2. Background

• 2.1 Montreal Protocol
• 2.2 Canada's Ozone Protection Program
  • 2.2.1 Canada's Phase-Out Strategy and the National Action Plan
• 2.3 Limitations in Domestic Control Regime

The proposed extended producer responsibility (EPR) approach originates from discussions at the international and domestic levels, which highlight the need for the environmentally sound management of ODS banks. The EPR approach was chosen to address the problems associated with Canada's ODS banks. EPR is an environmental policy approach in which a producer's responsibility for a product is extended to the post-consumer stage of a product's life cycle.

In 1987, Canada signed the Montreal Protocol, a legally binding international agreement that now has universal participation, having been signed and ratified by 196 countries. The Montreal Protocol has resulted in:

1. the elimination of production of most CFC and other ODS (e.g., methyl bromide, tetrachloromethane, bromofluorocarbons);
2. the increased production and use of existing and new HCFC as replacements for CFC. HCFC are now subject to controls and phase-out; and
3. the new production of a wide range of industrial fluorine containing chemicals including HFC and PFC that are not ODS but are greenhouse gases introduced to replace CFC and HCFC.

Currently, the Montreal Protocol controls production and consumption (production + import - export) of ODS, not their actual use or emissions. Under the Montreal Protocol it is assumed that all “consumed” ODS have been or will be emitted because no provisions exist for the control of the emission of ODS.

Existing ODS in equipment, banks, stockpiles, etc. are not controlled under the Montreal Protocol and continue to be legally used in equipment such as chillers and refrigerators, and stocked for many years beyond phase-out dates. It is estimated that an additional 3.8 million ODP-tonnes of ODS exist in banks worldwide and could be prevented from reaching the atmosphere. These have already been accounted for in the phase-out of ODS when they were produced but are not currently subject to further control. Additionally, the recent decision to accelerate the phase-out of HCFC will provide further incentives for rapid technology substitution and increase the surplus of ODS stocks.

There is growing international concern regarding the lack of sound management of endof-life ODS since inappropriate treatment or disposal leads to releases of ODS. In recent years, discussions on the future challenges of the Montreal Protocol have highlighted the management of end-of-life of ODS. Discussions have been initiated on specific proposals including mandating destruction of ODS, and there is a sense of urgency to act internationally on this issue. These discussions have resulted in several decisions under the Montreal Protocol:

• In 1992, the Parties to the Montreal Protocol took a decision that urged all Parties to take all practicable measures to prevent releases of ODS, including the destruction of unneeded ODS where economically feasible and environmentally appropriate.
• An additional decision in 1999 requested Parties to develop strategies to address surplus stocks.
• The latest decision in 2008 related to the environmentally sound management of banks of ODS. It encourages Parties to develop or consider further improvements in the implementation of national strategies to ensure the proper recovery of ODS from equipment and the use of best practices and performance standards to prevent ODS emissions.

These decisions have been supported by technical bodies under the Montreal Protocol, which, since 1990, have assessed destruction technologies and approved codes of good housekeeping for their use. These have been periodically updated ever since. In 2009 there was a workshop on environmentally sound management and destruction of ODS that focussed on the technical aspects of the issue.

In Canada, the federal and provincial/territorial governments share regulatory responsibility for ozone layer protection. The federal government is responsible for implementing controls needed to meet Canada's international obligations under the Montreal Protocol. Canada fulfills its international obligations and regulates the phase-out of ODS under the Ozone-depleting Substances Regulations, 1998 of the Canadian Environmental Protection Act, 1999 (CEPA 1999). These Regulations control the import, export, manufacture, use and sale of ODS.

The federal, provincial and territorial governments control the use, releases and handling of ODS and halocarbon alternatives (HFC and PFC). The federal government is also responsible for regulating federal facilities that are not covered by provincial/territorial regulations.

A comprehensive review in 1994-1995 of Canada's Ozone Layer Protection Program determined that unless new initiatives are put in place to take CFC and halons out of service and dispose of them, most of the Canadian inventory of these substances will ultimately be released to the environment. The review's main recommendations to minimize releases of CFC and halons were:

• Zero-release target dates should be set and met by a combination of total containment and elimination of uses;
• The destruction or transformation (to other chemicals) of unnecessary ozone-depleting substances (ODS) should be required as soon as feasible;
• The development of new disposal technology should be supported;
• Governments should work in partnership with industry and other stakeholders to facilitate disposal; and
• Market force instruments to promote removal from service and proper disposal should be investigated.

In response to these recommendations, a Phase-out Strategy was developed to encourage an orderly transition from CFC and halons to alternative substances and technology, and to ensure safe disposal of surplus stocks. The objective of the Strategy is to minimize and avoid the ultimate release of CFC and halons to the environment.

The Strategy consists of specific approaches to phase out uses of CFC and halons and dispose of surplus substances. There are two separate components to the Strategy. The first component consists of initiatives that are general in nature. This “general” component of the Strategy addresses four separate areas: extended producer responsibility (EPR), market force instruments, disposal of surplus stocks and control measures.

For the EPR program, the Strategy proposed the following approach:
Industry will play a key role in the development of management strategies to phase-out, collect and dispose of surplus ODS in Canada, including:

• Development of management plans for retrofitting, converting or replacement of existing systems using CFC and Halons;
• Research and Development of alternative products and technologies; and
• Partnering with government and other stakeholders to develop management plans for collection and disposal of surplus stocks.

In response to this proposed approach, the Heating, Refrigeration and Air Conditioning Institute proposed and developed a program for the collection and disposal of surplus refrigerants in the stationary refrigeration, air conditioning and chillers sectors, funded by a voluntary industry levy on replacement refrigerants.

The second component of the Strategy consists of phase-out objectives and approaches that are specific to individual industry sectors. This component of the Strategy addresses six specific use sectors: mobile air conditioning, mobile refrigeration, household appliances, commercial refrigeration and air conditioning, chillers, and halons.

Both federal and provincial governments recognized early on the importance of coordination and consistency of regulatory programs among the different jurisdictions. An important initiative to address this issue is the National Action Plan (NAP), which was approved and published for the first time in 1992 by the Canadian Council of Ministers of the Environment (CCME). The NAP provides a national framework for a harmonized approach by the federal, provincial and territorial governments to implement an ozone layer protection program. The NAP identifies tasks necessary to ensure that consistent, progressive actions take place to control all aspects of pollution prevention and all industry sectors using ozone-depleting substances and their halocarbon alternatives (HFC and PFC). The NAP has been updated and approved by CCME in May 2001 to reflect the status of previous tasks and identify new tasks for the implementation of Canada's Strategy to Accelerate the Phase-out of CFC and Halon Uses and to Dispose of the Surplus Stocks. The updated NAP included the following tasks:

• Encourage industry to develop EPR programs and participate in their development;
• Develop and implement control measures needed to support the EPR programs.

To date, control measures established by individual governments developed and implemented to support the EPR programs have not led to a level playing field throughout Canada because requirements vary greatly from province to province. One goal of the proposed EPR Regulations is to establish a harmonized framework and national level playing field. For example, most provinces simply require that, prior to disposing of air-conditioning or refrigeration equipment, the refrigerant be recovered for recycling, reclamation or destruction. Some provinces have seller take-back provisions, but requirements for the sound collection, storage, recovery and destruction of end-of-life ODS and alternatives is lacking, and their scope is not as wide as the proposed federal EPR Regulations.

The proposed Regulations would allow for the objectives of the EPR tasks identified in the NAP to be met nationally and ensure a level playing field across the country. The management of end-of-life ODS and their halocarbon alternatives is a common goal that touches all jurisdictions. Therefore, a national EPR program seems timely and appropriate to address stewardship gaps and ensure national consistency. Furthermore, the federal government has the authority to control the full life cycle of CFC, HCFC, HFC and PFC under CEPA 1999, since they are all listed in Schedule 1 of CEPA 1999.