EIA warns that revised European regulation on ozone-depleting chemicals leaves loopholes for illegal trade

As the European Union enters the final phase of revising its ozone depleting substances (ODS) regulation, EIA is cautioning that the new regulation does not take account of past mistakes and continues to allow loop holes for illegal trade in controlled chemicals. It also allows for production and export of large quantities of ODS to developing countries precisely at a time when efforts are underway to try to reduce and eliminate consumption of these chemicals.

EIA has more than a decade of experience in tracking the illegal trade in ODS, especially chlorofluorocarbons (CFCs) used in refrigeration. In 1997 EIA was the first group to expose the scale of CFC smuggling into the EU. In 2001 revealed how CFCs manufactured in the EU were turning up on the black market in many developing countries.  

"Rather than learn from past mistakes, the EU has determined to repeat them by allowing loopholes in licensing requirements and permitting the export of vast amounts of HCFCs, banned in the EU, to developing countries, precisely at the time they are trying to curtail their consumption" Said Fionnuala Walravens EIA's global environment campaigner.

ODS movements into and out of the EU are generally tracked using a licensing system allowing the European Commission to monitor and control trade in these restricted substances.   However the new regulation will not require licensing for several types of imported ODS: imports intended for transit through the EC, and imports under the temporary storage, customs-warehousing or free zone procedure remaining in the customs territory for 45 days or less. The question is how will anyone know if they are sold in the EU or where they go, if they are not subject to a license or other tracking system

The loopholes in licensing means that some ozone-damaging chemicals will be able to move in,  out and through the EU under the radar and risks allowing past mistakes to reoccur. Investigations carried out by EIA in the late 1990s  documented how the loophole of allowing EU importers to repackage ODS for onward export led to a series of illegal CFC shipments being sent to the US. It is clear that such loopholes should be closed eliminating the remaining exemptions for producing, importing and exporting ODS.

The guiding principals of the Regulation state that export of products & equipment containing HCFCs after a ban has come into force, and ODS for servicing, should be prohibited in order to avoid the building-up of banks of ODS in other countries. However the details of the regulation contradict this by permitting exports to continue for several substances & uses after the date that they have been banned in the EU.

Proposals by the European Parliament to put an early stop to HCFC exports to developing countries were rejected by the EU Member States in favour of text that allows the production and export of very large volumes of HCFCs until 2020. Allowing large amounts of HCFCs to be exported to developing countries risks increasing dependency on these damaging chemicals and hinders the uptake of less damaging alternatives. The revised regulation allows for the production and export of the equivalent of about 379,000 tonnes of HCFC-22 between 2010-2019. This is equates to about 20,894 ODP tonnes or 687.6 million tonnes CO2 equivalent. The potential global warming emissions from this level of exports is well over the UK's total greenhouse gas emission in 2006.

These exports will increase the already enormous pile of ODS accumulated in existing equipment around the world. HCFCs accumulated in developing countries are expected to reach about 1.8 million metric tonnes in 2015.

Not only will these gases have enormous environmental impacts but they are being exported to developing countries at a time when they are expected to take their consumption back down to 2009-2010 levels and begin phasing down consumption in 2013. Moreover, it is likely that EU taxpayers will later have to pay to help developing countries get rid of this pile of HCFCs under the Montreal Protocol funding programme.

Virgin HCFCs will be banned from use in the EU from January 2010. After this time only recycled HCFCs are supposed to be used within the EU; the allowing continued production of 'new' (virgin) HCFCs up until 2020 will make it relatively simple for them to be disguised and sold as recycled, using the 'placing on the market for repackaging and export' loophole .  EIA investigations into Chinese CFC exporters in the late 1990s revealed unscrupulous exporters deliberately reducing the purity of CFCs to label them as recycled in order to circumvent trade restrictions.
EIA is calling for these loopholes to be closed before the final text is signed off. Failing this EIA will monitor these loopholes and bring them to the attention of the EU if it appears that they are being misused for illegal trade.

The Environmental Investigation Agency is a non-profit NGO based in Washington, DC and London that is committed to investigating and exposing environmental crime, and to promoting lasting solutions. EIA has been actively tracking the global illegal trade in ozone-depleting substances (ODS) since the mid-1990s to provide information to the Montreal Protocol and other relevant bodies, as well as to training and regional cooperation workshops.