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Study on hydrofluorocarbons (HFC)

Whole Report pdf - 478 KB [478 KB]

Executive Summary

This report is the result of a study of the current and future usage of HFCs in the EU. The study was carried out by March Consulting Group on behalf of DGIII-C-4 of the European Commission during the period April to August 1998.

The study was carried out to provide information to help prepare EU policies in respect of meeting commitments in the Kyoto Protocol.

The work was based on an in-depth review of relevant literature and on detailed interviews with the suppliers and users of the various fluids.

The EU has a commitment to reduce emissions of global warming gases by 8% from 1990 levels. This must be met at some time in the period 2008-2012 (the Kyoto Protocol "commitment period").

There are six gases covered by the Kyoto Protocol. These are CO2, CH4, N2O, PFCs, SF6 and HFCs. Total EU emissions in 1995 were 3 900 Mtonnes CO2 equivalent. Current emission levels are dominated by CO2, representing over 82% of the total. CH4 and N2O represent a further 16%. The three "new" gases introduced at Kyoto currently represent 1.6% of the total EU global warming emissions.

HFCs, PFCs and SF6 have been included in the Kyoto Protocol because they are powerful global warming gases. HFCs have GWPs (global warming potentials) that are typically 1000-3000 times higher than that of CO2.

HFC markets

HFCs accounted for 1% of EU emissions in 1995, estimated at 41 Mtonnes CO2 equivalent.

HFCs were virtually unused prior to 1990. The market for HFCs has grown as a response to phase out of CFCs and HCFCs under the Montreal Protocol.

There are six main markets in which HFCs are used currently or are likely to be used in the future. These are refrigeration/air-conditioning, foam blowing, general aerosols, metered dose inhalers (MDIs), solvent cleaning and fire fighting.

From an emissions perspective the main sources of atmospheric HFCs are these six user markets together with two other important emitters. These are chemical plants making HCFC 22 (from which HFC 23 is emitted as a by-product) and plants making HFCs.

For the purposes of this study these emission sources have been sub-divided into 25 distinct market sub-segments. This has enabled a detailed evaluation of emission reduction opportunities to be carried out.

The report provides a detailed background to the 25 market sub-segments together with a review of technologies that can be used to reduce levels of HFC emission. These include alternative fluids, not-in-kind technologies and emission prevention techniques.

Emissions in a business-as-usual scenario

A computer model of the 25 market sub-segments has been developed to predict future levels of HFC emissions under a wide variety of control scenarios. The model calculates emissions on an annual basis from 1990 to 2020.

An emissions forecast has been made for a "base case", against which other scenarios can be compared. This is referred to as the Business-as-Usual Scenario. It represents the best estimate of emissions assuming that current public and private sector initiatives to limit the impact of global warming are followed.

The Business-as-Usual Scenario shows a 2010 HFC emission of 66 Mtonnes CO2 equiv. This is a 62% increase on 1995 emissions. Refrigeration and air-conditioning represents 43% of this emission with foam blowing representing 21%. HFC 23 emissions from HCFC 22 manufacture are also significant, at 15% of the total.

The report provides estimates of future emissions in each of the 25 market sub-segments. An "emissions league table" shows clearly which are the most important emitters. The top five emitters account for 66% of the total, and the top ten account for 85% of the total. The largest single sub-segment is HFC 23 from HCFC 22, which represents 15% of the total. The other members of the "top 5" are supermarket refrigeration, mobile air-conditioning, general aerosols and extruded polystyrene foam.

Emission reduction opportunities

Information is provided on the advantages and disadvantages of a range of control mechanisms such as voluntary agreements, fiscal measures and end use emission regulations. These are discussed individually for each of the main market sub-segments.

A wide range of control scenarios is proposed for each market sub-segment. A total of 90 scenarios are analysed to assess emission reduction potential and Cost Effectiveness (this is defined as the cost of achieving a one tonne reduction in CO2 equivalent emissions, using total costs and emissions for the time period 2000-2012). Many of these scenarios have been defined in both "low impact" and "high impact" terms. A low impact scenario only achieves a small proportion of the technical potential whereas a high impact scenario assumes a higher proportion is achieved.

The analysis shows excellent technical potential for reducing emissions from the Business-as-Usual Scenario level. With a selection of low impact scenarios emissions in 2010 fall to 39 Mtonnes CO2 equiv. This is 41% below the 2010 Business-as-Usual Scenario and 5% below 1995 emissions. Adopting all the high impact scenarios could reduce emissions to 22 Mtonnes CO² equivalent, which is a 45% reduction on 1995 emissions.

The above analysis has been carried out for EU-15. There are significant variations in emissions between Member States. In particular, only seven countries are HCFC 22 producers. Most of these countries had a substantial HFC 23 emission in 1995 and will find it relatively easy to reduce emissions by well over 8%. The other eight Member States will find it much harder to reduce emissions from very low 1995 levels.

Costs of emission reduction

The Cost Effectiveness of each control scenario has been evaluated. Some measures can be achieved at relatively low costs, in the range of 1-10 ECU/tonne CO2 equivalent. Some measures have a medium level of cost, in the region 10-50 ECU/tonne CO2 equivalent. Others are less attractive, being in the range of 50-400 ECU/tonne CO2 equivalent.

The largest single reduction is a 2010 saving of 9.2 Mtonnes CO2 equiv. related to HFC emissions from HCFC 22 plants. This can be achieved at just 2 ECU/tonne CO2 equivalent. Good levels of saving can be also made in supermarket refrigeration, mobile air-conditioning, general aerosols and XPS foam with Cost Effectiveness ranging from 9 to 16 ECU/tonne CO2 equivalent. If these were all fully implemented the emission in 2010 would fall to 41 Mtonnes CO2 equivalent, which is equal to the 1995 level of emission. If these best measures are aggregated, the emission reductions can be achieved with an average Cost Effectiveness of around 7 ECU/tonne CO2 equivalent.

A further emission reduction of about 6 Mtonnes CO2 equivalent can be achieved by implementing a number of measures with a Cost Effectiveness in the range 20-30 ECU/tonne CO2 equivalent. Together with the measures described in Paragraph 21 this would achieve a 15% emission reduction compared to 1995 - well in excess of the Kyoto target of 8%.

We recommend that measures with a Cost Effectiveness significantly above 30 ECU/tonne CO2 equivalent should not be implemented.

A number of energy efficiency measures related to indirect CO2.

Emissions from refrigeration and air-conditioning systems were evaluated. These all have "negative Cost Effectiveness" which implies these energy efficiency measures should provide end users with a net financial benefit.

Control mechanisms

The control mechanisms required to achieve these savings must be based on the characteristics of each market sub-segment. It is not considered appropriate to implement "blanket mechanisms" across the whole HFC market. This would have a detrimental impact on many market sub-segments for which there may not be a cost effective or safe alternative to HFCs.

For the key low cost measures described in Paragraph 21 above it is likely that voluntary agreements with selected organisations could prove highly effective. Each voluntary agreement should be tailored to a specific market sub-segment. The most important agreements will be with chemical producers, supermarkets, car manufacturers and XPS manufacturers.

For one of the low cost measures and some of the medium cost measures the market sub-segment characteristics are not well suited to voluntary agreements. These include general aerosols, industrial refrigeration, small commercial refrigeration and solvents. In these markets some form of fiscal measure may prove most effective.

Emissions reporting, based on the 25 market sub-segments used in this study rather than a "top down" methodology will help ensure that an effective emission reduction strategy is being implemented. It will also help ensure that "unregulated" markets do not increase their consumption and emissions of HFCs.

Comparisons with other global warming gases

The report discusses the importance of comparing the Cost Effectiveness of HFC emission reduction measures with opportunities to reduce the emissions of other global warming gases. Data is given for the refrigeration market to show the costs and benefits of improving energy efficiency and hence reducing indirect CO2 emissions. Because of the on-going electricity savings all the efficiency opportunities have a net cost benefit to the end user over the life of the equipment. Hence many energy efficiency opportunities are intrinsically more cost effective than direct HFC reduction measures which usually have no "up-side".

HFCs must not be treated in isolation. The Kyoto Protocol is based on a "basket of gases". The most economically beneficial response must be based on a review of the whole basket of emission reduction opportunities together.

Other comments

Providing the approach described above is adopted it is believed that market flexibility will be maintained. This will ensure the most economically beneficial measures will be implemented. It will also minimise any threats to international competitiveness. A well structured emission reduction programme could help EU companies establish new export markets to help other countries achieve their Kyoto targets.

Care should be taken interpreting the emissions data for the foam market sub-segments. By the end of the Kyoto commitment period (2012) there will be no "disposal emissions" from HFC blown foam products because none will have reached the end of their life. Many foam insulation products have a life of 50 years, hence disposal emissions will not occur until well into the next century.

Production capacity for most HFCs should not prove a major barrier to the development of HFC markets. This is either because sufficient capacity already exists (e.g. HFC 134a) or because the quantities required are relatively modest. However, there could be a very significant requirement for HFC 245fa and/or HFC 365mfc for foam blowing applications. Chemical companies will find it hard to make the complex investment decisions required without a clear understanding of regulatory responses to the Kyoto Protocol.

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