  incorporated 
("controlled") in the Montreal Protocol and their common uses.  

Table 1: Common Ozone Depleting Substances and Their Uses 

Substance 

Most Common Uses 

Chlorofluorocarbons (CFCs) 

Refrigerants; cleaning solvents; aerosol propellants;  
foam blowing agents. 

Halons 

Fire extinguishants; explosion suppressants. 

Carbon  tetrachloride,  CCl4 
(CTC) 

Feedstock  chemical  in  CFC  production;  cleaning  and 
industrial solvent. 

ODP4 
0.6 – 1.0 

3 – 10 

1.1 

Methyl  chloroform,  CHCl3 
(TCA) 

MB, CH3Br (MB) 

Industrial solvent for cleaning, inks, correction fluid. 

0.1 

Fumigant for control of soil-borne pests and diseases in 
crops and stored commodities. 

0.6 

Hydrochlorofluorocarbons 
(HCFCs) 

Refrigerants;  cleaning  solvents;  foam  blowing  agents; 
fire extinguishants. 

0.01 – 0.5 

In  2007,  as  the  Parties  celebrated  the  Montreal  Protocol's  20th  Anniversary  the 
Protocol  was  widely  hailed  as  one  of  the  most  successful  of  all  international 
environmental agreements.5  

Figure  1  illustrates  how  successful  the  Protocol  has  been  in  reducing  global 
consumption and production up until the period ending 2005. By then, all 191 Parties 
had  achieved  a  95  percent  reduction  in  the  consumption  of  ODS  compared  to 
established  baselines.  Reductions  are  highest  (99.2  percent)  in  industrialized 
countries,  and  somewhat  lower  (80  percent)  in  developing  countries.  These 
reductions were achieved on the basis of agreed consumption and production freezes 
and subsequent time-bound stepped reductions.6 

4 

5 

6 

Note: The ODP is the ratio of a chemical's impact on the ozone layer compared to that of a similar mass 
of CFC-11, which is set to 1.0. 
It is worth noting that the ability to focus on phasing out the tangible production and consumption of the 
ODS,  rather  that  targeting  emissions  is  by  many  considered  a  key  feature  of  the  success  of  the 
regulatory framework (both at international and EU level). 
Successful reductions in developing countries were made possible by the Multi-Lateral Fund which has 
to date channelled about US$ 2.2 billion to technology transfer and related capacity building projects in 
developing countries. 

EN 

8 

   EN 

 
 
 
                                                 
Figure 1: Global Phase Out of Controlled ODS under the Montreal Protocol (ODP tonnes) 

2.000.000

1.800.000

1.600.000

1.400.000

1.200.000

1.000.000

800.000

600.000

400.000

200.000

Consumption

Production

0
1986*

1989*

1992*

1995

1998

2001

2004

As of 2010, production and consumption of the most harmful (known) ODS should 
be completely banned in industrialized countries, except for a very limited number of 
exempted  or  non-controlled  uses  and  a  reducing  "tail"  of  hydrofluorocarbons.  Full 
bans  in  developing  countries  typically  come  into  effect  within  5  to  10  years 
following the bans in industrialized countries, although that an increasing number of 
developing  countries  now  align  their  policies  with  industrialized  countries  such  as 
those of the EU. 

A key feature of the success of the regulatory framework (both at international and 
EU level) is its focus on phasing out the tangible production and consumption of the 
ODS, rather that targeting emissions.  

The  Scientific  Assessment  Panel  (SAP),  in  its  latest  Report  released  in  2007, 
confirmed  that  the  ozone  layer  is  slowly  recovering  thanks  to  the  control  measures 
introduced  by  the  Protocol  –  albeit  with  a  10-15  years  delay  compared  to  the 
projections in its earlier 2002 Report. Global average ozone and Arctic ozone levels 
are expected to return to pre-1980 levels by 2050 whilst the Antarctic ozone hole is 
expected to return to pre-industrial levels by the 2065-2075 timeframe. 

Following  the  causal  relationship  between  increased  exposure  to  UV-B  (due  to  the 
depleted ozone layer) and adverse health impacts such as cataract or skin cancer, the 
risks related to the occurrence of these health impacts will significantly decrease in 
future. According to UNEP, controls implemented under the Montreal Protocol will 
enable  the  global  community  to  avoid  millions  of  fatal  skin  cancers  and  tens  of 
millions  of  non-fatal  skin  cancers  and  cataracts.  The  United  States'  authorities 
estimate  that  more  than  6.3  million  skin  cancers  will  have  been  avoided  in  the  US 
alone  and  that  efforts  to  protect  the  ozone  layer  will  have  saved  4.2  trillion  U.S. 
dollars in health care costs over the period 1990-2165.7 8 9 

7 

The Benefits and Costs of the Clean Air Act, 1990-2010. Environmental Protection Agency; Office of 
Air and Radiation. November 1999. EPA 4W-R-99-001. 

EN 

9 

   EN 

 
 
                                                 
Controls  implemented  under  the  Montreal  Protocol  have  furthermore  delivered 
substantial  climate  benefits.  That  is  because  most  ODS  have  a  very  high  Global 
Warming Potential (GWP) as indicated in Table 2. 

Table 2: Global Warming Potentials of the controlled ODS 

Substance 

Chlorofluorocarbons (CFCs) 

Halons 

Carbon tetrachloride, CCl4 (CTC) 

Methyl chloroform, CHCl3 (TCA) 

MB, CH3Br (MB) 

GWP10 

4,750 – 14,420 

404 – 7,140 

1,400 

146 

5 

Hydrochlorofluorocarbons (HCFCs) 

77 – 2,310 

Source: Scientific Assessment of Ozone Depletion: 2006, WMO, 2007 

Unmitigated,  ODS-related  GHG  emissions  could  have  been  as  much  of  a  concern 
today  as  global  CO2  emissions.  The  Montreal  Protocol  phase-out  schedules  have 
helped  avoiding  the  emission  of  greenhouse  gases  equivalent  to  more  than  100 
billion tons CO2 between 1990 and 2010. By 2010, GWP-weighted ODS emissions 
will  account  for  less  than  5%  of  global  projected  CO2  emissions  whereas  they 
accounted  for  nearly  50%  of  global  CO2  emissions  in  1990.  On  top  of  this,  the 
Montreal  Protocol  decision  of  the  September  2007  Meeting  of  the  Parties  to 
strengthen  further  the  HCFC  phase-out  will  potentially  reduce  emissions  by  an 
additional 18 billion tons of CO2-equivalent by 2030 corresponding to about 60% of 
current  global  annual  CO2  emissions.  Combined  voluntary  and  national  efforts  to 
phase out ODS before the MP started, and the mandatory efforts under the Protocol, 
have  succeeded  in  delaying  the  overall  growth  in  greenhouse  gas  levels  by  a 
significant 7-12 years.11 

2.2. 

Remaining Global Challenges Related to Recovery of the Ozone Layer 

Despite  the  significant  successes  achieved  to  date,  the  2006  SAP  Report  clearly 
stated  that  the  global  community  continues  to  face  significant  challenges  if  the 
projected  schedule  for  the  recovery  of  the  ozone  layer  is  to  be  achieved.  The  SAP 
and Technical and Economic Assessment Panel reports released in 2007 stated that 
the anticipated recovery of the ozone layer critically depends on Parties accounting 
for the key issues listed below: 

8 
9 

10 

11 

Key Achievements of the Montreal Protocol to date, UNEP Fact Sheet, 2007. 
The occurrence of skin cancers in mid-latitude developing countries has nevertheless increased over the 
last two decades due also to other factors such as the aging of population and the increased exposure to 
UV-B radiation due to changing life styles. 
Global  warming  potential  (GWP)  is  the  ratio  of  the  warming  caused  by  a  substance  compared  to  the 
warming caused by a similar mass of carbon dioxide. The GWP of carbon dioxide is 1.0. 
G.J. Velders et al., The importance of the Montreal Protocol in protecting climate, Proc. Nat. Acad. Sci, 
2007, 10.1073/pnas.0610328104. 

EN 

10 

   EN 

 
                                                                                                                                                         
(1) 

Failure to comply with the Montreal Protocol would delay, or could even 
prevent, recovery of the ozone layer.  

Emissions  associated  with  continued  or  expanded  exemptions  under  the 
Montreal  Protocol  could  delay  or  even  prevent  achieving  the  projected 
recovery  of  the  ozone  layer.  For  example,  critical  use  exemptions  allowing 
production of MB in 2005 and 2006, and continued use of MB for quarantine 
and pre-shipment (QPS) purposes would, if they were to continue indefinitely 
at the 2006 levels, result in an increase in stratospheric chlorine levels at mid-
latitude, thereby delaying recovery of the ozone layer. SAP finally suggested 
that Parties should also to monitor ODS emissions from other exempted uses, 
related to their use as feedstock and process agents. 

(2) 

Alarming  growth  of  HCFC  production  and  consumption  in  developing 
countries.  

New projections for the recovery of the ozone layer assume action is taken by 
Parties to stem the alarming growth of HCFC production and consumption in 
developing countries. HCFCs had been phased in as a transitional alternatives 
to  CFCs  in  some  sectors  even  though  they  still  have  significant  (but  lower 
than  CFC)  ODP  characteristics.  Whilst  developed  countries  are  well 
advanced  in  the  phase  out  of  HCFCs,  production  and  consumption  in 
developing  countries  were  projected  to  double  from  their  current  levels 
in  developed  countries).12 
(similar 

to  current  yet  decreasing 

levels 

Parties have moved swiftly by adopting Decision XIX/6 on the early phase-
out  of  HCFCs  less  than  a  year  after  the  publication  of  the  SAP  report.  The 
Decision  commits  developed  countries,  including  the  EC,  to  bring  forward 
the full phase out of HCFC production from 2025 to 2020.  

(3) 

Significant  ODS  contained  or  "banked"  in  products  and  equipment. 

Because the Protocol has focused on the reduction and ultimate elimination of 
ODS  production  rather  than  on  controlling  use,  there  remain  significant 
quantities  of  ODS  contained  in  products  such  as  building  insulation  foams 
and  in  refrigeration  and  air  conditioning  equipment.  A  failure  to  recover, 
recycle, and ultimately destroy these ODS at the end of the useful life of the 
products  or  equipment  concerned  poses  a  risk  to  maintaining  the  progress 
to  global  warming.  
achieved 

in  phasing  out  ODS  as  well  as 

TEAP  estimated  that,  in  2005,  3.5  million  ODP  tonnes  of  ODS  were 
contained  in  equipment  and  products  and,  as  such,  ODS  banks  present  the 
second most significant threat (after potential growth of HCFCs consumption 
in A5 countries) towards early recovery of the ozone layer. Recovery of ODS 
from the banks also presents an opportunity. Considering the significant GWP 
characteristics of CFCs and other "banked" ODS, these banks also represent a 
significant  climate  change  issue,  i.e.  containing  over  greenhouse  gases 
equivalent to over 2 billion tonnes of CO2. 

12 

Based on latest available date for 2005, they represented about 60 percent of the remaining substances 
in developed countries with overall quantities steadily decreasing.  

EN 

11 

   EN 

 
 
 
 
 
 
                                                 
(4) 

The  role  of  very  short-lived  substances  in  ozone  depletion  is  of  greater 
importance than previously assessed. 

It  is  now  believed  that  very  short-lived  halogenated  substances  such  as 
normal-propyl  bromide  (n-PB),  which  is  almost  exclusively  anthropogenic, 
significantly  contribute  to  total  stratospheric  bromine  and  thus  have  an 
adverse  effect  on  stratospheric  ozone.13  The  TEAP's  n-PB  Task  Force 
informed Parties in 2001 that n-PB is being aggressively marketed for solvent 
applications which traditionally used ODS and non-ODS. Production of n-PB 
is  a  rather  simple  process  allowing  it  to  be  economically  produced  in  both 
developed  and  developing  countries.  Hence,  annual  production  could  easily 
increase  significantly  over  the  next  few  years  if  no  preventative  measures 
were  taken.  Technically  and  economically  feasible  alternatives  that  are 
environmentally superior to n-PB are available for almost all its applications 
–  in  solvents,  as  a  feedstock  and  as  a  carrier  and  intermediate  for 
pharmaceutical and other industries. 

(5) 

Understanding the interconnections between ozone depletion and climate 
future  ozone  abundances. 
change 

for  projections  of 

is  crucial 

By the middle of the 21st century, quantities of the ODS in the stratosphere 
are  expected  to  have  fallen  to  those  present  in  1980  before  the  onset  of 
significant ozone depletion. However, climate and other atmospheric factors 
will  not  be  the  same  in  2050  as  in  1980,  and  this  could  cause  ozone 
abundances  in  2050  to  be  somewhat  different  from  those  observed  in  1980. 
At  high  latitudes,  the  stratospheric  temperature  cooling  related  to  climate 
change  tends  to  delay  the  recovery  of  the  ozone  layer.  In  mid-latitudes 
however,  the  recovery  is  somewhat  accelerated  by  the  changes  in  the 
temperature  in  the  upper  atmosphere.  Hence,  projections  of  the  recovery  of 
the  ozone  layer  remain  uncertain  and  further  delay  in  the  recovery  of  the 
ozone layer because of climate change cannot be excluded. 

At  the  19th  Meeting  of  the  Parties  held  in  2007,  the  above  challenges  were 
recognised  by  the  EU  Member  States  and  the  Commission.  Hence  they  are  duly 
accounted for in the problem definition outlined below.  

2.3. 

Regulation  (EC)  N°  2037/2000  on  Substances  that  Deplete  the  Ozone  Layer  –
Leading the Montreal Protocol Implementation 

The Regulation is the Community's main instrument for implementing the provisions 
of 
the  Montreal  Protocol.  The  closely  matching  and  mutually  reinforcing 
international and EU policy framework has lead to an impressive track record, with a 
near complete phase out of production and consumption of the controlled ODS (See 
appendix II for specific features).  

As shown in Figure 2, ODS production and consumption in the EU have decreased 
by more than 99 percent compared to baseline levels. 

13 

SAP  confirmed  the  ODP  for  n-PB  to  be  0.1  for  tropical  emissions  and  0.02-0.03  for  emissions  in 
northern mid-latitudes in its 2006 Report.  

EN 

12 

   EN 

 
 
 
                                                 
Figure 2: Trends in EU ODS Production and Consumption 1987-2006 

EU ODS Production and Consumption (Baseline till 2006)

700000

600000

500000

400000

300000

200000

100000

s
e
n
n
o
T
P
D
O

0

Baseline

-100000

Consumption

Production

1986

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

The  survey  conducted  in  support  of  the  review  showed  a  general  stakeholder 
satisfaction  with  the  effectiveness  of  the  Regulation.  Likewise,  stakeholders  have 
generally appreciated the efficiency of the Regulation, notably the fact that it allowed 
markets to adapt whilst keeping the overall administrative burden under control.  

Table  3  summarizes  the  key  characteristics  of  the  Regulation,  building  on 
stakeholder's  comments  in  terms  of  its  strengths,  weaknesses,  opportunities  and 
threats – a SWOT analysis. 

The  near-complete  phase  out  in  ODS  production  and  consumption  has  not  lead  to 
any material market disruption in the EU or globally. Following the provisions of the 
Montreal  Protocol,  the  staged  phase-out  approach  embedded  in  the  Regulation  has 
offered  a  clear  perspective  for  markets  (both  producers  and  consumers)  allowing 
them  gradually  to  adapt  without  causing  major  market  disruptions.  Where  the 
Regulation  has  banned  ODS  production,  a  series  of  exemptions  for  critical  and 
essential uses has been allowed in line with the provisions of the Montreal Protocol 
and associated Decisions of the Parties.14  

These exemption regimes have allowed for a (controlled) grace period for the more 
difficult  and  costly  phase  out  areas  and  formed  one  of  the  Regulation's  efficiency 
features.15  In  the  areas  where  the  Regulation  went  beyond  the  provisions  of  the 
Montreal Protocol, such as where it established use bans on equipment that contained 
or  relied  upon  HCFCs,  cost-efficiency  was  achieved 
through  progressive 
introduction  of  use  bans  by  date  and  sector.  The  use  of  HCFCs  in  products  and 
equipment for which alternatives were readily available was banned first, and longer 
phase out schedules were applied to more difficult sectors.  

14 

15 

Decisions  of  the  Parties  have  generally  established  two  key  criteria  concerning  critical  and  essential 
uses, i.e. (1) the importance of the use, and (2) the lack of availability of technically and economically 
feasible alternatives. 
Before  2010,  the  two  most  important  exemption  regimes  provided  for  in  the  Regulation  will  have 
ended:  essential  uses  for  metered  dose  inhalers  (MDI)  and  critical  uses  of  MB.  The  remaining 
exemption regimes are currently under review.  

EN 

13 

   EN 

 
 
  
                                                 
Table 3: A SWOT Analysis – Building on 20 Years' Experience. 

Strengths 

Weaknesses 

•  Complex Regulation 
•  Rigid quota and licensing procedures 
•  Extensive reporting requirements 
•  Lack of Synergies with other EC policies 

•  Effective policy framework 

•  Near complete phase out of production 

of controlled ODS  

•  Clear  evidence  of  decreasing  ODS 

levels in the atmosphere 

•  Prospects  of  ozone 
between 2050-75 

layer  recovery 

•  Significant 

indirect 

environmental 

benefits (climate change) 

•  Efficient policy framework 

•  Staged phase-out regimes 
•  Post-phase out exemption regimes  
•  On-line  ODS 

licensing  and  other 

efficiency features 

Opportunities 

Threats 

•  Advancing the progress of ODS phase-out 
•  Critical use of MB 
•  Essential  use  of  CFCs  for  Metered 

Dose Inhalers (MDIs) 

•  Essential laboratory and analytical uses 
•  Critical uses of halons 
•  HCFC Production 

•  New  Scientific  Assessment  &  TEAP  Reports 

(2006) 

•  Emissions from "non-controlled" ODS use 

•  Banks 
•  QPS 
•  New and short-lived ODS 
•  Feedstock Use 
Illegal and Harmful Trade  

• 
•  Climate change impacts on ozone layer recovery  
•  Fading Commitment to Remaining Phase-Out  

•  Growth  of  HCFC  use 

in  Developing 

•  Better  understanding  of  (short-lived) 

Countries 

ODS impacts 

•  Slowing  reduction  in  phasing  out  ODS 

•  Better  understanding  of  ozone  & 

essential/critical uses 

climate change links 

•  New data on ODS/GHG "Banks" 
•  Updated  risk  assessment  related  to 

ozone layer recovery  
•  Dialogue on the future of the MP  

•  Fading  R&D  prioritization  and  donor 

attention 

Whilst  this  flexibility  has  imposed  (often  significant)  administrative  costs  on 
Member  States'  authorities,  including  their  customs  agencies,  the  Commission,  and 
the companies benefiting from the flexible arrangements, these costs have generally 
come down as the number of exemptions requested and granted has reduced.16 

The  staged  phase-out  regimes  have  furthermore  served  as  instrumental  in  driving 
innovation  and  the  development  and  marketing  of  new,  more  environmentally 
friendly, products, equipment and processes that no longer contain or rely on ODS.17  

GENERAL PROBLEM DEFINITION AND OBJECTIVES 

Defining  the  Remaining  Problems  to  be  Tackled  in  the  EU  Based  on  the  2010 
Outlook 

By  2010,  the  EC  will  have  reached  a  full  phase-out  of  controlled  ODS,  save  for 
approximately  1  200  ODP  tonnes  p.a.  (See  figure  3  below).  The  amount  of  1  200 

The  bulk  of  these  costs  have  gone  to  the  management  of  the  procedures  for  these  exemptions.  For 
example,  an  analysis  indicates  that  the  ODS  Management  Committee  spends  about  one-half  of  its 
meeting  time  discussing  these  exemptions,  including  issues  not  clearly  defined  in  the  Regulation 
Estimate based on an analysis of the minutes of Management Committee meetings in 2005 and 2006. 
For  examples  of  applications  that  historically  relied  on  ODS  and  where  non-ODS  solutions  were 
developed and adopted by the markets see: http://ec.europa.eu/environment/ozone/alternatives.htm. 

3. 

3.1. 

16 

17 

EN 

14 

   EN 

 
 
 
                                                 
ODP  tonnes  compares  to  baseline  consumption  levels  of  400  000  ODP  tonnes  and 
includes an estimated 1 000 ODP tonnes of recycled or reclaimed HCFCs which will 
be banned as of 2015, thus leaving a tail of less than 200 ODP tonnes p.a. of ODS 
"consumption"  as  defined  by  the  Montreal  Protocol.  In  addition,  there  will  be  a 
remaining  use  of  "emissive  ODS  uses"  that  are  covered  by  the  regulation  (yet  not 
accounted for as consumption under the Protocol) amounting to an estimated 1 400 
ODP  tonnes  for  the  period  beyond  2010  (assuming  that  current  levels  would  be 
maintained in the absence of further measures). ODS production in the EC will have 
reached less than 4 000 ODP tonnes p.a. by 2010 (comparing to baseline production 
levels of 700 000 ODP tonnes). Further details on the 2010 outlook are provided in 
Appendix III.  

Figure 3: Remaining Emissive Uses of the ODS in the EU (Base Case Estimates for 
the period ending in 2020) 

.

a
.
p
s
e
n
n
o
T
-
P
D
O

3.000

2.500

2.000

1.500

1.000

500

0

2008

2009

2010

2015

2020

Essential Use CFC-MDI
Use of HCFC (virgin)

Critical Use MB
Use of HCFC (recycled or reclaimed)*

Essential Use Laboratory & Analytical

Considering the international context described in section 2.2, the 2010 outlook and 
stakeholders'  suggestions  for  improvement  (Appendix  V),  the  following  remaining 
problem areas have been defined: 

(1) 

Regulatory 

and 

Associated 

Administrative 

Complexity 

The  administrative  costs  incurred  by  users  in  interpreting  the  legal  text,  if 
current complexities remained, are estimated at €5.6 million over the period 
2010-2020, including €5.4 million for EU i ndustry, particularly SMEs. There 
is  a  need  for  simplification  and  clarification  of  the  Regulation's  structure, 
inter  alia  by  removing  obsolete  provisions,  for  example  those  related  to  the 
phase out steps before 2010. Current reporting requirements, if they were to 
continue  up  over  the  period  considered,  would  amount  to  €2.48  million 
overall  in  terms  of  administrative  costs,  including  €1.5  million  falling  upon 
Member  States.  In  addition,  the  overall  administrative  costs  related  to 
exemption regimes in case of no action would be €1.3 million over the whole 
period.  Measures  to  reduce  administrative  costs  are  therefore  required, 
notably  related  to  reporting.  Synergies  with  related  policies  such  as  the 
regulations  on  fluorinated  greenhouse  gases,  waste,  chemicals  and  plant 
protection  should  be  better  exploited.  The  quota  and  licensing  procedures 
need to remain flexible.  

EN 

15 

   EN 

 
 
 
 
(2) 

Full  compliance  with  the  Montreal  Protocol,  as  adjusted,  and  risk  of 
illegal trade 

To address the global growth of HCFC production and consumption, Parties 
adopted  Decision  XIX/6  on  an  early  phase-out  of  HCFCs.  The  Regulation 
must  as  a  minimum  option  be  realigned  with  the  Decision  to  bring  forward 
the  production  phase-out  of  HCFCs  from  2025,  as  currently  provided  for  in 
the  Regulation,  to  2020.18In  addition,  the  upcoming  phase-out  of  the  use  of 
“virgin”  HCFCs  for  the  maintenance  and  servicing  of  refrigeration  and  air 
conditioning equipment, and the related difficulties in verifying the source of 
the  HCFC  potentially  fuelling  illegal  trade  in  virgin  HCFCs  are  also  of 
concern.  As  a  comparison,  during  the  CFC  phase  out  in  the  1990s,  an 
estimated  15.000  ODP  tonnes  p.a.  were  traded  illegally  during  the  period 
1994-96. Stronger enforcement of import and export requirements across the 
EC is required.  

(3) 

Uncontrolled  ODS  production  and  trade,  and  ODS  banked  in  products 
and equipment 

Introducing  measures  for  currently  uncontrolled  ODS  production  and  trade 
(notably  new  ODS  and  methyl  bromide  uses  for  Quarantine  and  Pre-
Shipment purposes) and to ensure recovery and destruction of ODS banked in 
products  and  equipment  must  be  considered.  Annual  emissions  from  ODS 
banks  are  estimated  to  be  in  the  range  of  17 000-24 000  ODP  tonnes  in  the 
EU  (compared  to  180 000  globally).  Emissions  over  the  period  2010-2020 
would add up to 200 000 tonnes. The production of new and short-lived ODS 
is projected to be up to 20 600 ODP tonnes over the whole period. The annual 
use of methyl bromide to QPS is currently 200 ODP tonnes (10 000 globally), 
which would amount to 2000 ODP tonnes over the full period considered. 

In  addressing  the  above  mentioned  problems,  due  account  will  be  given  to  their 
drivers, notably that remaining ODS remain profitable for producers and consumers 
albeit that technically viable alternatives are available to date for all but a few ODS 
uses. 

3.2. 

General and Specific Objectives 

The general long-term objective pursued during the review remains the timely 
recovery and subsequent protection of the ozone layer to avoid adverse impacts, 
notably  on  human  health  and  ecosystems.  The  associated  short  and  medium-
term objective, however, is to simplify the regulatory framework, whilst at the 
same  time  reducing  any  unnecessary  administrative  burden,  in  line  with  the 
Commission’s commitment to develop and implement better regulation.19  

18 
19 

This also followed consultations with EU industry and Member States who endorsed the EC position. 
It  is  noted  that  jointly  pursuing  the  long-term  and  short/medium  term  objectives  implies  that  major 
revisions of the regulation that would lead to a substantial deviation from the current regulation were to 
be avoided (notably related to definitions which stem from the Protocol), unless there was an overriding 
argument  to  do  so.  It  implies  also,  that  a  review  in  the  context  of  a  simplification  exercise  is  not  to 
exclude the consideration of selective measured strengthening provisions that are required to enabling 
the EU to adapting to remaining challenges.  

EN 

16 

   EN 

 
 
 
                                                 
In  order  to  deliver  these  general  objectives,  specific  objectives  were  identified, 
addressing  all  problems  outlined  above  whilst  building  on  the  strengths  and 
opportunities  identified  in  the  SWOT  analysis.  These  objectives,  listed  in  order  of 
priority, include: 

(1) 

Achieving  better  and  simpler  regulation  by  reducing  the  administrative 
burden 

(a)  Clarifying and simplifying the Regulation 
(b)  Streamlining reporting and associated administrative burden 
(c)  Updating exemption regimes and associated administrative processes 

(2) 

Ensuring  continued  compliance  through  full  implementation  of  the 
Montreal Protocol as adapted in 2007 and strengthened enforcement 

(a) 

(b) 

Implementing Decision XIX/6 on the advanced HCFC phase out 

Ensuring  EC  compliance  status  and  preventing  illegal  and  harmful 
trade  

(3) 

Addressing  future  challenges  by  tackling  ODS  not  yet  controlled  under 
the Montreal Protocol 

(a) 

(b) 

ODS contained (or "banked") in products and equipment 

New and Short-lived ODS 

(c)  MB Use for Quarantine and Pre-Shipment Purposes 

3.3.  Method and Criteria for Assessing the Impacts 

The  methodology  recommended  by  the  impact  assessment  guidelines  was  adopted 
for the purpose of conducting this review.20  

The  impacts  of  the  different  policy  options  were  considered  according  to  the  three 
general impact assessment criteria recommended by the guidelines: economic, social 
and  environmental  impacts.  Within  these  three  impact  categories,  16  specific 
categories  were  identified  based  on  an  initial  review  of  the  options  and  of  the 
information and comments gathered during the review study.  

Details of the assessments and the criteria used are provided in Appendix IV and can 
be found in the study commissioned to support this impact assessment.21 

Since  this  Review  takes  place  in  the  context  of  the  'Better  Regulation'  initiative, 
special emphasis was put on the evaluation of the impact of proposed policy options 
on administrative costs, using the EU standard cost model. 

Direct economic impacts were approximated using forgone profit margins. 

Impacts in terms of administrative costs and direct economic impacts for the period 
until 2020 have been stated in terms of Net Present Value (NPV) in the year of 2010, 
using a 4 percent discount rate. 

Environmental benefits were quantified in terms of saved ODP tonnes when feasible. 
Final impacts in terms of reduced probability of skin cancer and cataract, increased 

20 
21 

Reference to IA Guidelines 
See http://ec.europa.eu/environment/ozone/review.htm 

EN 

17 

   EN 

 
                                                 
crop  and  fisheries  productivity  thanks  to  reduced  exposure  to  UV-B  could  in 
principle be monetised. This was not deemed useful for two main reasons: 

•  a  full  cost-benefit  analysis  would  not  be  proportional  to  the  problem  as  the 
benefits (as well as the costs) are expected to be small since we are now at the tail-
end of the problem. Monetising the benefits would be time-consuming and would 
be unlikely to change the decision process; 

•  the  exercise  would  not  be  meaningful  as  formation  and  depletion  of  the  ozone 
layer are governed by long-term processes, and attempting to link an annual net 
gain in a unit ODP tonne to global processes and final human and environmental 
health impacts is an extremely difficult task. The final figure is likely to be well 
within the error margin. A cost-benefit analysis of limiting emissions of ODS was 
undertaken for by the US Environmental Protection analysis for the period 1990-
2175,  based  on  dose-response  models.  The  same  study  however  underlined  that 
estimating  incremental  effects  of  a  reduction  in  emissions  of  ODS  was  an 
'extremely  difficult,  if  not  impossible,  task'.22  The  same  rationale  applies  to  the 
small quantities and time frame considered here. 

In  some  cases,  full  quantification  was  not  possible  because  of  lack  of  data,  or 
because  the  magnitude  of  the  impact  was  difficult  to  assess  ex  ante  (e.g.  the 
environmental  impact  of  strengthened  inspection  or  labelling  provisions).  A  scale 
was used where (detailed) impacts were largely unquantified, i.e. "+" or "-" referring 
to  environmental  impacts  of  less  than  1  000  ODP  tonnes  and  "++"  or  "-  -  "  for 
impacts over this threshold. Likewise, the same scale was used for economic impacts 
below or in excess of €1 000 000.  

3.4.  Who may be affected?  

The risk of a delay in the recovery of the ozone layer concerns all EU citizens and 
indeed the global population. 

The current complexity of the Regulation and the related administrative burden affect 
the Commission, Member States, and industry, particularly SMEs which tend to be 
more  affected.  Considering  that  the  review  takes  place  at  the  tail-end  of  the  ODS 
policy problem, there remain relatively few stakeholders that are directly affected by 
the present Regulation.  

For  example,  there  remain  only  16  producers  of  ODS,  most  of  which  are 
multinational  companies.  There  remain  an  equally  low  number  of  producers  of 
products and equipment that contain or rely upon ODS, mostly the manufacturers of 
refrigeration,  air  conditioning  and  heat  pump  system  and  producers  of  insulation 
foams. Whilst these are also mainly multi-national companies, associated installation 
and servicing companies tend to be mostly SMEs.  

There  are  a  limited  number  of  users  of  ODS  is  specialist  sectors  such  as  research, 
defence and aerospace 

The  main  stakeholders  potentially  affected  by  the  revision  to  the  Regulation  have 
been identified, as well as the areas where options are most likely to affect them. All 
relevant stakeholders have been invited to participate in the review. 

22 

The Benefits and Costs of the Clean Air Act, 1990-2010. Environmental Protection Agency; Office of 
Air and Radiation. November 1999. EPA 4W-R-99-001, p G-1. 

EN 

18 

   EN 

 
                                                 
4. 

DEVELOPING VIABLE POLICY OPTIONS 

4.1.  Maintaining the Business as Usual Scenario 

The  2010  outlook  on  the  status  of  ODS  in  the  EU  (section  2.3  and  Appendix  III) 
offers a good indication of the business as usual (BAU) case. 

Maintaining  the  BAU  scenario  is  attractive  at  first  sight.  What  is  the  advantage  of 
changing  the  regulation  if  only  1%  of  the  problem  remains?  However,  it  has  been 
rejected  by  stakeholders  first  and  foremost  because  it  prevents  the  pursuit  of  the 
simplification objective and removes any opportunity to reap the associated savings 
in  administrative  costs.  It  would  also  prevent  an  appropriate  EU  response  to  the 
remaining challenges that have been identified (section 3.1).  

Failure to revise the Regulation would also put the EC and its Member States in non-
compliance with the Montreal Protocol, because the adjustment related to the phase 
out schedules of HCFCs (see section 3.1) would not be transposed into EU laws.  

Whilst  some  limited  progress  in  ODS  phase-out  could  be  expected  under  BAU 
(because producers and product and equipment manufactures and service companies 
would continue to retract from the declining ODS sector), net environmental impacts 
are likely to be negative. This is due inter alia to the fact that illegal trade may not be 
adequately tackled and that opportunities for further reducing ODS use (e.g. reducing 
the cap for QPS) are missed. 

4.2.  Withdrawing the Regulation 

The  option  of  withdrawing  the  Regulation  goes  beyond  BAU.  This  option  was  not 
seen  by  stakeholders  or  the  Commission  as  a  valid  alternative  for  obvious  reasons, 
not  least  that  the  EC  and  Member  States  would  no  longer  be  able  to  comply  with 
their international commitments under the Montreal Protocol.  

4.3. 

Towards Simpler and Better Regulation 

Maintaining the BAU scenario or withdrawing the Regulation are clearly not viable 
options for the reasons explained above. In line with stakeholders' views, there is a 
need for, and opportunities to be gained from, changes to the Regulation in line with 
the overall and specific objectives stated in section 3.2.  

A considerable effort has been made to identify all possible areas for improvement to 
the Regulation. Managing the implementation of the Regulation has evolved over the 
years  into  a  broad  set  of  processes  and  associated  applications  linked  to  reporting, 
monitoring, information exchanges and enforcement. Hence, many opportunities for 
savings are to be found in "non regulatory" options.  

Considering the above, the policy options are described in detail in the remainder of 
the  Impact  Assessment.  The  description  is  structured  according  to  the  specific 
objectives stated in section 3.2. 

4.4. 

Other Policy Options Initially Considered and Subsidiarity 

Finally,  it  should  be  noted  that  some  broad  policy  options  to  reduce  the  remaining 
uses of ODS have been discarded early in the processes. These include the selective 
use of taxes or other economic instruments such as tradable permit systems.  

These  options  were  discarded  because  the  low  remaining  level  of  ODS  production 
and use would not warrant the creation of a totally new infrastructure. Furthermore, 
some Member States already use taxes or levies as an instrument to discourage the 

EN 

19 

   EN 

 
remaining use of ODS (and to encourage the adoption of alternatives). Pursuing tax 
measures at the EU level would imply difficult and time-consuming decision-making 
and would run counter to subsidiarity principles.  

5. 

ACHIEVING SIMPLER AND BETTER REGULATION 

During  the  consultation,  a  large  number  of  Member  States  and  other  stakeholders 
underlined their desire for a simpler, clearer Regulation. Significant efforts went into 
the identification and development of options for achieving this. The insights gained 
by  the  Commission,  Member  States'  competent  authorities  and  industry  from 
(almost)  ten  years'  experience  with  the  current  Regulation  proved  particularly 
valuable in this respect. 

5.1. 

Clarifying and simplifying the Regulation 

5.1.1.  Definition and Drivers of the Problem 

Many  stakeholders  commented  that  the  Regulation  is  unnecessarily  complex,  now 
contains  numerous  obsolete  provisions,  and  requires  significant  knowledge  by  the 
reader of the international context because of a lack of clarity in definition of terms. 
In several key areas, Member States have different interpretations of the Regulation’s 
provisions23. The different interpretations imply that businesses may face variation in 
enforcement of the Regulation across the EU. 

5.1.2.  Description of Options  

Option 0 

No EU action 

Option 1 

Removing obsolete regulatory provisions 

Option 2 

Simplifying the structure of the legal text 

Option 3 
policies 

Improving  definitions  and  links  with  Montreal  Protocol  and  other 

Option 4 

Removing perceived regulatory uncertainties and loopholes 

Option 0  No EU Action 

Current  complexities  would  remain.  A  conservative  estimate  of  the  extra  time 
required  to  interpret  this  Regulation  (compared  to  the  same  Regulation  drafted 
according  to  best  practice  standards)  yields  a  total  of  about  12  full-time  equivalent 
professional staff per year across 500 companies. This estimate includes the time that 
EU  businesses  spend  in  interpreting  the  legal  text  and  by  trade  associations  in 
supporting their members at EU and national level. The current complexity and lack 
of clarity is felt to be particularly disadvantageous to SMEs and new entrants to the 
market. The overall administrative costs for interpreting the legal text over the period 
2010-2020  would  be  €5.6  million,  including 
for Member States, and €81 100 for the Commission. 

€5.4  million  for  EU  industry,  €42 900 

Option 1  Removing obsolete regulatory provisions 

The progress that has been made in phasing out ODS offers an opportunity to remove 
obsolete and expired provisions, especially related to the production, placing on the 

23 

One  important  example  is  the  difference  in  the  interpretation  of  “placing  on  the  market”.  Another  is 
whether the Regulation requires recovery of MB during QPS use (see section 1.3). 

EN 

20 

   EN 

 
                                                 
market  and  use  of  CFCs  and  MB.  Articles  3,  4  and  5  would  be  most  affected.  For 
example:  

•  Article 3(1), second subparagraph, on essential uses of CFCs for medical devices 

can be removed because these uses will have become obsolete by 2010; 

•  Article 3(1)(ii) on critical uses of MB can be removed because of new restrictions 

on MB use under biocide and pesticide legislation24;  

Option 2 

Simplifying the structure of the legal text 

Separate  chapters  would  be  created  for  the  different  types  of  exemption  and 
derogation. Linked issues would be collated into single articles. 

Option 3 
Montreal Protocol and other EU policies 

Improving  definitions  and  clarifying  links  and  synergies  with  the 

Although  stakeholders  have  called  for  a  closer  alignment  of  the  definitions  in  the 
Regulation  with  other  EU  regulations,  balance  is  necessary  to  ensure  that  the 
definitions  do  not  deviate  unacceptably  from  those  contained  in  the  Montreal 
Protocol. Nevertheless, where sensible, definitions would be shortened and realigned 
with  other  legislation  and  interpretations  that  have  developed  in  practice.  An 
example of the latter would be to replace "placing on the market" with “first placing 
on the market”.  

The introduction of several new annexes would improve the Regulation's links to the 
Montreal Protocol and, for example, help Member States identify and regulate ODS 
destruction  technologies  that  have  been  approved  by  the  Parties  to  the  Protocol. 
References to the relevant EC legislation on chemicals and waste would be included. 

Option 4  Removing perceived regulatory uncertainties and loopholes 

Real or perceived regulatory uncertainties would be addressed throughout the text to 
improve  clarity  and  consistency  in  the  use  of  terms  such  as  "products  and 
equipment". 

5.1.3. 

Impact Analysis  

Removing  obsolete  regulatory  provisions,  consolidating  linked  issues  within  single 
articles,  and  introducing  better  structured  chapters  considerably  would  reduce  the 
current  complexity  of  the  Regulation.  This  would  facilitate  the  enforcement  of  the 
Regulation  and  help  deliver  better  compliance.  Environmental  benefits,  whilst  not 
directly quantifiable, can therefore be expected.  

Clarifying and simplifying the legal text is expected to reduce costs for industry, the 
Commission  and  Member  States'  competent  authorities.  It  should  also  simplify 
enforcement  procedures  and  thus  reduce  the  costs  for  other  Member  State 
organisations. It is estimated that the options would save almost half of the estimated 
annual baseline costs for Member States (of € 0.02 million – all estimates are NPV at 
2010)  and  the  Commission  (€  0.03  million),  and  for  industry  (€  2.3  million).  This 
estimate assumes that a revised regulation would require some learning effort when 
introduced, with costs estimated to be twice the baseline costs in the first year. 

24 

A critical use exemption clause will be retained in case of a serious pest outbreak for which MB use is 
deemed necessary  

EN 

21 

   EN 

 
                                                 
5.1.4.  Comparison of the Options and Emerging Preferences 

As  "Better  Regulation  and  Simplification"  is  an  overarching  objective  of  the 
Commission, the "no-action" option was discarded. All of the above options would 
be selected to maximise simplification and related benefits, which are summarized in 
Table 4. 

Table 4: Options for clarifying and simplifying the Regulation 

POLICY OPTIONS 

Bold: preferred regulatory option 

Italics: preferred non-regulatory option 

Strikethrough: discarded option 

*option implemented through other EC legislation 

Combined options 1 through 4  

0
2
0
2
-
0
1
0
2

)
s
e
n
n
o
t

(

P
D
O

l
a
t
n
e
m
n
o
r
i
v
n
E
0-50 

s
t
c
a
p
m

I

(

)
0
1
0
2
V
P
N

s
t
s
o
C
e
v
i
t
a
r
t
s
i
n
i
m
d
A
-2.35 

)
n
o
i
l
l
i

m

(

)
n
o
i
l
l
i

m

(

s
t
c
a
p
m

I

c
i
m
o
n
o
c
E

t
c
e
r
i
D
0 

)
0
1
0
2
V
P
N

(

Total impacts related to preferred options 

0-50 

-2.35 

0 

1. Reduced burden on SMEs 

r
e
h
t
O
d
n
a

l
a
i
c
o
S

+1 

+1 

s
t
c
a
p
m

I

A number of other options are described in the following chapters which would also 
help  simplify  the  regulation  and  generate  benefits.  Whilst  they  are  not  duplicated 
here, a reference to these synergies is included in the summary table in appendix VI. 

5.2. 

Streamlining of Reporting and Reducing the Associated Administrative Burden 

5.2.1.  Definition and Drivers of the Problem 

Several  Member  States  called  for  measures  to  reduce  their  administrative  costs 
related to reporting, indicating that these are one of the more burdensome aspects of 
implementing the Regulation. In contrast, responses from business and industry did 
not cite major concerns with reporting.  

A  legal  analysis  of  the  different  options  for  streamlined  reporting  showed  however 
that the margin for manoeuvre was limited because of the need to meet the reporting 
obligations of the Montreal Protocol and the Commission’s need for information on 
progress  in  the  various  phase-outs25.  An  analysis  of  potential  synergies  with 
reporting  under  other  EU  legislation  showed  no  duplication  of  information. 
Moreover, the reporting and monitoring provisions in the Regulation are often cited 
as one of its strengths.  

Reporting represents an administrative cost for Member States and companies in the 
form  of  time  and  effort  required  to  collate  information  and  prepare  and  submit 
reports.  Producers,  importers,  exporters  and  users  of  controlled  substances  are 
required  to  report  respectively  on  production,  imports,  exports  and  on  quantities 
recycled, reclaimed and destroyed, as well as any stocks of ODS.  

25 

In addition, two options were considered and discarded. Harmonising reporting requirements with the 
F-Gas regulation was discarded because few companies report under both pieces of legislation and the 
reporting  requirements  do  not  overlap  significantly.  Sanctioning  companies  who  have  not  reported  in 
three or more years by withholding licenses or authorisations was also discarded because of concerns of 
proportionality.  

EN 

22 

   EN 

 
 
 
 
 
 
 
 
€
 
 
 
 
 
 
€
 
 
 
 
 
 
 
 
                                                 
5.2.2.  Description of Options  

Option 0:  No EU action 

Option 1: 
regulatory option) 

Simplified  and  on-line  reporting  requirements  for  companies  (non-

Option 2: 

Streamlining reporting on ODS destruction 

Option  3:  Cancelling  the  reporting  requirement  for  ODS  recovery,  recycling  and 
reclamation, and for HCFCs replacing halons  

Option 4:  Centralising  reporting  to  UNEP  at  the  Commission  level  (non-
regulatory option) 

Option 0: No EU action 

The  current  reporting  requirements  would  continue.  These  are  estimated  over  the 
period 2010-2020 at a total of €1.5 million to Member States and €420,000 to ODS 
importers, exporters and producers. The Commission’s overall cost of gathering this 
information and  assembling  it  into  reports  for the Ozone Secretariat  is  estimated at 
€560,000. 

Option 1: Simplified and online reporting requirements for companies 

Companies  that  export  and  import  ODS  must  provide  data,  annually  via  the  ODS 
database26, to the Commission for the purpose of ensuring EC compliance with the 
reporting obligations under the Montreal Protocol. The companies are not required to 
provide the Commission with production data as production is licensed by Member 
States. The obligation on companies to report data on imports and exports could be 
deleted from Article 19.  

The feasibility of this option depends on addressing some data gaps in the licensing 
processes  that  are  processed  through  the  Commission's  ODS  database  as  well  as 
improved  feedback  from  Custom  authorities  that  currently  do  not  return  processed 
licenses. Reporting on production which is not subject to licensing by the EC would 
still  be  required  under  Article  19,  as  well  as  information  on  stock  levels.  These 
reporting  requirements  can  be  modified  through  Comitology  in  the  current 
Regulation. 

Moving  beyond  electronic  data  submission  towards  online  reporting  would  allow 
Member States (and companies) to directly input information into the ODS licensing 
database  hosted  by  the  Commission.  Electronic  reporting  by  Member  States  (i.e. 
sending  reports  in  electronic  form,  e.g.  via  CIRCA)  is  currently  widely  used. 
Companies  and  other  users  currently  report  by  email,  and  a  contractor  to  the 
European  Commission  compiles  these  reports.  Whilst  electronically  submitting 
reports  yields  some  time  saving,  its  efficiency  gains  would  be  limited  because  it  is 
still necessary to input the data at some stage.  

Option 2: Streamlining reporting on ODS destruction  

Given  the  particular  importance  of  monitoring  the  recovery  of  ODS  from  older 
products  and  equipment,  this  option  would  require  ODS  destruction  facilities  to 

26 

The  ODS  database  is  an  on-line  facility  operated  by  the  Commission  to  facilitate  licensing  of  and 
reporting by industry 

EN 

23 

   EN 

 
                                                 
report  directly  to  the  Commission  on  the  types  and  quantities  of  ODS  they  have 
destroyed  rather  than  indirectly  via  the  Member  State  Competent  Authorities. 
Currently, Member States are required to report on recovery, recycling, reclamation 
and  destruction  of  ODS.  However  the  quality  of  the  data  received  by  the 
Commission is often poor reflecting also the difficulties in obtaining those data.  

An  extension  of  this  option  was  considered,  requiring  recovery,  recycling  and 
reclamation  operators  to  report  directly  to  the  Commission.  This  extension  was 
discarded  in  view  of  the  large  number  of  facilities  involved  in  the  recovery  and 
recycling of ODS (including small enterprises such as motor vehicle services, WEEE 
collectors),  as  it  would  lead  to  disproportionate  implementation  and  enforcement 
costs whilst there is no such reporting requirement on these data under the Montreal 
Protocol.  

Option  3:  Cancelling  the  Member  States'  annual  reporting  requirement  for 
ODS recovery, recycling and reclamation and for HCFCs replacing halons 

Reporting  on  ODS  recovery,  recycling  and  reclamation  is  not  a  requirement  of  the 
Montreal  Protocol.  This  option  would  therefore  remove  Member  States'  reporting 
obligations  on  recovery,  recycling  and  reclamation.  However,  Member  States  shall 
ensure  that  operators  keep  records  on  those  activities,  already  broadly  covered  by 
national waste legislation transposing the relevant EC Directives. 

By  2010,  Member  States  are  not  expected  to  report  to  the  Commission  any  further 
use  of  HCFCs  as  replacements  for  halon  critical  uses,  as  required  by  Article  5(3). 
This obligation can therefore be removed. 

Option  4:  Centralising  reporting  to  UNEP  at  the  Commission  level  (non 
regulatory option) 

In accordance with the ratification provision, Member States currently report directly 
to  the  Ozone  Secretariat  on  ODS  production,  whilst  the  Commission  reports  on 
consumption  of  ODS  on  their  behalf.  Since  consumption  is  defined  as  production 
plus imports minus exports, the Commission must await the collection of production 
data (mainly done through Article 19) before consumption data can be calculated and 
reported to the Secretariat. There is, therefore, duplication of reporting effort, which 
sometimes  also  leads  to  inconsistencies  at  UNEP  level  between  production  and 
consumption  data.  This  option  would  require  data  collation  and  reporting  by  the 
Commission  to  the  Ozone  Secretariat  to  be  expanded  to  include  both  consumption 
and production.  

5.2.3. 

Impact Analysis  

Simplified reporting requirements for companies, through relying more on the ODS 
licensing database for the purpose of complying with the Montreal Protocol reporting 
obligations as proposed in option 1, could yield savings in administrative costs of an 
estimated €0.29 million (all estimates NPV 2010).  

Moving towards online reporting for companies would require an initial investment 
from the Community Budget of an estimated €50 000 in the first y ear. Over time, on-
line  reporting  will  yield  savings  in  administrative  costs  for  companies  and  the 
Commission by simplifying the paper flow. Overall costs saved by the Commission 
for  companies  are  likely  to  be  more 
are  estimated  to  be  €0.16  million.  Savings 
modest, assuming the same data would need to be reported (€ 0.05 million). Set-up 

EN 

24 

   EN 

 
cost  for  online  reporting  for  Member  States  is  likely  to  be  higher  as  reporting 
requirements  are  more  complex.  The  immediate  benefits  for  Member  States  would 
also be limited as most reports contain qualitative  information  for which it is more 
difficult to create uniform reporting formats that would yield significant savings.  

Concerning option 2, various pieces of EC legislation, such as the Waste Framework 
Directive and the WEEE Directive, require the relevant facilities to keep records of 
the quantities of substances27, including ODS, that are recovered, recycled, reclaimed 
and destroyed, and to make them available to the authorities when so required. The 
cost would be further limited because there are few destruction facilities within the 
EU, and they are already familiar with reporting as Member States normally request 
this information from them. In addition, the quality of reporting on ODS destruction 
will improve. It is estimated that the additional administrative cost to industry for a 
more systematic reporting directly to the Commission would be some € 0.2 million. 
The associated cancelling of the reporting requirements from Member States would 
lead in parallel to savings of € 0.27 million. 

The savings in terms of reporting costs from Member States associated with option 3 
are  estimated  at  around  € 0.4  million.  This  would  lead  to  less  information  on 
recycling, recovery and reclamation, but due to the difficulty in obtaining these data, 
the  current  quality  of  the  reporting  is  poor,  and  there  is  no  reporting  requirement 
under  the  Montreal  Protocol.  Under  Member  States'  waste  legislation  the  relevant 
information  should  already  be  recorded  by  the  operator  concerned.  On  the  basis  of 
Article 20 such data might be requested by the Commission on a case by case basis, 
if need be. 

Cancelling the reporting requirement relating to the use of HCFCs to replace halons, 
would  reduce  administrative  costs  for  Member  States  and  the  Commission  for  an 
estimated € 0.02 million. 

Provided  that  additional  reporting  from  destruction  facilities  becomes  effective  (as 
proposed in option 3), the centralizing of UNEP reporting proposed in option 4 could 
reduce  the  administrative  burden  associated  with  the  reporting  of  production  and 
consumption  data  by  Member  States  and  the  Commission  by  an  estimated  € 0.06 
million.  Increased  consistency  in  the  data  reported  to  UNEP  (and  subsequently 
published) is considered another ancillary benefit.  

5.2.4.  Comparison of the Options and Emerging Preferences  

Table  5:  Options  for  streamlining  of  reporting  and  reducing  the  associated 
administrative burden 

POLICY OPTIONS 

Bold: preferred regulatory option 

Italics: preferred non-regulatory option 

Strikethrough: discarded option 

*option implemented through other EC legislation 

1. Simplified and online reporting for 
companies & users 

0
2
0
2
-
0
1
0
2

)
s
e
n
n
o
t

P
D
O

(

s
t
c
a
p
m

I

l
a
t
n
e
m
n
o
r
i
v
n
E
0 

)
0
1
0
2
V
P
N

(

s
t
s
o
C
e
v
i
t
a
r
t
s
i

i

)
n
o
i
l
l
i

n
m
d
A
-0. 5 

m

(

)
n
o
i
l
l
i

m

(

s
t
c
a
p
m

I

c
i
m
o
n
o
c
E

t
c
e
r
i
D
0 

)
0
1
0
2
V
P
N

(

r
e
h
t
O
d
n
a

l
a
i
c
o
S
0 

s
t
c
a
p
m

I

27 

E.g. Article 14 of Directive 2006/12/EC or Article 7(3) of Directive 2002/96/EC. 

EN 

25 

   EN 

 
 
 
 
 
 
 
 
€
 
 
 
 
 
 
€
 
 
 
 
 
 
 
 
                                                 
2. Streamlining reporting on ODS 
destruction 

3. Cancelling MS reporting on ODS 
recovery, recycling and reclamation and 
for HCFCs replacing Halons 

4. Streamlining UNEP reporting 

Total impacts related to preferred regulatory 
options 

0 

0 

0 

0 

-0.07 

-0.42 

-0.06 

-0.49 

0 

0 

0 

0 

0 

0 

0 

0 

All the options considered are complementary and are proposed to be retained, some 
alternatives  having  already  been  discarded.  Option  2  would  provide  additional 
information  from  destruction  facilities  thereby  enabling  the  Commission  to  have 
more complete data on production and to centralise reporting to UNEP (option 4).  

Option  3  would  cancel  the  reporting  requirement  on  ODS  recovery,  recycling,  and 
reclamation  from  Member  States.  The  Regulation  should  include  a  clause  allowing 
the Commission to seek such information from Member States as and when needed 
to allow effective monitoring of implementation and future review. 

Further  non-regulatory  actions  (options  1  and  6),  to  implement  in  parallel  to  the 
Regulation  review  following  more  detailed  assessment,  would  provide  additional 
savings.  

Overall  savings  in  administrative  burden  resulting  from  regulatory  options  would 
amount to about €0.5 million (more than €1 million when including non regulatory 
options). Accompanying direct costs to industry are expected to be negligible. 

5.3. 

Updating Exemption Regimes and Related Administrative Processes 

5.3.1.  Definition and Drivers of the Problem 

Exemption regimes have played an important role in ensuring cost-effectiveness and 
proportionality,  especially  during  the  early  stages  of  the  implementation  of  ODS 
phase-out.  At  the  tail  end  of  this  process  most  exemption  regimes  have  lost  their 
economic relevance.  Relatively  few actors benefit from the exemption regimes,  yet 
their administration still results in considerable costs. Moreover, the 2006 Report of 
the  SAP  warned  that  current  exempted  uses must be reduced if the recovery of the 
ozone layer was to materialize as projected. 

A  specific  issue  is  related  to  the  inward  processing  relief  (IPR)  regime,  whereby 
ODS  are  imported  into  the  European  Community  for  repackaging  and  export.  The 
ODS Regulation allows the issue of import licenses for specific substances for IPR. 
As these uses are phased out, the IPR regime should be re-assessed.  

In addition, in parallel to the review of the Regulation, a separate review is underway 
of  the  critical  uses  of  halons  listed  in  Annex  VII.  The  purpose  of  the  Annex  VII 
review  is  to  reduce  the  number  of  uses  and  insert  phase  out  dates  for  those  that 
remain,  reflecting  the  now  greater  availability  of  alternatives.  Consultations  with 
stakeholders have confirmed the feasibility of ending the critical uses over the period 
2010  to  2030.  Stakeholders  have  indicated,  however,  that  for  certain  specific 
applications, no alternatives have yet been identified. For the purpose of enabling the 
insertion  of  challenging  deadlines  whilst  avoiding  possible  disproportionate  costs 
(and adverse safety implications), it was strongly recommended that a new exempted 
use clause would be inserted in the Regulation. 

EN 

26 

   EN 

 
5.3.2.  Description of Options  

Option 0:  No EU action 

Option 1: 

Ending production of ODS for Basic Domestic Needs (BDN) 

Option 2: 

Ending the Inward Processing Relief (IPR) Regime for MB and HCFCs 

Option 3: 

Ending exempted uses of HCFCs for replacing halons 

Option 4: 

Ending exempted uses of HCFCs where no alternatives are available  

Option 5: 

Inserting a new exempted use clause for critical uses of halons 

Option 6: Updating the essential use process for laboratory and analytical uses 

Option 0:  No EU action 

The projected level of exemptions will continue as from 2010. Whilst EC companies 
currently produce and export CFCs and CTC to enable developing countries to meet 
their basic domestic needs for these substances (BDN), those regimes will soon end 
in accordance with the provisions of the Montreal Protocol. Between 2010 and 2015, 
the  BDN  regime  will  be  limited  to  1,1,1-trichloroethane  (TCA).  The  current  low 
levels of TCA exports for BDN (at less than 100 ODP tonnes) are expected to drop 
beyond 2010 as demand decreases. The continued BDN regime would maintain low 
levels of administrative costs. 

The  IPR  regime  for  MB,  although  involving  relatively  small  quantities  of  ODS, 
results in several hundred licence applications each year. The overall administrative 
costs are estimated to be €0.63 million (all estimates are NPV at 2010). 

IPR  for  HCFCs  currently  represents  only  a  small  share  of  the  number  of  requested 
IPR  licences.  EU  HCFC  producers  have  been  withdrawing  from  the  global  HCFC 
market, shifting production capacity to HFC substitutes for which demand has been 
growing  steadily.  Furthermore,  IPR  applies  only  to  a  very  small  share  of  global 
demand for HCFCs, which is expected to fade more rapidly following the adoption 
of  Decision  XIX/6  on  the  accelerated  phase  out  of  HCFCs.  The  associated 
administrative costs are estimated at €0.29 million. 

The  Regulation  provides  an  exemption  to  allow  use  of  HCFCs  as  replacements  for 
halon  critical  uses.  This  provision  has  been  little  used  in  the  past  with  only  one 
request  dating  back  to  2005  that  involved  25  kg  (for  which  alternatives  are  now 
available).  The  baseline  assumes  no  further  exemption  requests  and  therefore  no 
administrative cost. 

The present exemption for the placing on the market of HCFCs when no alternatives 
are available is projected to continue into the future under the baseline scenario, with 
associated costs of €0.12 million. 

Laboratory  and  analytical  uses  of  ODS  will  remain  as  one  of  the  few  remaining 
exempted  uses  beyond  2010.  Projected  administrative  costs  of  licensing  are 
estimated at €0.28 million. 

The overall administrative costs associated with no action over the period 2010-2020 
would therefore be more than €1.3 million. 

Option 1: Ending production of ODS for Basic Domestic Needs 

EN 

27 

   EN 

 
This option would remove the current Article 3(6) provision allowing production of 
TCA for BDN.  

Option 2: Ending the Inward Processing Relief Regime for Methyl Bromide and 
HCFCs  

This option would end the IPR regime for MB and as such correct what is generally 
considered a loophole. IPR for ODS has traditionally been allowed until their placing 
on the EU market was banned according to the Regulation. For MB, the IPR regime 
did not stop when the import ban came into place. This is generally considered as an 
omission at the time the Regulation was developed. It would also end the IPR regime 
for HCFCs in 2010, when the import ban for HCFCs will come into effect.  

Option 3: Ending exempted uses of HCFCs for replacing halon 

This  option  would  remove  the  present  derogation  in  Article  5(3)  of  the  Regulation 
allowing  the  use  of  HCFCs  as  replacements  for  halon  critical  uses.  This  option  is 
considered as merely updating the Regulation to reflect the present state of play.  

Option 4: Ending the exemption for the placing on the market of HCFC where 
no alternatives are available 

This option would remove the present Article 5(7) of the Regulation which provides 
the  possibility  of  authorising  the  placing  on  the  market  and  time-limited  use  of 
HCFCs where alternatives are not available.  

Option 5: Inserting a new exempted use clause for critical uses of Halons 

This  option  would  insert  a  modified  exemption  clause  in  the  Regulation,  to  avoid 
possible  disproportionate  costs  and  adverse  safety  implications  linked  to  the  phase 
out dates for critical uses likely to be proposed as a result of the separate review of 
Annex VII to the Regulation.28  

Option 6: Updating essential use regime for laboratory and analytical purposes 

The preferred option is for the Commission to assess requests and grant exemptions 
for multiple years, rather than annually as currently practised, and to establish a cap 
on  total  ODS  consumption  at  a  level  close  to  that  of  recent  historic  use.  The  latter 
would serve as an additional signal to laboratories that the ultimate goal is for them 
to  move  away  from  ODS  use.  The  option  also  implies  further  non-legislative 
initiatives whereby the Commission and/or Member States would develop web-based 
information to better inform laboratories on the alternatives to ODS use29. 

5.3.3. 

Impact Analysis  

The impact of option 1 on EU companies is projected to be zero or very low as few 
developing  countries  are  currently  importing  TCA  from  the  EC  for  and  demand  is 
continuing to drop towards zero. Ending the BDN exemption will further contribute 
to an overall simplification of the Regulation and the enforcement thereof. 

The ending of the IPR regime for MB, as proposed in option 2, is expected to have a 
small economic impact (approximated to be forgone profit margins for the company 

28 
29 

The preferred solution is subject to ongoing discussions with the Commission Legal Services. 
The  option  to  extend  licensing  requirement  to  laboratories  rather  than  importers  and  producers  was 
discarded  because  of  the  large  number  of  laboratories  that  would  be  impacted  and  the  significant 
infrastructural changes that would be required at the level of the ODS licensing system. 

EN 

28 

   EN 

 
                                                 
involved)  but  also  savings  in  administrative  costs,  notably  for  the  Commission  and 
one Member State. 

As MB traded according to the IPR regime is not destined for the EU market, there 
will be no immediate direct environmental impacts. Indirect environmental benefits 
can be expected, however, outside the EU, notably in destination countries that may 
have  further  incentives  to  adopt  alternatives  that  are  technically  and  economically 
viable.  The  extent  to  which  these  benefits  will  materialize  will  depend  on  the 
substitution  rate  in  destination  countries  and  the  involved  company's  readiness  to 
adapt  its  product  range  to  include  these  alternatives.  Should  the  latter  not  happen, 
there may be consequences in terms of social impacts, i.e. a few tens of jobs may be 
lost.  This  social  impact  is  considered  very  low,  however,  considering  the  presently 
tight labour market in the Member State involved. An important side benefit is that 
the  ending  of  this  IPR  regime  will  strengthen  the  EC’s  negotiating  position  in  the 
Montreal Protocol context, notably in its efforts to motivate other Parties towards a 
quicker phase-out of critical and other uses of MB. It also removes the risk of non-
compliance with the Montreal Protocol due to likely discrepancies between licensed 
import and export volumes at the end of the year.  

Ending  the  IPR  regime  for  HCFCs  in  2010  will  not  have  significant  direct 
environmental  impacts  as  global  customers  may  readily  switch  to  other  non-EU 
based  suppliers.  Indirect  environmental  benefits  could  be  generated  through 
international  negotiations  and  related  support  activities  as  it  would  strengthen  the 
EU's  credibility  in  promoting  the  timely  implementation  of  the  global  phase-out  of 
HCFCs. The economic impact of ending the IPR for HCFCs is expected to be low as 
demand  for  HCFCs  is  expected  to  decrease.  Under  a  low-demand  scenario,  direct 
costs  for  the  companies  involved  are  expected  to  be  €0.5  million  (using  foregone 
profit margins for the period 2010-2020 as a proxy). However, as mentioned, these 
losses are likely to be offset by increased  profits from the  more lucrative export of 
HFCs.  Related  administrative  cost  savings  are  expected  to  range  between  €0.21 
million for industry and € 0.08 for the Commission. 

Removing the derogation for HCFCs replacing halons, as proposed in option 3 and 
for  placing  on  the  market  of  HCFCs,  option  4,  will  not  have  significant  economic, 
environmental or social impacts. Savings in administrative costs and environmental 
benefits would be equally limited, considering that very few cases were processed in 
recent  years.  According  to  a  conservative  estimate,  savings  would  amount  to  €0.1 
million.  However,  two  Member  States  and  industry  have  requested  retention  of  the 
placing  on  the  market  exemption.  Furthermore,  enlarging  the  exemption  to  include 
products  and  equipments  would  limit  the  costs  of  banning  trade  of  products  and 
equipments manufactured before the HCFC use ban date (providing also a benefit in 
terms  of  illegal  trade)  and  allow  continued  exemptions  for  HCFC  use  as  halon 
alternatives where necessary. Thus the preference is for option 3, and option 4 will 
not be taken forward.  

Option 5 would create administrative costs associated with assessing the requests for 
exemptions for critical uses of halons, but these would be considerably smaller than 
the disproportionate costs of replacing halons in the most challenging circumstances. 

With  option  6,  only  producers  and  importers  of  ODS,  distributors  of  laboratory 
chemicals and laboratories and research institutions in the public and private sector 
would be affected. No regionally specific impact is expected. The extent to which the 
multi-year exemption will reduce administrative costs would depend on the number 

EN 

29 

   EN 

 
of years for which the exemption would be granted and will have to be tied to related 
Decisions  of  the  Parties.  Estimated  saving  based  on  an  average  two-year  cycle  are 
generally  low,  however,  amounting  to  €0.09  million.  In  addition,  the  multi-year 
exemption will improve regulatory certainty for importers and producers (which will 
still have to request licenses on a yearly basis). 

5.3.4.  Comparison of the Options and Emerging Preferences 

Table  6:  Options  for  Updating  Exemption  Regimes  and  Related  Administrative 
Processes 

POLICY OPTIONS 

Bold: preferred regulatory option 

Italics: preferred non-regulatory option 

Strikethrough: discarded option 

*option implemented through other EC legislation 

1. Ending production of ODS for BDN 

s
t
s
o
C
e
v
i
t
a
r
t
s
i
n
i
m
d
A

)
0
1
0
2
V
P
N

(

)
n
o
i
l
l
i

m

(

- 

0
2
0
2
-
0
1
0
2

)
s
e
n
n
o
t

(

P
D
O

l
a
t
n
e
m
n
o
r
i
v
n
E
0-22 

s
t
c
a
p
m

I

2. Ending IPR for MB and HCFCs in 2010 

0-6475 

-0.92 

3. Ending exempted uses of HCFCs for 
replacing halons 

0 

- 

4. Ending exempted uses of HCFCs when no 
alternatives are available 

0-2000 

-0.12 

5. Inserting a new exempted use clause for 
critical uses of Halons 

-125 -0

+ 

6. Updating the essential use process for 
laboratory and analytical uses 

0-200 

-0.09 

c
i
m
o
n
o
c
E

t
c
e
r
i
D

)
n
o
i
l
l
i

m

(

s
t
c
a
p
m

I

)
0
1
0
2
V
P
N

(

r
e
h
t
O
d
n
a

l
a
i
c
o
S

+(1) 

+(1) 
0 

+ 

-- 

0 

s
t
c
a
p
m

I

-(2) 

-(2) 
0 

0 

0 

0 

Total impacts related to preferred options 

0-6570 

-1 

3.3 

-(2) 

1 Confidential (impact included in total) 

2. Possible small job loss 

Considering that all options, as summarised in Table 6, are complementary and that 
none would have significant economic impacts, the preference is to retain all options 
except  option  5.  Expected  administrative  savings  are  more  than  €1  million.  Direct 
economic  impacts  (approximated  by  foregone  profit  margins)  would  be  in  the 
magnitude of €3 million. Whilst the packag e could result in up to 6570 reduction in 
ODP  tonnes  produced  or  transiting  in  the  EU,  there  is  uncertainty  in  terms  of  the 
global environmental impact, as much depends on the indirect impact on production 
and consumption in developing countries. Indirect benefits could however be reaped 
from a stronger Community position in international negotiations.  

EN 

30 

   EN 

 
 
 
 
 
 
 
 
€
 
 
 
 
 
 
€
 
 
 
 
 
 
 
 
6. 

6.1. 

ENSURING CONTINUED COMPLIANCE WITH THE MONTREAL PROTOCOL 

Implementing Decision XIX/6 on the accelerated phase out of HCFCs 

6.1.1.  Definition and Drivers of the Problem 

Following  the  concerns  expressed  in  the  SAP's  2006  Report  on  the  accelerating 
growth  of  HCFC  production  and  consumption  in  developing  countries,  the  EU  and 
other  Parties  acted  swiftly  by  adopting  Decision  XIX/6.  Whilst  the  phase  out 
schedule for developing countries was advanced from 2040 to 2030, the schedule for 
industrialized countries was changed from 2030 to 2020, reflecting the fact that most 
industrialized countries, notably the EU, were already ahead of the schedule. 

The key task is to align the Regulation with this Decision by adjusting the phase out 
schedule from 2025 to 2020.  

Options for contributing to the efforts of developing countries could also usefully be 
explored. 

6.1.2.  Description of Options  

Option  0  (maintaining  the  BAU  case)  would  put  the  EU  into  non  compliance  with 
the Montreal Protocol, and was therefore discarded. 

Option 1: Adjusting HCFC Production Phase out Date from 2025 to 2020 

Option 2: Moving HCFC Production ban to 2015 or 2010 (instead of 2020) 

Option 1: Adjusting the HCFC Production Phase-Out Date from 2025 to 2020 

This  option  implies  a  minimum  level  of  action  by  strictly  adjusting  the  phase-out 
data  for  production  of  HCFCs  from  2025  to  2020  as  required  by  all  industrialized 
countries  in  accordance  with  Decision  XIX/6.  As  this  measure  was  already  agreed 
upon at the 19th Meeting of the Parties held in September 2007, it forms the de facto 
baseline case against which the other options are assessed.  

Option 2: Moving Production ban to 2015 or 2010 (instead of 2020) 

This  option  implies  a  more  ambitious  adaptation  of  the  Regulation  by  moving 
forward the phase out date for the production of HCFCs in the EU to 2015 instead of 
the required 2020 date. It would align the phase out of production with the ending of 
permitted  use  of  HCFCs  in  the  EU.  An  alternative  would  imply  aligning  the 
production  ban  of  HCFCs  with  the  2010  ban  date  for  importing  and  using  virgin 
HCFC in the EU.  

6.1.3. 

Impact Analysis  

Because moving the ban on production of HCFCs from 2025 to 2020, as proposed in 
option 1, represents the de facto baseline, no additional impacts are associated with 
this  option.  This  option  was  indeed  already  agreed  upon  with  Member  States  and 
industry  during  the  final  consultations  that  were  held  in  the  margins  of  the  19th 
Meeting of the Parties. 

Moving the ban on production of HCFCs within the EU to 2015 or 2010 – option 2 – 
implies  an  additional  economic  impact  for  EU  industry  equal  to  the  potential 
foregone  exports.  Considering  a  low  and  high  price  scenario,  the  total  market  that 
would  be  lost  could  range  between  €11.7  million  and  €82.9  million  for  the  period 
2010 to 2020. Because a number of HCFC-related patents are due to expire in 2010, 
with associated downward pressure on prices, the low-end of the range is considered 

EN 

31 

   EN 

 
more  likely  to  apply.  Assuming  a  net  profit  margin  of  about  20  percent,  the  direct 
cost to industry related to a shift to 2015 would be around €2.3 million (all estimates 
are  NPV  in  2010).  Foregone  profits  related  to  a  shift  to  2010  would  be  ranging 
around €9.5 million. Direct costs may still be overstated because released production 
capacity is likely to be absorbed by the same companies for the production of HFC or 
other  chemical alternatives  for  HCFC refrigerants (with higher profit  margins). For 
the same reasons, job losses or other social impacts are expected to be insignificant.  

Environmental impacts associated with option 2 are likely to be limited. Moving the 
ban to 2015 would result in a foregone production compared to the baseline of 5200 
ODP tonnes, whereas a phase out in 2010 would result in a reduction of 18000 ODP 
tonnes  for.  Reduced  global  supplies  of  HCFCs  from  EU  producers  are  likely  to  be 
partly  replaced  by  increased  production  of  HCFC  in  developing  countries,  where 
production plants may operate according to less strict environmental standards. For 
example, HFC23, a by-product of HCFC production with a high GWP, is not flared 
in all installations as it is in the EU, so additional HCFC production in such plants 
may  contribute  further  to  global  warming.  Environmental  benefits  will  be 
furthermore muted in the event that restricted supplies of HCFCs (should this occur) 
may lead to a greater uptake of HFCs rather than lower-ODP alternatives. 

6.1.4.  Comparison of the Options and Emerging Preferences 

Table 7: Options for Implementing Decision XIX/6 on the accelerated phase out of 
HCFCs 

POLICY OPTIONS 

Bold: preferred regulatory option 

Italics: preferred non-regulatory option 

Strikethrough: discarded option 

*option implemented through other EC 
 legislation 

s
t
c
a
p
m

I

l
a
t
n
e
m
n
o
r
i
v
n
E

)
s
e
n
n
o
t

P
D
O

(

0
2
0
2
-
0
1
0
2

s
t
s
o
C
e
v
i
t
a
r
t
s
i
n
i
m
d
A

)
0
1
0
2
V
P
N

(

)
n
o
i
l
l
i

(€m

s
t
c
a
p
m

I

c
i
m
o
n
o
c
E

t
c
e
r
i

D

)
0
1
0
2
V
P
N

(

)
n
o
i
l
l
i

(€m

s
t
c
a
p
m

I

r
e
h
t
O
d
n
a

l
a
i
c
o
S

1. Advancing production phase out to 2020 

De facto base case 

2.  Advancing  production  phase  out  to  2010  or 
2015 

0-18000 

Total impacts related to preferred options 

0 

- 

0 

2.3-9.5 

0 

+ 

0 

Option 2 is an alternative to option 1, which represents the de facto base case against 
which impacts were assessed  

Advancing  the  ban  on  HCFC  production  from  2025  to  2010  would  be  most 
consistent as it would align the production ban with the ban on HCFC import and the 
use  of  virgin  HCFCs.  However,  when  comparing  the  options  there  emerges  no 
compelling argument for deviating from the de facto base case reflected in option 1. 
Environmental  benefits  do  not  constitute  a  decisive  criterion,  as  the  overall  global 
is  uncertain.  Neither  do  anticipated 
impact  of  a  reduced  EU  production 
administrative  savings  provide  an  overriding  argument  for  compensating  the 
anticipated  direct  costs  for  EU  producers  of  HCFCs.  Hence  option  1  whereby 
production of HCFCs is moved forward from 2025 to 2020, emerges as the preferred 
choice.  

EN 

32 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
It  is  noted  that,  even  for  the  most  ambitious  scenarios  reflected  in  option  2,  direct 
costs to industry remain fairly modest. Depending on the need for tighter measures, 
e.g. against illegal trade, there is some margin during the political decision making to 
deviate  from  the  preferred  option,  ideally  following  further  consultations  with  the 
industry involved. 

6.2. 

Adapting the phasing out of the use of HCFCs 

6.2.1.  Definition and Drivers of the Problem 

Article 5(1)(v) of the Regulation calls upon the Commission to assess the technical 
and economic availability of alternatives to HCFCs for the purpose of a reviewing of 
the 2015 phase-out date for the use of recycled and reclaimed HCFCs. The rationale 
for this review is to consider bringing forward or delaying these phase out dates in 
view of latest experiences. A related issue is the need to assess whether a mechanism 
is required to avoid virgin HCFCs being placed on the market as illegal substitutes 
for  recycled  or  reclaimed  HCFC.  Virgin  HCFC  can  indeed  be  rather  easily 
contaminated  or  processed  to  make  it  indistinguishable  from  recycled  HCFC.  This 
form  of  counterfeiting  is  less  likely  to  occur  for  reclaimed  ODS  as  these  are 
undergoing a purification process in specialized sites. 

6.2.2.  Description of Options 

Option 0: No EU action 

Option  1:  Advancing  the  Phase  out  date  for  the  use  of  recycled  and  reclaimed 
HCFCs from 2015 to 2012 

Option 2: Voluntary agreement with industrial process refrigeration sector 

Option 3: Certification of recycled and reclaimed HCFCs 

Option 4: Limiting the supply of HCFCs to reclaimed HCFCs only 

An additional option to delay the phase-out date for the use of recycled HCFCs from 
2015 to 2020 was discarded, based on the recommendations of a study conducted for 
the  Commission  in  2006.  This  found  that  industry  was  facing  no  difficulties  in 
complying with the 2015 date.30 

Option 0: No EU action 

The  use  of  recycled  and  reclaimed  HCFCs  would  be  phased  out  as  from  2015  as 
currently foreseen by the Regulation.  

Option 1: Advancing the Phase out date for the use of recycled and reclaimed 
HCFCs from 2015 to 2012 

The ban date for the use of recycled and reclaimed HCFCs would be brought forward 
from  2015  to  2012,  taking  into  consideration  progress  with  the  technical  and 
economic availability of alternatives to recycled HCFC. 

Option 2: Voluntary agreement with industrial process refrigeration sector 

To account for potential difficulties for the industrial process refrigeration sector by 
2012, a voluntary agreement would be pursued with this sub sector as an alternative 

30 

ICF  International,  Review  of  the  Technical  and  Economic  Availability  of  Feasible  Alternatives  to 
Recycled Hydrochlorofluorocarbons (HCFCs) in Existing Refrigeration Equipment, 2006 

EN 

33 

   EN 

 
                                                 
to option 1. This would require that the sector proposes a phase-out strategy with an 
accompanying  monitoring  scheme  that  is  then  reviewed  and  endorsed  by  the 
Commission and the Member States.  

Option 3: Labelling of recycled and reclaimed HCFCs 

This  option  would  require  producers  (including  reclamation  facilities)  and 
distributors  of  recycled  and  reclaimed  HCFCs  to  label  containers  with  the  origin 
(using a unique ID number) and purity of the HCFC.  

Option 4: Limiting the supply of HCFCs to reclaimed HCFCs only 

This option would prohibit the sale of recycled HCFCs, limiting the supply HCFCs 
for servicing of equipment between 2010 and 2015 to reclaimed HCFCs only, which 
would have to be labelled as reclaimed. As with option 3, this would aim at reducing 
the risks of illegal trade and use of HCFCs.  

The  re-use  of  HCFCs  recovered  while  servicing  equipments  would  remain 
authorised. Reclaimed HCFCs would serve as top-up material. 

6.2.3. 

Impact Analysis  

The  main  sectors  identified  as  being  potentially  affected  by  option  1  are  related  to 
commercial  refrigeration,  refrigerated  transport,  stationary  air  conditioning,  and 
industrial  process  refrigeration.  The  2006  study  noted  that,  whilst  alternatives  to 
HCFC  were  widely  available  for  most  sectors,  phase-out  earlier  than  2015  would 
impose  disproportionate  economic  and  technical  burdens  on  European  companies, 
particularly  for  SMEs  in  the  commercial  refrigeration,  refrigerated  transport,  and 
stationary  air  conditioning  sectors.  With  regards  to  industrial  process  refrigeration, 
this study estimated that an advanced schedule for phase-out could yield significant 
ODS  emission  reductions  cost-effectively.31  However,  a  detailed  follow-up  study32 
on  HCFC  use  in  industrial  process  refrigeration  raised  issues  with  respect  to 
implementing a phase-out by 2012 and did not confirm that cost effective, significant 
environmental benefits could be delivered by bringing the phase-out date to 2012 for 
this  sector  on  its  own,  due  to  lack  of  data.  The  study  proposed  instead  that  a 
voluntary agreement is negotiated between the Commission, Member States and the 
representatives  of  the  industrial  process  refrigeration  sector,  pending  further 
consultation of the sector. 

Option 2 would develop a phase-out strategy with the industrial process refrigeration 
sector where environmental benefits might be realised, prioritising the phase-out of 
old  and  large  installations  requiring  most  maintenance  care  and  servicing  with 
HCFCs. 

The costs of option 3 are limited to affixing labels by the recycling and reclamation 
facilities. The aim would be to verify the source of recycled products and to reduce 
the risk of illegal trade and use of virgin HCFCs. However, this option may not be 
easily implemented as the number of actors involved in the recycling process is much 
larger  than  the  number  of  players  in  HCFC  reclamation  business.  Recycling 

31 

32 

ICF  International,  Supply  and  Demand  of  Recycled  Hydrochlorofluorocarbons  (HCFCs)  in  Existing 
Refrigeration  and  Air  Conditioning  Equipment  Beyond  2009:  Analysis  of  Regulatory  Phaseout 
Scenarios, August 2006 
ICF International, The feasibility and Cost effectiveness of advancing the phase-out date for HCFCs in 
industrial Process refrigeration equipment, Draft report, April 2008. 

EN 

34 

   EN 

 
                                                 
operations  with  HCFC  can  be  done  on  the  equipment  site  with  simple  filtering 
devices.  The  enforcement  of  the  requirement  to  certify  and  label  the  recycled 
material is likely to prove difficult in practice.  

Option  4  would  minimise  the  risk  of  development  of  a  market  of  illegal  recycled 
HCFC, whilst also limiting the risk of diverted use of virgin HCFCs. This option is 
realistic  considering  that  supply  of  reclaimed  HCFCs  is  not  projected  to  constrain 
demand  over  the  period  2010  to  2015.  Currently,  46  reclamation  facilities  operate 
across  20  EC  Member  States33.  As  the  projected  supply  of  reclaimed  HCFC 
significantly  exceeds  the  projected  demand,  the  cost  increase  from  restricting  the 
servicing market to reclaimed HCFCs  only  is marginal. Incidentally, an increase in 
the  price  of  reclaimed  HCFCs  would  accelerate  the  transition  away  from  HCFCs 
which would reap environmental benefits also from a climate change perspective as 
new equipment demonstrates significantly better energy efficiency.  

6.2.4.  Comparison of the Options and Emerging Preferences 

On Option 1, the cost-effectiveness of an expedited phase out for recycled/reclaimed 
HCFCs  could  not  be  demonstrated,  due  to  lack  of  data.  A  more  targeted  voluntary 
agreement with the industrial process refrigeration sector, where some cost-effective 
options have been identified, could be envisaged (option 2). Option 4 was preferred 
to option 3 as it offers a more effective solution to avoid illegal use of virgin HCFCs. 

Table 8: Adapting the phasing out of the use of HCFCs 

POLICY OPTIONS 

Bold: preferred regulatory option 

Italics: preferred non-regulatory option 

Strikethrough: discarded option 

*option 
 legislation 

implemented 

through  other  EC

1.  Expedited  phase  out  from  the  use  of 

recycled and reclaimed HCFCs  

2.  Voluntary  agreement  on  phase  out 

strategy with industry 

3.  Certification  of 
reclaimed HCFCs 

s
t
c
a
p
m

I

l
a
t
n
e
m
n
o
r
i
v
n
E

)
s
e
n
n
o
t
P
D
O

(

0
2
0
2
-
0
1
0
2

0-600  

0-400 

s
t
s
o
C
e
v
i
t
a
r
t
s
i
n
i
m
d
A

)
0
1
0
2
V
P
N

,

n
o
i
l
l
i

m

(

- 

0 

recycled 

and 

+ 

++ 

4. Use of reclaimed HCFCs only after 

2010 

impacts  related 

Total 
options 

to  preferred 

1. Reduced risk of illegal use of virgin HCFCs 

0-300 

0-300 

+ 

+ 

s
t
c
a
p
m

I

c
i
m
o
n
o
c
E

t
c
e
r
i
D

)
0
1
0
2
V
P
N

,

n
o
i
l
l
i

m

(

++ 

+ 

0 

+ 

+ 

s
t
c
a
p
m

I

r
e
h
t
O
d
n
a

l
a
i
c
o
S

+(1) 

0 

+(1) 

+(1) 

+(1) 

33 

7 Member States did not reply to date to the survey on recycled/reclaimed HCFCs. 

EN 

35 

   EN 

 
 
 
 
 
 
 
 
 
 
€
 
 
 
 
 
 
 
€
 
 
 
 
 
 
 
 
 
                                                 
6.3. 

Options for Strengthening Enforcement of the Regulation 

6.3.1.  Definition and Drivers of the Problem 

Responsibility  for  enforcement  action  rests  with  the  Member  States,  but  there  are 
indications that there is much left to do in this area. The provisions for enforcement 
in  the  current  ODS  Regulation  are  limited.  In  addition  to  illegal  or  harmful  trade, 
there  are  concerns  about  ODS  emissions  within  the  EU  due  to  levels  of  leakages 
from  stationary  and  mobile  refrigeration  units.  Inspections  are  also  needed  during 
waste management operations, as the WEEE and ELV Directives do not require them 
for ODS. An additional concern is that customs officials find it difficult to identify 
ODS  and  to  distinguish  products  and  equipment  that  contain  controlled  substances 
from those which do not.  

6.3.2.  Description of Options  

Option 0: No EU action 

Option 1: Updating inspections provisions 

Option 2: Adapting labelling requirements for ODS produced for feedstock 

Option 3: Extending labelling requirements to sales of products and equipment 

Option 4: Labelling existing products and equipment during servicing, recycling, and 
reclaiming. 

Option 5: Awareness Raising and Training Programmes 

An  option  to  include  further  specifications  on  penalties  was  discarded  because  of 
subsidiarity  issues  and  the  ongoing  inter-institutional  debate  on  ways  to  tackle 
environmental crime.  

Option 0: No EU action 

Under the business as usual scenario, Member States would continue to follow varied 
approaches  to  inspections  for  the  enforcement  of  the  Regulation.  These  differences 
could provide a window for illegal trade as well as for lax practices where ODS are 
used. 

In  addition,  current  provisions  of  EC  chemicals  legislation  require  producers, 
importers  and  exporters  to  label  substances  classified  as  ODS34.  It  is  however  not 
required  to  specify  the  use  for  which  these  substances  have  been  produced  or 
imported, and there is no explicit requirement on labelling of products and equipment 
containing or relying on ODS. Under the no action scenario, substances produced for 
certain uses only would continue to circulate freely in the Community with risks of 
diversion  for  other  uses,  and  Member  States  would  continue  to  have  difficulties 
identifying products and equipment containing ODS. 

Option 1: Updating inspections provisions 

This option would amend Article 20 to highlight the need for risk-based inspection 
regimes. The scope of this obligation should be explicitly extended to checks on the 

34 

Directive 1999/45/EC of the European Parliament and of the Council of 31 May 1999 concerning the 
approximation of the laws, regulations and administrative provisions of the Member States relating to 
the classification, packaging and labelling of dangerous preparations. 

EN 

36 

   EN 

 
                                                 
compliance  with  all  provisions  of  the  Regulation  and  not  only  with  the  import 
requirements.  

Option 2: Adapting labelling requirements for ODS produced for feedstock 

Labels  would  be  affixed  to  containers  of  ODS  produced  or  imported  for  feedstock 
uses, to distinguish them from ODS intended for other uses. 

Option 3: Extending labelling requirements to sales of products and equipment 

This option would extend the current labelling requirements for ODS to include the 
placing on the market of new products and equipment containing or relying on ODS, 
as well as to sales of used products and equipment. 

Option  4:  Labelling  existing  products  and  equipment  during  servicing, 
recycling, and reclaiming. 

This option would involve affixing labels to fixed equipment (mainly large cooling 
installations), during servicing and whilst recycling, reclaiming and topping up  any 
losses from leakages. 

Option 5: Awareness raising and training programmes 

This option would require the Commission and Member States to launch additional 
awareness raising and training initiatives to strengthen inspections and enforcement. 
These  actions  would  particularly  focus  on  Member  States'  customs  agents  in 
cooperation with existing platforms such as IMPEL or CLEEN. The preparation and 
distribution  of  handbooks  to  assist  in  the  implementation  of  the  Regulations  are 
envisaged as accompanying measures.  

6.3.3. 

Impact Analysis  

Option  1  should  not  entail  significant  additional  costs,  as  the  current  Regulation 
already obliges Member States to ensure its enforcement. The extension of the scope 
of  the  obligation  would  clarify  this  general  obligation.  Shifting  to  risk-based 
sampling  would  only  entail  a  marginal  additional  cost  in  terms  of  designing  a  new 
sampling  strategy,  whilst  contributing  to  a  more  efficient  use  of  resources.  There 
should be a positive environmental impact in terms of reduction in illegal trade and 
leakage rates. 

labelling  requirement  reflected 

increase 
The  extended 
administrative  costs  for  a  limited  number  of  importers  and  producers  of  ODS  for 
feedstock  uses.  However,  since  ODS  are  already  subject  to  labelling  requirements 
under  the  chemicals  legislation,  the  increase  would  be  limited  to  the  costs  of 
designing  and  distributing  new  labels.  The  improved  transparency  would  facilitate 
the enforcement by the Member States' authorities and would contribute to reduced 
illegal trade.  

in  option  2  would 

The labelling requirement in option 3 would mainly affect used, commercially sold 
refrigeration  and  air  conditioning  equipment  containing  HCFCs.  It  would  impose 
direct  costs  on  businesses,  in  particular  producers  and  distributors  of  products  and 
equipment containing ODS as well as resellers of used products and equipment. The 
administrative  costs  for  industry  should  be  low–  estimated  at  €37,000  annually 
between 2010 and 2014 (or €0.16 million NPV) – ,  as this market is expected to be 
restricted  when  the  revised  Regulation  comes  into  force  (products  and  equipment 
sold among individuals, such as used household refrigerators, would not be affected). 

EN 

37 

   EN 

 
However, the environmental benefit would also be limited as quantities involved in 
terms of ODP would be small. 

Option 4 mainly impacts operators of large cooling installations. Servicing operators 
would  incur  costs  related  to  the  time  needed  to  fill  out  and  affix  labels  to  the 
equipment  they  service.  The  estimated  costs  are  some  € 400,000  annually  for 
operators  across  the  EU,  decreasing  over  time,  i.e.  a  NPV  of  € 0.92  million.  All 
installations  would  be  progressively  covered,  with  decreasing  costs  in  time,  and 
benefits in terms of reduced illegal trade, alerting operators to the need to recover the 
ODS at end of life. 

Option 5 would cost little as information material is already under preparation, which 
could serve as basis for this initiative. For instance the Nordic Council of Ministers is 
currently  preparing  a  handbook.  A  joint  workshop  in  cooperation  with  IMPEL  or 
CLEEN  would  cost  around  € 0.08  million,  and  would  increase  knowledge  about 
violations and therefore reduce illegal activities. 

6.3.4.  Comparison of the Options and Emerging Preferences 

Table 9: Options for strengthening enforcement of the regulation 

POLICY OPTIONS 

Bold: preferred regulatory option 

Italics: preferred non-regulatory option 

Strikethrough: discarded option 

*option 
 legislation 

implemented 

through  other  EC

s
t
c
a
p
m

I

l
a
t
n
e
m
n
o
r
i
v
n
E

)
s
e
n
n
o
t
P
D
O

(

0
2
0
2
-
0
1
0
2

1. Updating inspections provisions 

0-150 

2.  Adapting  labelling  requirements  for 

ODS for feedstock use 

0-90 

s
t
s
o
C
e
v
i
t
a
r
t
s
i
n
i
m
d
A

)
0
1
0
2
V
P
N

,

n
o
i
l
l
i

m

(

+ 

+ 

3. Extending labelling requirements to sales 

of products and equipments 

+ 

0.16 

4.  Labelling  requirements  for  existing 
equipment  during 

and 

products 
servicing 

0-30 

0.92 

5.  Awareness 
programmes 

raising 

and 

training 

+ 

Total impacts related to preferred options 

0-270 

0.08 

0.92 

1. Reduced risk of illegal trade/use 

2. Increased consumer choice 

s
t
c
a
p
m

I

c
i
m
o
n
o
c
E

t
c
e
r
i
D

)
0
1
0
2
V
P
N

,

n
o
i
l
l
i

m

(

0 

0 

0 

0 

0 

0 

s
t
c
a
p
m

I

r
e
h
t
O
d
n
a

l
a
i
c
o
S

+(1) 

+(1) 

+(1) (2) 

+(1) (2) 

+(1) 

+(1) (2) 

From  the  analysis,  the  preferred  regulatory  options  would  be  options  1,  2  and  4. 
Options  1  would  provide  benefits  in  terms  of  better  enforcement  at  little  or  no 
additional  cost,  whereas  option  2  would  help  to  keep  track  of  ODS  produced  for 
feedstock,  reducing  the  risk  of  diversion  for  other  uses  at  a  small  additional  cost. 
Option 4 would be the most effective labelling option to reduce illegal trade, inform 
consumers  and  facilitate  the  recovery  of  ODS.  In  contrast,  option  3  would  provide 

EN 

38 

   EN 

 
 
 
 
 
 
 
 
 
€
 
 
 
 
 
 
 
€
 
 
 
 
 
 
 
 
 
little  benefit  while  creating  some  costs.  Option  5  would  also  provide  additional 
benefit and would be implemented outside the regulation.  

6.4. 

Options for Avoiding Illegal Imports and Closing Remaining Loopholes  

6.4.1.  Problem definition and Drivers 

Article  4(6)  allows  the  importation  and  placing  on  the  market  of  products  and 
equipment containing all ODS except HCFCs and MB manufactured before the entry 
into force of the Regulation. Article 5(4) allows the importation and placing on the 
market of products and equipment containing HCFCs manufactured before the date 
of  entry  into  force  of  the  specific  use  restriction.  These  provisions  are  transitional 
clauses to reduce economic disruption. The last use ban for commercial products and 
equipment  containing  CFCs  took  effect  in  2005,  whilst  the  last  ban  for  military 
equipment using CFC will take effect in 2009. For HCFCs, the last use ban will enter 
into force on 31 December 2008. Thus, by 2010 such transitional clauses should no 
longer be necessary. 

Nonetheless,  Articles  4(6)  and  5(4)  contain  a  loophole:  they  refer  to  products  and 
equipment  containing  ODS,  but  not  to  those  relying  on  ODS.  In  at  least  one  new 
Member  State,  second-hand  refrigerators  and  air-conditioners  relying  on  HCFCs 
have been imported without their HCFCs with the intention of being refilled and sold 
in the EC, thus passing through the loophole. 

Lack of control of trans-shipment has been identified by the Parties of the Montreal 
Protocol as a potential source of illegal trade (Decision XIX/12). 

6.4.2.  Description of Options  

Option 0: 

no EU action 

Option 1: 

Ending the import of products and equipments relying on ODS 

Option 2: 
ODS manufactured before the specific use ban date 

Ending the import of products and equipments containing or relying on 

Option 3: 
approved treatments 

Extending licensing to entry under customs procedures or for customs-

Option 0: No EU action 

The legislation would remain unclear and the opportunity for import of used products 
and  equipment  relying  on  ODS  manufactured  before  the  Regulation’s  entry  into 
force would remain. It is assumed that up to 45 000 refrigerators and freezers would 
be imported annually from 2010 to 2014, in particular into the new Member States. 
The  loophole  allowing  import  of  products  and  equipment  relying  on  ODS  for 
refilling in the EC would not be addressed. 

Option 1: Ending the import of products and equipments relying on ODS  

This option would extend the ban in articles 4(6) and 5(4) on import of products and 
equipments containing ODS to products and equipments relying on ODS. 

Option 2: Ending the import of products and equipments containing or relying 
on ODS manufactured before the specific use ban date  

This  option  concerns  all  ODS  and  would  remove  the  placing  on  the  market  ban 
exemption for products and equipments manufactured before each relevant use ban. 
Placing  on  the  market  is  interpreted  as  first  placing  on  the  market  in  the  ODS 

EN 

39 

   EN 

 
Regulation,  and  this  option  would  therefore  only  affect  imports  of  products  and 
equipments.  Second  hand  markets  within  the  EU  for  products  and  equipments 
already on the EU market before 2010 would still be allowed. In parallel, exemptions 
would be provided for specific cases deemed to be too costly. Article 5(7) currently 
provides an exemption for the placing on the market of HCFCs when no alternatives 
are available. Enlarging it to products and equipments would enable such exemptions 
by a Comitology decision. 

Option  3:  Extending  licensing  to  entry  under  customs  procedures  or  for 
customs-approved treatments 

Licensing currently only covers entry of goods into the customs territory for release 
for  free  circulation  in  the  Community.  This  option  would  extend  licensing 
requirements  to  entry  under  other  customs  procedures  or  for  customs-approved 
treatments  and  uses,  to  better  align  the  Regulation  with  the  customs  code.  ODS 
placed  under  temporary  storage,  including  transhipment  in  Community  ports  and 
airports as well as transit through the Community under customs supervision, would 
not be subject to licensing at this stage, but a legal basis would be established for the 
Commission to gather evidence and consider measures for further control. 

6.4.3. 

Impact Analysis  

Option 1 would have very minor economic impacts, as there have been few requests 
for  imports  of  products  and  equipments  relying  on  ODS.  Environmental  impacts 
would equally be small. The option is, however, necessary to clarify the Regulation 
and to close an unintended loophole.  

Option 2: The economic impacts for CFCs would again be minimal as refrigerators 
and  freezers  containing  CFCs  imported  under  this  provision  would  have  been 
manufactured  before  2000  and  so  not  have  significant  market  value.  In  addition, 
ending the imports would remove a provision that has proved extremely difficult to 
enforce,  as  there  is  no  manufacture  date  on  used  products.  Environmental  benefits 
would be small in quantitative terms, but would avoid a continued build-up of CFC 
banks, particularly in the EU-12 countries. 

The  main  economic  impact  for  HCFCs  would  be  on  current  importers  of  used 
refrigerators and users, who would incur an annual  loss estimated at €0.22  million. 
On  the  other  hand,  this  option  would  increase  EU  sales  of  non-ODS  containing 
refrigerators and freezers (a net annual benefit estimated at €0.85 million). As a first 
estimate, it is assumed that – due to higher prices – new sales replace only half of the 
imports of HCFC-containing refrigerators and freezers. Even so, there would be a net 
economic benefit to EC operators of €2.78  million (NPV at 2010). The option would 
also provide greater legal clarity for enforcement against possible illegal imports of 
products and equipment and thus could reduce administrative costs for enforcement 
on the part of the Member States. 

There may be rare cases where, to avoid disproportionate costs from bans on imports 
of  long-life  and  high-value  products  and  equipment,  such  as  ships  and  aircraft, 
exemptions could be provided. 

Concerning environmental impacts, this option would reduce HCFC consumption in 
the EC by 1.5 ODP tonnes over the period 2010-2015. Importantly, it would limit the 
growth of HCFC banks in the EU. On a global basis, however, little environmental 
benefit is expected, as used products and equipment would remain in third countries. 

EN 

40 

   EN 

 
Under Option 3, additional control on entry into the customs territory would make 
the  tracking  of  illegal  shipments  possible  and  would  therefore  reduce  the  risk  of 
illegal  trade.  No  data  are  available  on  the  volumes  concerned,  but  additional 
administrative  costs  for  customs  authorities  are  not  expected  to  be  disproportional. 
Licensing  would  at  this  stage  not  apply  to  transhipment  or  transit  through  the 
Community under customs  supervision to  avoid increasing the  burden  on  operators 
and  customs  authorities,  pending  a  separate  evaluation  of  the  benefits  and  costs  of 
such a measure. 

6.4.4.  Comparison of the Options and Emerging Preferences 

Table 10: Options for avoiding illegal imports and closing remaining loopholes 

POLICY OPTIONS 

Bold: preferred regulatory option 

Italics: preferred non-regulatory option 

Strikethrough: discarded option 

*option 
 legislation 

implemented 

through  other  EC

s
t
c
a
p
m

I

l
a
t
n
e
m
n
o
r
i
v
n
E

)
s
e
n
n
o
t
P
D
O

(

0
2
0
2
-
0
1
0
2

1. Ending the import of products and 

0-5 

equipments relying on ODS  

s
t
s
o
C
e
v
i
t
a
r
t
s
i
n
i
m
d
  A
- 

)
0
1
0
2
V
P
N

,

n
o
i
l
l
i

m

(

s
t
c
a
p
m

I

c
i
m
o
n
o
c
E

t
c
e
r
i
D

)
0
1
0
2
V
P
N

,

n
o
i
l
l
i

m

(

+ 

s
t
c
a
p
m

I

r
e
h
t
O
d
n
a

l
a
i
c
o
S
0 

2. Ending the import of products and 
equipments  containing  or  relying 
on  ODS  manufactured  before  the 
specific use ban date 

3.  Extending  licensing  to  entry 
under customs procedures or for 
customs-approved treatments 

0-140 

- 

-2.78 

+(1)(2) 

+ 

+ 

0 

+(1) 

impacts  related 

Total 
options 

to  preferred 

0-145 

-- 

-2.78 

+(1)(2) 

1 Reduced risk of illegal trade 
2. Possible job increase in the destruction sector 

The  three  options  are  not  mutually  exclusive,  and  it  is  recommended  that  all  are 
adopted. Option 1 would have minimal impacts, but is necessary to close an existing 
loophole  in  the  Regulation.  Option  2  is  necessary  to  avoid  the  further  build-up  of 
ODS  banks  in  the  EU,  and  would  give  a  boost  to  the  EU  market  for  non-ODS 
refrigerators,  resulting  in  an  overall  economic  benefit.  A  possibility  to  grant 
exemptions  would  be  provided  to  avoid  disproportionate  costs  in  exceptional 
circumstances.  Option  3  strengthens  imports  control  measures  to  address  potential 
threats of illegal trade. 

6.5. 

Options for Avoiding Exports Harming the Phase Out in Destination Countries 

6.5.1.  Problem definition and Drivers 

Several  Member  States,  several  parties  to  the  Protocol  and  environmental  NGOs 
have  called  for  stronger  international  control  of  transboundary  movement  of  ODS 
and  ODS-containing  products  and  equipment,  to  reduce  illegal  trade.  Although  the 
EU, as an exporter, can play a key role, the Commission does not at present have a 

EN 

41 

   EN 

 
 
 
 
 
 
 
 
 
€
 
 
 
 
 
 
 
€
 
 
 
 
 
 
 
 
 
strong legal basis to reject any export authorisation request. With the various phase-
outs  already  underway,  there  will  be  increasing  incentives  for  illegal  trade.  The 
reviewed  options  aim  to  improve  the  control  of  transboundary  movements  of  ODS 
and to bring the exports from the EU into closer compliance with Decision XIX/12 
and with other Decisions of the Parties in this regard.  

6.5.2.  Description of Options  

Option 0:  No EU action 
Option 1: 
Option 2: 
Option 3: 
Option 4: 
Option 5: 
MB and licensing remaining products and equipment 

Preventing the issuing of export authorisations for unwanted ODS 
Establishing an export notification procedure for all ODS  
Extending the ban on ODS exports to MB and HCFCs for destruction 
Introducing export licensing per shipment 
Extending the ban on exports of products and equipment to HCFCs and 

Option 0: No EU action 

By 2010, a number of export categories will have disappeared. Decreases in licence 
applications  are  observed  in  most  export  categories,  with  the  exception  of  IPR  and 
halons.  Taking  this  into  account,  the  export  authorisation  regime  will  become  less 
demanding  to  administer,  and  the  projected  baseline  administrative  costs  are  15.25 
work months per year (compared to an estimated 30.3 in 2006).  

Under  business  as  usual,  used  products  and  equipment  will  also  continue  to  be 
exported to developing and transitional countries, and the  contained  ODS  might  be 
released where those countries do not have facilities for their proper recovery. 

Option 1: Preventing the issuing of export authorisations for unwanted ODS 

This  option  would  provide  the  legal  basis  for  the  Commission  to  refuse  an  export 
license,  if  it  had  received  information  from  other  Parties  to  the  Montreal  Protocol 
which  indicated  the  potential  for  illegal  trade  or  adverse  consequences  for  ODS 
control measures in the importing country. 

Option 2: Establishing an export notification procedure for all ODS  

The  Prior  Informed  Consent  (PIC)  Regulation,  which  implements  the  Rotterdam 
Convention on the PIC Procedure for Certain Hazardous Chemicals and Pesticides in 
International  Trade,  already  covers  two  ODS  (CTC  and  TCA).  This  option  would 
expand this to include all ODS. 

Option 3: Extending the ban on ODS exports for destruction to MB and HCFCs  

The export for destruction of all ODS is banned, except for MB and HCFCs. Exports 
of the latter substances are indeed authorized for all uses, including for destruction. A 
generalization of the export ban for all substances would end this loophole. 

Option 4: Introducing export licensing per shipment 

As  the  Regulation  does  not  specify  the  type  of  licence  required,  this  is  not  a 
regulatory  option.  Currently,  individual  licences  are  required  for  each  shipment  of 
halons, ODS for basic domestic needs, inward processing regime (IPR), and essential 
use exports. This option would extend the licensing requirement for other exports for 
which currently bulk licences are issued: ODS for feedstock uses, for process agent 
uses, all exports for MB and HCFCs except for IPR.  

EN 

42 

   EN 

 
Option 5: Extending the ban on exports of products and equipment to HCFCs 
and MB and licensing remaining products and equipments 

The export of products and equipment containing or relying on ODS other than MB 
and HCFCs, with the exception of some items such as personal effects, is currently 
prohibited. This option involves extending the ban to MB and HCFCs. 

Licensing  is  only  currently  required  for  substances.  This  option  would  extend  the 
requirement to remaining products and equipment that contain or rely upon ODS. 

6.5.3. 

Impact Analysis 

Option 1: Under the Montreal Protocol there are currently several schemes based on 
information exchange, which have been recognised as a useful tool to prevent illegal 
trade (e.g. Decision XIX/12, introduced by the EC). Establishing a legal basis for the 
refusal of licensing requests would enable the European Community to participate in 
those schemes more effectively. The economic impact would be negligible, as in the 
few cases that have occurred in the past, companies agreed voluntarily to withdraw 
their requests.  

Option  2:  Expanding  the  PIC  regulation  to  all  ODS  could  potentially  lead  to  a 
simplified  notification  system  for  the  Commission.  The  additional  information  on 
substances  and  hazards  provided  by  the  PIC  procedures  could  be  useful  in  the 
monitoring  and  enforcement  of  transboundary  movements  of  ODS.  However,  this 
would require action at the level of the Rotterdam convention, i.e. outside the scope 
of  this  review,  with  likely  high  administrative  costs.  Furthermore,  the  licensing 
requirements of the Rotterdam Convention and the Montreal Protocol do not match, 
e.g. the PIC system does not differentiate between uses. A previous test to merge PIC 
export  notifications  with  the  ODS  database  showed  that  it  would  not  deliver  the 
expected benefits. 

Option  3:  There  are  currently  no  exports  of  MB  for  destruction.  No  data  are 
available on HCFC exports for destruction as the ODS database does not allow this 
distinction.  It  is  however  unlikely  to  be  significant  as  HCFCs  (as  all  ODS)  are 
covered by the Basel convention, which would imply high export costs. Exports of 
other ODS for destruction are currently prohibited. The ban on exports of HCFCs for 
destruction  would  therefore  clarify  and  strengthen  the  EU  position  on  exports  of 
waste,  with  no  expected  significant  economic  impact.  The  environmental  impact 
would  be  positive  as  destruction  facilities  outside  Europe  are  unlikely  to  be  of  the 
same standards, with an increased risk of release in the atmosphere. 

Option  4:  Moving  to  licensing  per  shipment  for  all  exports  would  have  significant 
benefits in terms of improved control over exports, and in harmonizing the regulatory 
requirements  placed  on  all  exporters,  and  would  facilitate  the  exchange  of 
information  between  Parties.  The  administrative  costs  of  expanding  the  current 
system  are  estimated  to  increase  by  around  0.6  man-months  per  annum  for  the 
Commission  and  2  man-months  for  industry,  representing  an  overall  cost  of  €0.17 
million  (NPV  at  2010).  This  would,  however,  be  offset  by  a  simplification  of  the 
licensing system (with only one type of licence), and the possibility of reducing the 
requirements for reporting by companies and users (see the option on streamlining of 
reporting). There may also be a case for exempting the maritime service sector from 
a requirement to apply for a licence of each shipment, if it is demonstrated that it is 
disproportionately hit by this measure. 

EN 

43 

   EN 

 
Option  5:  The  use  of  HCFCs  in  the  manufacture  of  products  for  export  will  be 
banned as from 1 January 2010. Hence exports of equipment containing HCFCs will 
be  limited  to  used  equipment.  It  is  expected  that,  for  the  bulk  of  the  equipment, 
HCFCs would be recovered and reclaimed. However, there is a risk that significant 
quantities  of  used  HCFC  equipment,  which  can  no  longer  be  refilled  in  the  EU, 
would be exported to developing countries. While it has not been possible to evaluate 
the economic impact in terms of foregone benefits of banning such exports, it would 
be clearly undesirable that a market develops which would result in the build-up of 
HCFC  banks  in  countries  where  destruction  facilities  might  not  available,  thereby 
causing a negative environmental impact. Such trade would be seen as harmful in the 
context of the Montreal Protocol. Economic impacts might however be high for some 
long-lived  products  and  equipment.  To  avoid  excessive  costs,  an  exemption  for 
aircraft  and  ships  should  be  considered.  Exemptions  could  also  be  granted  for 
products and equipments intended for analytical purposes. 

There are no known products or equipment relying on MB, and extending the ban to 
that substance would mainly be for completeness and clarification.  

In terms of economic impacts, licensing remaining products and equipments would 
require  minor  additional  administrative  and  enforcement  effort  and  result  in 
associated costs for the Commission and Member States. However, in the long term, 
a better system of information sharing, as well as a clearer procedure, should reduce 
enforcement  costs  for  Member  States.  There  would  also  be  minor  administrative 
costs for EC exporting businesses. Only a few sectors are expected to continue such 
exports after 2010, including civil aircraft and military equipment containing halons, 
currently subject to an export authorisation (Article 12(4)). 

In  terms  of  environmental  impacts,  this  provision  would  strengthen  provisions 
against  illegal  trade,  by  enabling  customs  to  distinguish  between  legal  and  illegal 
trade (all new equipment).  

6.5.4.  Comparison of the Options and Emerging Preferences 

Table  11:  Options  for  avoiding  exports  harming  the  phase  out  in  destination 
countries 

POLICY OPTIONS 

Bold: preferred regulatory option 

Italics: preferred non-regulatory option 

Strikethrough: discarded option 

*option 
 legislation 

implemented 

through  other  EC

1. Preventing the issuing of export 
licenses for unwanted ODS 

0
2
0
2
-
0
1
0
2

l
a
t
n
e
m
n
o
r
i
v
n
E
0-5 

s
t
c
a
p
m

I

)
s
e
n
n
o
t
P
D
O

(

)
0
1
0
2
V
P
N

,

n
o
i
l
l
i

m

(

s
t
s
o
C
e
v
i
t
a
r
t
s
i
n
i
m
d
A
+ 

2. Establishing an export notification 
procedure for all ODS 

3. Extending the ban on ODS exports to 
MB and HCFCs for destruction 

4. Introducing export licensing per 
shipment 

0-10 

++ 

+ 

0 

0-130 

0.17 

)
0
1
0
2
V
P
N

,

n
o
i
l
l
i

m

(

c
i
m
o
n
o
c
E

t
c
e
r
i
D

s
t
c
a
p
m

I

0 

0 

- 

0 

r
e
h
t
O
d
n
a

l
a
i
c
o
S

s
t
c
a
p
m
+1 

I

)
s
b
o
J
n
o
i
l
l
i

M

(

+1 

+1,3 

+1 

EN 

44 

   EN 

 
 
 
 
 
 
 
 
 
€
 
 
 
 
 
 
 
€
 
 
 
 
 
 
 
 
 
5. Extending the ban on exports of 
products and equipment to HCFCs and 
MB and licensing remaining products 
and equipment 

0-95 

+ 

Total impacts related to preferred options 

0-100 

+ 

+ 

0 

+1,2 

+1,2 

1. Reduction in illegal/harmful trade 

2. Reduced ODS banks in developing countries 

3. Possible job increase 

Option  2  was  discarded  as  it  is  likely  to  impose  high  administrative  costs  with 
comparably  low  benefits.  Options  1  and  3  are  recommended  as  low  cost  options 
which  would  strengthen  the  EU  ability  to  control  illegal  and  harmful  trade.  Non-
regulatory  option  4  is  likely  to  be  the  most  effective  for  improving  control  over 
exports.  It  would  entail  an  administrative  cost,  but  would  also  lead  to  savings  in 
terms of reduced reporting requirements on exports for companies. 

As  illegal  trade  is  currently  one  of  the  main  challenges  for  enforcing  the  Montreal 
Protocol,  option  5  is  recommended,  with  exemptions  limited  to  ships  and  aircraft 
where necessary to avoid excessive economic costs, and licensing for controlling the 
remaining exports under these exemptions. 

7. 

7.1. 

ENSURING FUTURE CHALLENGES ARE BEING ADDRESSED 

Avoiding Emissions of ODS "Banked" in Products and Equipment 

7.1.1.  Definition and Drivers of the Problem 

By  2010,  ODS  “banked”  or  contained  in  products  and  equipment  within  the  EU 
could amount to 700 000 ODP-tonnes.35 Assuming an overall leakage rate of 3.5 % 
(derived  from  the  2005  TEAP  reports),  EU  ODS  emissions  from  such  banks  could 
potentially  range  around  24  000  ODP  tonnes  p.a.  for  the  period  until  2015  (or  170 
million tonnes of CO2eq p.a.).36 
In  principle,  most  emissions  from  banks  could  be  avoided  based  on  existing 
provisions in the EU Waste Framework Directive (WFD)37, the Waste from Electric 
and  Electronic  Equipment  (“WEEE”)  Directive38,  the  Directive  on  the  landfill  of 
waste39,  related  Member  States’  national  waste  legislation  as  well  as  provisions 
contained  in  the  Regulation  (Articles  16  and  17).  Recent  assessments  of  waste 
management  policies  in  the  EU,  however,  point  at  generally  weak  recycling  rates, 
below 30%, for products and equipment.  

35 
36 

37 

38 

39 

Experts acknowledge that these estimates contain a relatively large degree of uncertainty. 
These estimates were derived by extrapolating from best available global estimates contained in a 2005 
TEAP  report  and  according  to  which  global  banks  amounted  to  3.5  million  ODP  tonnes  (20  billion 
tonnes  CO2eq)  in  2002  whilst  the  projected  amounts  for  2015  would  be  reduced  to  2  million  ODP 
tonnes (13.4 billion tonnes of CO2eq). 
Directive 2006/12/EC of the European Parliament and of the Council of 5 April 2006 on waste, OJ L 
114, 27.4.2006, p 9. 
Directive 2002/96/EC of the European Parliament and of the Council of 27 January 2003 on waste from 
electrical  and  electronic  equipment  (WEEE),  OJ  L  37,  13.2.2003,  p.  24.  Directive  as  amended  by 
Directive 2003/108/EC (OJ L 345, 31.12.2003, p. 106). 
Council Directive 1999/31/EC on the landfill of waste 

EN 

45 

   EN 

 
                                                 
Considering  these  low  recycling  rates,  annual  emission  from  ODS  banks  would 
amount to approximately 17 000 ODP-tonnes (122.5 million tonnes of CO2eq p.a.).  

With projected annual emissions from ODS banks of 17 000 - 24 000 ODP-tonnes, in 
comparison  to  emissions  from  post-2010  controlled  uses  of  ODS  of  approximately 
1.000  ODP  tonnes,  improving  recovery  of  banked  ODS  is  a  key  issue  to  address 
within  the  EU.  Overall  emissions  during  the  period  2010-2020  are  expected  to  be 
around 200 000 ODP-tonnes. 

Figure 4 shows that, in 2010, 90% of banked ODS will be in CFC- and HCFC-blown 
foams,  with  the  remainder  being  mainly  CFCs  in  refrigeration  and  air  conditioning 
systems, including mobile air containing systems. 

Whilst  Austria  and  Sweden  commissioned  studies  on  the  amounts  of  ODS  in 
building foams,40 no clear action to recover ODS from building wastes is expected in 
the  immediate  future.  There  exists  no  EU  legislation  specifically  targeting  ODS  in 
building and demolition waste streams. In Member States, the level of recycling and 
re-use  of  building  waste  varies  greatly  (between  5%  and  90%).41  Furthermore, 
current  practice  in  managing  building  and  demolition  waste  recovery  is  not 
appropriate  for  addressing  ODS  contained  in  (insulation)  foams.  After  some  basic 
on-site separation (bricks and concrete) building and demolition waste is transported 
in  bulk  to  the  waste  treatment  plants  where  it  is  sorted  through  sieving  machines. 
ODS are emitted from the foams when they are damaged during collection, sorting 
and  shredding  processes.  Existing  provisions  should  therefore  be  strengthened,  or 
new measures developed, to ensure that insulation foams are separated from building 
waste at an early stage and delivered, with  minimum  damage,  to  appropriate  waste 
management  sites  for  subsequent  ODS  recovery,  recycling,  reclamation,  or 
destruction. 

Figure 4: Banked ODS by substance 

EU ODS Banks 2010

OTHER
0%

REF
6%

RAC
2%

MAC
2%

FOAM
90%

Other  banks  of  ODS  are,  to  a  large  extent,  covered  by  the  WEEE  Directive  which 
establishes producer responsibility for the collection and recovery at end of product 
life. However, a recent study for the review of the WEEE Directive suggests that, for 
the EU27 in 2005, only 27% of refrigerators and freezers were collected at their end-

40 

41 

Richard  Obernosterer,  Roman  Smutny  and  Erika  Jäger,  Nachhaltige  FCKW  –  Bewirtschaftung 
Österreich, Final report to Österreichisches Bundesministeriums für Land- und Forstwirtschaft, Umwelt 
und  Wasserwirtschaft  (BMLFUW),  June  2005;  Peter  Norderg,  EcoManagement,  Kartläggning  av 
kvarvarande områden med ozonnedbrytande ämnen och uppföljning, 2002. 
Report on Data gathering and impact assessment for a review and possible widening of the scope of the 
IPPC  Directive  in  relation  to  waste  treatment  activities)  –Factsheet  E3  –  Sorting  of  construction  and 
demolition waste, VITO and BIO, with IEEP and IVM, 2007 

EN 

46 

   EN 

 
 
                                                 
of-life.42 Where "best practice" is implemented, about 90% of the ODS is recovered 
from the fridges and freezers and sent to recycling plants but, according to estimates 
by RAL, an organisation that establishes standards for refrigerator recovery, only a 
few Member States reach those standards.43 

Finally,  the  analysis  undertaken  in  the  context  of  this  review  revealed  that  costs 
associated  with 
the  recovery,  recycling,  reclamation,  and  destruction  vary 
significantly  (ranging  between  4.5  and  100  €/kg  ODS)  depending  on  the  recycling 
levels achieved. 

7.1.2.  Description of Options  

The  considered  options  aim  to  mitigate  emissions  from  ODS  Banks.  Whilst  some 
options relate to the Regulation, it is clear from the analysis that action should also 
be  taken  to  improve  the  implementation  and  enforcement  of  other  EU  waste 
legislation44.  

Option 0: No EU action 

Option 1: Adapting the ODS Recovery Provisions in the Regulation  

Option 2: Strengthening Policies on Building and Demolition Waste 

Option 3: Strengthening the WEEE Directive 

Option  4:  Developing  Incentive  Mechanisms  for  Promoting  the  Implementation  of 
Waste Legislation. 

Option 0: No EU action 

ODS  "banked"  in  products  and  equipment  would  be  gradually  emitted  to  the 
atmosphere, at an average estimated rate of about 17 000 ODP-tonnes per year (equal 
to 122.5 million tonnes of CO2eq p.a.).  

Option 1: Adapting the ODS Recovery Provisions in the Regulation  

This option would “fine tune” the Regulation, notably through the following changes 
to Articles 16 and 17 on recovery of used controlled substances and leakage: 

(1) 

For  the  purpose  of  clarifying  the  Regulation  and  streamlining  with  relevant 
provisions  in  other  chemical  and  waste legislation,  a  revised  Article  16  will 
include a cross-reference to the relevant chemical and waste legislation.45 For 

42 

43 

44 

45 

United Nations University et al, 2008 Review of Directive 2002/96 on Waste Electrical and Electronic 
Equipment  (WEEE),  5  August  2007,  p.  iv  and  elsewhere.  The  study  used  a  top-down  approach  to 
estimate the share of refrigerators and freezers based on the level of overall WEEE waste collection.  
Although Member States report ODS recovery data annually to the Commission, detailed data are not 
available, as reported data do not refer to the specific sources of the ODS recovery. 
For  the  purpose  of  the  review  of  the  Regulation,  the  development  of  options  for  avoiding  emissions 
from  banks  focuses  on  domestic  EU  options.  It  is  acknowledged  that  international  action  is  equally 
important.  The  issue of banks  already  featured  during  Parties’  dialogue on  the future of  the Protocol. 
The  European  Commission  and  Member  States  will  actively  contribute  to  developing  suitable 
international  solutions  in  this  context  and,  where  relevant,  also  in  the  context  of  the  UNFCCC/KP. 
Some  international  policy  options  that  are  emerging  in  the  context  of  the  Montreal  Protocol,  include 
establishing  a  dedicated  seed  capital  window  under  the  Multi-Lateral  Fund  or  using  flexible  off-set 
mechanisms to fund ODS recovery and destruction projects in developing countries. 
Possible  acts  for  cross-referencing  include  Commission  Decision  2000/532/EC  establishing  a  list  of 
waste following Council Directive (91/689/EEC) on hazardous waste, or Council Directive 1999/31/EC 
on the landfill of waste. 

EN 

47 

   EN 

 
                                                 
(2) 

(3) 

the  purpose  of  raising  awareness  on  available  technologies  for  destroying 
ODS,  a  revised  Article  16  will  be  complemented  by  an  Annex  listing  the 
technologies approved by the Parties to the Protocol.  

To gradually strengthen the provisions in line with technological progress, a 
legal  basis  will  be  introduced  for  listing  products,  installations,  and 
equipment  for  which  the  recovery  of  ODS  is  considered  "practicable",  i.e. 
technically and economically feasible.  

For  the  purpose  of  increasing  synergies  across  EU  legislation,  a  legal  basis 
should be created to align requirements for personnel qualifications for leak-
checking  and  handling  of  substances  under  the  Regulation  to  similar 
requirements  in  other  EU  legislation  (e.g.  Regulation  (EC)  No  842/2006  on 
certain fluorinated gases).  

Option 2: Strengthening Policies on Building and Demolition Waste 

From the problem analysis, it clearly emerges that solutions to the problem of banks 
are  to  be  found  in  the  waste  policy  area,  notably  through  improving  the 
implementation of recycling and recovery of ODS in the construction and demolition 
waste stream.  

Whilst  pursuing  such  policy  options  falls  outside  the  scope  of  the  present  review, 
some actions taken outside the EU can offer guidance for increasing the recovery of 
ODS  from  foams.  For  example,  Norway  amended  its  legislation  on  recovery  and 
treatment  of  waste,  now  requiring  producers  of  waste  from  the  demolition  of  large 
building  sites  to  prepare  plans  for  the  adequate  separation  and  treatment  of  waste 
components such as insulation foams containing ODS.46 These plans are expected to 
include the destruction of ODS in such foams47. The issue has also been studied in 
Japan.  This  has  lead  to  provisions  for  promoting  voluntary  actions  under  the 
Japanese Construction Material Recycling Law.48 

Option 3: Strengthening the WEEE Directive 

Whilst  the  nature  of  the  banks  clearly  points  towards  the  need  for  urgent  action 
related  to  ODS-blown  foams,  there  is  also  a  need  to  improve  the  recovery  of  ODS 
contained in electric equipment such as fridges and freezers. This could be achieved 
by  strengthening  the  provisions  contained  in  the  WEEE  directive,  notably  by 
inserting  a  standard  in  the  form  of  a  minimum  recovery  rate  for  ODS  contained  in 
waste products and equipment and by enlarging the scope of WEEE to include larger 
installations, such as commercial refrigeration and air conditioning systems.  

Option 4: Developing incentive mechanisms for promoting the implementation 
of the waste legislation. 

The  low  recycling  rates  of  waste  in  general  and  ODS  in  particular  may  be  partly 
explained  by  the  costs  involved  in  meeting  the  stated  policy  objectives.  The  high 
variation  in  costs  mentioned  in  section  7.1.1  points  towards  the  need  to  consider 
using incentive mechanisms for improving the implementation of waste management 
policies.  Examples  that  merit  further  study  include  making  destruction  facilities 

46 

47 
48 

Outline  of  Chapter  15  of  the  Norwegian  Regulation  on  Recovery  and  Treatment  of  Waste  (“Waste 
Regulation” – “Avfallsforskriften”). 
Sophia Mylona, Norwegian Pollution Control Authority: personal communication, November 2007 
TEAP, Report of the Rigid and Flexible Foams Technical Options Committee, 2006. 

EN 

48 

   EN 

 
                                                 
eligible for financial support from the regional funds, and developing offset systems 
for  the  quantities  of  ODS  recovered  and  destroyed.  Despite  the  high  GWP  of  the 
ODS involved, emissions of these substances are not covered by the Kyoto Protocol. 
Therefore  the  EU  Emission  Trading  Scheme  cannot  readily  offer  a  solution. 
Nevertheless,  emissions  trading  schemes  and  other  incentive  mechanisms  could  be 
useful  to  promote  the  most  cost-effective  projects  by  compensating  for  high 
implementation costs.  

7.1.3. 

Impact Analysis  

Option  1  is  not  expected  to  generate  significant  environmental  benefits,  unless  a 
listing  of  products,  installations,  and  equipment  for  which  the  recovery  of  ODS  is 
considered  "practicable"  is  introduced.  If  such  a  listing  was  introduced,  it  is 
estimated  that  up  to  14  000  ODP  tonnes  could  be  recovered  (10%  of  the  expected 
emissions from foams over the period considered). In any case it will contribute to 
overall awareness on the scale of the ODS bank problem. In addition, this option is 
likely  to  ensure  a  more  uniform  application  of  destruction  technologies  across 
Member  States.  The  process  of  updating  the  list  of  approved  technologies  through 
Comitology  will  incur  some  limited  administrative  costs.  Benefits  will  also  accrue 
should  personnel  qualified  to  handle  other  related  hazardous  materials  be  allowed 
also to handle ODS under the Regulation.  

Impacts related to options 2 and 3 are not included in the present impact assessment 
as  these  options  will  have  to  be  pursued  separately.  However,  some  estimates  are 
available  on  the  total  costs  related  to  bringing  actual  levels  of  recovered  and 
destroyed ODS in line with current objectives and provisions in the waste legislation. 
Costs of better handling of waste ODS-blown foams may range around € 2 billion. 49 

Impacts  related  to  the  use  of  market-based  incentive  mechanisms  as  suggested  in 
option  4  are  not  fully  developed  at  present.  Based  on  the  experience  with  the  EU 
ETS,  and  also  considering  the  large  variability  in  costs  for  the  various  products 
(ranging  from  €4.5  for  simple  destruction 
destruction  of  ODS  contained  in  insulation  foams  ),  it  is  clear  that  market-based 
incentive mechanisms may offer significant reductions in the cost of complying with 
present  or  strengthened  waste  treatment  standards.  Hence  options  for  developing 
such  systems,  both  at  the  national  and  EU  level,  should  be  further  explored  as  a 
follow-up to the present review.  

to  €100  per  ODP  kg  for  recovery  and 

7.1.4.  Comparison of the Options and Emerging Preferences 

The  preference  is  to  pursue  the  amendment  to  the  Regulation  in  option  1,  with 
parallel  follow-up  actions  mainly  in  the areas  of  waste  management  and  associated 
incentive mechanisms. The latter actions are outside the scope of the present review 
exercise. The amendment to the regulation alone could bring benefits of up to 14 000 
ODP tonnes, or 112 million tonnes of CO2eq. 

Table 12: Avoiding Emissions of ODS "Banked" in Products and Equipment 

49 

http://ec.europa.eu/environment/ozone/review.htm 

EN 

49 

   EN 

 
                                                 
POLICY OPTIONS 

Bold: preferred regulatory option 

Italics: preferred non-regulatory option 

Strikethrough: discarded option 

*option implemented through other EC legislation 

1.  Adapting  ODS  recovery  provisions  in  the 
Regulation 

0
2
0
2
-
0
1
0
2

)
s
e
n
n
o
t
P
D
O

l
a
t
n
e
m
n
o
r
i
v
n
E
0-14000 

s
t
c
a
p
m

I

(

)
0
1
0
2
V
P
N

,

n
o
i
l
l
i

m

(

s
t
s
o
C
e
v
i
t
a
r
t
s
i
n
i
m
d
A
+ 

)
0
1
0
2
V
P
N

,

n
o
i
l
l
i

m

(

r
e
h
t
O
d
n
a

l
a
i
c
o
S

s
t
c
a
p
m

I

0(1) 

c
i
m
o
n
o
c
E

t
c
e
r
i
D
0 

s
t
c
a
p
m

I

2.  Strengthening  policies  on  building  and 
demolition waste* 

0-7000 

3. Strengthening the WEEE directive* 

4.  Use  of  incentive  mechanisms  to  promote 
implementation of waste legislation* 

0-27000 

0-46000 

+ 

+ 

0 

Total impacts related to preferred options 
1. Significant additional climate change benefits 

0-14000  + 

+ 

0 

+ 

+ 

0 

0(1) 
+(1) 

+(1) 

7.2. 

Avoiding the Marketing of New and Short-lived ODS 

7.2.1.  Definition and Drivers of the Problem 

A number of ODS are currently not controlled by the Montreal Protocol. There are 
two categories: (a) substances with a known, significant, ODP which have remained 
uncontrolled  because  of  small  production  volumes,  and  (b)  substances  with  an 
uncertain, but low, ODP (because of their short atmospheric lifetimes) and uncertain 
production levels. The substances are being, or could be, marketed as alternatives to 
controlled  ODS  and,  without  appropriate  measures,  production  levels  may  increase 
to the level at which further substantial harm to the ozone layer could result.  

The  current  text  of  the  Regulation  permits  controls  to  be  introduced  for  any  new 
substance identified by the Scientific Assessment Panel  as having significant ODP, 
and  refers  to  Annex  II  for  this  list.  However,  this  annex  was  deleted  in  200350. 
Simple  re-instatement  of  the  Annex  II  would  allow  controls  to  be  implemented  for 
these substances but would not address any rise in the production and use of short-
lived substances with a low ODP. 

The second issue is which specific substances should be included. In their responses 
to the questionnaire, Member States proposed four new ODS for inclusion under the 
Regulation. One is a halon with a significant ODP. The three others are short-lived in 
the atmosphere and have low ozone depleting potentials. Concern would arise only if 
these substances came to be produced in large quantities.  

7.2.2.  Description of Options  

Option 0:  No EU action 

Option 1:  Monitoring  of  new  short-lived  ODS  with  low  ODP  and  prohibition  of 
new ODS with a significant ODP 

50 

Regulation  (EC)  No.  1804/2003  deleted  Annex  II  and  moved  the  sole  ODS  there  listed, 
bromochloromethane,  to  Annex  I  (as  Group  IX),  stating  in  its  recital  (9)  that  the  Annex  “does  not 
provide the same level of control” for this ODS as for others. 

EN 

50 

   EN 

 
 
 
 
 
 
 
 
 
€
 
 
 
 
 
 
€
 
 
 
 
 
 
 
                                                 
Option 2:  Non regulatory measure: establishing links with REACH 

Option 0: No EU action 

Without any restriction the market for new and short-lived ODS would rise to its full 
potential  value.  The  projected  total  unrestricted  production  of  the  three  short-lived 
new substances for the period 2010 to 2020, is 20 600 tonnes51, with a global market 
value of €17 billion (2010 NP V) and an EU market value of €3.7 billion. A scenario 
with  a  significant  impact  could  potentially  reduce  the  production  to  16 400  tonnes, 
with a decrease of the market value to €3 billion.  

Option 1: Monitoring new ODS and prohibition of ODS with a significant ODP 

This option involves re-establishing the former Annex II, with two parts:  

(1) 

(2) 

Part  A  would  include  new  ODS  that  have  been  identified  by  the  Scientific 
Assessment  Panel  as  having  a  “significant  ozone-depleting  potential”.  The 
production, release for free circulation in the Community, inward processing 
and placing on the market or use of these substances would be prohibited (as 
per the current Article 22 for Annex II). 

Part  B  would  include  substances  which  have  been  identified  under  REACH 
notification and registration processes as having a non-zero ODP. Producers 
and importers of substances listed in Part B would be required to report each 
year on the quantities produced, imported, exported and destroyed. 

Listing  of  substances  in  either  part  of  the  new  Annex  II  would  be  subject  to 
Comitology. In this review, one new ODS (dibromodifluoromethane - or halon 1202) 
would be included in Annex II.A and three new ODS would be included in Annex 
II.B:  n-propyl  bromide;  ethyl  bromide;  and  trifluoroiodomethane  (trifluoromethyl 
iodide or CF3I).  

Option 2: Establishing links with REACH (Non regulatory measure) 

This  option  would  require  an  appropriate  level  of  information  exchange  to  ensure 
consistency  between  REACH  and  the  ODS  Regulation  and  an  efficient  use  of  the 
data generated under the REACH authorisation process. 

7.2.3. 

Impact Analysis  

Option  1  would  generate  an  environmental  benefit  by  reducing  the  risk  of  further 
depletion  of  the  ozone  layer,  by  banning  the  production  of  one  new  substance  of 
significant  ODP,  and  by  allowing  the  monitoring  of  production  of  three  other  new 
short-lived substances to inform the taking of further measures at a later date if that 
proves  to  be  necessary.  Option  2  would  facilitate  the  identification  of  any  new 
substances with a non-zero ODP. 

Option 1, including halon 1202 in  Annex II.A, would have no  economic  impact as 
there is no known production or use in the EU. On Annex II.B, the key question is 
whether the listing of a substance would influence its market potential. As Directive 
67/548/EEC  already  requires  any  substance  with  an  ODP  to  be  labelled  as  a 
dangerous  substance,  this  additional  listing  is  considered  not  likely  to  have  a 
significant impact. Any impact on the market potential would, in any case, not be a 
dead-weight  loss,  as  alternatives  would  be  developed  to  replace  these  substances. 

51 

Estimated assuming an ODP of 0.01 

EN 

51 

   EN 

 
                                                 
Administrative  costs  related  to  the  new  reporting  requirements  are  estimated  to  be 
€ 0.05  million  for  industry,  and  € 0.03  m illion  for  the  Commission.  Additional 
subsequent  studies  may  be  required  to  monitor  new  ODS  contained  in  imported 
products and equipment. Option 2 would cause negligible administrative costs. 

No significant social impact was identified. 

7.2.4.  Comparison of the Options and Emerging Preferences 

Table 14: Avoiding the Marketing of New and Short-lived ODS 

POLICY OPTIONS 

Bold: preferred regulatory option 

Italics: preferred non-regulatory option 

Strikethrough: discarded option 

*option implemented through other EC legislation 

Re-establish former Annex II, part A and B 

Establishing links with REACH 

Total impacts related to preferred options 

0
2
0
2
-
0
1
0
2

s
t
c
a
p
m

I

)
s
e
n
n
o
t
P
D
O

(

l
a
t
n
e
m
n
o
r
i
v
n
E

+ 

+ 

+ 

s
t
s
o
C
e
v
i
t
a
r
t
s
i
n
i
m
d
A

)
0
1
0
2
V
P
N

,

n
o
i
l
l
i

m

(

0.12 

+ 

0.12 

c
i
m
o
n
o
c
E

t
c
e
r
i
D

)
n
o
i
l
l
i

m

(

s
t
c
a
p
m

I

)
0
1
0
2
V
P
N

(

r
e
h
t
O
d
n
a

l
a
i
c
o
S

s
t
c
a
p
m

I

+ 

0 

+ 

0 

0 

0 

Both options appear beneficial compared to business as usual, and are not mutually 
exclusive.  Option  1,  in  particular,  provides  environmental  benefits  in  terms  of 
reduced risks of ozone depletion, without a significant economic impact on industry. 

7.3. 

Avoiding  Using  Methyl  Bromide  (MB)  for  Quarantine  and  Pre-shipment 
purposes 

7.3.1.  Definition and of Drivers of the Problem 

Though the placing on the market and use of MB for controlled uses in the EC have 
been  phased  out,  quarantine  and  pre-shipment  (QPS)  applications  of  this  ODS  are 
still  allowed  under  the  Regulation.  QPS  applications  are  mainly  for  phytosanitary 
purposes, to prevent the spread of plant diseases and pests through exports of plants 
and plant products. Such phytosanitary treatments are governed by the International 
Plant Protection Convention (IPPC). 

Several decisions of the Parties under the Montreal Protocol and a Recommendation 
under the IPPC call for reducing QPS use of MB. Alternatives exist for many types 
of  QPS  treatments:  in  a  2004  survey,  Parties  to  the  Montreal  Protocol  reported 
widespread  availability  of  alternatives.  However,  the  same  study  noted  that  “cost, 
location of facilities, and lack of acceptance by trading partners are impediments to 
their implementation”. 

Specific  concerns  regarding  the  use  of  MB  for  QPS  in  the  EC  include  its  misuse 
when  QPS  conditions  are  met,  and  the  continuation  of  emissive  uses  even  though 
both  a  Decision  of  the  Parties  and  the  current  ODS  Regulation  call  for  minimising 
emissions of MB during QPS treatments.  

MB is currently under review under the Plant Protection Products Directive (PPPD). 
It  is  highly  likely  that  a  decision  for  not  including  it  in  the  list  of  authorised 
pesticides  will  be  taken  by  the  end  of  2008.  If  this  is  the  case,  all  phytosanitary 
applications of MB, including QPS, will have ended by the beginning of 2010. 

EN 

52 

   EN 

 
 
 
 
 
 
 
 
 
€
 
 
 
 
 
 
€
 
 
 
 
 
 
 
 
Description of Options  

Option 0: No EU action 

Option 1: End QPS uses of MB in 2010 

Option 2: Require mandatory recapture and recovery during 2010-2020 

Option 3: Require mandatory recapture up to 2015, and phase out thereafter 

Option 4: Cap QPS use at the Effective level 

Option 5: Awareness raising and action at international level 

Option 0: No EU action 

Under  the  baseline  scenario,  it  is  assumed  that  the  use  of  MB  for  QPS,  which  has 
been  relatively  stable  from  2004  to  2006,  remains  at  the  current  level,  around  220 
ODP tonnes per year. If MB is de-registered under PPPD, the base line is 0 use of 
MB for QPS, and not of the options considered would have an impact. 

Option 1: End QPS uses of MB by 2010 

This option would ban the use of MB for QPS uses when the new regulation enters 
into  force,  leaving  heat  treatment  as  the  only  method  meeting  the  international 
standard under the International Plant Protection Convention.  

Option 2: Require Mandatory Recapture and Recovery from 2010 to 2020 

The Regulation specifies that all precautionary measures practicable shall be taken to 
prevent  and  minimise  leakages  of  MB.  Recapture  and  recovery  of  MB  is  however 
not widely implemented in the EU, which could therefore be made mandatory. 

Option 3: Require mandatory recapture up to 2015, and phase out thereafter 

This option would phase out the use of MB for QPS in 2015, and require mandatory 
recapture and recovery when MB is used up to 2015. 

Option 4: Cap QPS use at the Effective level 

While the overall cap for QPS use of MB in Annex III is currently set to 607 ODP 
tonnes,  Article  4(2)(iii)  sets  limits  on  individual  imports  which  resulted  in  an 
effective cap of 515 ODP tonnes in 2006. This option would set the cap in Annex III 
of the ODS Regulation to this lower effective cap. 

Option 5: Awareness raising and action at international level 

This option comprises two non-legislative measures: 

(1) 

(2) 

Developing  guidelines  for  best  practice  based  on  a  Commission  study  of 
current QPS uses of MB within the Community. The study should review the 
situation  in  third  countries  for  the  purpose  of  establishing  a  clear  list  of 
situations  where  MB  is  required.  The  resulting  guidelines  could  ultimately 
help specifying a limited list of permitted QPS situations in which MB can be 
used and for reviewing the cap contained in the regulation.  

Support efforts underway, both under the Montreal Protocol and the IPPC, to 
reduce  QPS  uses  of  MB.  This  support  could  be  provided  both  through 
international  negotiations  and  by  supporting  international  studies,  standards 
and guidelines on the topic. 

EN 

53 

   EN 

 
7.3.2. 

Impact Analysis  

Option  1:  During  the  consultation,  three  Member  States  proposed  an  end  to  QPS 
uses, arguing that alternatives existed, and two other Member States underlined that 
they had phased out the use of MB. If MB is de-registered under the Plant Protection 
Products  Directive  (PPPD),  all  QPS  uses  would  end.  The  TEAP's  Methyl  Bromide 
Technical Options Committee has identified many alternative treatments for various 
perishable  and  durable  commodities.  The  most  important  use  of  MB  is  for  the 
treatment  of  wood  packaging,  for  which  the  international  standard  under  the  IPPC 
(ISPM  15)  specifies  only  two  types  of  treatment:  MB  and  heat  treatment.  For  the 
assessment,  heat  treatment  of  containers  is  therefore  considered  as  the  sole 
alternative. 

Estimates  of  the  costs  of  heat  treatment  for  QPS  range  from  approximately  €75  to 
€150  per  container,  which  should  be  compar ed  to  an  average  cost  of  €105  per 
container  for  treatment  with  MB.  Assuming  an  average  quantity  of  MB  used  per 
container of 3 kg, an average cost of €110 pe r container, and the continuation of the 
current use of 220 ODP tonnes, the additional cost of heat treatment instead of MB 
would be €7.4 million (NPV at 2010), for a  net amount of MB saved over that ten 
year period of 2200 tonnes. 

However,  in  their  comments  on  the  preliminary  study  for  this  Impact  Assessment, 
the  European  Methyl  Bromide  Association  stated  that  some  of  the  shipments  that 
arrived in ports directly on untreated pallets could not be effectively heat-treated, MB 
being then the only solution. If this is the case, the overall cost of this option could be 
significantly higher. 

Option  2:  Belgium  specifically  requires  the  recovery  of  MB  from  all  QPS 
applications. Based on this experience, costs of an EC-wide mandatory requirement 
for recapture and recovery can be estimated. In Belgium, the costs for MB treatment 
vary  from  winter  (when  the  substance  needs  to  be  heated  before  application)  to 
summer.  Treatment  methods  with  recapture  are  competitive  with  winter  prices, 
though  significantly  higher  than  summer  prices.  As  a  high  estimate,  costs  for 
treatment with recapture may be 25% above current treatment costs.  

Under  current  international  phytosanitary  rules,  at  least  50%  of  the  MB  applied 
should  remain  in  the  container  24h  after  fumigation.  It  is  assumed  that  this  is 
therefore the minimum quantity that can be recovered for new use. Current systems 
can recapture over 99% of this share – however, doing so requires several hours, and 
the resulting personnel costs are not competitive with simple degassing and release to 
the atmosphere. Belgium requires a recapture rate of 80%, which current equipment 
can  achieve  in  under  an  hour.  The  effective  recapture  is  therefore  40%  of  the  MB 
originally placed in the container. The estimated cost of treatment with recapture is 
therefore  €135.75  per  container,  with  a  ne t  use  of  MB  of  1.8  kg  per  container, 
compared to a cost without recapture of €105, and a net use of 3 kg. The additional 
cost of recapture and recovery over the ten year period is therefore €26 million (NPV 
2010), for a MB emissions reduction of 880 ODP tonnes. In practice, the higher cost 
of recapture and recovery would make heat treatment competitive in many situations, 
and  the  likely  switch  to  this  alternative  would  reduce  the  overall  cost  to  industry. 
Assuming  that  20%  of  containers  are  not  heat-treated,  the  overall  cost  to  industry 
would be €11.15 million over the period 2010-2020, with MB emissions reduced by 
1 850 ODP tonnes. 

EN 

54 

   EN 

 
Option  3:  This  option  would  combine  the  impacts  of  option  2  up  to  2015,  and  of 
option 3 from 2015 to 2020. However, more alternatives are likely to be available by 
2015, and adopted as agreed measures under ISPM-15, thereby reducing the overall 
costs  of  the  measure.  It  is  estimated  that  the  amount  of  MB  saved  would  be  2000 
ODP tonnes over the whole period considered, and the cost to industry would be €9.5 
million.  Although  companies  may  be  reluctant  to  invest  in  a  technology  if  MB  for 
QPS is likely to be phased out in the short to medium term, recapture technologies 
are  generally  designed  to  operate  with  other  fumigants,  and  development  is  under 
way to widen the range of fumigants for which they are operational. 

Option 4: Because current use (slightly over 200 ODP tonnes in 2006) is below the 
level  of  the  effective  cap,  this  would  not  create  direct  costs  for  EC  exporters  or 
fumigators.  It  would  mainly  clarify  the  cap  on  the  use  of  MB,  should  there  be 
increases  under  ISPM-15  due  to  further  development  of  trade.  Additional 
environmental  benefits  would  be  accrued  through  the  existing  provision  in  the 
Regulation for the cap to be further adjusted by comitology 

Option  5:  By  setting  EU  guidelines  for  best  practice,  standards  of  use  should  rise, 
and  the  associated  health  and  safety  risks  fall.  This  impact  may  be  limited,  as  the 
standards would be voluntary. At the same time, EU best practice may have a wider 
impact  by  influencing  practices  in  other  parts  of  the  world.  Developing  guidelines 
would represent an administrative cost for the Commission. The impact of action at 
international level is difficult to evaluate in terms of economic cost, but would have 
an effective environmental impact both in the EU and globally. 

7.3.3.  Comparison of the Options and Emerging Preferences 

Table 13: Avoiding Emissions of ODS "Banked" in Products and Equipment 

POLICY OPTIONS 

Bold: preferred regulatory option 

Italics: preferred non-regulatory option 

Strikethrough: discarded option 

*option implemented through other EC legislation 

0
2
0
2
-
0
1
0
2

s
t
c
a
p
m

I

l
a
t
n
e
m
n
o
r
i
v
n
E

)
s
e
n
n
o
t
P
D
O

(

s
t
s
o
C
e
v
i
t
a
r
t
s
i
n
i
m
d
A

)
0
1
0
2
V
P
N

,

n
o
i
l
l
i

m

(

1. End QPS uses of MB by 2010 

0-2200 

- 

2.  Require  mandatory  recapture  and  recovery 
from 2010 to 2020 

0-1850 

3. Require mandatory recapture up to 2015, 
and phase out thereafter 

0-2000 

4. Cap MB for QPS to effective level 

5. Guidelines and awareness raising 

+ 

+ 

Total impacts related to preferred options 

0-2000 

0 

- 

- 

+ 

- 

1. Reduced health and safety risks 

)
0
1
0
2
V
P
N

,

n
o
i
l
l
i

m

(

c
i
m
o
n
o
c
E

t
c
e
r
i
D

s
t
c
a
p
m

I

++ 

r
e
h
t
O
d
n
a

l
a
i
c
o
S

s
t
c
a
p
m

I

+(1) 

0-11.1 

+(1 

0-9.5 

+(1) 

0 

0 

0-9.5 

+ 

+(1) 

+(1) 

EN 

55 

   EN 

 
 
 
 
 
 
 
 
 
€
 
 
 
 
 
 
€
 
 
 
 
 
 
 
Options 1 and 2 are mutually exclusive. Although heat treatment seems generally to 
be more cost-effective than recapture and recovery of MB, it is not recommended to 
end the use of MB for QPS immediately as heat treatment does not cover all cases 
where  treatment  is  needed.  By  2015  however,  more  alternatives  are  likely  to  be 
available,  reducing  the  cost  of  a  phase  out.  Making  recapture  and  recovery 
mandatory would increase the cost of MB use, and make heat treatment competitive 
in  many  situations.  Option  3,  which  is  a  combination  of  options  1  and  2,  is  the 
preferred option, with MB still being allowed for QPS up to 2015 under the condition 
of recapture and recovery, and a complete phase out by 2015, with more alternatives 
likely to be available by then. 

For  all  options,  if  MB  is  no  longer  authorised  for  phytosanitary  purposes  in  early 
2010, as is currently likely, the impact would be 0. 

In  their  response  to  the  consultation  on  the  review  study,  the  European  Methyl 
Bromide  Association  stated  that  they  would  not  be  opposed  to  recapture  and 
recovery being a condition for QPS uses.  

Option 5 would be a low cost measure to be taken outside the Regulation. 

8. 

MONITORING AND EVALUATION 

The monitoring and evaluation of the revised Regulation will continue to rely on the 
proven reporting mechanism that is in place to date, both at the EU level and under 
the Montreal Protocol.  

Data indicating the progress in the phase out and related matters will continue to be 
posted, both on the web portals of the Commission, Member States, and UNEP (in its 
capacity of the Montreal Protocol's Secretariat).  

In  addition,  regular  meeting  of  the  Management  Committee  established  under  the 
Regulation will continue to serve as a very useful information exchange platform and 
as  the  forum  for  consulting  Member  States  on  specific  implementing  decision  for 
which  powers  have  been  given  to  the  Commission.  For  the  latter  purpose,  the  new 
scrutiny rules that will come into place will offer further consultation opportunities, 
also with the European Parliament.  

In  cases  of  non-compliance,  infringement  cases  might  be  launched  in  line  with  or 
independently  from  the  compliance  regime  that  is  in  place  at  the  global  level  and 
governed by the Implementation Committee of the Montreal Protocol. 

9. 

SUMMARY AND CONCLUSIONS 

Appendix VI summarises all the options considered and their impacts (quantitative or 
qualitative  depending  on  available  data),  whilst  highlighting  the  preferred  options. 
The latter are described below in relation to the specific objectives. 

Simpler and better regulation 

The package of preferred options to reduce unnecessary administrative burden and to 
clarify  and  simplify  the  Regulation,  includes  removing  obsolete  regulatory 
provisions, simplifying the structure of the text, improving definitions and clarifying 
links with other policies, as well as removing perceived regulatory uncertainties and 
loopholes. Simplification opportunities were also identified in terms of reporting. To 
streamline  the  reporting  and  enable  further  gains  through  the  Commission 

EN 

56 

   EN 

 
centralising  reporting  obligations  to  UNEP,  it  is  proposed  that  destruction  facilities 
report  directly  to  the  Commission.  Finally,  ending  a  number  of  exemption  and 
related  processes,  due  to  the  phase  out  of  substances  and  greater  availability  of 
alternatives  would  further  simplify  the  implementation  of  the  Regulation.  Overall, 
the proposed package would result in a much simplified Regulation, and net savings 
in terms of administrative costs of nearly €4 million (NPV 2010). 

Ensuring continued compliance with the Montreal Protocol 

This  package  includes  the  implementation  of  decision  XIX/6  on  the  accelerated 
phase  out  of  HCFCs  by  moving  forward  the  production  phase  out  of  HCFCs  from 
2025 to 2020 and a combination of further actions for strengthening enforcement of 
the Regulation, and reducing the risk of illegal and harmful trade. Rather than further 
advancing the production phase out date, voluntary agreements with industry should 
be explored. To reduce the risk of illegal use of virgin HCFCs, restricting the use of 
HCFCs  to  reclaimed  HCFCs  only  was  the  preferred  option.  Preferred  options  for 
strengthening  enforcement  include  a  move  towards  a  risk-based  inspection  regime, 
labelling  provisions  for  ODS  for  feedstock  use,  and  for  products  and  equipments 
while  servicing,  and  a  non  regulatory  measure  on  training  and  awareness  raising. 
Options to control illegal and harmful trade include closing a loophole for imports of 
products and equipments relying on HCFCs, while ending the transitory exemption 
on the import ban for products and equipments manufactured before a certain date. In 
addition, a better control of exports would be obtained through extending the existing 
general  ban  on  ODS  (and  on  products  and  equipments  containing  and  relying  on 
ODS)  to  HCFCs,  as  well  as  extending  the  current  licensing  procedure.  The  overall 
administrative burden of the package is estimated at €0.9 million 

The  overall  package  enables  better  compliance  with  the  Montreal  Protocol,  and  in 
particular  better  control  over  illegal  and  harmful  trade.  By  maintaining  certain 
targeted exemption provisions any undue or excessive costs to industry are avoided. 

Ensuring future challenges are being addressed 

Options to address future challenges focus on avoiding emissions of ODS banked in 
products and equipments, avoiding the placing on the market of new and short-lived 
substances with a significant ODP, and reducing quantities of methyl bromide used 
for  quarantine  and  pre-shipment  purposes.  Proposed  options  to  address  the  issue 
within  the  Regulation  include  strengthening  the  provisions  on  the  recovery  and 
destruction  of  ODS  in  products  and  equipment,  potentially  yielding  environmental 
benefits  of  up  to  14  000  ODP  tonnes  (112  million  tonnes  of  CO2eq).  It  was 
the 
established 
implementation  and  enforcement  of  the  waste  policy  framework,  in  particular 
regarding  construction  and  demolition  waste,  and  better  implementation  of  the 
WEEE  directive,  bringing  potential  additional  benefits  of  34  000  ODP  tonnes  (270 
million  tonnes  of  CO2eq).  Given  the  wide  ranging  costs  depending  on  the  type  of 
banks  (from  €4.5  for  simple  destruction 
to  €100  per  ODP  kg  for  recovery  and 
destruction of ODS contained in insulation foams), the use of incentive mechanisms 
would be appropriate, for which practical details need to be further explored. 

the  most  effective  measures 

involved  strengthening 

that 

For  reducing  methyl  bromide  use  for  QPS  purposes,  the  option  preferred  to  a 
straightforward ban from 2010 is to make recapture and recovery mandatory during a 
transition  period,  thereby  making  the  alternative  method  of  heat  treatment  more 
competitive,  while  still  allowing  methyl  bromide  treatment  if  required  in  specific 
situations.  MB  use  for  QPS  would  be  fully  phased  out  in  2015,  when  more 

EN 

57 

   EN 

 
alternatives  are  likely  to  be  available.  This  measure  would  yield  overall  savings  of 
2000 ODP tonnes. Finally, monitoring of new substances with an ODP as they come 
on the market, and banning the ones with a significant ODP is the preferred option 
for new and short-lived substances. 

Overall policy package 

In  conclusion,  the  review  of  a  wide  range  of  options  led  to  a  package  aiming  to 
ensure  continued  compliance  with  the  Montreal  Protocol,  while  addressing  future 
challenges  and  simplifying  the  current  regulation.  Building  on  past  successes  and 
opportunities  for  simplification,  overall  reductions  in  terms  of  administrative  costs 
total nearly €3 million (NPV at 2010), w ith about €2 million accruing to industry, € 
0.7  million  to  Member  State  authorities  and  the  remainder  to  the  European 
Commission. Excessive direct costs to industry were at the same time avoided, with 
quantified impacts expected to stay below €13 million, mainly related to measures to 
reduce  methyl  bromide  use  for  QPS  purposes.  52  Simplification  is  expected  to  be 
particularly  beneficial  to  SMEs  which  have  less  access  to  specialist  knowledge  for 
implementing the Regulation. 

The most tangible environmental benefits in the package are those related to reduced 
consumption and increased recovery mostly stemming from policy actions on banks 
and  QPS.  These  could  add  up  to  a  net  gain  of  16  000  ODP  tonnes,  or  112  million 
tonnes  of CO2eq.53 Further translation in terms  of reduced cancer risk would not be 
meaningful considering the small quantities involved compared to the global scale of 
the problem, and the large uncertainties around the dose-response function linking a 
unit  ODP  tonne  to  the  final  human  and  environmental  health  impacts.  This  net 
reduction in ODP emissions would however contribute to reducing the risk of further 
depletion of the ozone layer, whilst also bringing real climate change benefits. 

52 

53 

Costs  would  be  significantly  lower  if  taking  into  account  the  likely  decision  to  deregister  Methyl 
Bromide on health grounds.  
In  terms  of  global  warming  potential,  this  is  equivalent  to  about  2%  of  greenhouse  gas  emissions  in 
1990. For comparison only, reductions are equivalent to 1/10th of the reductions necessary to achieve 
the 2020 objective of cutting greenhouse gas emissions by 20% under the climate and energy package.  

EN 

58 

   EN 

 
                                                 
Appendix I –Glossary 

A5 

Developing  countries  (i.e.  Parties  to  the  Montreal  Protocol 
operating under paragraph 1 of Article 5). 

Annex VII 

… to Regulation EC No 2037/2000. Lists permitted critical uses 
of halons, all other uses being prohibited. 

Assessment 
Panel 

Bank 

BDN 

Cap 

CFC 

CO2eq 

A  committee  of  experts  established  by  the  MP  to  advise  the 
Parties.  There  are 
the 
Environmental Effects Assessment Panel. Each has a number of 
subsidiary specialist committees. 

the  SAP  and 

the  TEAP, 

three: 

The  entirety  of  the  quantity  of  one  or  more  ODS  currently  in 
existence,  whether  incorporated  in  equipment  (refrigerators)  or 
products (foams), or recovered and stored ready for use. 

Production  of  ODS  by  developed  countries  solely  to  meet  the 
Basic Domestic Needs of A5 developing countries which have no 
production capacity of their own. 

An  upper  limit  on  the  quantity  of  ODS  that  can  be  produced, 
imported or used. 

Chlorofluorocarbon, a controlled substance, used as a refrigerant, 
solvent  and  foam  blowing  agent.  Different  examples  are 
distinguished  by  a  number 
their  chemical 
composition. 

that  describes 

The quantity of a gas in metric tonnes multiplied by its associated 
global  warming  potential  (GWP).  This  is  used  to  compare  the 
emissions from various greenhouse gases based upon their global 
warming potential. 

Consumption 

The  quantity  of  ODS  produced  plus  imported,  minus  exported 
minus destroyed. 

Controlled 
substance 

An ODS which has its production and consumption controlled by 
the Montreal Protocol and, consequently, the Regulation. 

Critical Use 

A vital use of an ODS for which no alternative is available, but 
for which sufficient stocks of ODS are available. 

Emissive use 

A  use  of  an  ODS  that  results  in  significant  emissions  to 
atmosphere. 

Essential Use  A  vital  use  of  an  ODS  for  which  no  alternative  is  available. 
Exiting  stocks  are  insufficient  to  meet  needs  and  production, 
subject to limits agreed by a MOP, is permitted. 

Feedstock 

A  substance  (in  this  case  an  ODS)  which  is  transformed  or 

EN 

59 

   EN 

 
GWP 

HCFC 

Halon 

IPPC 

IPR 

ISPM 

consumed as an ingredient in a production process. 

Global  Warming  Potential  -  the  relative  potency,  molecule  for 
molecule,  of  a  greenhouse  gas,  taking  account  of  how  long  it 
remains active in the atmosphere. The global warming potentials 
(GWPs)  currently  used  are  those  calculated  over  100  years. 
Carbon dioxide is taken as the gas of reference and given a 100-
year GWP of 1. 

Hydrochlorofluorocarbon,  a  controlled  substance,  used  as  a 
refrigerant, solvent and foam blowing agent. Different examples 
are  distinguished  by  a  number  that  describes  their  chemical 
composition. The ODP of HCFCs is lowr than that of CFCs. 

A  controlled  substance,  used  as  a  fire  extinguishant.  Different 
examples  are  distinguished  by  a  number  that  describes  their 
chemical composition. The ODP of halons is higher than that of 
other ODS. 

International  Plant  Protection  Convention  (not  to  be  confused 
with IPPC = Integrated Pollution Prevention and Control). 

Inward  Processing  Relief  (for  ODS  that  are  imported,  but  not 
placed  on  the  market).  ODS  subject  to  IPR  do  not  count  as 
imported under the MP and Regulation. 

International  phytosanitary  measure  developed  by  IPPC.  ISPM-
15 is a standard for import requirements of wooden packages 

Laboratory 
use 

Use of an ODS as a necessary component or part of a laboratory 
process. 

MB 

MDI 

MOP 

MP 

Methyl  bromide,  a  controlled  substance,  used  as  a  pesticide  in 
farming and food storage facilities and for QPS fumigation. 

Metered-dose inhaler. CFCs used as the propellant in delivery of 
pharmaceutical  products  via  an  inhaler  are  considered  to  be 
essential uses in some cases because of stringent safety approvals 
necessary for alternatives. However, alternatives are increasingly 
becoming available. 

Annual Meeting of the Parties to the Montreal Protocol. 

The  Montreal  Protocol  on  Substances  that  Deplete  the  Ozone 
Layer,  established  in  1987,  now  signed  by  about  190  countries. 
The MP controls production and consumption of ODS. 

Non-A5 

Developed  countries  (i.e.  Parties  to  the  Montreal  Protocol  not 
operating under Article 5, but operating under Article 2). 

EN 

60 

   EN 

 
 
NPV 

nPB 

ODP 

Net Present Value 

n-propyl  bromide,  an  ODS  which  is  not  controlled  by  the  MP, 
but which is marketed and finding increased use as a solvent. 

Ozone-Depleting  Potential,  quantified  in  relation  to  a  certain 
CFC (CFC-11) that has by definition an ODP of 1. 

ODP tonne 

The  quantity  of  an  ODS  in  tonnes  multiplied  by  its  ODP.  The 
value gives an ODP-weighting to quantities produced or emitted. 

ODS 

PIC 

POM 

Processing 
agent 

QPS 

Reclaim 

Recover 

Recycle 

SAP 

TEAP 

SME 

Use 

Ozone-depleting substance and a substance with ODP > 1. 

Prior  Informed  Consent  procedure  which  governs  international 
trade in waste and hazardous substances. 

Placing on the market. The supply of an ODS to third persons in 
return for payment or free of charge. 

Use  of  an  ODS  as  a  catalyst  or  solvent  or  otherwise  as  a 
"facilitator" of a chemical or industrial process where the ODS is 
not consumed or emitted but recovered and re-used. The MP and 
the Regulation list the uses that can be defined in this way. 

Quarantine  and  Pre-shipment  use.  The  use  of  MB  in  the 
fumigation  of  products  in  shipping containers  to eliminate  pests 
before  export  of  goods,  notably  timber.  Importing  authorities 
require  certification  according  to  IPPC,  which  mandates  MB  as 
one of only two options). 

The  industrial  process  by  which  used  or  contaminated  ODS  is 
returned to "as-new" quality. 

The  process  of  capturing  ODS  for  recycling,  reclaim,  re-use  or 
destruction, thus preventing emissions to atmosphere. 

The process of basic cleaning of recovered ODS so that it is fit 
for re-use. 

Scientific Assessment Panel, established to advise the Parties on 
scientific aspects of ozone layer protection. 

Technology  &  Economic  Assessment  Panel,  established  to 
advise  the  Parties  on  technical  and  economic  issues  relating  to 
ODS phase-out 

Small and medium enterprises 

Utilisation  of  an  ODS  in  the  production  or  maintenance  of 
equipment or products, or in processes other than as feedstock or 
processing agents. 

EN 

61 

   EN 

 
UNFCCC 

The UN Framework Convention on Climate Change, which aims 
to  prevent  harmful  human-induced  climate  change.  The 
UNFCCC  spawned  the  Kyoto  Protocol,  which  set  limits  on 
emissions  of  a  basket  of  greenhouse  gases  for  developed 
countries 

Virgin HCFC  HCFC  of  new-production  standard  that  has  not  been  used, 

recycled or reclaimed. 

EN 

62 

   EN 

 
Appendix II –Key Principles and Features of Regulation (EC) N° 2037/2000 

The  Regulation  (EC)  N°  2037/2000  on  Ozone  Depleting  Substances  is  the 
Communities'  main  instrument  for  implementing  the  provisions  of  the  Montreal 
Protocol.  

The Regulation follows the principles embedded in the Montreal Protocol by banning 
the  production  and  consumption  of  the  most  damaging  ODS,  i.e.  emissive  uses  of 
ODS.  54  Likewise,  non-emissive  uses  of  ODS  are  largely  exempted  from  control 
measures  notably  ODS  used  for  feedstock.  The  Regulation  is  stricter  than  the 
Protocol  where  it  sets  quantitative  limits  for  the  use  or  "placing  on  the  market"  of 
ODS and of products and equipment containing or relying upon banned ODS and for 
Quarantine and Pre-Shipment use of Methyl Bromide.  

Similar principles apply to all quantitative controls contained in the Regulation: ODS 
production  and/or  use  is  capped  at  an  agreed  baseline  level  that  is  then  step-wise 
reduced at agreed intervals, and ultimately banned. Where a full-phase out or ban is 
in place (currently for all but for HCFCs in the EC), exemptions exist in line with the 
Protocol's provisions. “Essential" or "critical" use exemptions have served the need 
for flexibility in  specific cases and  are granted only if, following  a review process, 
there  is  satisfactory  proof  that  no  technical  and  economically  viable  alternatives 
exist.  The  EC  regulatory  processes  build  on  the  provisions  and  decision  of  the 
Protocol  Parties  and  their  assessment  panels:  the  levels  of  exempted  ODS  uses  are 
agreed  each  year  by  the  Parties  to  the  Protocol  or  based  on  caps  contained  in  the 
Regulation.  These  "caps"  guide  the  allocation  of  POM  quota  to  EC  producers  and 
importers.  Quotas  are  allocated  through  annual  Commission  decisions  subject  to 
requesting  the  opinion  of  the  Management  Committee.  Producers  and  importers 
subsequently  apply  for  import  licences  (and  authorizations  for  essential  use 
production)  through  the  Commission's  on-line  ODS  database.55  To  accommodate 
industrial rationalization, quotas can be transferred amongst companies.  

Annual reporting of actual production, imports, and placing on the market of ODS by 
EC-companies  enables  the  monitoring  of  the  Regulation's  implementation  by  the 
Commission  and  Member  States,  including  EC  compliance  with  the  Montreal 
Protocol.  

Finally, the Regulation provides the legal basis for opening infringement procedures 
against Member States in case non-compliance is observed. 

54 
55 

In the context of the Protocol, consumption equals "production + import –export –destruction of ODS". 
The EC licensing requirement also covers the production and import of Methyl Bromide for the purpose 
Quarantine and Pre-Shipment treatment of pests. The present Regulation contains a dual cap, i.e. 607 
ODP  tonnes  515  ODP  tonnes  based  on  average  1996-97-98  production  levels.  This  provision  goes 
beyond  the  Montreal  Protocol  which  to  date  requires  only  reporting  of  methyl  bromide  use  for  QPS 
purposes. Furthermore, in areas where the Protocol demands reporting of ODS only (e.g. production of 
ODS  for  export  to  developing  countries  that  are  not  yet  subject  to  full  phase-out  regimes),  EC 
companies have to declare planned ODS transactions which subsequently serve as caps for authorizing 
exports in the subsequent year through the ODS licensing system. 

EN 

63 

   EN 

 
 
                                                 
Appendix III –The 2010 Outlook Regarding Controlled Ozone Depleting Substances in 
the EU –the Baseline for Finishing the Job 

This  appendix  summarizes  the  outlook  for  2010  with  respect  to  ozone  depleting 
substances  in  the  EU.  The  outlook  has  also  served  as  the  policy  baseline,  i.e.  the 
business as usual scenario against which other policy options are evaluated.  

By  2010,  the  EC  will  have  reached  a  full  phase-out  of  controlled  ODS,  save  for 
approximately 1 200 ODP tonnes p.a. (compared to baseline consumption levels of 
400 000 ODP tonnes). The amount of 1 200 ODP tonnes includes an estimated 1 000 
ODP tonnes of recycled or reclaimed HCFCs which will be banned as of 2015, thus 
leaving a tail of less than 200 ODP tonnes p.a. of ODS "consumption" as defined by 
the Montreal Protocol.  

In addition, there will be a remaining use of "emissive ODS uses" that are covered by 
the regulation (yet not accounted for as consumption under the Protocol) amounting 
to an estimated 1 400 ODP tonnes for the period beyond 2010 (assuming that current 
levels would be maintained in the absence of further measures).  

ODS  production  in  the  EC  will  have  reached  less  than  4  000  ODP  tonnes  p.a.  by 
2010 (comparing to baseline production levels of 700 000 ODP tonnes).  

Further details on the 2010 outlook are provided below for the respective categories 
as  well  other  features  of  the  Regulation,  such  as  expected  trends  in  the  licensing 
volumes  processed  through  the  online  ODS  database  hosted  by  the  Commission, 
trends in the so-called Inward Processing Regime.  

Figure 2: Remaining Emissive Uses of the ODS in the EU (Base Case Estimates for 
the period ending in 2020) 

.
a
.
p
s
e
n
n
o
T
-

P
D
O

3.000

2.500

2.000

1.500

1.000

500

0

2008

2009

2010

2015

2020

Essential Use CFC-MDI
Use of HCFC (virgin)

Critical Use MB
Use of HCFC (recycled or reclaimed)*

Essential Use Laboratory & Analytical

The  figure  above  illustrates  the  nature  of  the  first  category  of  remaining  emissive 
uses other, notably showing that:  

(1) 

Critical use of Methyl Bromide for fumigation purposes will end in 2008.  

Following the agreement reached with Member States in 2007, the EC has not 

EN 

64 

   EN 

 
 
 
 
submitted  nominations  to  the  Ozone  Secretariat  for  the  use  of  Methyl 
Bromide from 2009 onwards. 

(2) 

Production of CFCs for essential use in Metered Dose Inhalers will end 
after 2009. 

Following  the  agreement  reached  with  Member  States  in  2007,  the  EC  will 
not  submitted  nominations  to  the  Ozone  Secretariat  for  the  production  of 
CFCs for essential use in Metered Dose Inhalers from 2010 onwards.56  

(3) 

The  use  of  “virgin”  HCFCs  for  the  purpose  of  servicing  remaining 
relying  on  HCFCs  will  be  banned  after  2010. 
equipment 

For  the  period  ending  in  2009,  the  annual  placing  on  the  market  of  virgin 
HCFC is capped at 1.870 ODP tonnes.  

(4) 

The use of recycled or reclaimed HCFCs will be allowed until 2015 with 
estimated demand decreasing steadily from less then 1 000 ODP tonnes.  

In the context of the Regulation, the "use" of HCFCs refers to the refilling or 
recharging  of  equipment  relaying  on  HCFCs.  Whilst  the  use  of  HCFCs  for 
refilling  has  been  gradually  banned  for  equipment  manufactured  between 
2001 and 2004 (depending on the type and capacity of the equipment) there 
remain  a  few  categories  for  which  the  use  ban  enters  into  force  after  2010 
(e.g.  commercial  air  conditioning  and  refrigeration  units).  Demand  for 
recycled or reclaimed HCFCs for the period starting in 2010 is estimated to 
amount to less than 1 000 ODP tonnes, decreasing to about 200 ODP tonnes 
towards the ban date starting in 2015.57 It is noted that the use of recycled or 
reclaimed  ODS  does  not  count  as  consumption  as  defined  by  the  Montreal 
Protocol. 

(5) 

Essential uses for the purpose of analytical and laboratory uses will stay 
at  current  levels  amounting  to  less  than  200  ODP  tonnes  per  year. 

This  level  is  conservatively  assumed  to  be  maintained  in  the  absence  of 
further  measures.  TEAP  regularly  informs  Parties  on  laboratory  and 
analytical  process  that  no  longer  require  the  use  of  ODS.  Parties  may 
therefore  take  additional  decisions  whereby  more  processes  are  listed  for 
which  ODS  are  no  longer  authorised.  Such  decisions  will  reduce  the  EC's 
annual  consumption  of  ODS  for  laboratory  and  analytical  uses  through  the 
existing quota and licensing procedure.  

The  figure  below  furthermore  illustrates  the  "other"  emissive  uses  that  will  remain 
beyond 2010 albeit at equally low levels which were conservatively estimated to stay 
around present levels.  

56 
57 

This commitment is reflected in Decision XIX/13 adopted at the 19th meeting of the Parties in 2007. 
ICF international, Supply and demand or recycled HCFCs in existing refrigeration and air conditioning 
equipment beyond 2009: analysis of regulatory phase-out scenarios, August 2006. 

EN 

65 

   EN 

 
 
 
 
 
                                                 
Figure  2:  Other  Uses  of  the  ODS  in  the  EU  (Base  Case  Estimates  for  the  period 
ending in 2020) 

.

.

a
p
s
e
n
n
o
T
P
D
O

1.600

1.400

1.200

1.000

800

600

400

200

0

2008

2009

2010

2015

2020

Critical Use Halon (from existing stocks)
Exempted Use Process Agents (emissions)

Exempted Use QPS (100% emissive)
Est. Emissions related to ODS Feedstock (1%)

From this figure, it follows that: 

(1) 

Critical uses of Halons will continue beyond 2010 at the current levels of 
ca. 500 ODP Tonnes 

Whilst  production  of  Halon  for  emissive  uses  is  banned,  approximately  500 
ODP  tonnes  per  year  are  taken  from  (official)  EC  and  international  “Halon 
banks”  to  serve  specific  critical  (fire-fighting)  uses  in  military,  aviation, 
maritime, and oil and gas applications. These critical uses are listed in Annex 
VII  of  the  Regulation.  Whilst  the  present  Annex  VII  contains  no  phase  out 
dates  for  these  applications,  consultations  with  relevant  stakeholders  held  in 
the  context  of  the  review  of  this  Annex  (based  on  Article  4(4)iv  of  the 
Regulation) have confirmed that phase out dates ranging from 2015 to 2030 
for  the  most  difficult  sectors  are  feasible.  Hence,  assuming  that  the  revised 
Annex VII will be adopted before 2010, the levels of "critical" Halon uses are 
expected to gradually come down to zero before 2030. 

(2) 

The exempted use of Methyl Bromide for Quarantine and Pre-Shipment 
is  expected  to  stay  at  the  current  level  of  ca.  200  ODP  tonnes. 

In addition to the obligation to report on the use of Methyl Bromide for the 
purpose of Quarantine and Pre-Shipment (QPS) purposes, its use if capped by 
the Regulation. Following the latest available data for 2006, present amounts 
of  Methyl  Bromide  used  for  QPS  in  the  EU  have  come  down  to  just  above 
200 ODP tonnes per annum or about 300 ODP tonnes below the current cap 
of 515 ODP tonnes based on average 1996-97-98 production levels (and 400 
ODP tonnes below the second cap of 607 ODP tonnes contained in the Annex 
of  the  Regulation.  This  reduction  has  been  achieved  although  12  Members 
States  joined  the  EU  and  trade  volumes  significantly  increased  between  the 
EC and other countries over the same period.  

(3) 

Emissions  related  to  exempted  uses  of  ODS  for  process  agents  are 
expected to stay at currently estimated levels of less than 20 ODP tonnes.  

EN 

66 

   EN 

 
 
 
 
 
 
Uses of ODS as process agent are limited so specific applications, defined in 
the  Montreal  Protocol  and  further  restricted  in  Annex  VI  of  the  Regulation. 
The  list  of  authorised  uses  may  progressively  be  reduced  in  the  light  of 
progress in the availability of alternative processing agents. 

(4) 

Emissions  from  ODS  use  for  feedstock  are  assumed  to  remain 
"insignificant"  with  levels  assumed  to  stay  around  600  ODP-tonnes.  

Both  the  Montreal  Protocol  and  the  Regulation  exempt  emissions  of  ODS 
from  feedstock  reactions  which  treated  as  non  emissive  uses  of  ODS. 
However, as a total consumption of ODS for emissive uses reaches very low 
levels,  emissions  from  feedstock  (estimated  to  less  than  1%  of  the  material 
used in the chemical reaction) become significant in relative terms. Best way 
to  address  emissions  of  ODS  from  feedstock  in  the  EC  would  be  to  take 
measures  for  further  minimising  emissions  in  the  framework  of  industrial 
pollution  policies.  Modifying  the  scope  of  the  Regulation  on  ODS  to  cover 
feedstock  emission  would  be  inconsistent  with  the  Montreal  Protocol 
approach. 

With  respect  to  2010  outlook  for  production  of  ODS  in  the  EU,  the  following  is 
noted:  

(5) 

Production of HCFCs for export to serve needs of non-EU Parties to the 
Protocol  is  expected  to  decrease  from  current  levels  of  less  than  4  000 
2020. 
ODP 

tonnes 

zero 

by 

to 

Albeit that the current Regulation allows for the production of HCFCs within 
the EU for exports to non-EU countries (where there is no ban in place yet) 
till 2025, the actual baseline date will be brought forward to 2020 as part of 
need  to  align  the  Regulation  with  the  MOP19  Decision  on  the  accelerated 
phase  out  of  HCFC.  Until  then  production  levels  for  export  to  non-EU 
countries  is  conservatively  estimated  to  stay  at  current  levels  amounting  to 
approximately 4 000 ODP tonnes. In reality, these volumes tend to go down 
more  rapidly  as  the  ban  date  approaches  and  companies  adapt  their 
production schedules to the new market reality ahead of time. 

(6) 

As of 2010 the EC production of ODS to serve so called "basic domestic 
needs"  (BDN)  will  have  decreased  to  less  than  100  ODP  tonnes. 

Whilst  the  EC  companies  currently  produced  and  exported  CFCs  (several 
types) and carbon tetrachloride (CTC) for basic domestic needs, those BDN 
regimes will end in accordance with the provisions of the Montreal Protocol. 
As  of  2010,  EC  companies  could  continue  producing  and  exporting  1,1,1-
trichloroethane until the BDN regime for this substance will also end in 2015. 
Current  low  levels  of  BDN  1,1,1-trichloroethane  exports  (at  less  than  100 
ODP  tonnes)  are  expected  to  drop  beyond  2010  as  the  number  of  countries 
requiring imports continues to decrease.58 

58 

Exact data are not provided as less than three companies produce and export this substance for BDN. 

EN 

67 

   EN 

 
 
 
 
 
                                                 
As a final consideration related to the 2010 outlook, it is noted from the figure below 
that the number of licenses that are processed annually through the on-line ODS data 
base  system  is  expected  to  decrease  to  an  estimated  1  000  (from  almost  3  000  in 
2002 when the system was first launched). Of this remaining total, more than 50% is 
related  to  so  called  inward  processing,  i.e.  the  importing  and  exporting  of  ODS 
(mainly Methyl Bromide) without those goods entering the EC customs area. Whilst 
in transit, goods may undergo minor transformations usually (re)packaging according 
to the requirements of the destination country. 

Figure 3: Trends in Licences Processed through the ODS licensing System (For the 
period since its launching in 2002 estimated volumes for 2010) 

3.000

2.500

2.000

1.500

1.000

500

0

2002

2003

2004

2005

2006

2007

2010

Request for fumigation

Application for production

Application for recycled product

Classic export authorisation

EAN for CFC MDI to non-A5

EAN for BDN

Export Notification

IMP for IPR

EAN for essential use

IMP for production

EAN for Halon

Import licence (IMP)

Laboratory supply

EAN for IPR

IMP for MB for critical use

Production authorisation

Production authorisation Ex-EU

Request for use of MB stock

Transfer of fumigation quota

Transfer of production

Transfer of import quota

EN 

68 

   EN 

 
 
Appendix IV –Methods and Criteria For Assessing the Impacts 

The  impacts  of  the  different  policy  options  were  considered  according  to  the  three 
general  impact  assessment  criteria  recommended  by  the  Commission’s  impact 
assessment  guidelines:  economic,  social  and  environmental  impacts.  In  these  three 
main  areas,  16  specific  categories  were  identified  based  on  an  initial  review  of  the 
options and of the information and comments gathered during the review study (see 
table [8] below).  

The full  list of 16 impact categories was  used in the qualitative analysis of options 
retained  during  the  review  study.  A  short  list  of  the  10  most  important  impact 
categories  was  also  identified,  as  presented  in  the  table  above.  Quantified 
assessments were prepared for 6 of the 10 categories (these six are listed are in bold 
in the short list). The other four categories remain important. Wherever possible, the 
main  stakeholders  potentially  affected  by  a  revision  to  the  Regulation  were  also 
identified, as well as areas where options are most likely to affect them.  

Since  this  Review  takes  place  in  the  context  of  the  'Better  Regulation'  initiative, 
special emphasis was put on the evaluation of the impact of proposed policy options 
on  administrative  costs.  The  methodology  recommended  by  the  impact  assessment 
guidelines  was  adopted.  Details  of  the  assessments  can  be  found  in  the  study 
commissioned to support this impact assessment59. 

Table 3: Impact Analysis Criteria 

General 
categories  

Economic  

Full qualitative analytical list 

Short list of categories 

Direct costs (or benefits) to EU industry  
(with particular consideration of SMEs) 

Direct costs for EU industry 

Admin. costs (or benefits) on EU business 

Administrative costs for EU industry 

Costs (or benefits) to downstream users 
International competitiveness 
Competition in the internal market 
Specific sectors and regions  
Innovation and research 

Public authorities: administration and  
Enforcement 

Social 

Employment 
Health and safety  
Crime: especially illegal trade 

Other economic impacts 

Admin. costs for Member States 

Administrative costs for the COM 

Social impacts 

Environmental 

Ozone layer 

Ozone depleting emissions 

Climate change  

Greenhouse gas emissions 

Waste management 
Local  impacts  (on  biodiversity,  flora  and  fauna 
and water quality) 

Other environmental impacts 

EC Leadership in international negotiations 

EC position in global negotiations 

59 

See http://ec.europa.eu/environment/ozone/review.htm 

EN 

69 

   EN 

 
 
                                                 
Appendix V –Stakeholders' Suggested Areas for Further Improvement 

Whilst the stakeholders' response to the survey was generally very positive, several 
suggestions were submitted related to areas where further improvements areas could 
be  pursued.  Considering  also  the  international  challenges  (see  section  1.3),  the 
following remaining problem areas have been defined: 

(1) 

Complex Regulation 

The  main  comments  resulting  from  the  survey  related  to  the  Regulation’s 
complexity  and  a  desire  for  simplification  and  clarification.  Many 
stakeholders  commented  that  the  current  legislation  is  complex  mainly  in 
terms  of  structure  (i.e.  ban  provisions  and  exemptions  treated  in  various 
sections), the presence of numerous obsolete provisions,  and  provisions that 
require  significant  knowledge  of  the  (international)  context  also  due  to 
definitions that are considered lacking clarity.  

(2) 

Extensive Reporting Requirements 

In  their  responses  to  the  survey  for  the  review  of  the  Regulation,  a  few 
Member States called for measures to reduce their administrative costs related 
to  reporting  also  indicating  that  the  administrative  costs  associated  with 
reporting appears to be one of the more burdensome aspects of implementing 
the  Regulation  requirements  for  Member States.  In  contrast,  responses  from 
business and industry did not cite major concerns with reporting.  

(3) 

Synergies with other policies 

Many  surveyed  stakeholders  called  for  more  synergies  with  related  policies 
such  as  the  regulations  on  F-gases,  waste,  chemicals,  plant  protection  and 
sanitation. 

(4) 

Inflexible 

quota 

and 

licensing 

procedures 

In  their  responses  to  the  survey  for  the  review  of  the  Regulation,  a  few 
companies suggested that the quota and licensing procedures where offering 
insufficient flexibility, notably where ODS production, import and/or export 
volumes  deviated  from  forecasted  amounts  that  had  served  the  basis  for 
establishing the EU maximum quota ("cap").  

(5) 

(Re)inforcing 

Import 

and 

Export 

Bans 

Nearly  half  of  the  Member  States  that  responded  to  the  survey  called  for 
strong  enforcement  of  import  and  export  requirements  across  the  EC. 
Likewise,  several  industry  respondents  reported  cases  of  illegal  imports  of 
ODS,  hence  expressing  equal  concerns.  A  further  concern  related  to  the 
upcoming  phase-out  of  the  use  of  “virgin”  HCFCs  for  the  maintenance  and 
servicing  of  refrigeration  and  air  conditioning  equipment  could  fuel  illegal 
trade in “virgin” HCFCs.  

(6) 

Uncontrolled Substances 

EN 

70 

   EN 

 
 
 
 
 
 
 
Some  Member  States  suggested  that  action  be  considered  to  introduce 
measures for currently uncontrolled ODS production and trade (e.g. DE, NL), 
and  ODS  banked  in  products  and  equipment.  These  suggestions  echo  the 
concerns  expressed  in  the  2006  Report  of  the  Scientific  Assessment  Panel 
established by the Parties to the Montreal Protocol. 

EN 

71 

   EN 

 
Appendix VI –List of options considered and their impacts 

POLICY OPTIONS 

Environmental impact 

In bold: preferred regulatory option 

In italics: preferred non-regulatory option 

Strikethrough: discarded option 

Marked with *: implemented through other EC legislation 

ODP 
tonnes 
(2010-
2020) 

CO2 . 
tonnes 1 
(2010-
2020) 

Administrative
Costs 

€ million 
(NPV2010) 

Or qualitative 
assessment  

Direct 
economic 
impact 

€ million 
(NPV2010) 

Or qualitative 
assessment 

Other impacts: 

Social impacts; 

Trade-offs / synergies 

1. OPTIONS FOR ACHIEVING SIMPLER AND BETTER REGULATION 

Clarifying and simplifying the Regulation 

Combined options 

Streamlining reporting 

Simplified and online reporting for companies and users 

Streamlining reporting on ODS destruction 

Cancelling MS reporting on ODS recovery, recycling 
and reclamation, and on exempted uses of HCFCs 
replacing Halons 

Streamlining UNEP reporting 

Exemption regimes and related administrative processes 

+ 

0 

0 

0 

0 

+ 

0 

0 

0 

0 

-2.35  

-0.50 

-0.07 

-0.42 

-0.06 

0 

0 

0 

0 

0 

+ (Reduced burden on SMEs) 

0 

Condition for streamlined UNEP 
reporting 

0 

0 

Ending production of ODS for Basic Domestic Needs 

0-22 2 

0-32 000 2 

- 

+ 
(confidential) 

- (Possible small job loss) 

EN 

72 

EN 

 
  
Ending IPR for MB and HCFCs in 2010 

0-6475 2 

0-8.7 
million 2 

Ending exempted uses of HCFCs for replacing halons 

Ending exempted uses of HCFCs where no alternatives 
available 

Inserted a new exempted use clause for critical uses of 
Halons 

Updating the essential use process for laboratory and 
analytical uses 

0 

+ 

- 

+ 

0 

+ 

- 

+ 

-0.92 

- 

-0.12 

+ 

-0.09 

+ 
(confidential) 

- (Possible small job loss) 

0 

+ 

-- 

0 

0 

0 

0 

0 

SUBTOTAL FOR ACHIEVING BETTER AND 
SIMPLER REGULATION 

0-6500 2 

8.73 million 

-3.85 

3.3  (including 
confidential 
data) 

- (Possible job loss) 

2. OPTIONS FOR ENSURING FULL COMPLIANCE WITH THE MONTREAL PROTOCOL 

Options related to the accelerated HCFC phase out 

Advancing production phase out to 2020 

De facto base case 

Advancing production phase out to 2010 or 2015 

0-18000 

0-455.2 
million 

Options related to the HCFC use phase out 

Expedited phase out from the use of recycled and 
reclaimed HCFCs  

 0-600 2 

0-10.9 
million 2 

Voluntary agreement on phase out strategy with industry 

+ 

+ 

- 

- 

0 

2.3 -9.5 

+ (Synergy with 'simplification') 

++ 

+ 

+ (Reduced risk of illegal use of 
virgin HCFCs) 

0 

EN 

73 

EN 

 
  
Certification of recycled and reclaimed HCFCs 

Use of reclaimed HCFCs only after 2010 

Options related to strengthening enforcement 

Updating inspections provisions 

Adapting labelling requirements for ODS for feedstock 
use 

Extending labelling requirements to sales of products and 
equipment 

Labelling requirements for existing products and 
equipment during servicing 

Awareness raising and training programmes 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

Options related to avoiding illegal imports and remaining loopholes 

Ending the import of products and equipments relying 
on ODS  

Ending the import of products and equipments 
containing or relying on ODS manufactured before the 
specific use ban date 

Extending licensing to entry under customs 
procedures or for customs-approved treatments 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

++ 

+ 

+ 

+ 

0.16 

0.92 

0.08 

- 

- 

+ 

0 

+ 

0 

0 

0 

0 

0 

+ 

+ (Reduced risk of illegal use of 
virgin HCFCs) 

+ (Reduced risk of illegal use of 
virgin HCFCs) 

+ (Reduced risk of illegal 
trade/use) 

+ (Reduced risk of diversion for 
other uses) 

+ (Reduced risk of illegal trade; 
Increased consumer choice) 

+ (Reduced risk of illegal trade; 
Increased consumer choice) 

+ (Reduced risk of illegal trade) 

Synergy with 'Simplification' 

-2.78 

+ (Reduced risk of illegal trade. 
Possible job increase). Synergy with 
'Simplification' 

0 

+ (Reduced risk of illegal trade) 

EN 

74 

EN 

 
  
Options related to avoiding harmful exports 

Preventing the issuing of export licenses for unwanted 
ODS 

Establishing an export notification procedure for all ODS 

Extending the ban on ODS exports to methyl bromide 
and HCFCs for destruction 

Introducing export licensing per shipment 

Extending the ban on exports of products and 
equipment to HCFCs and methyl bromide; licensing 
remaining products and equipments 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

+ 

++ 

0 

0.17 

+ 

SUBTOTAL FOR ENSURING FULL COMPLIANCE 
WITH THE MONTREAL PROTOCOL 

++ 

++ 

0.92 

3. OPTIONS FOR ENSURING FUTURE CHALLENGES ARE ADDRESSED 

Avoiding emissions of ODS banked in products and equipments 

Adapt the provisions related to the recovery of ODS 

0-14000 

0-112 million + 

Strengthening policies on building and demolition waste* 

0-7000 

0-56 million 

0 

Strengthening the WEEE directive* 

0-27000 

0-216 million + 

0 

0 

+ (reduced risk of illegal trade) 

+ (reduced risk of illegal trade) 

- (EU destruction 
facilities) 

+ (Reduction in harmful trade; 
Possible job increase) 

0 

+ 

+ 

0 

+ 

0 

+ (Reduced risk of illegal trade) 

+ (Reduction in harmful/illegal 
trade/Reduced ODS banks in dev. 
countries) 

+ (Reduced risk of illegal trade; 
reduced ODS banks in dev. 
Countries) 

+ (significant additional climate 
change benefits) 

0 

+ (significant additional climate 
change benefits) 

EN 

75 

EN 

 
  
Use of incentive mechanisms* 

0-46000 

0-368 million 0 

Options related to new and short-lived ODS 

Re-establish former Annex II, part A and B 

0-500 

0-15 500 

0.12 

Establishing links with REACH 

0-20 

0-10 000 

+ 

Options related to QPS 

End QPS uses of MB by 2010 

0-2200 

0-18 300 

Require mandatory recapture and recovery 2010-2020 

0-1850 

0-15 400 

Recapture up to 2015 and phase out thereafter 

0-2000 

0-16 000 

Cap MB for QPS to effective level 

Awareness raising and action at international level 

+ 

+ 

+ 

+ 

- 

0 

- 

- 

+ 

+ 

+ 

0 

++ 

+ (significant additional climate 
change benefits) 

0 

0 

+ (Reduced health and safety 
risks); synergy with 'simplification' 

0-11.1  

+ (Reduced health and safety risks) 

0-9.5 

0 

0 

+ (Reduced health and safety 
risks); synergy with 'simplification' 

0 

+ (Reduced health and safety risks) 

SUBTOTAL FOR ENSURING FUTURE 
CHALLENGES ARE ADDRESSED 

0-16 500 

0-112 
million 

0.12 

0-9.5 

+ (Reduced health and safety risks) 

TOTAL FOR PREFERRED OPTIONS 
(including quantified impacts of preferred regulatory 
options only) 

0-23 000 

0-120 million -2.8 

3.3-13 

+ (reduced risk of illegal trade; 
reduced health and safety risks) 
- (possible job losses) 

1 Assuming an average GWP of 1000 when considering a basket of ODS. 

2 

The 

global 

environmental 

impact 

depends 

on 

the 

degree 

of 

relocation 

of 

the 

activity 

in 

third 

countries.

EN 

76 

EN 

 
  
Appendix VII –Comments from the Impact Assessment Board 

As explained in Chapter 1, a draft of this report was submitted to the Commission’s 
Impact  Assessment  Board  on  30  April  2008.  The  draft  impact  assessment  was 
presented  and  discussed  at  the  21  May  2008  meeting  of  the  Impact  Assessment 
Board. On 27 May 2008, the Impact Assessment Board issued its opinion which is 
reproduced in Appendix VII. This appendix also explains how the Board's comments 
were accounted for in the present document.  

(A) Context 

The Montreal Protocol on Substances that Deplete the Ozone Layer (1987) mandated the phase-out of 
production  of  ODS  by  all  signatory  Parties  according  to  a  specific  time-table  (that  has  been  modified 
five  times  to  include  additional  ODS  and  to  accelerate  the  production  phase-out).  The  EU  regulations 
implementing the Montreal Protocol have often been more ambitious than the MP schedule. As of 2010, 
production  and  consumption  of  the  most  harmful  (known)  ODS  should  be  completely  banned  in 
industrialized  countries,  except  for  a  very  limited  number  of  exempted  or  non-controlled  uses  and  a 
declining  "tail"  of  hydrofluorocarbons.  Full  bans  in  developing  countries  typically  come  into  effect 
within  5  to  10  years  following  the  bans  in  industrialized  countries,  although  an  increasing  number  of 
developing countries now align their policies with industrialized countries such as those of the EU. The 
revised Regulation aims at simplifying the regulatory environment. 

(B) Positive aspects 

The IA report contains a robust analysis of costs and potential ODS reductions. There is an appropriate 
range  of  policy  options  and  a  detailed  analysis  of  their  impacts.  Simplification  gains  are  well 
demonstrated. 

(C) Main recommendations for improvements 

The  recommendations  below  are  listed  in  order  of  descending  importance.  Some  more  technical  comments  have 
been transmitted directly to the author DG and are expected to be incorporated in the final version of the impact 
assessment report.  

General recommendation: While the IA report contains a robust analysis of impacts, a number of 
issues deserve further clarification: scope of the problem and in particular the distinction between 
problems remaining at global level and those which are specific to the EU; policy objectives, trade 
offs  and  synergies  among  the  sub-options.  Additionally,  the  report  should  make  a  monetised 
estimate  where  relevant  of  expected  environmental  benefits,  and  clarify  who  will  bear 
administrative costs.  

(1)  The  problem  definition  section  should  better  explain  the  difference  between  global  and  EU 
specific problems. The IA should where possible describe the problems in more concrete terms – e.g. by 
assessing each of them in terms of administrative costs or tonnes of ODS. This should be reflected in a 
clearer prioritisation of the problems which in turn should be reflected in the objectives.  

(2)  Analysis  of  benefits  and  certain  impacts  could  be  strengthened.  The  report  is  based  on  a  cost 
effectiveness analysis rather than a full cost-benefit analysis. the IA report should nevertheless attempt to 
provide monetised estimates of the expected environmental benefits. Given the links to broader climate 
change  policies,  it  should  also  express  these  benefits  in  terms  of  CO2  reductions.  Discussion  on 
methodological difficulties, and experience in third countries (US) should be included in the IA report. 
Additionally, the administrative costs should be broken down to show who will bear them (companies, 
SMEs, public authorities, etc). The IA should also explain what is included under the category "direct 
economic impacts".  

(3) Objectives need to be redrafted. The objectives contained in section 3.1 should rather be moved to 
the section on the context, so that the IA report makes it clear that proposed actions concern only the EU. 
Additionally,  one  should  consider  developing  SMART  objectives  (section  3.2),  in  order  to  facilitate 
future evaluation of the policy.  

(4) Synergies and trade-offs between options should be more clearly presented. The disaggregation 
of the general policy options into a large number of sub-options makes it difficult to follow the potential 
synergies and trade-offs among them. The IA report could aggregate some of the individual options, in 
particular  in  cases  where  all  of  them  relate  to  the  same  action  and  are  retained  in  the  final  policy 

EN 

77 

   EN 

 
package, and expand information contained now in the table in the annex. Additionally, options that are 
not compatible with the Montreal Protocol should not be analysed.  

(D) Procedure and presentation 
The report exceeds 30-page limit. All other procedural requirements seem to be complied with.  

All recommendations for improvements have been accounted for in the final version 
of this impact assessment, as described below: 

General  recommendation:  the  scope  of  the  problem,  policy  objectives,  trade-offs 
and  synergies  were  clarified,  as  explained  in  more  detail  below.  Environmental 
benefits  were  quantified  as  far  as  possible,  and  the  distribution  of  administrative 
costs across categories was highlighted in the conclusion. 

(1) The problem definition section should better explain the difference between 
global and EU specific problems. 

The contextual description of global challenges was moved to the section describing 
the background. Problems at the EU level were quantified in terms of administrative 
costs or tonnes of ODS, and prioritised accordingly. 

(2) Analysis of benefits and certain impacts should be strengthened. 

Environmental  impacts  were  further  quantified  where  meaningful  and  both  ODP 
tonnes  and  CO2  equivalents  were  included  in  appendix  VI.  The  difficulty  of 
monetising  the  benefits  was  described  in  section  3.3.  More  information  was  also 
given  on  the  methodology  for  estimating  direct  economic  impacts.  Administrative 
costs were broken down in different categories and the distribution was summarised 
in the conclusion.  

(3) Objectives need to be redrafted.  

Section  3  was  re-organised  to  highlight  that  objectives  focus  on  the  EU  level,  and 
objectives were redrafted to make them more operational. 

(4) Synergies and trade-offs between options should be more clearly presented. 

The  range  of  options  considered  was  simplified  by  removing  options  that  were  not 
compatible  with  the  Montreal  Protocol,  and  individual  options  were  further 
aggregated  when  relevant  (e.g.  sections  5.2,  5.3,  6.1  and  6.4).  Synergies  and  trade-
offs were summarised in the last column of the appendix VI table. In one instance, 
this  analysis  led  to  considering  a  third  option,  combining  two  mutually  exclusive 
options in separate periods of time (section 7.3). 

EN 

78 

   EN