1. INDIA HCFC Production Sector: Key Issues
Ruma Tavorath
Sr. Environment Specialist World Bank

2. Gross Production of HCFCs: Consumption and Feedstock
Total
Consumption (Emissive Use)
Feedstock (PTFE)

3. Accelerated Phase-out Schedule
Year
% of Phaseout from Baseline (avg 2009 and 2010)
2013
Freeze
2015
10%
2020
35%
2025
67.5%
2030
Full phaseout*
2040
100% phaseout
* 2.5% of the baseline allowed for servicing – to be reviewed in 2025

4. Loss of Profit due to accelerated phase-out
This assumes production = consumption. Actually, production + consumption / 2 = baseline. Given that India has high exports – loss of profit would be larger than what is depicted here.

5. Background
India produces HCFC-22 (production ~45,000mt; consumption~11,000 ; exports ~30,000mt)
Decision XIX/6 on accelerated HCFC phase-out initiated the second phase of ODS phase-out and recognized the link between HCFCs and climate change
Opens the door for blending financial mechanisms (GEF; CF; CIF) and focusing on improved EE initiatives, clean alternatives etc
CFC Production phase-out: (accelerated)
Lessons learned from CFC Phase-out:
Requisite Policy framework
Coordination between consumption and production to minimize negative impacts (recognized and being encouraged)
Programmatic phase-out
Existing institutional and monitoring framework; pricing

6. Externalities
Increasing demand for HCFC-22 for RAC and for PTFE nationally and worldwide; (economic growth)
Large supply of HCFC in international and domestic market
Price differentials; import licenses in place; potential for illegal trade
Availability of substitute gases and technologies at realistic and affordable prices
GWP of alternatives is now a question – emphasis to reduce climate footprint of different end-uses – Cost?
Subsidization by CDM (incineration of HFC23 for HCFC-22 production facilities).
Post 2012 scenario? Wait for 20th MOP and Copenhagen…..

7. Challenges for production phase-out
Compensation for swing plants that have already received funding for CFC production phase-out? Funding for preparation?….Continuing debate…..
Short time frame – 2010 to freeze (amendment of policy, monitoring and management framework ; quota system for producers; technical audits; calculation of baseline)
Incentivizing early phase-out and phased approach to phase-out (higher ODP) is encouraged – How to operationalize;
Options of closure (environmental clean-up); conversion or continuation (feedstock use; (use of poor quality of HCFC22?)
Calculation of lost profit compensation
Additional resources for climate cost – Availability? Access?
Stakeholder workshop end 2009