Countries Agree to HFC Amendment to Montreal Protocol

20 October 2016

Nearly 200 countries secured a deal to phase down global climate-warming hydrofluorocarbon (HFC) emissions on Saturday, following round-the-clock negotiations during the Twenty-Eighth Meeting of the Parties to the Montreal Protocol (MOP28) held in Kigali, Rwanda, from 10-14 October.  The agreement reaffirms the potential for multilateral cooperation on critical climate issues in a deeply interconnected global economy while also deploying trade as a tool for implementation.

The deal amends the Montreal Protocol on Substances that Deplete the Ozone Layer, envisaging cuts in HFC use starting in 2019 for wealthier countries, with all nations significantly reigning in consumption by the late 2040s.

According to some estimates, the move could prevent up to 0.5 degrees Celsius in global warming above pre-industrial levels by the end of the century, though some experts have cautioned that this figure has not been confirmed.

HFCs are a synthetic gas with a warming potential that is hundreds – potentially even thousands – of times greater than carbon dioxide. These gases were once identified as a suitable alternative coolant for refrigerators and air conditioners, helping replace ozone-depleting hydrochloroflurocarbons (HCFCs) that the Montreal Protocol targets for elimination. With the demand for fans and fridges rising, HFC emissions are now among the world’s fastest growing greenhouse gas, expanding at a rate of 10-15 percent per year.

The news from Kigali capped a whirlwind month for climate action. Earlier this month, it was confirmed that the Paris Agreement on climate change will enter into force in early November – less than a year after it was adopted. The past fortnight also saw the UN’s civil aviation body endorse a new global deal to offset emissions from international air travel. (See Bridges Weekly, 6 October 2016 and 13 October 2016)

“Last year in Paris, we promised to keep the world safe from the worst effects of climate change. Today we are following through on that promise,” said UN Environment Programme (UNEP) Executive Director Erik Solheim in a press release on Sunday. 

With the amendment seven years in the making, countries were initially divided over whether to tackle HFCs under the Montreal Protocol, given that their rise was a by-product of that accord’s success, or whether the issue was best left to the UN climate talks that address climate-warming greenhouse gas emissions from all sectors in a more general manner. Countries eventually agreed last November to pursue targeted action through the Montreal Protocol.  (See BioRes, 11 November 2015)

Getting the job done

Although some critics have expressed concern that the Kigali deal does not push countries to move fast enough, others suggested that the final compromise reflects a trend in international governance toward pragmatic collaboration, where ambition is scaled up over time.

“It is not often you get a chance to have a 0.5-degree Centigrade reduction by taking one single step together as countries – each doing different things perhaps at different times, but getting the job done,” said US Secretary of State John Kerry, who along with nearly 40 other ministers attended the final days of the Kigali meet to help push the HFC amendment across the finish line.

Some commentators note that other Montreal Protocol amendments have been implemented faster than expected and suggest that a similar pattern might follow for HFCs as alternatives are commercialised and costs fall.

Several major chemical companies that manufacture fluoroproducts, including Honeywell and Chemours, were among those congratulating negotiators on a successful outcome.

“The Protocol provides a proven, consistent, and well understood framework that allows the global community to greatly reduce greenhouse gas emissions while ensuring that consumers and businesses experience a smooth transition to newer, more sustainable products,” said Paul Kirsch, president of Chemours Fluoroproducts, in a statement.

Some countries had expressed concern that their industries might not be in a position to grasp such commercial opportunities for new innovations or that their consumers would pay higher prices. The Montreal Protocol does provide that costs associated with intellectual property rights can be covered by a “Multilateral Fund” designed to support implementation.

According to research by the Center for Climate and Energy Solutions (C2ES), while several patents have been filed on HFC alternatives, far fewer have been granted. It estimates, for example, that 33 percent of patent files have been granted in the US and 12 percent in India.

New deal structure

Talks around how to calculate HFC consumption baselines – which would help in measuring subsequent cuts to these levels – proved to be a major focus of the meet. The pace of reduction was also a significant area of debate throughout the Kigali meeting’s final stages.

The final negotiated outcome involves two options for developing economies, known as “Article 5 parties” under the Montreal Protocol, and two options for developed economies.

The majority of non-Article 5 parties will begin cutting HFC emissions in 2019 and will consume no more than 15 percent of their 2011-2013 averaged baseline by 2036. Belarus, Kazakhstan, Russia, Tajikistan, and Uzbekistan will start the phase down in 2020, with a slower rate of reduction, later catching up to reach the same 2036 consumption target. The second group also has a slightly different baseline calculation.

The majority of Article 5 parties will freeze growth in 2024, start cuts in 2029, and consume no more than 20 percent of their 2020-2022 averaged baseline by 2045.

A second group of Article 5 parties, also with a slightly different baseline calculation, will freeze growth in 2028, begin the phase down in 2032, and consume no more than 15 percent of their 2024-2026 averaged baseline by 2047. This group includes Bahrain, India, Iran, Iraq, Kuwait, Oman, Pakistan, Qatar, Saudi Arabia, and the United Arab Emirates (UAE).

The distinctions reflect compromises between parties to account for particular economic circumstances, the cost of alternative technologies, and reliance on HFC-related products.

For example, the separate baseline for the second group of non-Article 5 parties accounts for existing differences in converting from HCFCs to HFCs. For Article 5 parties, the later freeze date and phase down provides breathing space for significant industry and consumer adaptation, while also allowing time for costs to fall and technology to advance for coping with high temperatures.

The approach is the first time parties to the Montreal Protocol have used country groupings beyond “developed” and “developing,” a move that recognises nuances between countries, and follows similar shifts in other governance efforts such as the UN climate talks.

“Despite [four] baselines, the bulk of global HFC emissions starts getting phased down earlier, delivering a massive gain for the fight against climate change,” wrote Arunabha Ghosh, CEO at the Delhi-based Council on Energy, Environment and Water (CEEW), in an op-ed for The Hindu on Wednesday. The piece was co-authored with CEEW Research Fellow Vaibhav Chaturvedi.

“The narrative of the global HFC negotiations also shifted, from merely ambition to include economy-wide costs, differentiation, and high-growth rates,” they added.

The deal also includes a specific time delimited exemption for so-called “high ambient temperature” (HAT) countries, agreed at an extraordinary meeting of the parties in held in July, under certain conditions and subject to review.

The Montreal Protocol’s Multilateral Fund will also be used to cover incremental costs related to the transition away from HFCs. Details on calculating such costs and guidelines for the fund’s support, however, still remain to be fleshed out. These will be reviewed at MOP29, due to be held next year in the protocol’s birthplace of Montreal, Canada. 

Shortly before the Kigali meet, a coalition of more than 100 countries had called for an ambitious phase down schedule for all parties. The declaration was supported by a US$80 million pledge from a group of donor countries and philanthropists, including Bill Gates, to support the amendment’s implementation and improve energy efficiency. 

Negotiators in Kigali also adopted a decision inviting parties to volunteer information on energy efficiency innovations in refrigerator, air conditioning, and heat pump sectors. This will be collected in a report and reviewed at next year’s MOP.  

The deal will come into force on 1 January 2019, provided that at least 20 countries have ratified by that point, and if not on the 90th day after this condition has been fulfilled. One of the open questions about the ratification process is how the US will approach the deal: whether it can approve it by executive action, or whether it will need the approval of the country’s Senate, whose composition after the upcoming elections is not yet clear.

Trade provisions

An innovative feature of the Montreal Protocol is the restriction of trade in controlled substances between parties and non-parties. The inclusion of trade measures in the original treaty was geared towards providing an incentive for countries to sign up to the protocol and its subsequent amendments. 

Parties do have some flexibility with the design of trade measures for each new amendment, such as by choosing to delay the start date of non-party trade measures for new controlled substances. This depends on feasibility of application, particular circumstances in certain parties, and available technologies.

The Kigali amendment foresees parties putting in place trade restrictions on HFCs with non-parties by 2030, provided that at least 70 countries have ratified the deal.

ICTSD reporting; “Summary of the Twenty-Eighth Meeting of the Parties to the Montreal Protocol,” EARTH NEGOTIATIONS BULLETIN, 18 October 2016; “5 Things to Know About HFCs,” THE WALL STREET JOURNAL, 16 October 2016; “How the Chemical Industry Joined the Fight Against Climate Change,” THE NEW YORK TIMES, 16 October 2016; “U.S. Senate Could Block Landmark HFC Climate Treaty,” CLIMATE CENTRAL, 17 October 2016; “Changing the course of the planet,” THE HINDU, 19 October 2016.

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