‘Developed nations want India to leapfrog to a technology which even they have not accepted’

Give us a brief background of the simmering debate between developed and developing countries on phasing out hydrofluorocarbons

In the fourth meeting of Montreal Protocol (a multilateral treaty to protect the ozone layer) in Copenhagen in 1990, the parties agreed to phase out the use of ozone depleting substances (ODSs) like chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs) used in refrigeration and air-conditioning sectors. CFCs and HCFCs contain chlorine which depletes the ozone layer. CFCs were phased out by 2010. Developed countries took a pledge to freeze the production and consumption of HCFCs by 2004 and totally phasing it out by 2020. Whereas developing countries including India consented to freeze them by 2013 and phasing it out completely by 2030. At that time, hydrofluorocarbons (HFCs) emerged as the refrigerant of choice to replace CFCs and HCFCs. And now when the developing countries have started shifting to HFCs by putting technology in place, the developed countries are asking them to phase out HFCs, too. They want to amend the protocol to regulate the use of HFCs. The Montreal Protocol is for substances that deplete the ozone layer. The UNFCCC and Kyoto Protocol deal with GHGs, including HFCs. Therefore, India and China are saying that HFCs cannot be brought under the Montreal Protocol and it is better dealt under the Kyoto Protocol. The Kyoto Protocol is a protocol to the United Nations Framework Convention on Climate Change (UNFCCC or FCCC) that set binding obligations on the industrialised countries to reduce their emissions of greenhouse gases. The financial mechanisms to deal with ODSs and GHGs are different. 

Then why are developed countries are asking for a phase out of HFCs?

Developed countries are saying that HFCs have a very high global warming potential (GWP). This means that HFCs are capable of trapping enormous amount of infrared radiations in the atmosphere and can cause greenhouse effect a thousand times stronger than carbon dioxide. There is a catch here. After using HFCs for years and already polluting the atmosphere, the developed countries want the developing countries to shift to use gases with low GWP like HFC-1234yf and HFC-32. The politics is that the technologies to make these new refrigerants are patented by only a few companies like DuPont, Arkema, Honeywell and Daikin, which are all based in developed countries. So if the developing countries follow, they will have to shell out enormous amounts of money for the transition. In fact, the developed countries themselves have not yet fully commercialised systems operating with these refrigerants and are extensively using HFCs like R-410A with high GWP and longer lifespan in atmosphere. But they want to burden the developing countries like India with new generation HFCs and asking us to leapfrog to a technology which have not yet fully accepted and used. They want to use the developing countries like guinea pigs. There are too many uncertainties and cost implications in this.

If the parties knew that HFCs have high global warming potential, why did they choose it as a ‘phase in’ option in the first place?

At that time, the concern was to protect the ozone layer and get rid of ozone depleting substances. And there was no other option but to go for HFCs or use natural refrigerants like ammonia, hydrocarbons (HCs) and carbon dioxide. Many enterprises in the developing world took the HFC option.

How much would the transition cost? Who will fund it?

The money for phasing out ODSs is funded through contributions from developed countries. The fund is managed by the Multilateral Fund (MLF). MLF usually funds with some caps on the total cost. The funding is given to developing country enterprises. Still a developing country has to bear some significant cost of the total project. In India, the hardware and consumables imported for such conversions are exempted from any import duty. This is a significant loss to the exchequer. The enterprises also have to bear some additional costs in the process of conversion.

What is India’s plan?

India moved away from CFCs to HCFCs and HFCs around 2003. Now we are focussing on the phase out of HCFC-22 which is the only refrigerant used in air-conditioners. We are mostly shifting to HFC- 134-a in place of CFC-12 in refrigerators and car air-conditioners. The market of ACs is booming in India by 22 per cent annually.  India has two options in the HCFC phase-out management plan, either to choose HFCs such as R410A which has high GWP or the natural refrigerant propane, which has negligible GWP. India and other developing countries already have technology to use R410A. Small-scale manufacturers in India support this refrigerant as they find it easier to use and it is not flammable. The only problem with using natural refrigerant is that we need additional safety measures to deal with its flammable property. And we would be able to use it for domestic purposes only. Exporting would be a problem because the importing countries may not have the expertise and manpower to handle propane. This would limit the expansion plans of big players. Godrej is the one of the very few companies in the world which have developed natural refrigerant propane called R290. Propane has no ozone depleting potential and its GWP is also very low.

If Godrej has the technology why cannot other companies replicate it in developing countries?

Godrej’s research and development for new technology to use propane was funded by German development agency—GIZ (Gesellschaft für Internationale Zusammenarbeit). Godrej used their internal resources and previous experience of using HCs in refrigerators to successfully launch HC-based ACs in India. Most of the other big international players like LG, Whirlpool or Panasonic depend on the directions of their parent companies. Godrej does not have any such constraint. 

Has the Indian government taken any position on the phase out of HFCs?

The Indian government has not taken any position to mandate the industries on the choice of refrigerants. It has left the choice to industry.

But the contribution of HFCs to climate change is less than one per cent. Then why so much brouhaha over it?

If we continue to use gases with high GWP, the burden of global warming will be passed on to the developing world. There are some studies carried out in the US which claim that the contribution of HFCs in developing countries will become significant in the next few decades. While this may be true to some extent, there are many unresolved issues like technology transfer and funding mechanism.

Why is the European Union stalling the sale of carbon credits earned by developing countries by capturing and destroying HFC-23 under its Clean Development Mechanism (CDM)?

HFC-23 is a potent greenhouse gas. It is a by-product of manufacturing HCFC 22. Since HFC-23 has very high GWP, many HCFC-22 producers opted to capture and destroy HFC-23 to earn carbon credits. Many developed countries supported this at that time as they were in dire need of carbon credits to compensate for their inadequacies within their countries to limit greenhouse gas emissions as per Kyoto Protocol. But this clean act led to something unpleasant. Since there is higher incentive for destroying HFC-23, the companies in developing countries have started manufacturing more of HCFC-22. The greenhouse gases are assigned GWP values based on their warming effect with respect to CO2. For instance, GWP of CO2 is one, while that of HFC-23 is 11,700. The carbon credits earned by destroying one tonne of HFC-23 stands at 11,700 as opposed to one credit earned by mitigating one tonne of CO2. There are around 19 HCFC-22 production centres in developing countries. Of this, 11 are in China and five in India. The technology to capture and destroy also came from developed countries, mostly from Europe. Since CDM programme started around 46 per cent of credits have been awarded to these 19 companies. It is also true that CERs earned from HFC-23 also made the CDM projects in other areas for CO2 emission mitigation, including renewable, unviable. Realising this, the EU has decided to stop buying HCF-23 credits from January 2013. Still, estimates show that substantial HCF-23 emissions originate from non-CDM HCFC-22 production facilities in China.   CDM is a legal mechanism under UNFCCC and developing countries took the advantage of the situation for quick CERs at that time.

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