Update on the Draft EC Regulation Presented by Pacific Scientific at the International Halon Replacement Working Group Meeting Bremen - May 2000

Update on the Draft Regulation Background and Status Halon Controls Critical Use Import / Export Impact for Aerospace Airline Strategy May 2000 Pacific Scientific Maidenhead UK

Pacific Scientific Maidenhead UK Background New Regulation first seen in draft form in Aug 1998. Proposes controls on the production, use, sale, import, export and recovery of ODS’s, including Halon. Includes Halons, CFCs HCFCs etc. Will replace regulation 3093/94, which prohibited production of Halon and other ODS’s. May 2000 Pacific Scientific Maidenhead UK

Pacific Scientific Maidenhead UK Current Status 2nd reading of the EU Parliament Dec 99 Some outstanding issues on HCFCs Halon aspects are agreed. Could be adopted June 2000. May 2000 Pacific Scientific Maidenhead UK

Current Status - Entry into Force Probable date is 1st October 2000. UK and others suggested 1st Jan 2001 to allow time for national ratification. Will supersede current national legislation in those countries which already have local controls (e.g. Germany) May 2000 Pacific Scientific Maidenhead UK

Halon Controls (Article 4) Prohibits sale or use of Halons after entry into force, except as allowed below: Use and sale of recovered/reclaimed Halons in existing systems until 31 Dec 2002 All systems and extinguishers must be de-commissioned by 31 Dec 2003. Exceptions for critical uses which are listed in Annex VII of the regulation. May 2000 Pacific Scientific Maidenhead UK

Critical Uses of Halons (Aircraft) “In Aircraft for the protection of crew compartments, engine nacelles,cargo bays and dry bays.” Halon 1211 “In hand-held fire extinguishers and fixed extinguisher equipment for engines for use on board aircraft” “In Aircraft for the protection of crew compartments, engine nacelles, cargo bays and dry bays” May 2000 Pacific Scientific Maidenhead UK

Import Controls (Articles 6 & 7) Import Licensing The restrictions are similar to those in 3093/94. An Import Licence issued by the Commission is required for bulk imports. There will be quantitative limits. Affects both Free Circulation and IPR imports. Free Circulation import only permitted for essential or critical use or destruction. In the event of a Halon shortage, obtaining an import Quota/Licence is likely to be a protracted process. No restrictions on products for critical uses. May 2000 Pacific Scientific Maidenhead UK

Export Controls (Articles 11 & 12) Export of products and equipment containing Halon will be permitted for Critical Uses It is understood that bulk export of Halon will not be permitted, even for Critical Uses Applies from Entry into Force date. Export Licences issued annually with quantity limits and stated destinations. Applications will need the support of the national enforcement agency. May 2000 Pacific Scientific Maidenhead UK

Pacific Scientific Maidenhead UK Impact for Aviation Users need to secure supplies before phase-out date. Affects non-EC users that are dependant on EC Service Providers. Airline is the Critical User, not Service Provider. Service Providers are unlikely to accept the full risk of Investment / Destruction Costs. US shortage of Halon could affect new aircraft deliveries ? Waste Bin Extinguisher not a Critical Use? May 2000 Pacific Scientific Maidenhead UK

Factors Affecting Future Needs Unknown existing stocks (Banked or Installed) Unknown end dates for each application. Fleet growth New regulation (D to C, etc.) Consumption ( Fires, False Warnings, Hydrostatic Testing) Economics, Feasibility and Timescale for a changeout on existing aircraft. Emergence of new technologies. May 2000 Pacific Scientific Maidenhead UK

Airline / Airframe Mfr Strategy Forecast of Future Needs is a priority. Strategy for continued availability. Airline Halon Bank Contracted Halon Bank or Contracted Supplies. Plan should consider the risk of a US Shortage Possible need to source the Halon needed for new aircraft. Regular purchases during Phase-out Minimise Financial Impact/Availability risks. May 2000 Pacific Scientific Maidenhead UK

Support from Service Providers Provider/Repair Station probably can: Assist with the Airlines requirements forecast. Assist with the sourcing of Halon before Phase-out. Provide recovery and banking facilities. Provide ongoing Overhaul and Recharging facilities. Provider/Repair Station probably won’t/can’t : Provide or guarantee the needs of the industry from their own resources. Take the risk of subsequent destruction costs unaided. Stabilise Halon prices - now a commodity. May 2000 Pacific Scientific Maidenhead UK

Pacific Scientific Maidenhead UK Conclusion Airlines and Manufacturers need: A forecast of future Halon requirements, which includes a “What if” analysis. A plan on how this will be provided. The plan should be reviewed regularly to take account of changing availability and alternatives progress. Active management of their Halon source, either through an Airline Bank, a Contracted Bank or a Supply agreement. Waste Bin Extinguisher replacement ? May 2000 Pacific Scientific Maidenhead UK

Pacific Scientific Maidenhead UK Finally If an Airline is going to rely on a Supplier agreement alone: They need to be pretty confident the supplier will still be in business and able to supply when Halon is needed. They are gambling on the Airline’s future, because the Halon price could be nothing, or a fortune. May 2000 Pacific Scientific Maidenhead UK