THE steep growth in consumption of HCFCs in developing countries suggests that the illegal trade in these refrigerants will outstrip that seen during the phase-out of CFCs, says a new report.
The risk assessment report published today by the London-based Environmental Investigation Agency (EIA) and United Nations Environment Programme (UNEP), confirms recent reports carried by ACR News that an illegal trade in HCFCs already exists and has the potential for huge growth if left unchecked. There is a genuine concern that as the phase-out of HCFCs begins to take hold in developing countries there will be a sharp spike in black market trade which would threaten compliance with the Montreal Protocol.

According to the report, consumption of HCFCs grew twice as fast in the decade leading up to the establishment of the baseline than had occurred previously with during CFC phase out over the corresponding length of time.

The market size for HCFCs is also much larger. In the mid-90s global CFC consumption peaked at about 189,000MT per annum. Current global HCFC consumption is about 641,331MT per annum and still growing. At its peak the illegal trade in CFCs represented about 20% of legitimate trade. If the same situation were allowed to occur for HCFCs the consequences would be dire, warns the report.

Over the last decade production of HCFCs in Article 5 (developing) countries has grown rapidly, especially in China and India. Production of HCFCs in these developing countries overtook that of developed countries for the first time in 2004. China is responsible for most of this growth; in 1997 it produced 1,500 ODP tonnes of HCFCs, and by 2009 this had risen to 28,500 ODP tonnes. Between 2002-2007 annual production and consumption of HCFCs in China increased by an average rate of 28% and 26% respectively.

While a complete ban on the use of HCFCs to service acr equipment comes into force in Europe on January 1 2015, under the Montreal Protocol other developed countries must phase out production and use by 2020. A reduction of 75% of baseline came in on 2010, with 90% by 2015 and 0.5% of baseline being allowed for servicing equipment until 2030.

Developing countries like China and India have 10 years longer to achieve phase out

While R22 is the main HCFC used in air conditioning and refrigeration equipment, the phase-out also includes HCFC blends such as R401A, R401B, R402A, R402B, R406A, R408A and R409A and the foam blowing agent R141b.

ACR News has reported recent high profile cases of illegal HCFC imports, notably in India and the USA, but illegal activity has been increasing over the last three years and Europe may be a target. A large number of systems in Europe are known to still be running on R22 and it is thought that demand for HCFCs for servicing remains higher than legal supplies can satisfy.

'With the cost of HCFC22 in the EU ranging from €18-30/kg and the chemical available from developing countries at about €2/kg, excluding shipping, the incentive for smugglers to step in to meet the demand is clear,' said Paul Newman of the EIA.

The report charts an incident In 2009 when an attempt was made to export supposedly 'recycled' HCFC22 into a European country, even though the country of origin did not have any licensed HCFC reclamation facilities. The report also claims that up to 10 small ships a day are ferrying small consignments of HCFCs to southern Europe from ports bordering the EU.

'There's little doubt that the emergence of a global black market in illegal HCFCs is a very real and significant threat,' added Newman. 'What's different this time around is that we have the prior experience gained in combating CFC smuggling.'