Halocarbons: response to comments on draft P2 notice

Environment and Climate Change Canada published the Proposed Notice Requiring the Preparation and Implementation of Pollution Prevention Plans in Respect of Halocarbons Used as a Refrigerant in the Canada Gazette, Part 1 on April 18, 2015. The publication of the proposed Notice was followed by a 60-day comment period that ended on June 17, 2015. Environment and Climate Change Canada received comments from one industry association and one stakeholder in the refrigerant industry on the proposed Notice. This document presents a summary of the comments submitted and Environment and Climate Change Canada's response to these comments.

Overview

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

On May 30, 2009, Environment and Climate Change Canada published in the Canada Gazette a Notice of Intent to develop and implement Extended Producer Responsibility regulations to manage the end-of-life of ozone-depleting substances and their halocarbon alternatives. The Notice indicated Environment and Climate Change Canada's intention to establish regulations under the Canadian Environmental Protection Act, 1999 (CEPA 1999) to manage halocarbon refrigerants throughout their life-cycle. The Notice indicated that the proposed Regulations would apply to refrigerants that contain chlorofluorocarbons, hydrochlorofluorocarbons, hydrofluorocarbons and perfluorocarbons that are recovered from stationary and mobile refrigeration and air-conditioning systems, other than domestic appliances. The Notice indicated that manufacturers, importers, distributors and reclaimers of virgin, used, reclaimed, recycled or recovered halocarbon refrigerants would be required to prepare and implement a stewardship program designed to collect, transport and dispose of halocarbon refrigerants recovered from the targeted systems.

The publication of the Notice of Intent was followed by a face-to-face meeting in Toronto, Ontario on November 30 and December 1, 2009. The purpose of these consultations was to obtain stakeholders comments on the Stewardship approach. Based on comments made at these consultations, Environment and Climate Change Canada agreed to implement stewardship policy with a Pollution Prevention Planning Notice instead of regulations.

A face-to-face meeting was held in Ottawa, Ontario on October 17, 2011. The objectives of this consultation meeting were to:

• Follow-up on previous consultations on the proposed stewardship approach;
• Provide an update on Environment and Climate Change Canada's approach and present a draft proposed Pollution Prevention Planning  Notice;

Based on the comments made at these consultations, Environment and Climate Change Canada agreed to exclude the mobile air-conditioning sector from the scope of the Pollution Prevention Planning Notice.

An electronic consultation was held in April 2014 by emailing a Consultation Document to interested stakeholders. The objectives of this consultation were again to follow-up on previous consultations and provide an update on Environment and Climate Change Canada's approach. The Consultation Document contained a revised draft proposed Pollution Prevention Planning Notice. In addition to excluding the mobile air conditioning sector, the revised Notice no longer included perfluorocarbons since they are barely used as a refrigerant.

A summary of the comments received during this consultation and Environment and Climate Change Canada's responses follow below.

Responses to Comments

Section 1: Definitions

Comment 1

A stakeholder indicated that definitions for mobile air conditioning systems and domestic refrigeration or air conditioning appliances should be included to prevent any confusion on the scope of exemptions in subsection 2(3). Regarding domestic air conditioning appliances, the exclusion should only apply to plug in appliances such as a domestic window air conditioner. Split systems air conditioners^Footnote1 should be covered by the Notice as they are installed by air conditioning professional.

Response to comment 1

Environment and Climate Change Canada has added definitions for domestic appliances to provide more clarity with respect to the scope of the Notice. Regarding mobile air conditioning systems, Environment and Climate Change Canada considers that such a definition is not needed as it is generally well understood what those systems are. Consequently, a definition for those systems was not added.

Comment 2

A stakeholder requested that the Pollution Prevention Planning Notice defines implementation as a plan being prepared and implemented, refrigerant being collected and the first environmental audit completed.

Response to comment 2

A stewardship program will be considered fully implemented when all activities or elements listed in the companies' pollution prevention plan have been put into effect. Further instructions or guidance on implementation will be provided in compliance material that will be prepared for this Notice.

Section 2: Person or class of persons required to prepare and implement a Plan

Comment 3

There were concerns with the exemption in paragraph 2(3)(d) for persons that import 500 kg or less of a halocarbon refrigerant to charge their refrigeration or air conditioning systems. The concern was that this exemption could be used as a loophole to avoid being subject to the Notice. In the stakeholder's experience, it can be very expensive to destroy 500 kg of refrigerant.

Response to comment 3

Environment and Climate Change Canada has modified the exemption in the Pollution Prevention Planning Notice to require that all of the following three conditions be met:

1. that the persons imports no more than 500 kg of halocarbon refrigerant on any one occasion;
2. that the halocarbon refrigerant serves only to charge air conditioning or refrigeration systems at facilities owned or operated by the importer
3. that the importer has entered into an agreement with a stewardship program for the reclamation and ultimate destruction of the imported halocarbon refrigerant when it reaches the end of its useful life.

Comment 4

It is also suggested that the term “pre-charged” be added to subparagraph 2(3)(e)(i) to clarify the intent.

Response to comment 4

Environment and Climate Change Canada has added the term “pre-charged”.

Comment 5

A stakeholder strongly disagreed with the exclusion of persons or class of persons listed in 2(3)(a), (b) and d(i) (mobile air conditioning systems, domestic refrigeration or air conditioning appliances and imported pre-charged equipment). According to the stakeholder, the exclusion of these sectors is contrary to the goals of the Extended Producer Responsibility policies and unfairly burdens persons in affected industry sectors. The stakeholder reiterated its comments submitted in 2009 that it remains inappropriate to exclude imported pre-charged equipment, domestic appliances and mobile air conditioning systems from the policy, despite the stated objective “to support a level playing field where all producers and importers in the identified sectors are subject to the same obligations, thereby eliminating free-riders”. This exclusion allows persons from those industry sectors to continue to act as free riders.

Response to comment 5

The decision to exclude vehicles' air conditioning systems does not imply that Environment and Climate Change Canada considers that refrigerants remaining in end-of-life vehicles (ELVs) should not be managed. In fact, in September 2013, Environment and Climate Change Canada commissioned a study on refrigerants remaining in light-duty ELVs. The final report shows that the total amount of refrigerant contained in these light-duty ELVs is estimated at 306 tonnes, across Canada. Environment and Climate Change Canada considers that this quantity of refrigerant is not negligible and needs to be properly managed.  At this time, options to manage ELVs are being considered.

For domestic appliances, Environment and Climate Change Canada proposes to rely, at this time, on the existing infrastructure, which includes municipal/regional programs and voluntary retailer take-back programs. It is estimated that this existing infrastructure recovers and recycles as high as 92 percent of all domestic appliances entering the waste stream annually.

Environment and Climate Change Canada considers that there is limited added value to including importers of pre-charged systems in the Pollution Prevention Planning Notice based on the volumes of halocarbon refrigerants involved. Environment and Climate Change Canada estimates that the amount of halocarbon refrigerant brought into Canada from imported pre-charged systems is negligible compared to the amount of halocarbon refrigerant imported in bulk or manufactured. The additional benefits gained by stewardship program(s) would therefore be negligible. It should be noted that refrigerants that enter Canada in containers shipped with large chillers are considered bulk imports. Importers of these refrigerants are subject to the Pollution Prevention Planning Notice.

Section 4: Factors to Consider in preparing the Plan

Comment 6

Clarifications were requested on whether having wholesalers taking back refrigerants met the intent of paragraph 4(4)(f) on providing access to collection facilities and collection services.

Response to comment 6

Environment and Climate Change Canada confirms that having wholesalers taking back refrigerants meets the intent of paragraph 4(4)(f).

Comment 7

Regarding the auditing provisions in paragraph 4(4)(j), one stakeholder suggested that audits be conducted annually during the first five (5) years of operation and then every three (3) years thereafter. For a new program, the stakeholder considers that environmental compliance audits would provide valuable feedback on the processes, ensure compliance with applicable regulations and provide early warning on issues needing corrective measures before these issues become unmanageable. Based on the stakeholder's experience, the cost of an audit for a program of a certain size is quite manageable within the program budget.

Comment 8

Another stakeholder expressed concerns related to the costs for an independent third-party audit, which for a smaller stewardship program may be a significant disadvantage.

Response to comments 7 and 8

Environment and Climate Change Canada considers that a third-party auditor provides more assurance that credible audits are conducted. An external, impartial audit is critical for a program to verify conformity with national, provincial and local laws and regulations, and with the Pollution Prevention Planning Notice. Environmental audits can also help programs identify ways to improve overall program efficiency and minimize liabilities.

Environment and Climate Change Canada considers that the three year interval ensures credible audits while not putting undue expenses on the program.

Comment 9

Regarding the reporting provisions in paragraph 4(4)(k), it remains unclear for a stakeholder if a stewardship program administrator can prepare the declarations and the annual report on behalf of the participants.

Response to comment 9

In the case of a collective stewardship program, a company subject to the Pollution Prevention Planning Notice may request assistance from a program administrator in the preparation of the declarations of preparation and of implementation, and annual reports. However the requirement to certify and submit the declarations and annual reports lies with the company subject to the Pollution Prevention Planning Notice. The obligation to be in compliance with the Notice also remains with the company subject to the Notice. Environment and Climate Change Canada will prepare compliance promotion material to this effect.

Comment 10

A stakeholder requested clarifications on the conditions in subsection 6 to withdraw from a stewardship program. For the stakeholder, it appears that the 100 kg threshold in paragraph 4(6)(a) runs contrary to the 150 kg threshold in paragraph 4(6)(b).

Response to comment 10

Environment and Climate Change Canada has removed the provisions of subsection 6 that allows a person to withdraw from a program. Upon review, Environment and Climate Change Canada considers that it is preferable to let stewardship programs determine how to manage these situations and not have provisions to that effect in the Notice.

Section 6: Period within which the Plan is to be implemented

Comment 11

A stakeholder requested clarifications on the 30 months period specified in section 6 to implement the Pollution Prevention (P2) plan. Considering that a stewardship program should start accepting halocarbon refrigerants within 12 months after becoming subject to the Notice (paragraph 4(4)(e)) and that an audit must be completed after 12 months of operation (paragraph 4(4)(j)), the stakeholder considers that implementation should be completed after 24 months instead of 30 months.

Response to comment 11

From the time a person becomes subject to the Notice, Environment and Climate Change Canada calculates 30 months to implement the P2 Plan as follows:

1. 12 months to start accepting halocarbon refrigerants in the stewardship program;
2. conduct an audit after 12 months of operation;
3. an additional 6 months to complete implementation of the P2 Plan, which should include completing the audit, writing the report and submitting the Declaration of Implementation.

Schedule 1: Declaration of Preparation

Comment 12

A stakeholder requested clarifications on section 5.3.1 (Anticipated Quantity of Halocarbon Refrigerant Recovered in Canada and Accepted in the Stewardship Program) of Schedule 1. According to the stakeholder it will not be possible to determine the quantity of refrigerant managed by each participant of the collective stewardship program. The quantities reported in this section should be the estimated annual quantities managed by the program and the same for each participant.

Response to comment 12

Environment and Climate Change Canada confirms that the quantities to be reported in section 5.3.1 of Schedule 1 are for the stewardship program, not for each participant.

Summary

In summary, the main changes made in the final Pollution Prevention Planning Notice are:

• A definition for domestic appliance was added.
• The exemption for a company that imports no more than 500 kg of halocarbon refrigerants to charge their air conditioning or refrigeration system was modified to address the concerns.
• The provisions to withdraw from a stewardship program were removed from the Pollution Prevention Planning Notice.