New Policy Measures in Japan that manage HFCs and promote alternatives. Masafumi OKI Ministry of Economy, Trade and Industry, Japan (METI) 12 July 2014, Paris. 1

Agenda 2 1.Managing HFCs Emission a) Industrial Voluntary Action Plans ( HFC, PFC, SF 6 ) b) “Fluorocarbons Recovery & Destruction Law” ( HFC, CFC, HCFC ) ( New law ) “Act on Rational Use & Proper Management of Fluorocarbons” ( HFC, CFC, HCFC ) ③ Reducing “In use leakage” ( HFC, CFC, HCFC ) Periodical check & Reporting total amount of emission ( by users of products for commercial use ) Restriction of repetitious refilling without repairs ( by users & by refiller ) 2.Promoting alternatives to lower GWP & Non-Fluorocarbons ( New law ) “Act on Rational Use & Proper Management of Fluorocarbons” ( HFC, CFC, HCFC ) ① Promoting lower-GWP/non-fluorocarbons in designated products ( HFC ) ( by Manufactures ) ② Conducting HFCs Phase-down ( HFC ) ( by Gas-producers )

Status of emissions per sector by Industrial Voluntary Action Plans HFC23: by-product of HCFC22 Refrigerants Air conditioner & refrigerator HFC23: by-product of HCFC22 Refrigerants Air conditioning & refrigerator （ Source Change of HFC emission ） 1995 HFC (20mil.t-CO2) 2012 HFC (21mil.t-CO2) Source: Industrial Structure Council, METI BAU Prospective increase of Fluorocarbons emissions in refrigeration & air-conditioning sector Base year level (51mil.t-CO2) The first commitment period of Kyoto Protocol.

4 Source: Industrial Structure Council, METI The rate of recovery is about 30% since the enforcement Prospective emissions of F-gases & leakages by sector in 2020 (BAU) Amount of Leakage from equipment in use is increasing more than expected Trend of the amount of recovery from commercial refrigerators & air-conditioners (mil t-CO2) In use In disposal Leakage 2020 BAU Showcases RAC Others, commercial ACs Other middle refrigerators Large refrigerators Small refrigerators Package ACs (note) The amount of recovery at service is not included. Status of implementation of “Fluorocarbons Recovery & Destruction Law” Recovered F-gases Destructed ／ Recycled “In use leakage”“Disposal”

( New Law ) “ Act on Rational Use & Proper Management of Fluorocarbons “ to address issues throughout Lifecycle of Fluorocarbons Air conditioner Dust blowers Refrigerator Producers of HFCs Manufacturers of products containing HFCs Supermarkets Lower GWP HFCs Natural Refrigerant Lower GWP HFCs Natural Refrigerant (1) Phase-down HFCs (2) Promote lower GWP products Products with alternatives Periodical check Maintenance Promoting of recycle (3) Reduce “In use leakage” Approved recyclers Approved recyclers Registered fillers/ recovery operators Registered fillers/ recovery operators Approved destructors Approved destructors “Fluorocarbons Recovery & Destruction Law” 5 Planning to be effective from April 2015 Concerns 1. Prospective rapid increase of HFCs emission 2. Low rate of Recovery in disposal 3. “In use leakage” 4. Technical development & commerciali- zation of low- GWP/non- fluorocarbon products 5. Global movement of strengthening the regulations on high-GWP fluorocarbons Report of leakage Log book Users of products

Manufactures and Importers of products will be required to replace high-GWP products with low-GWP or non-fluorocarbons ones, considering safety, energy efficiency, economic affordability etc. Index related to environmental impact To reduce climate impact by converting refrigerant to the target value which is specified referring to the lowest GWP among the designated products in Japan. High- GWP Low- GWP ・ Refrigerants GWP ・ Volume of products ・ Refrigerants ⇒ Lower-GWP/non-fluorocarbon ・ Volume of products ( New Measure ① ) Measures to promote low-GWP/non-fluorocarbons in designated products Target yearBase year 6 Target value Evaluate accomplishments for each product category （ weighted average ) Example) Air conditioning

27,738,000 t -CO2 (2012) ( New Measure ① ) Possible target of designated products using fluorocarbons Source ： inventory report of green house gases by METI ※ Based on GWP values for the second commitment period - Kyoto Protocol ※ Subject to change depending on considered categories of designated products. 7 （ HFC emission ） （ HFC stock amount ） 418,450,000 t-CO2 (2012)

( New Measure ① ) Target value and year for each designated product ( the first group ) Designated products ※ Present refrigerant(GWP) Target value (GWP) Target year Room air-conditioning R410A(2090) R32(675) ７５０２０１８ Commercial air-conditioning (for offices and stores) R410A(2090) ７５０２０２０ Condensing unit and refrigerating unit (for separate type showcases etc.) R404A(3920) R410A(2090) R407C(1774) CO2(1) １５００２０２５ Cold storage warehouse （ for more than ㎥） R404A(3920) Ammonia (single digit) １００２０１９ Mobile air-conditionerR134a(1430) １５０２０２３ Urethane foam (for House building materials) HFC-245fa(1030) HFC-365mfc(795) １００２０２０ Dust blowers HFC-134a(1430) HFC-152a(124) CO2(1), DME(1) １０２０１９ 8 ※ With some exceptions.

( New Measure ② ) Measures to conduct HFCs phase-down 9 Manufacturers and Importers of fluorocarbon gases will be required to make their plans to conduct “HFCs phase-down” with development and production of lower GWP gases considering safety, energy efficiency, economic affordability etc. A guideline can be referred in order for them to make plans to reduce HFCs and will be made based upon their prospective supply to follow the measures on the designated products to lower GWP / non-fluorocarbons gases. Manufactures of products containing HFCs (Measures ① ) Promoting lower GWP/ non F-gases products Producers of HFCs (Measure ② ) Conducting phase-down HFCs Total target amount set by METI To set every five years basically To be calculated automatically based upon the measures on the designated products by manufactures “Two Wheels” to drive the reductions Evaluation by METI Every five years basically Total actual amount by companies Total actual amount by companies Total target amount by METI Total target amount by METI

( New Measure ③ ) Measures to reduce “In use leakage” (conducting periodical check, repair before refilling etc.) users Periodical check “ log book ” to record items below Type/amount of refrigeration used Details of maintenance report including periodical check & repair record, date & time, result etc. “ log book ” to record items below Type/amount of refrigeration used Details of maintenance report including periodical check & repair record, date & time, result etc. Record Maintenance/refilling Users will be required to conduct periodical check, to call services to arrange repair before refilling as soon as leakage is found, to record their maintenance, and to disclose them to their maintenance operators etc. Maintenance operators ( registered fillers & recovery operators) Maintenance operators ( registered fillers & recovery operators) Explain its necessity to be repaired when leakage is identified. Call a service immediately to arrange repair/refill as soon as leakage is found. 10 Disclose

11 Summary of New Policy Measures in Japan 1.Promote lower GWP / Non F-gas Products by Manufacturers of products containing HFCs by Producers of HFCs 3.Reduce “In use leakage” from commercial products by Users of products containing F-Gases Making progress to reduce HFCs surely and practically with incentives to: 1. Manufactures → to develop and produce products containing lower GWP /non F-gases 2. Gas -Producers → to develop and produce Lower GWP F-gases 3. Users → to purchase non F-gases products (Upstream) 2.Phase-down HFCs (Downstream) considering safety, economic affordability, energy efficiency etc. No regulations in the case of using natural refrigerants & HFOs Periodical check Repair before refilling Report of leakage Log book

12