F-gas Regulation is Facing Major Updates

In April 2022, the European Commission has released the proposal on fluorinated greenhouse gases (F-gas), which would amend Directive (EU) 2019/1937 and repeal Regulation (EU) No 517/2014. This Regulation aims to further tighten the control on hydrofluorocarbons (HFCs) and fluorinated greenhouse gases (F-gas). If the revised Regulation gets approved, it will significantly influence enterprises that export fluorinated gases to the EU as well as enterprises that involve in pre-charged equipment such as refrigeration, air conditioners, and heat pump equipment charged with hydrofluorocarbons.

Fluorinated greenhouse gases are human-made chemicals that are very strong greenhouse gases (GHG). Fluorinated greenhouse gas emissions amount today to 2.5% of total GHG emissions, in the Union, but have doubled from 1990 to 2014 in contrast to other GHS emissions, which have fallen. To achieve the goal of limiting the global average temperature within 1.5°C, emission decreases for fluorinated greenhouse gases of up to 90% by 2050 globally compared to 2015 should be needed. Therefore, the proposal was launched for purpose of reducing fluorinated greenhouse gas emissions.

Compared with the current F-gas Regulation, the new Regulation makes the following changes:

• Requirements for quota application become stricter. Only importers and producers that have experience in trading activities of chemicals for three consecutive years prior to the quota allocation period shall be allowed to submit a declaration. (Note: producers based outside of EU can apply for quotas by designating an EU-based OR (only representative), fluorinated greenhouse gases in pre-charged equipment shall also apply for quota.);
• The allocation of quotas is subject to the payment of the amount due which equals to three euro for each tonne of CO2 equivalent of quota to be allocated. Importers and producers shall be notified via the F-gas Portal of the total amount due for its calculated maximum quota allocation for the following calendar year and of the deadline for completing the payment.
• Requirements for the third-party audit become stricter. The current Regulation requires an audit report on the placing on the market of 10,000 tonnes of CO2 equivalent or more of hydrofluorocarbons, while in this Proposal it is 1,000 ton/y.
• Stricter penalties on illegal activities, including fines, confiscation or seizure of illegally obtained goods or of revenues gained by the undertaking from the infringement, and suspension or revocation of authorizations. The Member States shall envisage maximum administrative fines of at least five times the market value of the concerned gases or products unlawfully traded and placed in the market.

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Reference

EU Proposal