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Methods for Synthetic Greenhouse Gases Regulations

Glossary

AC: Air Conditioning
Bank: This is the accumulation of the SGG installed or imported in new equipment each year, minus any leakage, retirements or exports.
Bulk: Bulk gas is any SGG in a container that is not pre-charged in equipment^{Footnote 1}
CFCs: Chlorofluorocarbons
Emissions: For ETS compliance, emissions are defined as any imported SGG^{Footnote 2}
ETS: Emissions Trading Scheme
GHG: Greenhouse Gases
GWP: 100-year Global Warming Potential
HCFCs: Hydrochlorofluorocarbons
HFCs: Hydrofluorocarbons
IPCC: Intergovernmental Panel on Climate Change
MAC: Mobile Air Conditioning
MEPS: Minimum Energy Performance Standards
PFCs: Perfluorocarbons
SGGs: Synthetic Greenhouse Gases covered by the Kyoto Protocol (HFCs, PFCs and SF₆)
SRAC: Stationary Refrigeration and Air Conditioning

Introduction

As part of the development of the New Zealand Emissions Trading Scheme, draft Climate Change (Synthetic Greenhouse Gas) Regulations must be developed for consultation that set out methods for those involved in synthetic greenhouse gas (SGG) sectors to monitor and calculate emissions from their activities.

Emissions of the SGGs – hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF₆) – have fundamental differences from other emissions associated with industry and industrial processes. The sources are very disparate and typically small with long lag times between gas utilisation and eventual emission – particularly for HFC refrigerants and for SF₆. (Apart from PFCs from aluminium smelting – covered by other regulations – there is only one PFC emitted in New Zealand as a component of two minor refrigerants.)

Other ETS regulations have used a format of default and unique emissions factors. It is not likely that this format would work for SGGs given their pure chemical nature and use. Instead, this report proposes draft methods by which importers, exporters and manufacturers can estimate the quantity of SGGs they have introduced to or removed from New Zealand through their activities in a calendar year.

The ETS allows for the allocation of emission units for activities that export or destroy SGGs. These are termed ‘removal activities’. This report proposes draft methods on how persons undertaking such activities should precisely estimate the amount of SGGs being exported or destroyed. An amendment to the existing Climate Change (Other Removal Activities) Regulations 2009 would be developed in order to provide eligibility for those activities.

Officials are aware of a number of potential gaming risks that need resolution within the regulations, such as banking SGGs before the ETS commencement date for these gases. For example, eligibility for removal units could require evidence that the SGGs being exported or destroyed are sourced either from waste collection with a time limit or from SGGs that have had an ETS obligation placed on their import earlier.

The Act provides for voluntary reporting for SGG importers and exporters from January 2011 and mandatory reporting for importers from January 2012. The requirement to surrender units (pay for credits) for imported SGGs will apply from January 2013. The option to claim units for exported SGGs will also be available from January 2013. The only HFCs excluded in equipment currently are metered dose inhalers and household goods of a passenger of a ship or aircraft that are not intended for gift, sale, or exchange.

Officials have helpfully provided the table below to summarise the sometimes complicated wording and cross-references of the Act. In the transition to 2013, there will be an important role for the Ministry for the Environment and industry associations in capacity building to facilitate participation in the ETS.

More information on the Emissions Trading Scheme can be found on the website www.climatechange.govt.nz. For guidance as to the stringency of estimating techniques, the Climate Change (Stationary Energy and Industrial Processes) Regulations are available at http://www.climatechange.govt.nz/emissions-trading-scheme/regulations.html

[Insert caption if available]
Year	Importing Schedule 3	Exporting Schedule 4	Reporting or Application Due	Surrender date
01 Jan – 31 Dec 2011	Voluntary reporting	Voluntary reporting	31 March 2012	None
01 Jan – 31 Dec 2012	Mandatory reporting	Voluntary reporting	31 March 2013	None
01 Jan – 31 Dec 2013	Mandatory reporting and surrender	Voluntary reporting and application	31 March 2014	31 May 2014
01 Jan – 31 Dec 2014	Mandatory reporting and surrender	Voluntary reporting and application	31 March 2015	31 May 2015

With regard to identifying methods for estimating SGG quantities, the purpose of this report is to provide information on:

the available methods for participants to determine the quantity of SGGs in bulk or in equipment
the available methods for participants to determine the chemical composition of SGGs in bulk or in equipment
the typical variation of chemical composition and methods to adjust estimated activity to allow for that variation
the available methods to link exported or destroyed SGGs to a verifiable waste gas collection activity or to its early importation
testing processes (including standards and verification procedures) that can be used to assess the (CO₂ equivalent) emissions from SGG activities and samples
technical specifications for certainty on the domestic destruction of any SGGs
the data that would be necessary for an ETS participant to hold in order to complete the tests and meet any verification requirements.

Bulk Chemical Imports

This section considers the measurement and reporting options for the HFCs/PFCs/SF₆ bulk chemical importers who will be the key ETS points of obligation.

In 2008, 411 tonnes of bulk HFCs/PFCs were imported into New Zealand and this quantity has ranged from 246 to 507 tonnes since 2001. In 2008, 2.3 tonnes of bulk SF₆ were imported into New Zealand and this quantity has ranged from 0.6 to 2.5 tonnes since 2001 (CRL Energy 2009).

Bulk SGG importers maintain accurate weight records (at least to the nearest kilogram) because these gases are relatively expensive commodities and a commercial imperative drives that need for accuracy. Consequently, CRL Energy assesses that it would be unrealistic to expect importers (or exporters) to maintain systems that have a greater degree of accuracy for compliance with the ETS.

Ivan Tottle from Polychem is chair of the Importers and Wholesalers Group (IWG), a committee of the Refrigeration and Air Conditioning Companies Association (RACCA). He has stated that for all HFCs the majority comes in the form of disposable “jugs” (13.6 kg for HFC-134a) and the pack size is constant for the same gas type. The industry accepts the stated net weight as the actual weight for billing purposes.

There is some import of HFCs in larger packs such as 1 tonne tanks and larger ISO tanks but the proportion is less than 20%. Where gas comes in an ISO tank it is typically packed off into 1 tonne tanks (often for use by the larger manufacturers; actually containing only 600–700kg). Weights documented by the gas manufacturer are accepted without the need for checking (Tottle 2010). Temperzone imports large quantities of refrigerant for its AC equipment manufacturing and again accepts the manufacturer weights (Curran 2010).

In contrast, both ABB Switchgear (equipment manufacturer) and Transpower do weigh SF₆bottles, more for their corporate GHG reporting (including SF₆Memorandum of Understanding for Transpower) than as a check on the manufacturer or suppliers. ABB regularly sends relatively small quantities of SF₆to the Korean gas manufacturer for purification (or for destruction if the quality is too degraded) (Lisowski 2010). ABB Service (a separate company) handles the gas consolidation, recycling and collection for destruction for Transpower’s four service companies (Shann 2010).

There is a question to be resolved of how the remaining “heel” in gas shipping containers sent back to the overseas manufacturer or supplier is to be treated in the ETS. 'Netting out' would be the sensible procedure (although it may not work well with the legislation separating imports and exports). Polychem and Temperzone report that they return large tanks after evacuating to an empty condition so there is a “zero” heel (Tottle 2010) (Curran 2010). IWG led a project to study heel in jugs (funded by the Ministry for the Environment Sustainability Fund). For HFC-134a, 67 jugs were sampled and 1.5% was measured as the average heel. However, this is not relevant for the ETS because the jugs are not returned overseas.

ABB said that its records show the average heel in its 40kg SF₆cylinders returned to the Korean manufacturer is 0.25 to 0.5kg, depending on the draw-off rate, although more than 1kg has been reported in some overseas studies (Lisowski 2010).

The chemical composition of refrigerant mixtures and of SF₆ appears never to have been questioned mainly because the high level of quality control from gas manufacturers ensures optimum operation of the various SGGs in their applications. One HFC supplier said he had never been asked about the subject of variability within a blend like R404A or R410A (Tottle 2010). Temperzone had never been questioned about variability of its R410A gas mixture and commented that Honeywell (the manufacturer) supplies for each shipment a Certificate of Analysis. These show that the specification for the composition is within a range of + 0.7% (Curran 2010).

Transpower commented there is an international standard for reclaimed/recycled SF₆gas (Shann 2010). IEC60480 has a 99.3% purity standard for most gas supplied and a 97% purity (3% air) limit for reused gas that is suitable for most applications.

CRL Energy assesses there is no need for compliance purposes to require chemical analysis of any imported SGG or mixture unless a new gas is imported with no manufacturer evidence of its composition. Apart from testing for refrigerants exported for destruction (covered in the next section), it would be difficult to justify the relatively high testing costs when the commercial imperative for quality control already provides adequate assurance. The inventory calculations (which determine New Zealand’s Kyoto liability) do not require a greater level of accuracy on gas composition. Those calculations are based on quantities that have much higher uncertainties than those associated with the composition of pure gases.

Draft Method of Calculating Emissions from Importing SGG Bulk Chemicals

The following information must be collected and recorded in relation to each SGG bulk chemical for the year [a spreadsheet calculator will simplify this for SGG mixtures]:

(a) the total number of kilograms of the SGG imported by the person in the year, including the ASHRAE names and quantities of any mixtures containing the SGG, as recorded at the customs point.

Emissions for the year in relation to each SGG must be calculated in accordance with the following formula:

E = A × GWP / 1000

where–

A is the total number of kilograms of the SGG imported by the person in the year

E is the emissions of the SGG (for the purpose of the Act) in tonnes of CO₂ equivalent

GWP is the 100-year Global Warming Potential for the SGG as specified below in Appendix A

ASHRAE names and compositions must be based on the figures in Appendix A (or the wider range in the ASHRAE reference) or manufacturer evidence or chemical analysis results must be provided for any other refrigerant mixtures.

An emissions return submitted by a person must record the person’s total emissions from the activity of importing bulk chemical SGGs in the relevant year, calculated by adding together the emissions for each SGG calculated above.

If an imported refrigerant mixture is not included in Appendix A (or the wider range in the ASHRAE reference), evidence of manufacturer composition would need to be provided. In the extremely rare event this was not available, the calculation would need to be made on the basis of a chemical analysis. This analysis would need to be accompanied by evidence that the sampling and analysis have been conducted to methods accredited to ISO 17025 and estimates of the uncertainty level for each relevant component gas. Such methods are not yet established in Australia or New Zealand, but it is likely they will be based on a general method like that described in ASTM D6806.

Bulk Chemical Exports

This section considers the ETS measurement and reporting options for HFCs/PFCs/SF₆ bulk chemical exporters, including those who export SGGs for recycling or destruction.

In 2008, 13 tonnes of bulk HFCs/PFCs were exported from New Zealand, including 5 tonnes exported by Refrigerant Recovery NZ Ltd (RRNZ) for destruction in Australia. The remainder appears to be mostly used to supply refrigerants to Pacific Island customers. In 2008, 0.1 tonne of bulk SF₆ was exported from New Zealand for recycling or destruction and this quantity has ranged from 0.05 to 0.2 tonne since 2001 (CRL Energy 2009).

John Bowen (Cowley Aquaheat) is widely recognised as an industry expert and is a member of the RRNZ Board. There has been a steady increase in the refrigerant amounts (and HFC proportions) collected for destruction in recent years. If this trend continues, there may be insufficient funds from the voluntary import levy scheme on bulk HCFCs and HFCs to pay for the collection and destruction (especially if a major increase in recent months turns out to be a new trend).

He stated that Coffey Environments (Melbourne) undertakes both a qualitative (mainly for oil impurities) and a quantitative analysis on each 8 to 9-tonne consignment of 1 tonne containers RRNZ sends for destruction approximately every 4 months (Bowen 2010). The quantitative analyses have been provided as the basis of inventory calculations since shipments began in 1999 (CRL Energy 2009).

Coffey Environments has helpfully provided a great deal of information on its procedures (Nigido 2010). The testing currently provided to RRNZ is described as qualitative testing because there is not yet an accredited technique for quantitative measurement of HFC mixtures. The purpose of the analysis has been “indicative” and also to provide the plasma destruction operators with an overview of plant efficiency. It was not designed to be comprehensive or representative of all the potential refrigerants nor provide quantitative amounts from a purity point of view. Coffey Environments has NATA accreditation to ISO 17025 for halons, but not for refrigerants. It uses a refrigerant standard (manufactured in the USA) to calibrate its gas chromatograph. It has figures for within-laboratory and between-laboratory repeatability of duplicate analyses for specific halon gas components but not refrigerants.

It is discussing a number of questions regarding testing accuracy with Environment Australia:

What range of refrigerants may need to be tested and whether the lab has the capacity to test them?
What level of accuracy is needed?
What methodology should be used and has it been validated and verified?
What level of uncertainty will be accepted?
Do best practice procedures need to be followed?

Coffey is looking at developing and accrediting its in-house method for this purpose and describes the task as “enormous”, with little progress so far. It is unaware of any laboratories in Australia that provide refrigerant testing as a commercial service. However, some laboratories conduct quality testing of product they re-package from bulk tanks to smaller cylinders.

Current disposal charges include the analysis charge and it is normal practice to analyse one sample only. If duplicate analyses were requested for greater regulatory certainty, Coffey estimates the extra time for the lab technician would be A$220 plus additional administrative time to compile results.

If someone sent Coffey a sample to check the composition of a mixture, it says the minimum charge would be A$1600 for one sample but if the customer sent a batch of samples, the price per sample would come down as there would only be one set-up cost. Samples could be sent in “lecture bottles” which are purpose-designed gas cylinders.

New Zealand refrigerant is imported to Australia for destruction at the National Halon Bank under the Australian Government’s Used Substance Licence. At this stage it is unclear how any destruction credits under the Australian ETS would be handled for RRNZ.

Coffey does not analyse or destroy SF₆ but other facilities are set up for this.

Double counting potential The proposed separation of importing and exporting bulk SGG reporting should ensure there is no double counting within New Zealand. Since RRNZ is simply exporting the SGGs, any destruction credits in Australia would presumably be sorted out within the Australian GHG inventory to prevent international double counting.

Practicality of determining early importation A cost benefit analysis needs to be conducted on the need to link exported or destroyed SGGs to a verifiable waste gas collection activity or to its early importation. It would appear unnecessary (and impractical) to consider the collection of waste gases could be linked to the import of post-2012 SGG imports. Instead, it would be considered prudent to maximise the incentives for waste gas collection. The potential impact of allowing credits for all exported waste SGGs on New Zealand’s Kyoto liability would be very small relative to the huge quantities being imported.

There may be a more realistic concern about “banking” bulk refrigerants before the 2013 liability is imposed and then exporting the gas for credits in 2013 or beyond. The prospect of such behaviour changes needs to be put in context that only up to 8 tonnes of non-waste bulk HFCs have been exported in recent years compared with 300 to 500 tonnes being imported. Calculations also need to be done to see what the potential gains would be, assuming importers had the overseas customers to sell the gases to when they could find a ready market within New Zealand. Those gains would have to be weighed against the transport and holding costs to the importer.

It is more realistic to expect that importers are likely to build up their stocks of the various SGGs as the 2013 liability approaches. This is particularly true for the very high GWP SF₆, where a $30 per tonne CO₂ price is likely to result in an approximately thirty-fold increase in the price per kilogram to one major user. For HFCs, Ivan Tottle (Polychem) said it was inevitable that chemical importers would accumulate stock. However, he would be surprised if anyone would carry more than 3–6 months stock because of the extra costs of holding it. He could see the possibility of a chemical importer profiteering by holding stock before 2013 and then selling it in 2013 at market rates with the equivalent of the emissions obligation included in the price (Tottle 2010).

If a cost benefit analysis shows that it is justifiable to require bulk SGG export removals to be certified as imported post 2012, the simplest way might be to have a check that the exporter has an import liability at least as great as the export level in terms of CO₂ equivalence. It may be possible to have a transitional regulation requirement of quarterly returns for export removals to check whether the crediting opportunity for say SF₆ is being used for gaming purposes.

A requirement for post-2012 certification of non-waste bulk SGGs may create inequities in the compliance costs for smaller importers compared with larger ones with the advantages of scale regarding paperwork.

Draft Method of Calculating Removals from Exporting SGG Bulk Chemicals

The following information must be collected and recorded in relation to each bulk chemical SGG for the year [a spreadsheet calculator will simplify this for SGG mixtures]:

(a) the total number of kilograms of the SGG exported by the person in the year, including the ASHRAE names and quantities of any mixtures containing the SGG, as recorded at the customs point; and

(b) in the case of refrigerant mixtures exported for recycling or destruction, a chemical analysis of the composition of the mixture.

Removals for the year in relation to each SGG must be calculated in accordance with the following formula:

R = B × GWP / 1000

where–

R is the removals of the SGG (for the purpose of the Act) in tonnes of CO₂ equivalent

B is the total number of kilograms of the SGG exported by the person in the year

GWP is the 100-year Global Warming Potential for the SGG as specified below in Appendix A

A removals return submitted by a person must record the person’s total removals from the activity of exporting bulk chemical SGGs in the relevant year, calculated by adding together the removals for each SGG calculated above.

Any exported refrigerant mixture not included in Appendix A without evidence of manufacturer composition would need to be calculated on the basis of a chemical analysis. This analysis would need to be accompanied by evidence that the sampling and analysis have been conducted to accredited methods (although such methods are not yet established in Australia or New Zealand) and estimates of the uncertainty level for each relevant component gas.

If an exported refrigerant mixture is not included in Appendix A (or the wider range in the ASHRAE reference), evidence of manufacturer composition would need to be provided. In the case of exported waste SGGs or the extremely rare event the manufacturer composition was not available for a pure mixture, the calculation would need to be made on the basis of a chemical analysis. This analysis would need to be accompanied by evidence that the sampling and analysis have been conducted to methods accredited to ISO 17025 and estimates of the uncertainty level for each relevant component gas. Such methods are not yet established in Australia or New Zealand, but it is likely they will be based on a general method like that described in ASTM D6806.

This method should adequately deal with the estimated heels remaining in “empty” SF₆ bottles and any HFC bulk containers and gas that are returned to a gas manufacturer for recycling or destruction.

Pre-charged Equipment Imports

This section considers the ETS measurement and reporting options for importers of pre-charged equipment containing HFCs/PFCs/SF₆.

In 2008, 170 tonnes of HFCs/PFCs were imported into New Zealand in pre-charged stationary refrigeration and air conditioning (SRAC) equipment, together with 147 tonnes of HFC-134a in mobile air conditioning (MAC) equipment and 57 tonnes of HFC-134a in aerosols and metered dose inhalers (covered in a later section). From 2001 to 2008, all SF₆ was assumed to be imported into New Zealand in bulk gas form but this assumption will be reconsidered after current discussions with equipment importers (CRL Energy 2009).

From the New Zealand GHG Inventory, the HFC bank^{Footnote 3} for the SRAC sector was broken down into seven sub-sectors (CRL Energy 2009). The bank estimates for 2008 are presented to indicate their relative significance for future emissions:

household refrigerators and freezers and dehumidifiers: 250 tonnes (low uncertainty)
self-contained refrigerated equipment used in the retail food and beverage industry: 84 tonnes (medium to high uncertainty)
remote cabinet systems as used in supermarkets and some other food retailers: 175 tonnes (low to medium uncertainty)
household and commercial air conditioners: 471 tonnes (low to medium uncertainty)
transport refrigeration systems: 56 tonnes (medium uncertainty)
dairy farm refrigeration systems: 106 tonnes (medium to high uncertainty)
other refrigeration (mainly industrial and commercial cool stores): 120 tonnes (very high uncertainty).

The MAC sector was calculated to have a bank of 1833 tonnes of HFC-134a in 2008 (CRL Energy 2009).

The fire protection sector was calculated to have a bank of 33 tonnes of HFC-227ea in 2008 (CRL Energy 2009).

The electrical equipment sector was calculated to have a bank of 46 tonnes SF₆ in 2008 (74% held by Transpower).

The practicality issues for reporting are considered for each sector below.

Household refrigerators/freezers/dehumidifiers The number of appliance importers in this sector was assessed to be up to 20 (CRL Energy 2008). Statistics New Zealand summaries of Customs imports (and exports) data have excellent size breakdowns that have been very helpful for inventory purposes. It is assumed that importers are well prepared for reporting procedures and these should be aligned as much as possible with Australian reporting.

Self-contained refrigerated equipment Self-contained retail refrigerators and freezers are charged at the time of manufacture and have very low leak rates. Based on a sample of loosely defined Customs categories, this is a sector covering a vast range of equipment including all frozen food display cases, reach-in refrigerators and freezers, beverage merchandisers and vending machines and large retail display cases that include a self-contained refrigeration unit.

There are also various classifications of water coolers, ice-cream, ‘soft serve’ and ‘slush’ machines, bar fridges, blood bank and laboratory fridges/freezers, ice makers, blast chillers, milk coolers, ice-cream freezers and small cool boxes. Statistics NZ import figures for imported commercial cabinets are unfortunately not as detailed as for the household sector with just a simple breakdown to refrigerator and freezer units (often no distinction between small water coolers and large chiller units).

Skope is the largest New Zealand manufacturer of commercial cooler and freezer cabinets (75% exported to Australia) and the company has provided for inventory purposes very detailed data on unit sizes, sales and refrigerant amounts (CRL Energy 2009). EECA made available sales information for the range of unit types and sizes gathered from its MEPS survey (with brand names removed). An industry expert in this sector (Miller 2010) has also been very helpful in providing an assessment of the whole New Zealand market, including large numbers of commercial refrigeration units not included in EECA’s MEPS survey.

Overall there were considerable difficulties in deciding how to deal with contradictory data for this sub-sector and an estimate of 50 potential points of obligation was highly speculative (CRL Energy 2008). Miller estimated that about 20 companies imported the vast majority of commercial units. Some of these importers are presumably familiar with Australian reporting but it may be difficult to engage the full range of importers in reporting procedures. Skope explained that commercial refrigeration equipment covered by the AS/NZS electrical safety standard is required to have the refrigerant and its quantity marked on the appliance (Eustace 2010). Skope considers it essential that ETS regulations are equitably applied across the whole industry.

Remote cabinet systems Since these systems are all charged in New Zealand with imported bulk chemical, the HFCs would be covered by the ETS.

Household and commercial air conditioners Industry sources (including Bowen 2010) stated that as well as all household AC units, almost all commercial equipment (at least below 20kW) is imported pre-charged with refrigerant. Importers are generally familiar with Australian reporting requirements so it is unlikely there will be difficulties if New Zealand adopts a similar scheme.

Transport refrigeration The main imports in this sector (by HFC volume) are Transcold and Thermo King who import the pre-charged units for refrigerated trucks and rail units. Reporting should not be difficult for these suppliers but it will be difficult to engage with the potentially large number of suppliers of smaller “off-engine” units.

Aircraft, ships and containers are discussed in Alternative Approach D. While it would be impractical to account for all refrigerant movements in and out of New Zealand, it may be possible to account for the net increase in containers because there is one main purchaser/refurbisher of this equipment. It will be difficult to estimate the number of minor container importers and engage with them.

Dairy farm refrigeration systems and industrial and commercial cool stores It has been assumed the diverse range of these systems are all charged in New Zealand with imported bulk chemical, so the HFCs would be covered by the ETS. This will need to be checked with the equipment suppliers.

Mobile Air Conditioning There is a range of views on how readily vehicle importers in this sector could adopt a comprehensive imported refrigerant reporting scheme. MIA indicated that the sheer volume of vehicle imports would make compliance reporting difficult (Kerr 2010). Nevertheless, for new vehicle imports his organisation represented about 25 companies who would find a reporting scheme less difficult than used vehicle importers. There could be up to 2500 used vehicle importers, of which 500 to 600 might be active in any one year. The New Zealand situation is very different from Australia where about 95% of imported vehicles are new (vs about 40% for New Zealand cars in 2008). It would be inequitable to put reporting requirements on just new vehicles because of these difficulties.

MTA considers that no vehicles should be exempted from reporting and that it would not be a huge imposition to add refrigerant reporting to the current safety VIN inspection at the Customs port (Gibbs 2010). There are just three Transport Service Delivery Agents and part of their job is to record information and collect fees.

IMVIA (Vinsen 2010) represents not just the importers of used vehicles but also the inspection agencies and many of the overseas agencies exporting vehicles to New Zealand. They are concerned that if a reporting scheme is introduced, it must be as simple as possible to avoid the potential for the wide range of car importers to be confused by the system and not comply with requirements. They would have a preference for a default refrigerant charge reporting system because even though members would complain, they need the simplicity. VIN inspection is for safety purposes but it could be adapted for this compliance purpose, as it was for the EECA fuel-efficiency rating scheme. They indicated that just four of their larger members are responsible for about 70% of all used vehicle imports. They have the best database on vehicles imported into the country and would use that to assist in the collection of data for reporting.

They may be able to help identify specialised truck importing firms for more information on the difficult sector of refrigerated trucks. However, they noted that there are unlikely to be many imports of smaller refrigerated trucks for the next few years because of recent restrictions placed on used diesel vehicle imports (Vinsen 2010).

Other industry stakeholders in the SRAC sectors consider it would be equitable to include MAC in the reporting system. Application of a fixed fee at the border would not fit easily into the current ETS legislation. However, the Transport Service Delivery Agents (or other industry agencies) may offer a voluntary importing service that takes responsibility for the compliance reporting and units (credits) purchase risk on behalf of the vehicle importer. Presumably, an agency could set a fixed fee (for a certain MAC unit size) that takes into account the unit price risk and the competitive pressure that would develop from other agencies offering such a service. However, MIA, IMVIA and MTA all stressed that if compliance was not made mandatory at the border, there were likely to be major compliance problems with smaller-scale importers.

Fire protection equipment These systems have very low leak rates with most emissions occurring during routine servicing and during accidental discharges. Currently, it is assumed the small amounts of HFC-227ea imported are for servicing rather than in equipment but this will be checked with the main supplier. Reporting should not be difficult for that supplier but it may be difficult to engage with the small number of minor suppliers.

Electrical equipment There are only about four significant importers of equipment pre-charged with SF₆. Some may be reporting in Australia so it should not be a problem to adopt a similar reporting scheme. Transpower stated that currently some of the four suppliers it uses have very detailed reporting (Shann 2010).

Draft Method of Calculating Emissions from Importing SGGs in Pre-charged Equipment

The following information must be collected and recorded in relation to each SGG component contained in pre-charged equipment for the year (a spreadsheet calculator will simplify this for SGG mixtures):

(a) for each equipment type and size containing the SGG, the total number of pieces of that equipment imported by the person in the year; and

(b) for each equipment type and size containing the SGG, the SGG charge in grams, including the ASHRAE names and quantities of any mixtures containing the SGG, as recorded at the customs point.

Emissions for the year in relation to each SGG must be calculated in accordance with the following formula:

E = ((C₁ × D₁) + (C₂ × D₂) + ......) x GWP / 1,000,000

where–

C₁ is the total number of pieces of equipment type/size 1 imported by the person in the year, C₂ is the total number of pieces of equipment type/size 2, etc.

D₁ is the SGG charge in grams for equipment type/size 1, D₂ is the SGG charge in grams for equipment type/size 2, etc.

E is the emissions of the SGG (for the purpose of the Act) in tonnes of CO₂ equivalent.

GWP is the 100-year Global Warming Potential for the SGG as specified below in Appendix A.

An emissions return submitted by a person must record the person’s total emissions from the activity of importing SGGs in pre-charged equipment in the relevant year, calculated by adding together the emissions for each SGG calculated above.

The SGG type (or ASHRAE mixture name) and charge must be as stated on the equipment nameplate or label or in the manufacturer specifications. If the SGG type or charge is claimed to be different from the nameplate/label or there is no nameplate/label, evidence must be provided for the claimed SGG type and charge to be acceptable for audit purposes.

As well as the method above, a default charge method could be developed for refrigerant sectors that have a wide range of imported equipment types if the nameplate/label charge amounts are not readily available for inspection.

Mobile Air Conditioning and refrigerated transport are sectors where the costs and benefits of this approach need to be assessed. The range of charges (from 0.2 to 4 kilograms) might be manageable for different vehicle classes. To assess the costs and benefits of such an approach, officials will require information from industry stakeholders on the current and historical ranges of refrigerant charges in new and imported vehicles.

MIA noted that correspondence with the Japanese Automobile Manufacturers Assn (Kerr 2010) stated that the size of the CFC-12 charge in passenger vehicles was about 700g before it was replaced by 1994 with HFC-134a. The size of the HFC-134a charge in passenger vehicles has been reduced to about 500g by advancing the control of leakage and the operational efficiency of the equipment. There are international discussions on various MAC alternatives, but none is yet in commercial production so there is no realistic alternative for New Zealand MAC systems in the near future.

RECOMMENDATION 1

CRL Energy recommends that officials investigate the costs and benefits of developing a regulation that includes default refrigerant charges for reporting MAC and refrigerated vehicles entering (and leaving) New Zealand. Based on inventory assumptions, the suggested default values would be 700 grams for cars, 1200 grams for trucks, and 2500 grams for both buses and off-engine (smaller) refrigerated trucks.

RECOMMENDATION 2

CRL Energy recommends that officials investigate the costs and benefits of developing a regulation making MAC vehicle compliance reporting (and units or fees payment) compulsory at the Customs border or at entry certification by TSDAs or at first registration because of the significant risk of non-compliance with smaller-scale vehicle importers. Officials should seek a ‘whole of government’ approach by talking with EECA and Ministry of Transport.

RECOMMENDATION 3

CRL Energy recommends that because of reporting difficulties, officials investigate the costs and benefits of developing a regulation that fixed fittings refrigerant (and perhaps some SF 6 in electrical equipment) coming to and going from New Zealand in aircraft, ship and container refrigeration systems be exempted from the ETS.

It would be very difficult to account for the entire refrigerant (and perhaps some SF₆ in electrical equipment) coming to and going from New Zealand in fixed fittings in aircraft, ship and container refrigeration systems. Consequently, it would be difficult to justify the benefits of ETS inclusion of those sources compared with the high compliance costs.

It may be possible to devise regulations that account for the relatively small net increase in container numbers held in New Zealand as assessed for the New Zealand GHG Inventory (CRL Energy 2009). It was estimated that about 2 tonnes of HFCs (with high uncertainty) are added to the equipment stock in New Zealand each year.

Most refrigerated containers (and especially the refurbished ones retained in this country after being sold by shipping companies) are currently serviced or filled in New Zealand from bulk HFC supplies. It remains to be seen whether container servicing in this country (as opposed to one without emissions pricing) will be affected by the ETS.

Pre-charged Equipment Exports

This section considers the ETS measurement and reporting options for exporters of pre-charged equipment containing HFCs/PFCs/SF₆.

In 2008, 59 tonnes of HFCs/PFCs were exported from New Zealand in pre-charged stationary refrigeration and air-conditioning (SRAC) equipment (range 21 to 73 tonnes since 2001), together with 5 tonnes of HFC-134a in aerosols (range 3 to 12 tonnes). In 2008, about 3 tonnes of SF₆ was exported into New Zealand in pre-charged equipment (CRL Energy 2009).

Temperzone reported that its information on refrigerant contained in each exported unit comes from its Bills of Material for each of its products (Curran 2010). It was considered likely the other export manufacturers (Fisher & Paykel and Skope) would have similarly readily available information since all of them report for the Australian market.

Aerosol imports are considered a major difficulty for ETS inclusion in a later section but it should not be too difficult for Arandee, the only aerosol manufacturer, to report its exports. In the past, Arandee has stated that without credits for exported HFCs, it might be uncompetitive against Asian manufacturers.

Draft Method of Calculating Removals from Exporting SGGs in Pre-charged Equipment

(a) for each equipment type and size containing the SGG, the total number of pieces of that equipment exported by the person in the year; and

(b) for each equipment type and size containing the SGG, the SGG charge in grams, including the ASHRAE names and quantities of any mixtures containing the SGG, as recorded at the customs point.

Removals for the year in relation to each SGG must be calculated in accordance with the following formula:

R = ((C₁ × D₁) + (C₂ × D₂) + ......) x GWP / 1,000,000

where–

R is the removals of the SGG (for the purpose of the Act) in tonnes of CO₂ equivalent

C₁ is the total number of pieces of equipment type/size 1 exported by the person in the year, C₂ is the total number of pieces of equipment type/size 2, etc.

D₁ is the SGG charge in grams for equipment type/size 1, D₂ is the SGG charge in grams for equipment type/size 2, etc.

GWP is the 100-year Global Warming Potential for the SGG as specified below in Appendix A.

A removals return submitted by a person must record the person’s total removals from the activity of exporting SGGs in pre-charged equipment in the relevant year, calculated by adding together the removals for each SGG calculated above.

If an exported refrigerant mixture is not included in Appendix A (or the wider range in the ASHRAE reference), evidence of manufacturer composition would need to be provided. In the extremely rare event this was not available, the calculation would need to be made on the basis of a chemical analysis. This analysis would need to be accompanied by evidence that the sampling and analysis have been conducted to methods accredited to ISO 17025 and estimates of the uncertainty level for each relevant component gas. Such methods are not yet established in Australia or New Zealand, but it is likely they will be based on a general method like that described in ASTM D6806.

Insulation Foam Imports/Exports

Internationally, HFCs are increasingly used as replacements for CFCs and HCFCs in foam applications such as insulating, cushioning and packaging. For open-cell foam, emissions of HFCs used as blowing agents are likely to occur during the manufacturing process. In closed-cell foam, emissions occur over a longer period (eg, 20 years).

Rigid foams blown with HFC, HCFC or CFC have superior insulating and foam formulation properties to alternative blowing agents like hydrocarbons or water/CO₂ but are more expensive to produce. HCFC-141b is licensed because of its ozone depleting potential and is due to be phased out in New Zealand by 2015. A HFC-245fa/365mfc mixture is being used by at least three companies but the high price (3 to 5 times higher than HCFC-141b) makes it uneconomic for most purposes.

The inventory study concluded that about 3 tonnes of HFC-245fa/365mfc were used in 2008 and total emissions were 0.8 tonne (CRL Energy 2009). These HFCs are not included in the Kyoto Protocol and so would not be included in the ETS regulations.

HFC-134a was used in small quantities (0.5 tonne per year) from 2000 to 2003 so the assumed annual leakage rate of 4.5%/yr means small quantities are estimated for inventory purposes. It is possible that this HFC and other Kyoto HFCs could be incorporated in imported equipment insulation foam. There is no evidence for this and it would be a major project to seek information from manufacturers of imported equipment or to undertake a sampling and analysis study.

Such a project would be difficult to justify for either inventory purposes or for inclusion in the ETS regulations because the quantities are currently likely to be negligible or zero. Bulk SGGs covered by the Kyoto Protocol would be included in the ETS regulations (ie, HFC-245fa/365mfc would not be included).

RECOMMENDATION 4

CRL Energy recommends that officials investigate the costs and benefits of developing a regulation exempting insulation foam from ETS regulations because of the impracticality of measuring minor SGG quantities imported or exported.

Aerosols Imports/Exports

Around 21 million aerosol packages are sold in New Zealand each year. The majority of these are imported, with the balance being produced by at least four aerosol loading companies. HFC propellants are a high-priced alternative to hydrocarbons (approximately 200 times more expensive) and are therefore used in specialist applications. The applications which are most likely to require an HFC-based aerosol are those where low toxicity and flammability are required. Such applications include:

metered dose inhalers
aerosols used on aircraft (insecticides)
aerosol products used in the underground mining industry
dust-off agents used for computers, ATM machines etc
freeze spray products used to test electronic circuits
solvent cleaning products used in the electronics industry.

Metered dose inhalers are specifically excluded from the ETS in the Act.

Currently, the GHG Inventory team knows of only two importers of solvent cleaning products (CRL Energy 2009). Consequently, a highly uncertain approximation is made to assess this emissions source for inventory purposes, partly based on Australian experience. Nevertheless, by assuming 1% of all non-MDI aerosols contain HFC-134a, it is a significant emissions source with about 25 tonnes emitted in 2008.

Several years ago, an inspection of Customs data revealed some other potential importers of aerosols containing HFCs. For assessing the costs and benefits of including aerosols in the imported pre-charged equipment regulations, it would be necessary for someone with access to Customs data to contact the wide range of aerosol importers for information on their aerosol propellants. This might reveal that there are relatively few importers of HFC aerosols for the specialised applications above.

RECOMMENDATION 5

CRL Energy recommends that officials investigate the costs and benefits of developing a regulation exempting aerosol cans from ETS import regulations because of the impracticality of measuring SGG quantities imported. They should be included in ETS export regulations because of the ease of measuring SGG quantities exported (currently only one manufacturer). Such exemption/inclusion would depend on an investigation of the potential for loopholes regarding supply or removals.

Future New Zealand Gas Manufacture Facilities

The IPCC Inventory Guidelines (2006, Volume 3, Chapter 3) provide guidance on assessing the emissions from any future SGG manufacturing facility situated in New Zealand. The draft method developed below also includes the possibility of emissions of SGGs associated with other manufacturing processes eg, HFC-23 is a significant emission during the manufacture of HCFC-22 (although use of this chemical is being phased out under the Montreal Protocol). PFC emissions from aluminium manufacture are covered by a specific regulation.

Draft Method of Calculating Emissions from Manufacturing SGG Bulk Chemicals and SGG By-products of other Processes

The following information must be collected and recorded in relation to each SGG bulk chemical manufactured for the year and/or any SGG emitted as a by-product of another manufacturing process (a spreadsheet calculator will simplify this for SGG mixtures):

the total number of kilograms of the SGG manufactured at the facility in the year, including the ASHRAE names and quantities of any mixtures containing the SGG
the total number of kilograms of the SGG emitted at the facility in the year, including the manufacturing emissions and any handling emissions of the final product.

Emissions for the year in relation to each SGG must be calculated in accordance with the following formula:

E = (F + G + H) × GWP / 1000

where–

F is the total number of kilograms of the SGG shipped from the facility in the year.

G is the total number of kilograms of the SGG emitted during manufacturing at the facility in the year.

H is the total number of kilograms of the SGG emitted during handling at the facility in the year.

E is the emissions of the SGG (for the purpose of the Act) in tonnes of CO₂ equivalent.

GWP is the 100-year Global Warming Potential for the SGG as specified below in Appendix A.

ASHRAE names and compositions must be based on the figures in Appendix A (or the wider range in the ASHRAE reference) or chemical analysis results must be provided for any other refrigerant mixtures.

An emissions return submitted by a person must record the facility’s total emissions from the activity of manufacturing bulk chemical SGGs (and/or emitting any SGG by-products) in the relevant year, calculated by adding together the emissions for each SGG calculated above.

If a manufactured refrigerant mixture is not included in Appendix A (or the wider range in the ASHRAE reference), evidence of manufacturer composition would need to be provided. In the extremely rare event this was not available, the calculation would need to be made on the basis of a chemical analysis. This analysis would need to be accompanied by evidence that the sampling and analysis have been conducted to methods accredited to ISO 17025 and estimates of the uncertainty level for each relevant component gas. Such methods are not yet established in Australia or New Zealand, but it is likely they will be based on a general method like that described in ASTM D6806.

Future New Zealand Gas Destruction Facilities

The IPCC Inventory Guidelines (2006, Volume 3, Chapters 7 and 8) provide guidance on assessing the emissions from any future SGG destruction facility situated in New Zealand. They include checks to be made to avoid double counting or overlooking emissions.

Draft Method of Calculating Emissions from Destroying SGG Chemicals in New Zealand

The following information must be collected and recorded in relation to each SGG for the year:

the number of kilograms of chemicals for each batch entering the destruction facility in the year
the mass proportion of each SGG component in each batch of chemicals being destroyed (as determined by the chemical analysis of each batch)
the destruction emission factor (proportion emitted) for each SGG component at the facility
estimates of any handling losses at the facility before the destruction process.

Emissions for the year in relation to each SGG must be calculated in accordance with the following formula:

E = (((I₁ × J₁) + (I₂ × J₂) + ......) x K + L) x GWP / 1000

where–

E is the emissions of the SGG in tonnes of CO₂ equivalent

I₁ is the number of kilograms of chemicals in batch 1 entering the destruction facility, I₂ in batch 2 etc.

J₁ is the mass proportion of the SGG in batch 1 entering the destruction facility, J₂ in batch 2 etc.

K is the destruction emission factor (proportion emitted) for the SGG at the facility.

L is the estimate of any handling losses for the SGG at the facility before the destruction process.

GWP is the 100-year Global Warming Potential for the SGG as specified below in Appendix A.

An emissions return submitted by a person must record the person’s total emissions from the activity of destroying SGGs in the relevant year, calculated by adding together the emissions for each SGG calculated above. The chemical analyses would need to be accompanied by evidence that the sampling and analysis have been conducted to methods accredited to ISO 17025 and estimates of the uncertainty level for each relevant component gas. Such methods are not yet established in Australia or New Zealand, but it is likely they will be based on a general method like that described in ASTM D6806.

For crediting (removals) purposes, the destroyed amount for each SGG would be calculated as the difference between the SGG amount fed into the facility and the destruction/handling emissions for that SGG. The total destroyed amount of SGGs in CO₂ equivalents would be calculated by adding the removals of each SGG.

Acknowledgements

The author is very grateful to the industry stakeholders and others who have given information and advice that have contributed to this report. Officials at Environment Australia and the Australian Department of Climate Change have been particularly helpful in providing information on their reporting schemes.

References

ADCC (2008) National Greenhouse and Energy Reporting (Measurement) Technical Guidelines 2008 v1.1, Department of Climate Change, Australia.

ANSI/ASHRAE (2007) Standard 34-2007, Designation and Safety Classification of Refrigerants, American National Standards Institute / American Society of Heating, Refrigerating and Air Conditioning Engineers. www.ashrae.org/technology/page/1933

ASTM (2007) Standard D6806 – 02(2007) e1, Standard Practice for Analysis of Halogenated Organic Solvents and their Admixtures by Gas Chromatography.

Bowen KJ. (2010) Personal communication on his experience in the commercial refrigeration and AC industry and refrigerant waste collection.

CRL Energy (2008) Synthetic greenhouse gases and the Emissions Trading Scheme, report to the Ministry for the Environment.

CRL Energy (2009) Inventory of HFC, PFC & SF6 Emissions for New Zealand 2008, report to the Ministry for the Environment.

Curran J. (2010) Personal communication on Temperzone’s assessment of the commercial AC industry.

Eustace C. (2010) Personal communication on Skope’s assessment of the self-contained commercial cabinet sector.

Gibbs P. (2010) Personal communication on the Motor Trade Assn assessment of the MAC industry.

IPCC (1996) Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories; Workbook 2.1 ― Industrial Processes, Intergovernmental Panel on Climate Change. www.ipcc-nggip.iges.or.jp

IPCC (2006) 2006 IPCC Guidelines for National Greenhouse Gas Inventories, Intergovernmental Panel on Climate Change. www.ipcc-nggip.iges.or.jp

IEC 60480 (2004) Guidelines for the checking and treatment of sulphur hexafluoride (SF₆ ) taken from electrical equipment and specification for its re-use.

ISO 17025:2005 General requirements for the competence of testing and calibration laboratories.

Kerr P. (2010) Personal communication on the Motor Industry Assn assessment of the MAC industry.

Lisowski E. (2010) Personal communication on assessment of ABB’s assessment of the SF₆ industry.

Miller P. (2010) Personal communication on Arrow Refrigeration’s assessment of the overall self-contained commercial cabinet sector.

Nigido E. (2010) Personal communication on Coffey Environments’ assessment of HFC testing for waste refrigerant gases.

Shann J. (2010) Personal communication on Transpower’s assessment of the SF₆ industry.

Tottle I. (2010) Personal communication on Polychem’s assessment of bulk HFC imports.

Vinsen, D. (2010) Personal communication on the Imported Motor Vehicle Industry Assn assessment of the MAC industry.

Appendix A – Detailed 100-year Global Warming Potentials* for SF 6 and commonly used ASHRAE named refrigerant mixtures

[Insert caption if available]
	HFC-23	HFC-32	HFC-125	HFC-134a	HFC-143a	HFC-152a	PFC-218	Other**	Total GWP
GWP 100yr (IPCC 1996)	11700	650	2800	1300	3800	140	7000	0
R23	100%								11700
R134a				100%					1300
R403B: 5% R290, 56% R22, 39% R218							39%	61%	2730
R404A: 44% R125, 52% R143a, 4% R134a			44%	4%	52%				3260
R407C: 23% R32, 25% R125, 52% R134a		23%	25%	52%					1530
R408A: 7% R125, 46% R143a, 47% R22			7%		46%			47%	1940
R410A: 50% R32, 50% R125		50%	50%						1730
R413A: 9% R218, 88% R134a, 3% R600a				88%			9%	3%	1770
R416A: 59% R134a, 39.5% R124,1.5% R600				59%				41%	770
R417A: 46.6% R125 50% R134a 3.4% R600			46.6%	50%				3.4%	1960
R422A: 85.1% R125, 11.5% R134a, 3.4% R600a			85.1%	11.5%				3.4%	2530
R507A: 50% R125, 50% R143a			50%		50%				3300

* For consistency until 2012, GWPs are set according to IPCC (1996)

** Hydrocarbons (such as R290 and R600a) and hydrochlorofluorocarbons (mainly R22) are not considered to have GWPs for GHG accounting purposes. ASHRAE names for refrigerant compositions are from ANSI/ASHRAE (2007), which should be consulted for less common mixtures; convention is upper case suffix letters for mixtures and lower case for individual components.

SF₆100-year GWP is 23,900

Total GWP has been calculated as the weighted average of individual GWPs for each refrigerant component, rounded off to the nearest 10 units. It would be desirable to have harmonisation with any Australian regulations that are developed in future. Australia requires HFC emission estimates from industrial facilities but ADCC (2008) and related documents do not include any calculations for refrigerant mixtures.

Back to footnote reference 1 Bulk SGG containers include cylinders, tanks and disposable containers such as “jugs”.

Back to footnote reference 2 In inventory terms, these are termed “potential emissions” that do not take into account the time lag before the SGG is used to replace leakage or to charge new equipment and the subsequent emission or recovery when that equipment is retired. SGG exports are covered in regulations as removals.

Back to footnote reference 3 There is insufficient information to accurately estimate the accumulated HFC bank for each sub-sector but these approximate figures serve to indicate relative significance.

Methods for Synthetic Greenhouse Gases Regulations

Glossary

Introduction

Bulk Chemical Imports

Draft Method of Calculating Removals from Exporting SGG Bulk Chemicals

Pre-charged Equipment Imports

Draft Method of Calculating Emissions from Importing SGGs in Pre-charged Equipment

Pre-charged Equipment Exports

Draft Method of Calculating Removals from Exporting SGGs in Pre-charged Equipment

Insulation Foam Imports/Exports

Aerosols Imports/Exports

Draft Method of Calculating Emissions from Manufacturing SGG Bulk Chemicals and SGG By-products of other Processes

Future New Zealand Gas Destruction Facilities

Draft Method of Calculating Emissions from Destroying SGG Chemicals in New Zealand

Acknowledgements

References

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