Consultation meeting on revisions to Ozone-depleting Substances Regulations: chapter 1

Presentations and Discussion - Segment I

A. Hydrochlorofluorocarbons

Nancy Seymour (EC) presented a status update on where EC is with the work to revise the ODSR 1998 since the March 2008 consultations, as well as some background and rationale for the proposed revisions.

EC presented an overview of the current proposals for HCFCs and how the 2008 stakeholder feedback was taken into account. The proposals presented touched on the following areas:

  • Phase-out schedule for consumption
  • Introduction of phase-out schedule for production
  • Refillable containers
  • Simplifying the allowance system
  • Methyl bromide reporting requirements

i. Consumption and Production

EC reminded participants of the options presented for managing consumption and production at the March 2008 consultations.

For the consumption of HCFCs, EC indicated that it plans to adjust the reduction schedule to reflect the accelerated phase-out schedule agreed to by Canada and other nations in Decision XIX/6 of the Parties to the Montreal Protocol. Details on the proposal for the phase-out schedule for consumption are available in Annex 1 of the Consultation Document and presentation on HCFCs.

For the production of HCFCs, EC indicated that it plans to allocate the entire production cap to the existing HCFC producers, meaning that Canada’s production allowance will be distributed on a pro-rated basis to those who produced in 2013, to a maximum of 81.9 ozone depletion potential tonnes (10% of the production baseline).

Details on the proposals for both the phase-out schedule for consumption and production are available in Annex 1 of the Consultation Document and presentation on HCFCs.

ii. Refillable Containers

EC then signalled its intention to permit the import of ozone-depleting substance refrigerants in refillable containers only and that HCFC refrigerants manufactured in Canada must also be put in refillable containers. It was explained that it is generally believed that this approach would address issues with the use of non-refillable containers and would help to address some of the issues surrounding illicit traffic of these substances. Participants were in favour of this revision and suggested that refillable containers should be mandated for all halocarbon refrigerants and should be applied to all controlled substances including other halocarbons (e.g. HFCs).

EC mentioned that this proposed change would help harmonize policies and practices with respect to the use of refillable containers across the country, where some provinces currently prohibit the use, sale, transfer or purchase of these products in non-refillable containers by either regulation or guideline.

iii. Simplified Allowance System

EC then summarized how the allowance system will be simplified, as was proposed in 2008. Currently, the years of recalculation take into consideration the initial baseline allowance and the consumption baseline allowance. It is proposed that allowances be calculated using the allowance given by Environment Canada at the beginning of the year of calculation. EC also indicated that the 90% threshold used for the years of recalculation and the actual quantities consumed will be used in the years of calculation and the use-it-or-lose-it approach will be removed. It was also noted that these proposed changes would help alleviate some of the administrative burden.

An example was presented to illustrate how the simplified allowance system would be applied to a company.

B. Methyl Bromide Reporting Requirements

EC also provided a very brief update on the proposed revisions to sections relating to the use of methyl bromide.

EC indicated that, based on feedback received from the 2008 consultations, it is proposing to allow the transfer of quantities of methyl bromide between quarantine applications, pre-shipment applications, critical uses and emergency uses to facilitate the depletion of inventories in Canada. It was also noted that all transfers of the quantities will be required to be reported to EC in annual reports. 

With respect to quarantine and pre-shipment (QPS) uses of methyl bromide, it was also mentioned that EC will collaborate with the Canadian Food Inspection Agency to develop a more robust tracking system.

This approach would meet both EC’s needs with respect to its reporting requirements under the Montreal Protocol as well as the needs of stakeholders who indicated that the additional reporting requirements for QPS applications would be onerous and duplicative. As such, the proposal for additional reporting requirements will not be carried forward.

Participants had no comments or questions. Given that most of the participants were not involved in activities related to methyl bromide, the Methyl Bromide Industry Stakeholder Group will also be consulted later in the summer on these proposed changes.

The presentation concluded by indicating that EC will consider stakeholder feedback in finalizing the draft regulations, pre-publish in Part I of the Canada Gazette by the end of 2013, in Part II of the Canada Gazette by the end of 2014, with the regulations coming into force on January 1, 2015.

C. Discussion

Basic domestic needs of developing countries

A participant raised the question on how to supply those countries under the Montreal Protocol who can consume HCFCs but do not have the capacity to produce such HCFCs, and as such must rely on imports.  Clarification was requested on whether supply to these countries would be considered an export and whether this would then count towards a company's consumption allowance.

EC responded that consideration is being given to adding provisions that would allow Canadian companies to produce up to 10% of Canada’s baseline production levels to satisfy the basic domestic needs of developing countries.  Additionally, the Montreal Protocol allows for industrial rationalization, which allows for the transfer of all or a portion of the calculated level of production of one Party to another. EC is also considering the implications surrounding adding provisions to support this principle. That said, exports to satisfy the basic domestic needs of developing countries would count towards a company’s consumption allowance but would result in a calculated consumption level of “0” (i.e.: Consumption = quantity imported + quantity produced - quantity exported, therefore 100 kg produced - 100 kg exported = 0)  

Export of HCFCs for feedstock use

A participant raised a question of how to supply those countries under the Montreal Protocol who require HCFCs for use as feedstock but do not have the capacity to produce HCFCs, and therefore must rely on imports for these uses.  Clarification was requested on whether it would be considered an export and whether it would count against a company’s consumption allowance.

EC responded that under the Montreal Protocol the production and consumption of HCFCs for feedstock uses are uncontrolled. Canada is however required to report on production and consumption of quantities used as feedstock. Given that HCFCs for use as feedstock are not taken into account in the production controls, these exports do not affect Canada’s production and the consumption levels. As such, the export of HCFCs for feedstock would not be counted against a company’s consumption allowance.

Other uses

Another participant sought clarification on consumption in the “other uses” category. He indicated that it has come to their attention that Canadian customers are purchasing and using fire suppressant formulations that are based on HCFC-123. These formulations are being supplied by U.S. companies that purchase HCFC-123 from a Canadian HCFC-123 production facility. He also noted the U.S. EPA’s recent ruling extends the use of HCFC-123 for use in fire suppressant applications beyond January 1, 2015, which is not currently supported in Canadian regulations. He cited an example where the Montreal Airport would no longer have access to a supply of HCFC-based formulations for use in their fire extinguishing equipment after January 2015.

EC responded that as this application is relatively new, it was not included in the provisions in the ODSR 1998. We are open to considering allowing the use of HCFCs post-2015 for fire extinguishing applications and would encourage stakeholders to provide additional information on quantities and specific uses as soon as possible.

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