THE Australian Refrigeration Association has made a submission to the Federal Department of the Environment regarding their Review of the Ozone Protection and Synthetic Greenhouse Gases Management Act (OPSGG MA).

The OPSGG MA is the Act that gives expression to the Montreal and Kyoto Protocols in Australia. It is the central piece of legislation determining the practices of the refrigeration and air conditioning industry. It specifically prohibits the intentional release of HFC & HCFC refrigerants. HCFCs are Ozone Depleting Substances. HFCs (and HCFCs) are high global warming materials that are the focus of the current review of the Montreal Protocol.   
 
The submission itself is complex because the topic is complex. The summary provided below is highly critical of the options and documents offered by the Department of the Environment for the reasons explained. To fully appreciate our concerns one must consider the source of those concerns: http://www.environment.gov.au/protection/ozone/legislation - review
 
Purpose:  The OPSGG Review asks the wrong question. The question that should be asked is: “How should regulation of and guidance to the HVACR industry be provided by the federal government”?  The Review focuses on how Australia should phase down HFC refrigerants without recognising that this policy development requires recognition of the refrigerants that will replace HFC refrigerants. We need to consider the regulatory changes to enable HFC phase down including the ways and means of enabling and encouraging the industry to transition to low GWP refrigerant based technology.  
 
Context & Scope:  The Review fails to explain that HFC emissions will become a large proportion of global CO2 / CO2e emissions if HFC use and emissions are not phased down.  It is clear that there will be global agreement to this important international initiative and Australian regulatory requirement by way of amendments to the Montreal Protocol.  Australia is capable of and must show leadership in the achievement of this important task. If we don’t it will not happen as effectively as it could. We should not expect others to support this important policy if we don’t. There is major economic value to Australia in reduced use and emissions of HFCs through the use of natural refrigerants based technologies.
 
Externalities and Economics:  The Review fails to recognise that HFC emissions are an externality and should be treated as such.  The high environmental cost of HFC emissions and the costs to reduce HFC emissions can and should be borne by the HVACR industry. The Review fails to recognise that the current OPSGG MA and its administration does not address the commercial incentives for contractors and scrap metal dealers to cause high HFC emissions due to lack of enforcement.

Our view is that Australia can reduce the cost of the HVACR industry by $10B PA; perhaps $150B in cost savings over the period to 2036. About $8B of annual savings will be delivered by refrigerant selection and the use of low cost, highly energy efficient HVACR technology. This is the potential of the Review. Clearly this potential is far greater than the costs & benefits offered by the Review and the proposed HFC phase down options.

Natural Refrigerants:  The Review fails to recognise the value of natural refrigerants in replacing HFCs. We have provided to DoE and its advisers, and they have access to, extensive proof of the value of NRs in all sectors, but ignore it. The explanation that this is a constitutional limitation should not enable the federal government to avoid showing the regulatory leadership to recognise the high value of natural refrigerant-based technology. It is nonetheless comprehensively ignored.  
  
Enforcement:  The Review fails to recognise that the lack of enforcement of the OPSGG MA is a fundamental driver to HFC emissions because there is no risk for contractors to profit from intentional emissions. It also fails to recognise that end of equipment life emissions are rampant because of failure to degas prior to shredding even though the Expert Group recommends better end of life management regulations and practices.
 
New Technology: The Review fails to recognise that Australia is a leader in HVACR innovation that could make a major contribution to the use of HVACR technology that does not give rise to HFC emissions. There is a significant export development opportunity in this regard.
    
Cost Benefit Assessment: The Review fails to recognise that the cost of the HVACR industry, in Australia, could be reduced by $10B pa. It focuses on a series of options for HFC emissions reduction that fall well short of the opportunity to reduce HFC emissions by at least 50% by 2030 and in so doing reduce the cost of Australia’s HVACR services dramatically.
 
Flammability and Toxicity: The Review perpetuates the myth that hydrocarbon refrigerants are more flammable than synthetic refrigerants. The fact is that all refrigerants are flammable excepting CO2 air and water.  It fails to recognise the toxicity of synthetic refrigerants.
 
Work Health & Safety: The Review argues that WH&S is a state responsibility that the OPSGG MA cannot address. This is a fundamental error that gives rise to a series of inaccurate assertions and assumptions. Most importantly the view that the OPSGG MA cannot address WH&S considerations because of the alleged constitutional constraint.
 
In fact the amendments to the Montreal Protocol can and should be interpreted as requiring the use of low GWP refrigerants that require new WH&S safety considerations. The Review also fails to recognise that the vast majority of the HVACR industry wants nationally consistent HVACR licensing.
 
The Review correctly recommends a high degree of education and training to enable transition to low GWP refrigerants but fails to recognise that governments at all levels have a major role in this regard, particularly by way of nationally consistent HVACR industry licensing.
 
We note in our submission a series of factual errors in the WH&S report provided to the DoE.
 
Training:    The Review has little to say about HVACR training despite the central role it plays in the impact of the OPSGGM and the performance of the industry.  It is clear that government leadership is required in this regard and the OPSGG MA can play an important role by making funding available and by guiding the industry as to the training and educational requirements.   
              
Bias:   The proposed options and the supporting documents are heavily biased in favour of outcomes that will serve the synthetic refrigerants industry. They are similarly biased against both the natural refrigerant-based technologies and the innovation that is obviously available, but ignored.
The synthetic refrigerants industry generates about $18 B pa in revenue worldwide on behalf of a relatively small number of multinational companies (all synthetic refrigerants are imported whilst natural refrigerants are largely locally manufactured). The equipment manufacturers and suppliers that offer equipment designed to use synthetic refrigerants generate about $150B pa in revenue worldwide. It is entirely clear that the synthetic refrigerants industry has a great deal to loose if HFC refrigerants are replaced by natural refrigerants.
A direct consequence of the relative strength of the synthetic refrigerants supply chain is that there is a large number of people and organisations that speak on their behalf and denigrate natural refrigerants. Inevitably a consultant in this field, in seeking to interview the members of the industry will experience the high presence of synthetic proponents and the relatively low presence of natural refrigerant proponents.

However technology assessment and emissions reduction is not a democratic matter. The commercially driven opinion of the synthetic refrigerants industry does not make it right. A far more balanced, science and evidence based, and ambitious treatment of the Review is required.  

Recommendations
The ARA will provide recommendations for change to the OPSGG MA in a subsequent submission. In the mean time we have recommended that the time available for submissions be extended by at least one month and much more importantly that the review be rebased and restarted to recognise the need for federal government leadership in the HVACR industry.

You can view the full submission here

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