Draft Report - June 2013 OEWG-33 – Bangkok, Thailand

Overview of Presentation Introduces the Decision and the interpretations applied by the Task Force to the operative paragraphs Does not provide a detailed review of all available options, since they are in the Draft Report Focuses on some of the challenges posed by Operative Paragraph (d) Provides initial overview of findings and highlights the importance of timely decision-making Seeks clarification on next steps relating to scope and levels of analytical detail 2

Dec XXIV/7 – Decision elements Preamble references high ambient temperatures and unique operating conditions (Decision XIX/8) Also references response to Decision XXIII/9 in 2012 Response to be ‘in consultation with experts from outside the Panel with relevant expertise’ To update information on alternatives and technologies in various sectors (operative paragraphs (a) to (e)). To take into account any information relevant for the report provided by parties to the Secretariat Prepare a draft report for consideration at thirty third OEWG and final report at twenty fifth MOP 3 ‘Update information on alternatives and technologies’

Dec XXIV/7 – Input from Parties Two Parties have made submissions US has made two separate submissions during February – largely focusing on refrigerant options EU has submitted a UBA Report (2010 – revision of 2004 report), an SKM Enviros Report (2012) on HFC phase-down in mid-March and several reports in April Not clear whether there is a final deadline for input Will more information come from Parties between OEWG-33 and MoP-25? Strong emphasis on RAC within the comments received 4

Dec XXIV/7 – Decision Clause (a) Describe all available alternatives to ODS that are commercially available, technically proven, environmentally-sound, taking into account their efficacy, health, safety and environmental characteristics, cost effectiveness, and their use including in high ambient temperatures and high urban density cities Environmentally sound technologies (ESTs) – Agenda 21  Protect the environment  Are less polluting  Use resources in a sustainable manner  Recycle more of their wastes and products  Handle residual wastes in a more environmentally acceptable way 5

Dec XXIV/7 – Decision Clause (b) Update information provided by previous TEAP reports on alternatives under development ‘Alternatives under development’  May or may not be already commercially available  Unlikely to be technically proven in all potential applications  Market penetration may be limited  Likely to still have some data-gaps in toxicological and eco-toxicological testing 6

Dec XXIV/7 – Decision Clause (c) Identify barriers and restrictions to the adoption and commercial use of certain environmentally sound alternatives to ODS ‘Barriers and restrictions’ could be:  Technical limitations  Lack of manufacturing capacity  High investment costs for downstream users  High operating costs based on price of substance  Geographic availability  Intellectual property restrictions 7

Dec XXIV/7 – Decision Clause (d) Estimate, if possible, the approximate amount of alternatives with negative environmental impacts that could be or could have been avoided or eliminated by both non-Article 5 and Article 5 Parties in the process of phasing-out ozone depleting substances; ‘Negative environmental impacts’ can include:  Ozone depletion (excluding short-lived ‘de minimis’ compounds)  Climate forcing  VOC emissions  Other environmental impacts (e.g. eutrophication) 8

Dec XXIV/7 – Decision Clause (d) Assessing ‘Negative Environmental Impacts’ Quantity of substances with Negative Environmental Impacts depends on the ‘impact’ assessed. Report assumes that climate is the criterion of most relevance, after ozone Quantification implies a comparative baseline which is taken as the situation with no Montreal Protocol ‘Most favourable option’ is viewed as the technology option which offers the lowest climate impact for the application in question irrespective of when it became available ‘Could have been avoided’ is simply assessed as a hypothetical maximum achievable with the ‘most favourable option’ which is, in turn, assumed to be available from the outset (1990) 9

Dec XXIV/7 – Decision Clause (e) Identify the opportunities for the selection of environmentally-sound alternatives to HCFCs in the future; ‘Opportunities for the selection’ were considered on the basis of being:  Within the period to 2020  Existing or emerging alternatives available in that period  Technically feasible and economically viable  Closest to the ‘most favourable option’ 10

Decision XXIV/7 Task Force Co-chairs with refrigeration expertise Lambert KuijpersRTOC co-chair (non-A5) Roberto PeixotoRTOC co-chair (A5) Members with refrigeration expertise Denis ClodicRTOC – France Daniel ColbourneRTOC – UK Osami KataokaOutside Expert - Japan Michael KauffeldRTOC – Germany Tingxun LiRTOC – China Rajan RajendranRTOC – USA David GodwinRTOC – USA Samuel Yama-MottaOutside Expert, Peru 11

RAC – Alternatives & Sectors Main alternatives Natural refrigerants, NH3, CO2 and hydrocarbons HFCs and unsaturated HFCs/HCFCs and blends with low GWP Other HFCs and blends Main sectors covered (both developed and developing) Domestic refrigeration Commercial refrigeration Large size and transport refrigeration Air conditioning Heat pumps and chillers Mobile AC 12

RAC – barriers & restrictions Flammability, toxicity and thermodynamic properties of certain non fluorocarbon and fluorocarbon refrigerants 5-15% higher costs for some hydrocarbon solutions (e.g. HC-290 & HC-1270) in indirect condensing units when compared with HFC options For Air Conditioners, loss of energy efficiency at high ambient temperatures is a significant issue with a number of alternatives The main barrier for R-744 systems in MAC systems has been the cost, although there are also issues related to safety, compressor durability and leak detection. Flammability of HFC-1234yf is also debated. R-410A and R-404A are the established refrigerants in a number of key sectors primarily because of cost and safety characteristics 13

RAC – opportunities for selection HFC-1234yf as a replacement for HFC-134a in a portion of the domestic refrigerator market R-744 already being used in Northern Europe for some indirect condensing units Proprietary low GWP blends N-13 and XP-10 can be used in existing commercial systems HFC-32 and L-41 are both candidates in Small Self-Contained ACs with HC-290 being used in portable and split ACs. In chillers, both HFC-1234ze(E) and HCFC-1233zd(E) have roles as replacements for HFC-134a and HCFC-123 respectively R-744 and HC-290 also making good progress in chillers, heat pumps and transport 14

15 ‘Could have been avoided’ : Refrigerant in Domestic Appliances Actual outcome was approximately 50/50 leading to annual savings of 246 MtCO 2 -eq/yr 3 year delay in CFC-12 phase-out would wipe out additional benefits of HC- 600a over a 20 year period. 15 CFC-12 HFC-134a HC-600a 263 MtCO 2 - eq / yr 230 MtCO 2 - eq /yr

In commercial refrigeration and air conditioning the change from HCFC-22 to HFCs or low GWP substances yields a saving in negative environmental impact per year Depends on consumption levels in A5 and non-A5 Parties and servicing amounts assumed Conversion of 10% of manufacture in a certain year, dependent on subsector or type of country, yields a saving in that year and further savings during the next 15 years the equipment is in service Every year the conversion is postponed has a consequence that is larger than just the reduction in negative environmental impact from the change in the manufacturing amounts only (5- 15 times that amount required for servicing over 15 year period) 16 Amounts that could be avoided

17 Example for 2 other sectors in refrigeration and air conditioning Assuming 2013 HCFC consumption, avoiding 10% HFCs in manufacture 17

Decision XXIV/7 Task Force Co-chairs with foam expertise Paul AshfordFoams TOC co-chair (non-A5) Members with foams expertise Samir AroraFTOC – India & Southern Asia, PU Mike Jeffs FTOC – Europe, PU Ilhan KaraağaçFTOC – Turkey, XPS Enshan ShengFTOC – China, PU Helen Walter-TerroniFTOC – USA, Blowing Agent Fred WangOutside Expert – China, XPS 18

Foams – Alternatives & Sectors Main alternatives Hydrocarbons, saturated HFCs and unsaturated HFCs/HCFCs*, HCOs (methyl formate, methylal)*, CO 2, other Main sectors covered (both developed and developing) PU Appliances PU Board/Laminate PU In-situ/Block PU Spray PU Integral Skin XPS Board Phenolic Small, medium and large enterprises * Considered as ‘emerging options’ and, in some instances, still ‘under development’ 19

Foams – barriers & restrictions Hydrocarbons still blowing agent of choice in most transitions but investment costs limit size of enterprise that can commit Transition to unsaturated HFCs and HCFCs (HFOs) is restricted at present by registration processes and investment plans Developed countries likely to provide the initial base load for new plants CO 2 has technical limitations for XPS and HFOs are likely to be difficult in isolation because of cost Challenges with flammability and the potential restriction of brominated and phosphate flame retardants 20

Foams – opportunities for selection HFOs are showing significant benefits for thermal conductivity Methyl Formate and Methylal are being used in niche areas (integral skin, some vending machines etc.) Hydrocarbons are being adopted more widely than might have been anticipated, but real costs are exceeding HPMP estimates Enterprises are often co-funding hydrocarbon solutions The development of blends continues to be critical to both technical and economic criteria 21

Impacts that could have been avoided (ODP) 22 Progression directly from CFCs to Hydrocarbons avoided substantial ‘missed opportunities’ Exposure in insulating foams limited in A5 Parties as at 1990 Main impact in PU Appliances caused by 10 year deferment

Impacts that could have been avoided (GWP) 23 Progression directly from CFCs to Hydrocarbons avoided substantial ‘missed opportunities’ except for XPS Exposure in insulating foams limited in A5 Parties as at 1990, although XPS significant Main impact in PU Appliances caused by 10 year deferment

Impacts that could still be avoided (ODP) 24 All ODS use in the foam sector phased out prior to 2010 Remaining savings to be made are primarily in PU Appliance and XPS sectors Challenge still for low-GWP XPS solutions

Impacts that could still be avoided (GWP) 25 Potential savings are driven to a significant extent by use of HFCs in North America Still fairly moderate in value PU Appliance saving small because of high initial conversion to HFCs XPS in developing countries is largest single potential saving in the foam sector worldwide

Decision XXIV/7 Task Force Members with other sector expertise Dave CatchpoleHTOC – Co-chair, UK Robert WickhamHTOC – Member, USA Joseph SenecalHTOC – Consulting Expert, USA Keiichi Ohnishi CTOC – Co-chair, Japan 26

CTOC/HTOC – calculation issues Solvent substitution strategies are often not ‘chemical for chemical’ but involve alternative cleaning systems Solvent industry usage is very dispersed, so tracking uses and the applicable alternatives is difficult Proprietary information within the fire protection sector makes estimation of individual fire suppressants difficult, although overall HFC uptake has been estimated by one producer at about 1% of total HFCs by weight Also halons, through large ozone depletion, are net global coolers and the warming and cooling do not offset each other – making it difficult to establish a baseline Fire suppressant selection is based on the assessment of individual risk so broad-based replacement scenarios are inappropriate 27

Decision XXIV/7 – Fire Protection 28 Commercially available alternatives to ODS Halocarbon alternatives (HFCs, a fluoro-ketone), inert gases, CO 2, water mist technologies, inert gas generators, fine solid particles, powders, water, aqueous salt solutions Alternatives under development Fluoro-ketone blend, 2-Bromo-3,3,3-trifluoropropene (unsaturated HBFC), undisclosed chemical under test Barriers and restrictions Every fire hazard is unique and needs to be assessed by a fire protection engineer (or other person skilled in fire protection technologies) using a logical decision process. There are no barriers to the adoption of environmentally-sound alternatives other than economic in some regions

Decision XXIV/7 – Fire Protection 29 Future needs in fire protection The need for chemical agents remains as inert gases, water mist and other traditional agents are not suitable for many fire protection applications. HFCs have filled that role and, since about 2005, a fluoro-ketone (FK) has become more accepted. Alternatives to HCFCs in the future The use of HCFCs in fire protection is declining, with the only total flood agent being provided for the maintenance of legacy systems that are themselves phasing out. Only HCFC-123 is used in any quantity in portable extinguishers and if the development of 2- bromo-3,3,3-trifluoropropene proves to be commercially successful, it would be the natural replacement for it and halon 1211 – particularly in the aviation industry

Solvents – alternatives & sectors Main alternatives Not in-kind alternatives Aqueous & semi-aqueous cleaning Hydrocarbon solvent cleaning Alcoholic solvents In-kind alternatives, Chlorinated and brominated solvents HFC and HFE solvents Unsaturated solvents (HCFO and HFO) Main sectors covered Metal cleaning Electronics cleaning Precision cleaning 30

Solvents - barriers & restrictions 31 Some conversion to (semi-)aqueous cleaning is likely but there are limits to its use because some products/processes simply can’t tolerate water. Hydrocarbons and alcohols are effective solvents but are extremely flammable. Chlorinated solvents will be available as replacements for HCFCs in a variety of cleaning applications. AEL should be strictly controlled due to the to their toxicity concerns. n-PB is an effective and useful solvent but widespread growth in its use would seem difficult to justify because of toxicity concerns.

Solvents - barriers & restrictions 32 HFC and HFEs are also good candidates for the replacement for HCFCs Some modification may be necessary due to their mild solvency All of HFCs and HFEs have zero ODP. Their GWP values vary depending on their structures. The relatively high cost of these materials limits their use Unsaturated substances such as HFOs and HCFOs are also becoming available for solvent use They are a new class of solvents specifically designed with a low atmospheric lifetime They can replace HCFCs, HFCs as well as HFEs Opportunities for selection

Decision XXIV/7 – Draft Report Summary The language of the Decision has created some challenges in addressing the requests for information The quantification of amounts of those substances with negative environmental impact depends on the impact assessed. The evidence suggests that the negative impact of delaying action can be more significant than the benefit of selecting the ‘most favourable option’ Barriers and restrictions in some sectors require further investigation as the experience with emerging alternatives increases Parties may wish to consider clarifying the list of sectors to be included in the scope of Decision XXIV/7 – for instance: medical aerosols, sterilants, MDIs, methyl bromide alternatives A Final Report is expected to be available in early October, on the assumption that any additional data is made available in good time 33