hydrochlorofluorocarbons (hcfc) phase out plan...

TRADE AND INDUSTRY CHAMBER

FUND FOR RESEARCH INTO INDUSTRIAL DEVELOPMENT,

GROWTH AND EQUITY (FRIDGE)

HYDROCHLOROFLUOROCARBONS (HCFC) PHASE OUT PLAN FOR SOUTH AFRICA

10 APRIL 2012

328 Long Avenue, Ferndale, 2194 South Africa; PO Box 197, Ferndale, 2160 South Africa; Tel: (011) 886 5709; Fax: 086 684 2735; Cell: 082 953 7977

E-mail: [email protected]; Website: www.dnw.co.za

mailto:[email protected]

http://www.dnw.co.za/

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TABLE OF CONTENTS

EXECUTIVE SUMMARY ............................................................................................................. i 1 INTRODUCTION ................................................................................................................1

1.1 Background Information .............................................................................................1

1.2 ODS Policy, Legislative, Regulatory and Institutional Framework .................................1

1.2.1 Status of Ratification of Amendments to the Montreal Protocol .............................. 2

1.2.2 ODS Legislation/Regulations ....................................................................................... 2

1.2.3 Legal and Policy Framework ....................................................................................... 3

1.2.4 Voluntary Initiatives .................................................................................................... 8

1.2.3 Voluntary Initiatives .................................................................................................. 12

1.3 Stakeholders ............................................................................................................ 12

1.4 ODS Phase-Out Programme ...................................................................................... 13

1.4.1 Enterprises Converted to an HCFC Technology ........................................................ 13

1.4.2 Refrigeration Servicing Sector ................................................................................... 13

1.5 Lessons Learned ....................................................................................................... 14

1.6 Monitoring of Phase-Out .......................................................................................... 15

2 HCFC CONSUMPTION DATA ............................................................................................ 16

2.1 METHODOLOGY AND VALIDATION ........................................................................... 16

2.2 HCFC CONSUMPTION DATA ...................................................................................... 17

2.3 SECTORAL DISTRIBUTION OF HCFCS .......................................................................... 25

2.3.2 Refrigeration Servicing Sector ................................................................................... 29

3 PHASE-OUT STRATEGY .................................................................................................... 33

3.1 OVERARCHING STRATEGY ......................................................................................... 33

3.2 FIRST STAGE IMPLEMENTATION PROGRAMME ......................................................... 36

3.3 HCFC REFRIGERATION SERVICING SECTOR ................................................................. 37

3.4 TECHNICAL ASSISTANCE ............................................................................................ 38

3.5 OTHER IMPACTS ON THE ENVIRONMENT .................................................................. 39

4 PROJECT COORDINATION AND MANAGEMENT ............................................................... 41

5 ACKNOWLEDGEMENTS ................................................................................................... 43

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HYDROCHLOROFLUOROCARBONS (HCFC) PHASE OUT PLAN FOR SOUTH AFRICA

EXECUTIVE SUMMARY This HCFC Management Phase-out Plan has been prepared by The Government of South Africa with assistance from the United Nations Industrial Development Organisation (UNIDO). It sets out the current situation HCFC consumption situation in South Africa and the strategy, actions and support needed to phase out HCFCs in accordance with South Africa's obligation under the Montreal Protocol. South Africa has significant consumption of HCFCs in several sub-sectors. HCFC-22

Refrigeration and air-conditioning manufacture, assembly and installation;

Refrigeration and air-conditioning service;

Manufacture of extruded polystyrene; and

Aerosol production.

HCFC-141b

Manufacture of rigid and flexible polyurethane foam.

HCFC-142b

Manufacture of extruded polystyrene. South Africa has highly developed refrigeration and air-conditioning service sector and whilst there have been some moves towards non-HCFC based equipment the service demand for HCFC-22 remains high. The calculated baseline HCFC consumption is 369.7 ODP tonnes, based on officially reported consumption data for 2009 and 2010. The total consumption in 2010 was 5,354 metric tonnes (MT).

Article 7 Reporting

Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 Baseline

ODP T 168.4 253.7 173.1 209.9 222.6 355.0 209.2 339.2 400.1 369.7

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Total HCFC Consumption in South Africa 2007-2010 (import-export)

Substance Consumption MT

2007 2008 2009 2010 2011

HCFC-22 3,849.7 2,833.3 3,631.9 3,800.4 ??

HCFC-123 20.0 33.1 25.6 0.0 ??

HCFC-124 12.1 15.9 0.4 -62.0** ??

HCFC-141b 1,295.0 465.8* 1,253.9 1,656.1 ??

HCFC-142b 2.2 16.7 14.8 -40.6** ??

Total 5,179.0 3,364.8 4,926.6 5,353.9 ??

* Possibly due to reporting logistics; ** Nett export

It is notable that the consumption of HCFCs dipped considerably between 2007 and 2008, in line with global recessionary pressure but consumption grew significantly in 2009 to almost the same level as 2007. Anecdotal evidence suggests that demand for HCFCs will continue to grow in 2010.

Consumption Breakdown

Ozone Depletion Potential (ODP) tons 2007-2010 (import-export)

Substance Consumption ODP T

2007 2008 2009 2010 2011

HCFC-22 192.5 141.7 181.6 190.0 ??

HCFC-123 0.4 0.7 0.5 0.0 ??

HCFC-124 0.2 0.3 0.0 -1.2 ??

HCFC-141b 142.5 51.2* 137.9 182.2 ??

HCFC-142b 0.2 1.2 1.0 -2.8 ??

Total 335.7 195.1 321.0 368.1 ??

* Possibly due to reporting logistics; ** Nett export HCFC baseline for compliance

The HCFC baseline for compliance will be the average consumption for 2009 and 2010 and is 369.7 ODP tonnes.

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To meet the required phase out targets and comply with the requirements of the Multilateral Fund (including guidance on the preparation of HCFC Phase-Out Management Plans (HPMPs) the following strategic priorities have been identified:

1. Additional legal instruments to control the supply and demand of HCFCs.

2. Non-investment activity to support control of HCFC import and usage.

3. Investment projects to phase out the use of HCFC-141b in all foam sectors.

4. Investment Project in Refrigeration Manufacturing Sector.

5. Assistance to the Refrigeration Service sector.

6. Technical assistance to develop in-country ODS destruction capability.

The HPMP addresses the issues required to phase out the use of HCFC-141b in the foam manufacturing sector to meet the 2013 freeze and 2015 reduction steps, and further activities in the refrigeration manufacturing and servicing sectors to meet and the 35% reduction step in 2020.

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HCFC Reduction Schedule for South Africa

Project Phase

MP Phase out Requirement

Allowable Consumption

ODP T

Schedule Period

Reduction Required

ODP T

Baseline Baseline established 370 2009-10

Growth Estimated peak consumption

420 2012

Freeze Equal to baseline 370 2013 50

Step 1 10% reduction 314 2015 56


Step 3 67.5 reduction 120 2025 120

Step 4 97.5% reduction 9 2030 111

Step 5 Complete phase-out 0 2040 9

To achieve the 35% reduction step by 2020, South Africa must phase out a total 180 ODP tonnes of HCFC consumption relative to the baseline.

MLF Maximum Funding Eligibility

HCFC-22 Consumption MT 3,849.70

HCFC-141b Consumption MT 1,656.10

HCFC-142b -40.60

Sub-sector HCFC-22 HCFC-141b

Total OEM Service Foam

% HCFC consumed in subsector 20% 80% 99%

Consumption MT 770 3,080 1,656 5,506

HPMP Phase out % 50% 10% 50%

Phase Out Target MT 384 308 828 1,521

Phase Out Target ODP 21.17 16.94 91.09 129

Eligibility 35%

129

Max cost effectiveness threshold $/kg

15.21 4.5 9.7

Maximum Funding US$ 5,855,394 1,385,892 8,032,085 15,273,371

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Funding is intended for the most cost-effective solutions. Amongst others there is a focus on not only reducing ODSs, but also GWPs. If high GWP alternatives are used where low GWP solutions are available, funding might not be approved. Funding is not prescriptive i.e. customers are free to select the most appropriate solution for their circumstances. In principal the funds can be rewarded retrospectively, although this is uncertain, since this may entice customers to postpone phase-out with a view to obtain funding at a later stage. However, a lack of availability of HCFC141b may force early phase out ahead of officially approved phase out plans, which may result in a lost opportunities for funding. Notwithstanding the aforementioned, funding will be considered for all phase-out initiatives implement from February 2012. South African affected industries will be acting in hast in order to benefit from the UNIDO funding. Retro-funding will probably not be considered. In order to expedite matter the following key dates have been agreed:

1. The South African proposal will be presented during April 2012.

2. UNIDO will consider this proposal during July 2012 and provide funding soon thereafter.

3. Next window of opportunity will only be at the end of 2012.

Activities that will be considered for funding are any activity related the change over, i.e. testing, piloting, training etc., would be considered for funding. But standard operations and maintenance will probably not be considered. Only phase-out of existing operations will be considered for funding, hence excluded new manufacturing facilities which use HCFC141b. The SA Government will be the agency applying to UNIDO for funding. Hence, industry needs to cooperate with government in this regard and by provide technical input as a matter of urgency.

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Summary of Phase-Out Strategy and Budget

Item Description Draft Grant

Budget Request

Co-Finance

SA

1 Policy implementation required to control the supply and demand of HCFCs in South Africa

250,000 400,000

Implementation of legislation for the control of HCFCs including quota system and import bans

50,000 250,000

Enhancement of tariff codes to accommodate HCFCs and HCFC based equipment

50,000 150,000

Enhanced support to improve monitoring and reporting 150,000

2 Non-investment activity to support control of HCFC import and usage

650,000 400,000

Enhanced customs training and capacity building 170,000

Public awareness component 80,000

HPMP Coordination 2012-2020 400,000 400,000

3 Investment Project in Foam Sector 6,832,085 0

Conversion of systems houses 3,034,838

Umbrella conversion of 25 PU foam manufactures to Methyl formate technology

541,200

Conversion of 3 PU foam manufacturers to hydrocarbon technology

2,756,047

Conversion of one polystyrene (XPS) manufacturer (demonstration project)

500,000

4 Investment project in RAC sector 5,855,394 0

Provision of basic equipment to replace HCFC-22 manufacturing with HFCs, Hydrocarbons and carbon dioxide technology

5,505,394

Demonstration project in commercial / supermarket refrigeration using non-HFC alternatives (CO2 and hydrocarbons)

350,000

5 Assistance to the Refrigeration Service sector 1,385,892 0

Supporting the setting up of Recovery and Reclamation Facility for HCFCs

735,892

Refrigerants emissions prevention component 500,000

Additional Training scheme for recovery/recycling activities 150,000

6 ODS Destruction 300,000 0

Technical assistance to develop in-country ODS destruction capability

300,000

TOTAL 15,273,371 800,000

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The government of South Africa believes that with adequate support this package of measures

will allow a full and effective phase out of HCFCs. It is important to note that the combination of

investment components, policy implementation and support to service sector are all required to

achieve a balanced and timely phase out with minimum socio-economic impact. Ultimately the

end-user should decide what alternative is most appropriate for their particular application.

Furthermore, customized solutions are necessary for sustainable implementation. These were

not necessarily the same as those utilised in Europe and America.

Government will probably allocate phase-out quotas to companies.

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1 INTRODUCTION

1.1 Background Information

South Africa has a land area of approximately 1.22 million sq km with land boundaries of 4,862 km; Botswana 1,840 km, Lesotho 909 km, Mozambique 491 km, Namibia 967 km, Swaziland 430 km, Zimbabwe 225 km. The country is divided into 9 provinces; Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North-West, Western Cape

It has a coastline of 2,798 km and a mostly semiarid; subtropical along east coast; sunny days, cool nights. It's natural resources include; gold, chromium, antimony, coal, iron ore, manganese, nickel, phosphates, tin, rare earth elements, uranium, gem diamonds, platinum, copper, vanadium, salt, natural gas. South Africa has a lack of important arterial rivers or lakes and therefore requires extensive water conservation and control measures. Other environmental issues include; growth in water usage outpacing supply; pollution of rivers from agricultural runoff and urban discharge; air pollution resulting in acid rain; soil erosion; desertification.

The population of South Africa is approximately 49 million with 62% of the population living in urban areas and 72% of the population connected to the national electricity grid.

South Africa is a middle-income, emerging market with an abundant supply of natural resources; well-developed financial, legal, communications, energy, and transport sectors; a stock exchange that is the 18th largest in the world; and modern infrastructure supporting a relatively efficient distribution of goods to major urban centres throughout the region.

The chemical industry has been identified as a priority industry particularly in relation to its contribution to the development of other industrial sectors.

Growth was robust from 2004 to 2007 as South Africa reaped the benefits of macroeconomic stability and a global commodities boom, but began to slow in the second half of 2007 due to the electricity crisis and the subsequent global financial crisis' impact on commodity prices and demand. Gross Domestic Product (GDP) fell nearly 2% in 2009. Unemployment remains high, i.e. more than a quarter of South Africa's population currently receives social grants.

1.2 ODS Policy, Legislative, Regulatory and Institutional Framework

When South Africa acceded to the Montreal Protocol in 1990 and ratification of its amendments in 1992, the Department of Health was responsible for the implementation of the Protocol, since the Department was also responsible for Air Pollution control. This responsibility was transferred to the Department of Environmental Affairs and Tourism (DEAT) on 1 April 1995. On 28 February 2005, the Minister approved a number of changes to the primary management structure of the department, elevating the air quality and climate change functions of the department to the level of a chief directorate. In September 2005 the Director General (DG) approved the establishment of the various substructures for the Chief Directorate, and in 2011 a further restructuring led to the creation of the Department for Environmental Affairs (DEA) as a separate department.


1.2.1 Status of ratification of amendments to the Montreal Protocol

Amendment Status Date of Accession Into Force

Vienna Convention Acceded 15 January 1990

Montreal Protocol Acceded 15 January 1990

London Amendment Acceded 15 May 1992

Copenhagen Amendment Acceded 13 March 2001

Montreal Amendment Acceded 11 November 2004

Beijing Amendment Acceded 11 November 2004

1.2.2 ODS Legislation/Regulations

It is the responsibility of the national government to apply the provisions of international treaties and protocols such as the Vienna Convention and the Montreal Protocol. The Department of Environmental Affairs (DEA) is the lead department in South Africa for the control of ozone depleting substances as air pollutants and for the management of waste. However various other aspects of the management of chemicals and industrial policy are the responsibility of other Ministries. Other Ministries have therefore been included in the HCFC phase out steering group. Various related activities fall within the responsibilities of different government departments as illustrated in Error! Reference source not found.. DEA has published draft ODS regulations during 2011 and is currently processing comments. Furthermore, legal advice to the department has indicated that the DEA does not have all the necessary legislation and associated regulations to enforce HCFC phase-out. Notwithstanding this fact, that there is a considerable body of legislation governing other aspects of hazardous chemicals.


Table 1: The ozone layer protection related responsibilities of different government departments

DEPARTMENT FOCUS

Department of Environmental Affairs (DEA)

National Focal Point for the Protection of Ozone Layer (Sub directorate Ozone Protection)

UV-B data and research (Weather Services)

Climate change programme

Hazardous waste management

Department of Trade and Industry (the dti)

Technology innovation

Industrial policy

Incentives to support industry competitiveness

National Treasury Custom and Excise – import taxes

Economic Development Department

ITAC – permits to import and export ozone depleting substances

National Department of Agriculture (NDA)

Methyl bromide phase out and use

Department of International Relations and Co-operation (DIRCO)

International agreements

Department of Health (DoH)

Hazardous Substances Act

Environmental Health

Metered dose inhalers (medicines control)

Department of Labour (DoL)

Occupational Health and Safety Act

Department of Higher Education and Training

Training

Department of Minerals and Energy (DME)

Use of ozone depleting substance in mines

Mine Health and Safety Act.

A number of legal instruments are available an applicable to the control of import, consumption and use of HCFCs in South Africa (SA does not produce any HCFCs). These instruments include existing provisions of the Air Quality Act 39/2004, as well as provisions of other legislation. This includes the issuing of import and export licenses, manufacturing licenses and standards, and guidelines for safe handling of ozone depleting substances.

1.2.3 Legal and policy framework

South Africa is a party to the Protocol and its amendments and is therefore obliged to follow the phase out as follows:

http://www.enviropaedia.com/topic/default.php?topic_id=162


Freeze consumption and production in 2013 at the baseline consumption (2009-2010);

Reduce 10% by 2015;

Reduce 35% by 2020;

Reduce 67.5% by 2025;

Allow 2.5% annual consumption during 2030-2040.

Implementation of these phase out requirements will need regulatory and policy provisions in the following areas:

International compliance;

Phase out of use of substances in line with the phase out requirements of the Protocol and its

amendments;

Control of cross border movement of ozone depleting substances;

Safe use of chemical substances;

Monitoring of phase out; and

Support for enterprises to achieve phase out.

1.2.3.1 International Compliance

International agreements are specifically addressed in Chapter 14 of the South African Constitution (Act 108 of 1996) as follows:

“231. (1) The negotiating and signing of all international agreements is the responsibility of the national executive.

(2) An international agreement binds the Republic only after it has been approved by resolution in both the National Assembly and the National Council of Provinces, unless it is an agreement referred to in subsection (3).

(3) An international agreement of a technical, administrative, or executive nature, or an agreement which does not require either ratification or accession, entered into by the national executive, binds the Republic without approval by the National Assembly and the National Council of Provinces, but must be tabled in the Assembly and the Council within a reasonable time.

(4) Any international agreement becomes law in the Republic when it is enacted into law by national legislation; but a self-executing provision of an agreement that has been approved by Parliament is law in the Republic unless it is inconsistent with the Constitution or an Act of Parliament.

(5) The Republic is bound by international agreements that were binding on the Republic when this Constitution took effect.”

In general, international law can take two different approaches:

That specific obligation should be imposed on states and enforced through compulsory

dispute resolution, and that violators should be punished by imposition of trade sanctions;


That the concept of state sovereignty is accepted and an attempt is made to gain consensus

within this system over a period through regular negotiations and by encouraging, rather

than imposing, compliance.

The Vienna Convention and the Montreal Protocol have combined both these approaches. In accordance with these principles, the South African government promotes an approach to ozone layer protection, as a key factor in achieving sustainable development by ensuring that:

South Africa meets all its international environmental obligations as required and that importers and exporters are assisted in meeting internationally-accepted standards of environmental management; International environmental controls are not used as unfair trade barriers against South Africa's products; and South Africa's environmental, social, and economic interests are adequately represented in international forums.

1.2.3.2 Phase out of use of substances in line with the phase out requirements of the protocol and its amendments

Draft regulations (DEA, 2011), "Proposed regulations regarding the phasing out and management of ozone depleting substances in the Republic of South Africa", have been developed under the Air Quality Act (Act 39 of 2004), include the instruments necessary to comply with Decision 54/39(e) of the Executive Committee of the Multilateral Fund (EXCOM):

From the date of promulgation of the regulations, which is expected in 2012, production, supply and importation of ODS which have essentially already been phased out voluntarily will be prohibited. A specific phase out schedule for methyl bromide is included in line with obligations under the Protocol.

The draft regulations were given out for public review and comments are currently being processed. Legal commentary indicated that the DEA do not have the necessary legislation and associated regulations to enforce phase out. Notwithstanding this fact, there is a considerable body of legislation governing other aspects of hazardous chemicals.

South Africa does not produce HCFCs but the import and sale of these substances is restricted as set out below

Level of restriction Date

Equal to baseline 2013

10% reduction 2015

35% reduction 2020

67.5 reduction 2025

97.5% reduction 2030

Complete phase-out 2040


Imports of these substances will be allowed on the basis of a quota system which will limit the amount of material allowed for import by each importer on the basis of his individual baseline less the percentage shown in the table above.

By 2040 a complete ban will be placed on all imports. In addition the imports of controlled substances from non parties are prohibited on promulgation of the regulations in 2012.

The premise of the regulations is that the restriction on import and sale effectively results in the control of manufacturing or assembly of HCFC based refrigeration and air conditioning or production of foams containing these materials.

The Department of Environmental Affairs intends to explore application of this provision to

ensure that phase out of ozone depleting substances occurs in line with the requirements of

the Protocol. Input on planned or existing regulations for ODS destruction and the mandatory

recovery and recycling / destruction of HCFCs.

Public consultation on the proposed regulatory framework will be initiated during 2012.

1.2.3.3. Control of cross border movement of ozone depleting substances

The International Trade Administration Act (Act 71 of 2002), makes provision for cross border control of goods. In terms of this Act, the Minister may by notice in the Government Gazette prescribe that no goods of a specified class or kind or no goods other than goods of a specified class or kind may be:

Imported into the Republic; except under the authority of and in accordance with the

conditions stated in a permit issued by the Commission; and

Exported from the Republic; except under the authority of and in accordance with the

conditions stated in a permit issued by the Commission

For the purpose of these regulations, goods may be classified according to:

Their source or origin;

Their intermediate final destination;

The channels along which they are transported;

The manner in which they are imported or exported;

The purposes for which they are intended to be used;

The method or processes by which they are produced;

The use of non-renewable natural resources in their production and their life-cycle impact

on the natural environment; or

Any other classification method determined by the Minister.

Export regulations in regulation no 1714 on 5 December 2003 and import control regulations in regulation no 3 on 2 January 2004, contain a Schedule 2 on the Montreal Protocol that requires import or export permits for ozone depleting substances in terms of the following provisions:


Goods referred to in Schedule 2 shall not be shipped unless the importer is in possession of

an appropriate valid import permit issued in terms of section 6 of the International Trade

Administration Act, 2002, and in which such goods are specifically described;

Goods referred to in Schedule 2 that arrive at ports of entry in the Republic and for which

the importer cannot produce a valid import permit shall be deemed to have been imported

in contravention of the International Trade Administration Act of 2002.

These regulations have been amended to accommodate the HS2012 tariff codes. The amendments are expected to be published in the first quarter of 2012. ITAC will consider applications for permits based on the requirements of the draft regulations.

1.2.3.4. Safe use of chemical substances

The Occupational Health and Safety Act (Act 83 of 1995) makes provision for the safe use of any materials produced or used in the workplace and includes a general duty to ensure that employees are trained in the use of hazardous materials.

The Hazardous Chemical Substances regulations promulgated in terms of the Occupational Health and Safety Act make provision for a range of requirements in respect of hazardous chemical substances, including labelling and distribution of safety data sheets. These regulations are applicable in all workplaces in South Africa. South Africa is in the process of implementing the Globally Harmonised System of Classification and Labelling of Chemicals.

1.2.3.5 Management of obsolete ODS

The Waste Act (Act 56 of 2008) provides for industry waste management plans to be submitted to the Minister in the case of certain priority waste streams. In cases where waste from phase out needs special treatment, mechanisms will be explored to support the establishment of destruction facilities, where necessary.

1.2.3.6 Emissions control

The Air Quality Act (Act 39 of 2004) makes provision for any substance that may contribute to air pollution to be declared as a priority pollutant, which in turn allows the Minister to require specific control mechanisms to be imposed including the submission of pollution prevention plans to the Minister.

The South African National Standard; SANS 10147 of 1994, contains a code of practice for the reduction of ozone depleting refrigerant emissions, in accordance with the Standards (29 /1993). This standard may be considered for compulsory application.

1.2.3.7 Support for enterprises to phase out

The Industrial Development Corporation (IDC) has a fund to support a transition to a greener economy and it is intended to explore how the IDC can supplement the funding available from the MLF to ensure successful phase out in line with South Africa’s obligations in terms of the Protocol. In addition a competitiveness fund to support improved competitiveness in manufacturing is being developed and could also be used for this purpose.


1.2.4 Voluntary initiatives

The Chemical and Allied Industries Association is the custodian of the global chemical Responsible initiative in South Africa. This initiative forms the basis of sustainable and sound management of chemicals. Product stewardship is a key element of this initiative and requires signatories to ensure that all users of material supplied by them have the appropriate installations to ensure safe use. All the systems houses are signatories to this initiative and will be applying this initiative to the replacement of HCFCs with a new material.

1.2.4.1 International Compliance International agreements are specifically addressed in Chapter 14 of the South African Constitution (Act 108 of 1996) as follows: “231. (1) The negotiating and signing of all international agreements is the responsibility

of the national executive. (2) An international agreement binds the Republic only after it has been approved

by resolution in both the National Assembly and the National Council of Provinces, unless it is an agreement referred to in subsection (3).

(3) An international agreement of a technical, administrative, or executive nature, or an agreement which does not require either ratification or accession, entered into by the national executive, binds the Republic without approval by the National Assembly and the National Council of Provinces, but must be tabled in the Assembly and the Council within a reasonable time.

(4) Any international agreement becomes law in the Republic when it is enacted into law by national legislation; but a self-executing provision of an agreement that has been approved by Parliament is law in the Republic unless it is inconsistent with the Constitution or an Act of Parliament.

(5) The Republic is bound by international agreements that were binding on the Republic when this Constitution took effect.”

In general, international law can take two different approaches:

That specific obligation should be imposed on states and enforced through compulsory

dispute resolution, and that violators should be punished by imposition of trade sanctions;

That the concept of state sovereignty is accepted and an attempt is made to gain consensus

within this system over a period through regular negotiations and by encouraging, rather

than imposing, compliance.

The Vienna Convention and the Montreal Protocol have combined both these approaches. In accordance with these principles, the South African government promotes an approach to ozone layer protection, as a key factor in achieving sustainable development by ensuring that:

South Africa meets all its international environmental obligations as required and that importers and exporters are assisted in meeting internationally-accepted standards of environmental management; International environmental controls are


not used as unfair trade barriers against South Africa's products; and South Africa's environmental, social, and economic interests are adequately represented in international forums.

Phase out of use of substances in line with the phase out requirements of the protocol and its amendments

Draft regulations (DEA, 2011), "Proposed regulations regarding the phasing out and management of ozone depleting substances in the Republic of South Africa", have been developed under the Air Quality Act (Act 39 of 2004), include the instruments necessary to comply with Decision 54/39(e) of the Executive Committee of the Multilateral Fund (EXCOM): From the date of promulgation of the regulations, which is expected in 2012, production, supply and importation of ODS which have essentially already been phased out voluntarily will be prohibited. A specific phase out schedule for methyl bromide is included in line with obligations under the Protocol. The draft regulations were given out for public review and comments are currently being processed. Legal commentary indicated that the DEA do not have the necessary legislation and associated regulations to enforce phase out. Notwithstanding this fact, there is a considerable body of legislation governing other aspects of hazardous chemicals. South Africa does not produce HCFCs but the import and sale of these substances is restricted as set out below

Level of restriction Date

Equal to baseline 2013

10% reduction 2015

35% reduction 2020

67.5 reduction 2025

97.5% reduction 2030

Complete phase-out 2040

Imports of these substances will be allowed on the basis of a quota system which will limit the amount of material allowed for import by each importer on the basis of his individual baseline less the percentage shown in the table above. By 2040 a complete ban will be placed on all imports. In addition the imports of controlled substances from non parties are prohibited on promulgation of the regulations in 2012.


The premise of the regulations is that the restriction on import and sale effectively results in the control of manufacturing or assembly of HCFC based refrigeration and air conditioning or production of foams containing these materials.

The Department of Environmental Affairs intends to explore application of this provision to

ensure that phase out of ozone depleting substances occurs in line with the requirements of

the Protocol. Input on planned or existing regulations for ODS destruction and the mandatory

recovery and recycling / destruction of HCFCs.

Public consultation on the proposed regulatory framework will be initiated during 2012. 1.2.4.2 Control of cross border movement of ozone depleting substances The International Trade Administration Act (Act 71 of 2002), makes provision for cross border control of goods. In terms of this Act, the Minister may by notice in the Government Gazette prescribe that no goods of a specified class or kind or no goods other than goods of a specified class or kind may be:

Imported into the Republic; except under the authority of and in accordance with the

conditions stated in a permit issued by the Commission; and

Exported from the Republic; except under the authority of and in accordance with the

conditions stated in a permit issued by the Commission

For the purpose of these regulations, goods may be classified according to:

Their source or origin;

Their intermediate final destination;

The channels along which they are transported;

The manner in which they are imported or exported;

The purposes for which they are intended to be used;

The method or processes by which they are produced;

The use of non-renewable natural resources in their production and their life-cycle impact

on the natural environment; or

Any other classification method determined by the Minister.

Export regulations in regulation no 1714 on 5 December 2003 and import control regulations in regulation no 3 on 2 January 2004, contain a Schedule 2 on the Montreal Protocol that requires import or export permits for ozone depleting substances in terms of the following provisions:

Goods referred to in Schedule 2 shall not be shipped unless the importer is in possession of

an appropriate valid import permit issued in terms of section 6 of the International Trade

Administration Act, 2002, and in which such goods are specifically described;


Goods referred to in Schedule 2 that arrive at ports of entry in the Republic and for which

the importer cannot produce a valid import permit shall be deemed to have been imported

in contravention of the International Trade Administration Act of 2002.

These regulations have been amended to accommodate the HS2012 tariff codes. The amendments are expected to be published in the first quarter of 2012. ITAC will consider applications for permits based on the requirements of the draft regulations. 1.2.4.3 Safe use of chemical substances The Occupational Health and Safety Act (Act 83 of 1995) makes provision for the safe use of any materials produced or used in the workplace and includes a general duty to ensure that employees are trained in the use of hazardous materials. The Hazardous Chemical Substances regulations promulgated in terms of the Occupational Health and Safety Act make provision for a range of requirements in respect of hazardous chemical substances, including labelling and distribution of safety data sheets. These regulations are applicable in all workplaces in South Africa. South Africa is in the process of implementing the Globally Harmonised System of Classification and Labelling of Chemicals. 1.2.4.5 Management of obsolete ODS The Waste Act (Act 56 of 2008) provides for industry waste management plans to be submitted to the Minister in the case of certain priority waste streams. In cases where waste from phase out needs special treatment, mechanisms will be explored to support the establishment of destruction facilities, where necessary. 1.2.4.6 Emissions control The Air Quality Act (Act 39 of 2004) makes provision for any substance that may contribute to air pollution to be declared as a priority pollutant, which in turn allows the Minister to require specific control mechanisms to be imposed including the submission of pollution prevention plans to the Minister. The South African National Standard; SANS 10147 of 1994, contains a code of practice for the reduction of ozone depleting refrigerant emissions, in accordance with the Standards (29 /1993). This standard may be considered for compulsory application. 1.2.4.7 Support for enterprises to phase out The Industrial Development Corporation (IDC) has a fund to support a transition to a greener economy and it is intended to explore how the IDC can supplement the funding available from the MLF to ensure successful phase out in line with South Africa’s obligations in terms of the Protocol. In addition a competitiveness fund to support improved competitiveness in manufacturing is being developed and could also be used for this purpose.


1.2.5 Voluntary initiatives

The Chemical and Allied Industries Association is the custodian of the global chemical Responsible initiative in South Africa. This initiative forms the basis of sustainable and sound management of chemicals. Product stewardship is a key element of this initiative and requires signatories to ensure that all users of material supplied by them have the appropriate installations to ensure safe use. All the systems houses are signatories to this initiative and will be applying this initiative to the replacement of HCFCs with a new material.

1.3 Stakeholders The key stakeholders involved in HCFC phase-out in South Africa are the following:

Area Key Stakeholders

Government Department of Environmental Affairs (DEA)

Department of Trade and Industry (the dti)

Controls

International Trade Administration Commission of South Africa (ITAC)

South African Revenue Service (SARS)

Customs and Border Management (SARS)

Implementing Agency

United Nations Industrial and Development Organization (UNIDO) National and International consultants

Public awareness and information dissemination

Trade Associations and NGOs

Private and public media, (TV and press)

The Cold Link - refrigeration industry technical publication

Trade and industry Associations

Air Conditioning Refrigeration Industry Council of South Africa (ACRICSA)

Southern African Refrigerated Distribution Association (SARDA)

Chemical and Allied Industries Association (CAIA)

Refrigeration and Foam Sector Working Groups

DAMSA, IMACA, RAMSA, SAACA, SARACCA

Importers

AFROX

KOVCO

A-GAS

Sectoral Education and Training Authorities

CHIETA, MQA, MERSETA


1.4 ODS Phase-Out Programme

During the initial period of the Montreal Protocol, South Africa was not classified as an Article 5 country and was therefore not eligible to access support from the Multilateral Fund. South Africa was reclassified by decision of the Parties in 1997, making it eligible for support from that time. Initially no legislation was used for the phase out of CFCs and other ozone depleting substances. When SA acceded to the Montreal Protocol, representatives of the affected industrial and agricultural sectors agreed to co-operate with the requirements of the Protocol by adopting feasible ozone depleting substance reduction targets. To assist the Department in the implementation of the Protocol, working groups from all affected sectors of the South African Industry were formed. These working groups represented the following sectors: Refrigeration and Air Conditioning; Automotive Air Conditioning; Fire fighting; Solvents; Foams; Aerosols and Methyl Bromide. Industry cooperation was generally good and the initial phase out took place primarily through self regulation. Urgent drivers for phase out are rapidly rising costs and availability, e.g. China will terminate supply by 2015. In 1994 a customs tax of R5 per kg was introduced on all imported CFCs as well as those produced in South Africa's, i.e. by the only production facility at Polifin. The application of the tax effectively doubled the price of some products and this was sufficient incentive to accelerate the phase out program. The larger industries adapted their products to the changing supply and demand for ozone depleting substances worldwide. The various chairpersons of the Working Groups, together with representatives from the Departments of Foreign Affairs, Trade and Industry and Customs and Excise, as well as a representative from Polifin, made up the National Committee for the Implementation of the Montreal Protocol. This committee met when necessary to discuss general matters and served as a forum for cross-pollination of ideas. However, this committee has subsequently been disbanded.

1.4.1 Enterprises converted to an HCFC technology No enterprises have been converted to HCFC technology through MLF funding. To date South Africa has received no assistance from the MLF other than the preparatory assistance funds for the preparation of the HPMP.

1.4.2 Refrigeration servicing sector As with the manufacturing sectors, the refrigeration and air-conditioning sector adapted to (CFC phase-out) without 3rd party assistance.


1.5 Lessons Learned It is clear that South's Africa's industrial infrastructure and governance is capable of reacting relatively quickly and efficiently to changing external constraints such as those brought about by the Montreal Protocol. The phase out of CFCs was achieved by coordinated industry action, but at a significant cost to industry which was inevitably passed on to consumers.

The absence of specific legislation on the import and consumption of ODS / CFCs may have led to isolated instances of stockpiling of CFCs for continued use of equipment, particularly in large refrigeration applications. Anecdotal evidence collected during the HCFC survey suggests that this was the case and that some illegal trade is still ongoing. The accelerated phase out of HCFCs has taken some time to be acknowledged by many industry players. This may be partly due to the perception that South African industry has already gone through significant disruption to phase out CFCs and HCFCs were the alternatives in many cases. It might also be accounted for by a reluctance to make further changes and investments in a period where economic activity has weakened. Multilateral Fund assistance is certainly considered a motivating factor by the majority of industrial sectors. In addition to this a certain amount of re-engagement will be required. The following points have been incorporated into the design of the HPMP:

Some enhancement to the identification capabilities and classification systems might be

needed to properly identify and control the import and uses of HCFCs and equipment which

contain them. South Africa has very long land border providing ample opportunity for illegal

movements and the complexity and variety of refrigeration and air-conditioning equipment

operating with HCFCs is even greater than CFC-12.

Considerable effort is required in fully engaging with end-user stakeholders in the

refrigeration and air-conditioning sector. Ongoing communications and awareness activities

are required through multiple channels due to the changing nature of the sector. Recently

trade association membership has been falling due to the weak economic situation and the

perceived lack of value in membership

It is evident that the training of trainers, and the training of technicians and customs and all

Government departments involved in inspection of ODS should be incorporated in the HCFCs

phase-out activities.

The long-term benefit of professional training is to enhance good service and business

practices in the refrigeration and air-conditioning sectors assisting the sector to switch over

to non-HCFC equipment in a smooth way without causing unnecessary disruption to the

local consumers. South African companies above an employee complement of 50 pay a skills

development levy of 1% of payroll which is used to support training managed by sectoral

education and training authorities.


The service sector will need to be engaged in order to make effective the enhanced

provisions of the Air Quality Act 39/2004. More training workshops for good refrigeration

management practices will be organized for service technicians of the formal and informal

sectors in order to engage fully with stakeholders and properly communicate the availability

of and implications for using alternatives refrigerants

Additional regulation amendments might be required to formalize tariff numbers and

enforce the planned HCFC quota system.

1.6 Monitoring of Phase-Out The national air quality information system, which manages the monitoring of ambient air quality, is currently being further developed to include a web based reporting portal through which listed emitters will be required to submit emission data. This system is being developed in collaboration with industry stakeholders. In so far as reporting may be required in support of the phase out plan it will be incorporated into this project, which will commence in the first quarter of 2012. Phase out will also be monitored on the basis of imports (as collected by ITAC) and use.


2 HCFC CONSUMPTION DATA

2.1 Methodology and Validation The HCFC Survey was conducted by the Department of Environmental Affairs, with the assistance of local consultants, recruited through the UNIDO field office in Pretoria. Two teams were recruited to investigate separately for consumption in the Refrigeration and Air-conditioning sector including service sector and the foam manufacturing sector including large scale appliance manufacturing.

The approach has been to analyze consumption and applications of all HCFCs from top down and bottom up. This included the collection and analysis of data supplied by Government agencies including South Africa Revenue Service (SARS), Department of Environmental Affairs (DEA) and the International Trade Administration Commission (ITAC). All companies on the list of permit holders were cross referenced with data from ITAC and SARS as well as information provided by distributors about their customers (end users). This provided an overall picture of consumption and usage patterns.


The information collected from institutional sources was compared with data collected at the enterprise / user level across all sectors, foam, refrigeration and air-conditioning and service. Several key stakeholder groups contributed to the survey including the Sector Working Groups, established by the DEA as part of the HPMP consultation process.

The initial findings of the first phase of the survey were presented and discussed at Sector Working Group meetings, attended by all parties including the HCFC importers and SARS. Comments and observations were invited from the group and these were taken into consideration in the following phases of work.

2.2 HCFC Consumption Data A compressive survey was carried out in 2010/11 as part of the preparatory work for the HPMP. The actual consumption of HCFCs is somewhat higher than official data indicates because customs tariff structures and import monitoring processes do not record HCFC-141b blended polyols.

Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 Baseline

ODP T 168.4 253.7 173.1 209.9 222.6 355.0 209.2 339.2 400.1 369.7

Total HCFC Consumption in South Africa 2007-2010

Substance Consumption MT

2007 2008 2009 2010

HCFC-22 3,849.7 2,833.3 3,631.9 3,800.4

HCFC-123 20.0 33.1 25.6 0.0

HCFC-124 12.1 15.9 0.4 -62.0

HCFC-141b 1,295.0 465.8 1,253.9 1,656.1

HCFC-142b 2.2 16.7 14.8 -40.6

Total 5,179.0 3,364.8 4,926.6 5,353.9

Consumption Breakdown ODP tons 2007-2009

Substance Consumption ODP T

2007 2008 2009 2010

HCFC-22 192.5 141.7 181.6 190.0

HCFC-123 0.4 0.7 0.5 0.0

HCFC-124 0.2 0.3 0.0 -1.2

HCFC-141b 142.5 51.2 137.9 182.2

HCFC-142b 0.2 1.2 1.0 -2.8

Total 335.7 195.1 321.0 368.1


It is notable that the consumption of HCFCs dipped considerable between 2007 and 2008. Although it is in line with global recessionary pressure, the accuracy could possibly be influenced by the reporting logistics. Anecdotal evidence suggests that demand for HCFCs will continue to grow in 2010. Negative values in usage reflect a net export of substance. Negative usage of HCFC142b, which is not produced in South Africa, is due to net movement of stock. Taking into consideration the ozone depletion potential of the various HCFCs being consumed it is seen that HCFC-22 and HCFC-141b accounted for approximately 70% and 30% by mass and 51% and 49% by ozone depletion potential (ODP) in 2010. HCFC-22 is used in the refrigeration and air conditioning servicing sector and in the manufacture of extruded polystyrene foam (XPS) and in refrigeration and air-conditioning manufacturing, assembly and installation sector. HCFC-141b is primarily used in the manufacture of flexible and rigid polyurethane foams. Other uses include aerosol propellant and some very small amounts used as process agents in manufacturing other compounds. The following industry sectors have been identified as the main consumers of HCFCs in South Africa

Refrigeration and Air-conditioning manufacture and assembly;

Refrigeration and Air-conditioning servicing;

Polyurethane foam manufacture (various applications);

Extruded Polystyrene Foam (XPS); and

Aerosol propellant.

The majority of HCFC-141b is imported by systems houses who supply the majority of end users in the polyurethane foam sector with pre-formulated 2-component foam systems blended for their particular requirements.

The majority of HCFCs consumed are imported by bulk break distributors, although a number of companies import directly foreign suppliers. A total of 81 companies held an import permit for HCFCs or HCFC based equipment in 2010, although not all of these companies exercised their right to import. Disposable cylinders are also commonly used in the refrigeration and air-conditioning service sector. Disposable cylinders manufactured for maximum portability using a thin gauge of material and are designed to be used only once. Smaller contractors prefer this supply method because they are cheap. However the use of disposable cylinders has implications from a cleaner production point of view.


Company Name Type of

Company City

Actom (Pty) Ltd Paarl

Adriaan Joubert Family Trust Pretoria

Aerothane Applications (Pty) Ltd Manufacturer Cape Town

African Oxygen Limited Distributor Germiston

A-Gas (South Africa) (Pty) Ltd Distributor Montague Gardens

AGL Agri-Soil Stellenbosch

Air Duct cc Umhlanga

Air products South Africa (Pty) Ltd Kempton Park

AJH Electrical Enterprises cc Distributor Stikland

All Hours P/C Pretoria



Company City

Anchor Chandling (Pty) Ltd Paarden Eiland

Atlas Consolidated Industries (Pty) Ltd Distributor Edenvale

Bumbo (PTY) Ltd Manufacturer Pretoria

Carrier South Africa (Pty) Ltd Johannesburg

CHC Elastogran (Pty) Ltd Johannesburg

Chemfit Technical Products (Pty) Ltd Distributor Boksburg North

Chemserve Systems (Pty) Ltd Chloorkop

Commercial Cooling Services Port Elizabeth

Contimex SA Muizenburg

Cosmo Africa Logistics cc Durban

Craig International Supplies Pty Ltd Cape Town

Crocodile Guest Lodge cc Distributor Johannesburg

Dilec (Pty) Ltd Installer Johannesburg

Dunham-Bush international(Africa)(Pty)Ltd Distributor Pretoria

Dynachem East Coast (Pty) Ltd Briardene

Dynachem(Pty)Limited Epping I

ENRC Management (South Africa) Pty Ltd Illovo

EuroCool cc Distributor Randburg

Fair Discount (Pty) Ltd Johannesburg

Fire and Security Technique cc Centurion

GMC Airconditioning cc Installer Pretoria

Gree Airconditioners Africa Pty(Ltd) - GACA Midrand

Hoya Hills Optics SA (Pty) Ltd Sandton

Ifihlile Spares Consolidated (Pty) Ltd Halfway House

Industrial Analytical (Pty) Ltd Johannesburg

ISCOSA (Pty) Ltd. Cape Town

Jafim Imports cc Johannesburg

Japan Optical cc Centurion

Kovco (Pty) Ltd Distributor Paarden Eiland

Lambda test Equipment cc Pretoria

Lamineno Fumigation Durban

Landkem (Pty) Ltd Sandton

Long Feng Int'l Trading .cc. Midrand

Macleans Refrigeration Installer Johannesburg

Maverick Trading cc Overport

Mebrom Chemicals (Pty) Ltd Kiber Rock

Merck (Pty) Ltd Germiston

MES Management cc Durban

Metraclark (Pty) Ltd Johannesburg

MYZ Appliances cc Johannesburg



Company City

NL Trading cc Johannesburg

Orient Collection Import (Pty) Ltd Rivonia

Pestlab Specialists cc Durban

Phoenix Racks (Pty) Ltd Cape town

Power Compressor Exchange Holdings (Pty) Ltd Distributor Benrose

Powertorq Distributor Midrand

PPM Airconditioning & Refrigeration Services Stanger/Durban

Prof Soil Fumigation cc Parow

RECO Johannesburg

Red Horse Products (Pty) Ltd Johannesburg

Refrigeration Compressor Spares cc Distributor Johannesburg

Roshni Enterprise cc Crown Mines

S A Paper Chemicals (Pty) Ltd Chloorkop

S.N.K Consulting cc Islando

Sagex A division of Owens Krugersdorp

Sigma-Aldrich (Pty) Ltd Kempton Park

Simitri Specialty Chemicals Chloorkop

Southern Chemicals (Pty) Ltd Sandton

Summit Dynamics cc Epping Ind

Tecsa (Pty) Ltd Distributor Johannesburg

Totaline Importing SA (Pty) Ltd Faerie Glen

US Refrigeration Pty Distributor Florida Hills

Vertical Business & Investment Consulting Distributor Johannesburg

Volcano Agroscience Durban

Watch Tower Bible & Tract Society of SA Krugersdorp

Whirlpool SA Pty Ltd Cape Town

Wilhelmsen Ships Services (Pty) Ltd Durban

Yarcher cc Johannesburg


The majority of HCFC-22 and HCFC-141b is imported by the following 20 distributors and large

end user companies.

Largest importers and users MT 2009/10

Company Name HCFC-141b HCFC-22 HCFC-123 Total

Aerothane Applications (Pty) Ltd 40 0 0 40

African Oxygen Limited 0 33 9 41

A-Gas (South Africa) (Pty) Ltd 525 1,462 17 2,004

AJH Electrical Enterprises cc 0 20 0 20

Atlas Consolidated Industries (Pty) Ltd 600 0 0 600

Bumbo (PTY) Ltd 60 0 0 60

Chemfit Technical Products (Pty) Ltd 0 100 0 100

Crocodile Guest Lodge cc 15 0 0 15

Dilec (Pty) Ltd 10 397 0 407

Dunham-Bush international(Africa)(Pty)Ltd

0 20 0 20

EuroCool CC 1 52 0 53

GMC Airconditioning CC 0 33 0 33

Kovco (Pty) Ltd 0 1,199 0 1,199

Macleans Refrigeration 0 4 0 4

Power Compressor Exchange Holdings (Pty)

3 54 0 57

Powertorq 0 78 0 78

Refrigeration Compressor Spares CC 0 93 0 93

Tecsa (Pty) Ltd 0 47 0 47

US Refrigeration Pty 0 16 0 16

Vertical Business & Investment Consulting 0 31 0 31

TOTAL 1,254 3,639 26 4,918

The majority of HCFC-141b was imported during 2010 by the following 20 distributors and large end user companies.


Largest importers and users of HCFC 141b MT during 2010

Company Name HCFC-141b (tonne p/a)

Whirlpool South Africa 250

Bumbo Pty Ltd 247

Resichem South Africa 120

Aerothane Applications (Pty) Ltd 65

Defy Appliances (Pty) Ltd (EL) 39

Defy Appliances (Pty) Ltd (Jacobs) 22

Defy Appliances (Pty) Ltd (Esakeni) 39

Kwikot Pty Ltd 22

Kwikspace Modular Buildings Pty Ltd 18

Cellomax / Poly Foam 17.5

Insulated Structure Pty Ltd 11

Franke Water Heating Systems 12

Zero Appliances 10

Staycold Pty Ltd 7

M Projects 7

Just Refrigeration Pty Ltd 6.2

WE Geyers Pty Ltd 6.2

Colcab Pty Ltd (Universal Industries) 6.2

National Urethane Industries (NU) 6

Taxidermy Industry - Various small producers

6

TOTAL 917.1

HCFC baseline for compliance

The HCFC baseline for compliance will be the average consumption for 2009 and 2010 and is 369.7 ODP tonnes.


HCFC Reduction Schedule for South Africa

Project Phase



ODP T

Schedule Period

Reduction Required

ODP T

Baseline Baseline established 370 2009-10

Growth Estimated peak consumption

420 2012

Freeze Equal to baseline 370 2013 50



Step 3 67.5 reduction 120 2025 120

Step 4 97.5% reduction 9 2030 111

Step 5 Complete phase-out 0 2040 9


Availability of HCFCs, HCFC blends, and alternative chemicals in South Africa

HCFC alternatives currently available in South Africa

Chemical Standard

Quantity kg Price ZAR Price US$ S/kg

R-22

R-134a

R-401A

R-404A

R-406A

R-407C

R-408A

R-408B

R-409A

R-410A

R-507

R-507A

R-507C

R-422A

R-422B

2.3 Sectoral Distribution of HCFCs Over 99% of HCFC consumption in South Africa in 2010 was HCFC-22 and HCFC-141b. HCFC-22 is used as refrigerant in the commercial and industrial refrigeration and air-conditioning manufacturing, and refrigeration air conditioning servicing. South Africa has a broad range of companies operating in the RAC sector which can be broadly categorised as manufacturers, assembles, installers and service companies. The majority of companies fall into the assembly, installation and service categories but there are a number of appliance manufacturers and some small scale manufacturers of commercial refrigeration equipment. Equipment manufactured and assembled in South Africa includes the full range of refrigeration and air-conditioning equipment, compressors and chillers which are imported through distributors and joint venture companies. South Africa has a relatively well developed industrial refrigeration sector serving food processing, brewing and other process industries.


The mining sector is also a major consumer of refrigerants, used in the installation and service of large scale refrigeration and air-conditioning equipment used in mines and associated processes. There are several large suppliers of commercial refrigerators and display cases, condensing units, spilt air conditioning systems, cold rooms and large cold stores for storage and processing.


Foam Sector

HCFC-141b is used as blowing agent to produce rigid polyurethane foam in situ for cold water pipes in variety of manufacturing and process industries including brewing and food processing, particularly fish processing and storage. Some HCFC-141b is also used to produce rigid polyurethane insulation for bespoke commercial refrigerators and display cases and cold stores. It is also commonly used as a solvent for degreasing refrigeration and air-conditioning circuits after fabrication and for cleaning of electronic and mechanical parts in various sectors.

HCFC-141b : Sub-Sector Consumption

MT

Consumption

ODP T

Appliances 475 52

Bottle Coolers 23 2.5

Commercial Display Cabinets 16 1.8

Domestic & Industrial Water Heaters 89 9.8

Rigid Spray Systems 20 2.2

Discontinuous Rigid Slabstock 150 16.5

Laminated Steel Faced Rigid Panels 66 7.3

Simulated Wood 36 4.0

Flexible Mouldings 262 28.8

Exported Blended Systems 140 15.4

TOTAL 1,277 140.5

The majority of HCFC-141b is imported by systems houses who supply the majority of end users in the polyurethane foam sector with pre-formulated 2 component foam systems blended for their particular requirements.

Sub-sector Company Sub-sector Company

Appliances Defy Refrigeration Whirlpool Zero Appliances

Flexible Faced Laminated Board

Rigichem

Bottle Coolers Just Refrigeration Freezepoint

Discont. Rigid Slabstock

Thermochem Rigichem Polyfoam IPC

Commercial Display Cabinets

Insulated Structures Colcab Matador Engineering Concorde refrigeration

Laminated Steel Faced Rigid Panels

Insulated Structures Kwikspace Just Refrigeration Dalucon M Projects

Domestic & Industrial Water Heaters

Kwikot Franke Geysers

Simulated Wood Donelly Volante Jack Maserow

Rigid Spray Systems IPC Flexible Mouldings Bumbo Eurofoam Rosco Mouldings


Refrigeration and Air-conditioning

HCFC-22: Sub-sector Consumption MT

ODP T

Air-conditioning assembly

Commercial refrigeration manufacturing/assembly

Commercial refrigeration installation

Industrial refrigeration

Extruded Polystyrene (XPS)

Polyurethane Foam

Refrigeration service

Aerosols

Total MT

Air Conditioning Despite the growth in demand for HFC blends as a percentage of the total refrigerant demand, the demand for HCFC- 22 remains high and continues to grow according to a number of installers and suppliers, particularly in the mini-split AC market. International suppliers and agents are actively promoting the benefits of high efficiency systems when quoting for new installations for medium and large scale systems and although some companies are convinced by the significant savings in running costs, many are still opting for the cheaper more traditional HCFC-22 systems due to the initial 50% price premium for high efficiency systems. There are areas, mainly in the larger cities and in large relatively wealthy companies where best practice is promoted and employed and the technology in use is similar to that in USA or Europe. The international equipment suppliers and their agents are able to service the need of these users albeit at premium compared to local service companies. However the majority of the demand for HCFC- 22 still comes from small and medium sized service companies and end users who do not necessarily have the technical knowhow or capital available to change systems. A key issue in accelerating the phase out of HCFCs will be therefore be to gain much better level of understanding of this area. Commercial Refrigeration Commercial refrigeration uses a wide range of equipment. The refrigeration capacity of centralized systems in supermarkets varies typically from 20 kW to 1000 kW while stand-alone equipment capacities are comparable to those of domestic equipment. Most new equipment uses HCFCs and HFC-134a and some now use carbon dioxide. The majority of commercial refrigeration systems (other than stand alone or plug in units) are operating with HCFC-22. The volume of HFC-134a equipment is increasing but HCFC-22 compressors are still cheaper then HFC compressors, this is a major blocker for phasing out HCFC


in smaller scale commercial applications in South Africa. Refrigerant sales for commercial refrigeration service indicate approximately 15% of equipment is now using HFC-134a whilst 80% is HCFC-22. New stand alone and plug in units manufactured in South Africa, such as display cases and commercial refrigerators, use HFC- 134a refrigerant and insulating foam blown by HCFC-141b.

Industrial Refrigeration Industrial Refrigeration is dominated by HCFC- 22 although some ammonia is being used. CFC-11, CFC-12, HFC-123a and HCFC-123 are used in chillers and process cooling. Refrigerant R-502 is no longer available and some R-404A and R-507 are used in low temperature applications. The mining sector is a major user of refrigeration and air-conditioning. Ammonia and HCFC-22 are currently the most commonly used refrigerants for industrial refrigeration, including cold storage and food processing. It is expected that ammonia will increase in importance in the future. Most of the initially available retrofit blends for HCFC-22 have a significant temperature glide, and so are not well suited to use in industrial systems which use flooded evaporators. This has severely hampered the take up of retrofits for HCFC-22 systems in the industrial refrigeration sector. It appears that the majority of users will try to keep their existing equipment operating as long as possible and replace it with new equipment when necessary. It is likely therefore that the industrial refrigeration sector will continue to provide a significant demand for HCFC-22 in the short to medium term. Consequently so far in South Africa there has been only limited adoption of HFC-134a in some process cooling applications where news systems have been installed. Chillers

HCFCs, HFCs, ammonia and hydrocarbons are all in use to a greater or lesser extent. While HCFC-22 still is used in chillers with scroll, screw and reciprocating compressors, there has been significant adoption of R-410A in new chillers with capacities up to 350 kW. There has been a certain amount of retrofitting CFC-11 chillers to HCFC-123 in larger centrifugal chillers for large buildings; however the associated drop in performance has lead many users to opt for new equipment. HFC- 134a is now commonly being used in new chiller installations with higher capacities

2.3.2 Refrigeration servicing sector

The service sector in South Africa is relatively well developed compared to many Article 5 countries, with the majority of technicians being trained and registered to either a service company or trade associations. Over the last few years the choice of RAC products has increased significantly as suppliers companies want to offer their customers a more comprehensive choice of products. There has


been a particular increase in the use of heat pump heating for residential and commercial applications and medium to low temperature refrigeration for retail and wholesale food outlets. Servicing can be carried out by equipment owners, manufactures or service technicians. Equipment owners and manufactures service systems either directly in most instances because of the technical knowledge of their own equipment. In some cases they service systems through authorized independent servicing companies. The challenge for the equipment owners and manufactures is to keep experienced technicians in their organization as there is a tendency for them to leave to set their own independent businesses based on low requirements on investment in equipment and skill, disregard to the environment and code of good practice and standards set by the bureau of standards (SABS). There is education and outreach through magazines and exhibitions to avoid this situation. These magazines and exhibitions incorporate every aspect of Refrigeration, Heating, Cooling, Air Conditioning, Ventilation, Environment, In-door Quality Control related to their use in Industrial, Mining, Commercial and Domestic applications. They focus on the technology, engineering and educational approach to refrigeration, heating, cooling and air conditioning. The RACA (Refrigeration and Air conditioning Africa) Journal is a monthly magazine catering for the owners of sector related businesses. The RACA Guides are distributed with the RACA Journal and are part of an ongoing commitment to education in the industry. There is also the publication of the RACA Directory of suppliers of products and services to the Industry. This directory is produced annually in hardcopy format as well as being available for query on the web site. The Cold Chain Newspaper is focused on the refrigeration aspect from concept to complete commercial applications and everything in between. There is an organisation, which looks after the interests of the contractors working in the field of air conditioning, refrigeration and ventilation for the past 42 years called SARACCA. Through membership of SARACCA, a member has the benefits of SEIFSA where there is access to advice on labour matters, dispute resolution, employment conditions, material and labour indices. The Associates' membership of SECC (Specialist Engineering Contractors Committee) and affiliation to BIFSA and the Contractual and Legal Committee, members have access to the JBCC (Joint Building Contracts Committee). SARACCA provided a major contribution to the drafting of the JBCC standard forms of contract and revisions over the years. Advice on contractual matters is available through these organisations. JBCC is responsible for the CPAP (Contract Price Adjustment Provisions) where the Work Group 170 is of importance to our members. Anomalies and irregularities can be addressed through these bodies. SARACCA is a member of ACRICSA (Air Conditioning and Refrigeration Industry Council South Africa). Through the membership SARACCA has supported the development of Unit Standards in the learnership program run by MERSETA, to improve the level of skills in our industry.


Through the SARACCA levy collection members provide substantial financing of ACRICSA and its training programs, such as the safe handling of refrigerants There are industry specific organisations that still need to have a good coordination but are functioning very well in the country and their effectiveness can be improved through coordination The service sector will continue to use the original refrigerant for equipment as long as possible particularly where there is reasonable life left in the equipment. This includes CFC-11 and CFC-12 if they are available and the price is not prohibitively high. The same will be true of HCFC-22. In general the view of most refrigeration stakeholders is that R-404A is becoming the preferred replacement in Supermarkets and large commercial applications whilst R-410A is the preferred choice for Comfort cooling applications. HCFC-141b is being used increasingly as a cleaning and flushing agent in the RAC sector and the sale of small cylinders and disposable cans has been increasing. The service industry is made up of the usual mix of large well equipped service companies allied to international suppliers and medium and small scale companies and informal technicians. It is estimated that there are over 4,000 practicing refrigeration technicians in South Africa. ACRICSA has over 2,500 formally registers technicians. There is plenty of expertise and international know-how available at the top end of the market, through the large service companies allied to international manufacturers, however at the smaller end of the market price is the key driver for end users and these results in a wide variety in the quality of installations and servicing practice. The emissions due to poorly maintained RAC equipment are therefore a significant factor in the overall consumption of HFCF-22 in South Africa

Summary of Refrigeration Service Sector Companies and Technicians

No Enterprises/date of Establishment No.

Technicians Qualifications

Average Annual

Cons. MT 1

2

3

4

5

6

7

8

9

10

11

12

13

TOTAL


Estimated Service Demand for HCFC-22

Type of System No. Units

operational % Using

R22

Avg. Charge

kg

Est. Bank MT

Service %

Cons

Window air-conditioners

Mini-split and multi-split air conditioners

Chillers

Central Air-conditioning units

Condensing units

Supermarket and commercial refrigeration units

Industrial refrigeration and process cooling

Other systems

Total


3 PHASE-OUT STRATEGY

3.1 Overarching Strategy South Africa has a relatively high consumption of both HCFC-22 and HCFC-141b, with consumption in all subsectors.



ODP T

Schedule Period

Reduction Required

ODP T

Equivalent MT HCFC-

22

Equivalent MT HCFC-

141b

Baseline established 82.8 2011

Peak consumption 89.56 2012

Equal to baseline 82.8 2013 6.76 135 61

10% reduction 74.52 2015 8.28 166 75

35% reduction 53.82 2020 20.7 414 188

67.5 reduction 26.91 2025 26.91 538 245

97.5% reduction 2.07 2030 24.84 497 226

Complete phase-out 2.07 2040

The schedule and targets set out in the table above will form the basis of the agreement. To achieve this phase out this HPMP includes 5 strategic priorities for South Africa to be implemented between 2012 and 2020. The HCFC survey data combined with the best current estimate of the consumption trends shows that reduction in HCFC consumption of 15.04 ODP T will be required to meet the 10% reduction target in 2015 and further 20.7 ODP T reduction will be required to meet the 2020 reduction step. Notwithstanding the above, it should be kept in mind that cost and availability are possibly more urgent drivers for the phase out of HCFC141b. China, for example shuts supply by 2015. This might reduce the time available for phase out as described above. The overarching strategy of the Government of South Africa is to phase out the use of HCFCs in line with and possibly ahead of the Montreal Protocol phase out schedule by implementing a number of work streams which address the key barriers to HCFC phase out: 1. Policy instruments required to control the supply and demand of HCFCs in South Africa

- Legislation for the control of HCFCs including quota system and import bans;

- Enhancement of tariff codes to accommodate HCFCs and HCFC based equipment; and

- Enhanced support to improve monitoring and reporting.

2. Non-investment activity to support control of HCFC import and usage

- Enhanced customs training and capacity building; and - Public awareness component.


3. Investment Project in Foam Sector (conversion of systems houses)

- Demonstration project for new technology introduction; and

- Provision of basic equipment for production using alternative refrigerants.

4. Investment project in RAC sector

- Provision of basic equipment to replace HCFC-22 manufacturing with HFCs, hydrocarbons

and carbon dioxide technology.

5. Assistance to the Refrigeration Service sector

- Supporting the setting up of Recovery and Reclamation Facility for HCFCs;

- Refrigerants emissions prevention component; and

- Additional Training scheme for recovery/recycling activities.

6. ODS Destruction

- Develop in-country ODS destruction capability.

The government of South Africa believes that with adequate support this package of measure will allow a full and effective phase out of HCFCs. It is important to note that the combination of investment components, policy implementation and support to service sector are all required to achieve a balanced and timely phase out with minimum socio-economic impact. Policy instruments The legislation up-date component of the HPMP is intended to improve and develop the existing regulations for a better control of the HCFCs. There is a prioritization of the further needed measures as already indicated above. The legal provisions will also include mandatory inspections for emission leakage rate verification of equipment and installations containing specific HCFCs charges, and the responsibility of owners of such equipment to ensure proper servicing activities in order to prevent the increase of the emissions rates during the functioning life-time. It is expected that such legal provisions to be supported and coordinated with the activities to be implemented under servicing sector assistance component of the HPMP. The interpretation and development of extensions and amendments to current regulations and the drafting of new regulations or ministerial decisions will be done by DEA. The estimated financial assistance required and the cost of the policy component is summarized as follows:


Activities Cost US$ Outcome

Deatailed audit and assement of current regulations - 2-4 legal consultants short term contracts

Selection and translation of appropriate European or International standards applicable to RAC

Miscellaneous office related costs

Developmet of basic electronic system (web based) for application for quoatas and provision of licences.

TOTAL

Activities to support control of HCFC import and usage Experience gained from CFC phase out shows that the control of import and distribution of HCFC will require a redoubling of efforts by the customs authorities in South Africa. The policy measures detailed above will be an important tool in identifying HCFCs transported as chemicals and equipment. However the geography of South Africa presents particular issues in terms of the movement of unauthorised goods. South Africa has approximately 4,862 km of land borders to control. The customs training component will enhance the capacity of customs and other law enforcement officers in monitoring, control and identification of HCFCs and HCFCs containing equipment. It will further strengthen the capacity of the trainers and customs training schools through the provision of necessary training materials and identification tool kits. It will also raise awareness of enforcement officers and the general public on the policies and legal instruments regarding the accelerated phase-out of HCFCs and HCFC containing equipment. The Customs Department plays an important role in prevention and monitoring of imports of ODS and ODS-containing equipment, the current tariff structure makes it difficult to identify all HCFC movements and no specific training has yet been conducted to address the issues of HCFCs. The accelerated phase-out of HCFCs will make it necessary to train enforcement officers and provide identification tools and techniques where they do not currently exist. The main objective of the component is to provide the customs and enforcement officers with necessary practical skills and knowledge to identify HCFCs and HCFCs containing equipment.


Expected Output of the Project

Fully enforced regulations and reduced illegal trade in HCFCs and other ODS;

Improved identification and control of the HCFCs and HCFCs containing equipment;

Increased awareness of Customs and other law enforcement Officers on Ozone Issues;

Enhanced coordination between Environment, Customs and other authorities, with properly

aligned processes and for identifying and differentiating between controlled and

uncontrolled substances and equipment;

Development and implementation of curriculum modules for customs and environmental

enforcement officer training, for both new and existing officers through “train the trainers”

activities; and

Provision of French/English language course materials, and demonstration equipment.

Project Activities:

Conduct one training workshop for up to XX trainers.

Conduct 8 training workshops for up to xxx customs officers and other law enforcement

officers and key stakeholders including SGS.

Disseminate information to law enforcers and key stakeholders on the regulation and viable

HCFC alternative technologies.

Procure and distribute refrigerant identifiers and written guides to border posts.

3.2 First stage implementation programme

HCFCs are used to manufacture refrigeration and Air-conditioning equipment and to produce rigid polyurethane insulation foam in a variety of sectors and to manufacture extruded polystyrene. Given the nature of the consumption and usage pattern in South Africa it will be necessary to support all HCFC consuming sectors over time and South Africa must ensure that adequate support is given to recipients on a fair and reasonable basis. However bearing in mind the impending 2013 consumption freeze and 2015 reduction targets and in line with ExCom recommendations and Guidelines activity will be phased to address the sub-sectors and end users where the biggest impact can be achieved most quickly and efficiently.

In order to effectively phase out HCFC141b in all the sectors that utilise the compound, the phase out plant must adhere to the following principles:

A unified response by the industry is required.

Users of HCFC141b should be approached via systems houses rather than directly.

It is important that end user should decide what alternative is most appropriate for their particular application.

The alternatives that are implemented must be sustainable and therefore it is often necessary to customize technologies for our situation in South Africa. Technologies that worked in Europe and America will not necessarily be sustainable in South Africa.


Foam Manufacturing

Monitoring & Control

Impact/Ease

Cost

RAC Service

Refrigeration Manufacturing

Nominal Phasing

By address in the manufacturing sectors first South Africa should be able to meet its Montreal Protocol obligations, whilst continuing to work with and support smaller users and the refrigeration service sector to phase down over a more extended period.

3.3 HCFC Refrigeration Servicing Sector

By far the largest consumption of HCFCs in South Africa is in the refrigeration service sector and it is this area that the greatest challenges to phase out will lie. It is therefore vital to put in place an appropriate package of policy and control measure in combination with technical and infrastructure support for the service sector. Whilst the policy measures outlined above create incentives and regulations designed to achieve certain behavioural outcomes amongst the refrigeration service community it will also be necessary to provide the means and know-how for technicians to comply with these policies. The HPMP aims to support the service sector by:

Implementing an emissions reduction programme;

Encouraging good practice and recovery and recycling; and

Establishing a national refrigerant recovery and reclamation scheme which will be

accessible to all service companies and end users


The availability of HCFCs for servicing existing equipment in South Africa will soon start to reduce as the HCFC phase out programme is implemented. Equipment owners must therefore be encouraged to ensure HCFC based equipment is made as "leak free" as possible, converted to an alternative refrigerant or replaced with suitable non-ODS based equipment in an appropriate timescale. Reducing emissions is a conservation philosophy that that takes into consideration the characteristics of system design, components, materials, and operating modes of systems as well as unpredictable events such as degradation and ruptures. Emission limitation profoundly affects each planned and unplanned interventions, such as breakdown, repair and charging or recovery. The main factors in emission reduction are:

Design of very tight systems;

Implementation of metrology for measuring leak flow rates;

Implementation of leak-tightness classification of components such as joints, valves and

flexible hoses;

Enforcement of no venting handling procedure;

Enforcement of mandatory recovery policies;

Availability of adequate high-quality equipment (detectors, monitors, recovery units etc);

Monitoring and targeting of system performance and leakage;

Tracking and tracing of refrigerant movement;

Definition of refrigerant-saving operation and maintenance procedures; and

Technician understanding and capabilities.

Emission reduction is not limited to improving leak tightness or recovering refrigerant it is discipline that applies to the entire life-cycle of the product and should be included at the design and installation stages of new products and systems. Significant volumes of HCFC-22 are commissioned and de-commissioned on a regular basis, due to lack of technical awareness and or storage and handling facilities large volumes are vented as they are considered unusable. Similarly small and medium service enterprises and technicians working in the informal centre assume there is no value in recovered refrigerant due to the quantity and or quality recovered. Secondly analysis of the local market and culture of the refrigeration sector as well as evidence from other markets and Article 5 countries suggests that technicians will be very sceptical about the quality or consistency of refrigerant recovered and recycled by third parties.

3.4 Technical Assistance

TBC


3.5 Other Impacts on the Environment

Summary of Phase-Out Strategy and Budget

Item Description Draft Grant

Budget Request

Co-Finance

SA

1 Policy implementation required to control the supply and demand of HCFCs in South Africa

250,000 400,000

Implementation of legislation for the control of HCFCs including quota system and import bans

50,000 250,000

Enhancement of tariff codes to accommodate HCFCs and HCFC based equipment

50,000 150,000

Enhanced support to improve monitoring and reporting 150,000

2 Non-investment activity to support control of HCFC import and usage

650,000 400,000

Enhanced customs training and capacity building 170,000

Public awareness component 80,000

HPMP Coordination 2012-2020 400,000 400,000

3 Investment Project in Foam Sector 6,832,085 0

conversion of systems houses 3,034,838

umbrella conversion of 25 PU foam manufactures to Methyl formate technology

541,200

conversion of 3 PU foam manufacturers to hydrocarbon technology

2,756,047

conversion of one polystyrene (XPS) manufacturer (demonstration project)

500,000

4 Investment project in RAC sector 5,855,394 0

provision of basic equipment to replace HCFC-22 manufacturing with HFCs, Hydrocarbons and carbon dioxide technology

5,505,394

demonstration project in commercial / supermarket refrigeration using non-HFC alternatives (CO2 and hydrocarbons)

350,000

5 Assistance to the Refrigeration Service sector 1,385,892 0


735,892



6 ODS Destruction 300,000 0

Technical assistance to develop in-country ODS destruction capability

300,000

TOTAL 15,273,371 800,000


The government of South Africa believes that with adequate support this package of measure will allow a full and effective phase out of HCFCs. It is important to note that the combination of investment components, policy implementation and support to service sector are all required to achieve a balanced and timely phase out with minimum socio-economic impact.


4 Project Coordination and Management The individual elements of the phase out strategy will be implemented by the responsible national entities under the overall oversight of the national focal for UNIDO, which is the dti.

ACTIVITY RESPONSIBILITY

Policy instruments required to control the supply and demand of HCFCs in South Africa

Legislation for the control of HCFCs

including quota system and import bans;

DEA

Enhancement of tariff codes to

accommodate HCFCs and HCFC based

equipment; and

ITAC

Enhanced support to improve monitoring

and reporting.

DEA

Non-investment activity to support control of HCFC import and usage

Enhanced customs training and capacity building; and

Public awareness component. DEA/industry associations Investment Project in Foam Sector (conversion of systems houses)

Demonstration project for new technology

introduction; and

the dti

Provision of basic equipment for production

using alternative refrigerants.

the dti

Investment project in RAC sector

Provision of basic equipment to replace

HCFC-22 manufacturing with HFCs,

hydrocarbons and carbon dioxide

technology.

the dti

Assistance to the Refrigeration Service

sector

Investigate supporting the setting up of

Recovery and Reclamation Facility for

HCFCs;

the dti

Refrigerants emissions prevention

component; and

DEA

Additional Training scheme for

recovery/recycling activities. Development

of training materials

the dti/MERSETA

ODS Destruction

Investigate development of in-country ODS

destruction capability.

DEA


Strategic Priority 2011 2012 2013 2014 2015


5 ACKNOWLEDGEMENTS The authors of this report wish to thank all organisations and individuals who contributed to the report. In particular we wish to thank:

The NEDLAC CPG for guiding and providing invaluable input and suggestions for the compilation of the report.

The FRIDGE for funding the investigation, and in particular, Mr. Kenneth Chauke from the IDC for administering the project so ably.

The authors of the report are from the company Dube Ngeleza Wiechers Environmental Consultancy (Pty) Ltd., i.e.:

Mrs. Betsie le Roux,

Mr. McDonald Mutsvangwa, and

Dr. Herman Wiechers.


Annex 1: Phase-out of HCFC in Polyurethane Foam

Overview of Foam Sector in South Africa South Africa has a relatively well developed industrial infrastructure compared to many Article 5 countries and this is reflected in the breadth and depth of applications of HCFC-141b found in the country. The HCFC survey has identified foam manufacturers in the following sub-sectors:

Appliances

Bottle Coolers

Commercial Display Cabinets

Domestic & Industrial Water Heaters

Rigid Spray Systems

Flexible Faced Laminated Board

Discontinuous rigid slabstock

Laminated Steel Faced Rigid Panels

Simulated Wood

Flexible Mouldings However there are only a small number of large scale manufacturers such as Whirlpool and Defy amongst the group and the majority of enterprises consuming HCFC-141b are classified and small or medium sized enterprises. Another important factor affecting the phase out strategy is that foam sector is almost entirely based on two component foam systems supplied through a number of systems houses, which have developed very specific formulations for each client enterprise. This has been the case for many years and it is notable that the level of in-house expertise in foam formulation and to some extent the operation of foam equipment is relatively low. It is common for a manufacturer to hire a national expert to oversee modifications manufacturing equipment or adaptations of products which require reformulation of the foam. The majority of the sector is aware of the Montreal Protocol and a number of the larger companies have given some thought to the options and alternatives available to them, and a number of companies have undertaken trials. However given the general economic climate the majority of companies are not inclined to make any significant investments until the have to. Sector Information and Baseline Data The HCFC survey has identified 63 companies involved in the manufacture of polyurethane across all sub-sectors. Of these 26 have elected to convert to methyl formate based technology and 20 are considering methyl formate technology to replace HCFC-141b. These 46 companies represent approximately 65-70% of the total foam sector.


Number of Companies

HCFC-141b MT

Foam Systems MT

Methyl Formate 26 677 8,927

To be decided 20 114 343

Total Potential 46 791 9,270

Technology Overview and Selection The financial constraints of SMEs remain key factors in many transition strategies, in particular the potential uptake of hydrocarbon technologies. Product and process safety issues and the associated cost of mitigating safety risks are still the key factors that prevent many companies from considering hydrocarbons as a viable solution. Non-ODS technologies are viewed as expensive by South African businesses. There remains concern among some users about the possibility of future supply/demand imbalances for critical HFCs, particularly in environments where phase-out might be accelerated. This extends to the maintenance of adequate supply chains. The future of HFC regulation in non-Article 5 countries continues to be an unknown. One company which adopted HFC-365mfc technology has recently decided to revert to HCFC-141b whilst it considers other long term solutions. The company decided that 365mfc was not a viable economic solution. 4th Generation Blowing Agents

Blowing Agent Manufacturer Chemical Formula Boiling point

FEA-1100 Du Pont (CF3-CF2-CH2-0-CH3) 25°C

HFO1234YF Honeywell (CF3 CF = CH2) -29°C

HFO1234ZE Honeywell (CF2H – CH2 CF2)

HBA-2 Honeywell -5°C

AFA- L1 Arkema (CF3-CH2-CH = CFH

The 4th generation blowing agents have a number of key advantages they have zero ozone depletion potential and low global warming potential. They also provide good insulation values in finished foam products and there are low boiling and high boiling alternatives available for different applications. However the key disadvantage for the South African market is cost of these agents which is typically between 6 and 8 USD/kg. There are also some concerns in the market about the longer time availability imported materials. The table below shows the relative costs of foam production using different blowing agents based on a study of a South African domestic refrigerator manufacturer assuming an annual production volume of 300,000 units.


Blowing agent

Water R245fa

Water R245fa

Water R365mfc / 227ea

Water + iP

Water ciP

Methyl Formate

MF/134a

Relative Cost

118% 119% 117% 114% 116% 108% 99%

Methyl Formate Driven to a large extent by the cost implications of either Hydrocarbons in terms of capital cost or HFCs in terms of operating costs, many foam manufacturers have considered methyl formate and or Ecomate a low cost phase out solution. One of the key benefits of methyl formate technology is that it requires relatively little modification to existing foaming equipment. Low pressure dispensing machines do not need to be modified, High Pressure machines require only that Hydromatic type pumps with stainless steel internals and straight mechanical coupling (not Mag Drive coupling) be used on Polyol side at a cost approximately US$12, 500 per unit. Flow Meters fitted on the polyol side must be converted to stainless steel units at an approximate cost of US$ 4,000. In addition to this carbide injector nozzles are required on polyol side at an approximate cost of US$500 per unit. To avoid the possibility of precipitation in the polyol systems on all systems it is advisable to ensure that he heat exchange capacity on the cooling units is capable of providing adequate cooling with water on temperatures at 5°C or above. This may require installing a new heat exchanger at cost of between US$ 3,000 and US$10,000. The total cost of converting an estimate total cost of US$ 19, 000 – 25,000 depending on machine configuration. In addition to these costs a number of products will require re-certification according to various health and safety regulations relating to fire resistance and structural properties. This will incur one-off costs for each substantive product or part for a number of manufacturers, particularly those manufacturing panels used in permanent and demountable buildings.


Technology Selection On the basis of the financial and technical analysis carried out by enterprises and systems houses it is clear that there is a general trend toward the adoption of Methyl Formate and Ecomate amongst the majority of South African foam manufacturers. A number of trials have been carried out in different applications with good results demonstrating the technology can provide the required thermal and physical properties in the range of sub-sectors. The Government of South Africa has therefore decided, within the scope of the HPMP to support a sector-wide project to: a) Provide a sustainable supply of methyl formate and Ecomate in South Africa by supporting

the conversion or adaption of existing systems houses to adequate market supply. b) Support the conversion of all foam manufacturers who have decide to convert to MF or

Ecomate technology.

Summary of Investment Proposal

A) Conversion of Systems Houses The capital cost for the provision of a single blending plant for Methyl Formate is as follows:

ITEM DESCRIPTION Cost US$

1 Civil works including site preparation structural steel, foundations and bunding

213,750

2 2 ton blender 99,750

3 10 ton blender 138,966

4 Finished product bulk storage 88,578

5 Methyl Formate bulk storage and handling system 332,310

6 Product piping, stainless steel Blending and storage 175,466

7 Services piping - Blending and storage 67,276

8 Electrical supply to controls, lighting and power sockets for blending and storage facility

43,776

9 Instrumentation and control systems, including monitoring and safety systems

159,623

Sub total 1,319,495

5% inflation (assumes 2012 start) 65,975

10 % contingency 131,949

TOTAL 1,517,419


To ensure security of supply and to avoid market distortion, two facilities will be invited to bid for the conversion of their facilities, with the expectation that bidding parties will supply 30% co-financing. The total investment sought for this activity is therefore:

US$ (1,517,419 x 2 ) x 70% = US$2, 124,387 B) Conversion of Foam manufacturing equipment at 46 Foam manufacturing Companies

Number of Companies

HCFC-141b MT

Foam Systems MT

Methyl Formate 26 677 8,927

To be decided 20 114 343

Total Potential 46 791 9,270

Modification Number Unit Cost

US$ Total Cost

US$

Stainless steel hydromantic pumps with straight mechanical coupling

23 12,500 287,500

Stainless steel polyol flow meters 30 4,000 120,000

Carbide injector nozzles 36 5,000 180,000

Heat exchanger capacity increase 24 3,000 72,000

Heat exchanger capacity increase 12 10,000 120,000

Total 492,000

C) Statutory Product Testing and Certification

Estimate 300 products and components at circa US$ 400 per item = US$ 120,000

TOTAL Investment Cost (excluding co-financing)

3 Investment Project in Foam Sector 6,832,085

Conversion of systems houses 3,034,838

Umbrella conversion of 25 PU foam manufactures to Methyl formate technology

541,200

Conversion of 3 PU foam manufacturers to hydrocarbon technology

2,756,047

Conversion of one polystyrene (XPS) manufacturer (demonstration project)

500,000

Incremental Operating Costs

Incremental operating costs for projects in the foam sector will be considered at US $1.60/metric kg for HCFC-141b and US $1.40/metric kg for HCFC-142b consumption to be phased out at the manufacturing enterprise. However for group projects linked to systems houses, incremental operating costs will be calculated on the basis of the total HCFC consumption to be phased out for all downstream foam enterprises.


Foam Sector Baseline Data

Name Location Products Consumption HCFC-141b

MT

Consumption System

MT Supplier

Proposed New

Technology Baseline Equipment

Aerothane Applications Pty Ltd

Milnerton Cut sheet block / laminated board

65

Bayer N/A Discontinuous block moulding self formulate

Bayer South Africa Isando Systems House 631.00(?)

Bayer / Industrial Urethanes

N/A

Blues Ally Trading 96 CC Temba Furniture

mouldings 0.5 13

Industrial Urethanes

MF / H₂O Hand pour plus LP machine

Bumbo Pty Ltd - South Africa

Pretoria

Integral skin flexible systems

for baby toys products

247

Bayer Methyl formate 3-4 low pressure Reac; Foaming dispensers;

Cellomax Kew Spray foam contractors,

17.5 25 Bayer N/A Graco Spray equipment; Hand pour block self formulated;

Clean Heat Kya Sands Hot Water Systems Domestic

1.6

China N/A Unknown

Club Refrigeration CC Rosslyn Insulated panels and commercial

refrigeration doors 0.8 15 Bayer N/A LP 60 kg Reac

Cochrane Steel Products Pty Ltd

Kempton Park Bouyancy flotation

1.5 20 Resichem Methyl formate 1 x 60 kg Reac Low Pressure Machine

Colcab Pty Ltd (Universal Industries)

Blackheath Refrigerated

display cabinets 6.2 102


Methyl formate 2 x L.P. 90 kg/min Reac machines

Concorde Refrigeration s Pty Ltd

Durban Refrigerated

Display Cabinets 3 50


Methyl formate 1 x 90 kg/min L.P Canon

Dalucon Refrigeration Products

Centurion Insulated Panels

Construction , refrigeration

5 70 Industrial Urethanes

Methyl formate 1 x 100 kg H.P. Canon; Manni Press;

Defy Appliances Pty Ltd (EL)

Natal Domestic

refrigerators and freezers

46 750 Industrial Urethanes

Methyl formate 1 x 100 kg OMS HP; 1 x 40 kg OMS HP; 1 x 100 kg Canon HP

Defy Appliances Pty Ltd (Head Office)

Natal Domestic

refrigerators and freezers

26 3,400.00 Industrial Urethanes

Methyl formate 6 x 100 Canon HP (1 x Pentane Ready); 2 x 40 Canon HP ; 1 x 100 Canon HP

Diverse Urethane / Urochem

Modderfontein Systems House 0.5

N/A MF / H₂O


Name Location Products Consumption

HCFC-141b MT Consumption

System MT Supplier

Proposed New Technology

Baseline Equipment

Donelly Group Johannesburg Furniture

manufacture - Rigid moulding

2 65 Industrial

Urethanes / Resichem

N/A 2 x 40 kg HP Canon

Extreme Heat (Fibrelogic) Kwa Zulu Natal Solar Water

Heating 3 50 Resichem Methyl formate Canon 60 kg L.P.

Famcor Urethane Products CC

Alberton Formulation of

Adhesives 0

N/A N/A N/A

Faurecia Autoplastic SA Pty Ltd

Port Elizabeth

Automotive indusrty door

panels dashboards headlines

0

Industrial Urethanes /

Bayer H₂O Canon

Feltex Foam Automotive Pty Ltd

Jacobs Automotive mouldings

15

Bayer / BASF

N/A Various

Foam-Pac Kew Foam Packaging 0

Instapak H₂O Instapak 1:1 dispensers

Franke Water Heating Systems

Midrand Hot water systems

12 300 Resichem Methyl Formate 1 x 100 kg Canon Pentane ready

Freeze Point Port Elizabeth Commercial

Bottle Coolers 0.35 5 Bayer N/A Low pressure

Frigoglass South Africa Pty Ltd (Owned by Coca Cola)

Johannesburg Commercial

Bottle Coolers 0 30 Bayer H₂O 1 x 100 HP Henneke

Full Spectrum Mobility Alberton Pre-fabrication of office buildings

classrooms 5 80


Methyl formate 100 kg H.P. Canon ; Manni Multidaylight Press;

GAP Pty Ltd Spartan Domestic Hot

Water Systems 5 75 Resichem Methyl formate LP 60 kg Reac machine

Gentech Engineering Products

Port Elizabeth injection moulded components for

automotive 0

NUI, Bayer,

BASF N/A N/A

Geo Cloud Pty Ltd Selby H.D. Furniture

mouldings 1.5 42


Methyl formate Low pressure technology

Gridnic Agencies Pty Ltd East London Refrigerators 0.28 4 Resichem Methyl formate Unknown

Gruppo Antolin (Port Elizabeth) Ltd Pty

Port Elizabeth Automotive headliners

0

Bayer H₂O Canon

Industrial Urethanes Pty Ltd

Kempton Park Systems House 115

Bayer / AGAS

N/A


Name Location Products Consumption HCFC-141b MT

Consumption System

MT Supplier

Proposed New


Insulated Structures Pty Ltd

Kya Sands

Polyurethane panels for cold rooms refrigerated transport,

construction, supermarket display cabinets.

11 176 Industrial

Urethanes Methyl formate 2 x L.P. 90 kg/min Canon

Insulpanel Closing Modular buildings, mobile

buildings, class rooms, sandwich panels, park homes

0

N/A N/A N/A

Insuseal Cape Town Spray foam construction 0.2 2.5 BASF HFA 245 / H₂O Graco / Gusmer

Jack Maserow Furniture CC

Johannesburg Simulated wood mouldings 3 65 Industrial

Urethanes Methyl formate 1 x 60 kg HP Canon

Just Refrigeration Pty Ltd

Kwa Zulu Natal

Commercial Coolers, Cold rooms, Underbar counters,

Beverage Coolers 6.2 100


Methyl formate 1 x 100 kg HP Canon non pentane

KH Refrigeration Pietermaritzbu

rg Freezer rooms, cold room

panels houses 1 15


Methyl formate 1 x 60 kg Low Pressure Reac

Kwikot Pty Ltd Benoni Domestic / Industrial hot water

heaters 22 350 BASF H₂O

2 x 100 kg Canon HP non pentanised

Kwikspace Modular Buildings Pty

Johannesburg Modular Buildings 18 275 Industrial

Urethanes Methyl formate

1 x Canon H.P. 100; Manni multidaylight press;

M Projects Kwa Zulu

Natal Modular Buildings Panels 7 100 BASF

HFA 245 / pentane

1 x Canon 100 kg HP non-pentanised; Manni Press;

Mac Bros Catering Equipment

Epping 1 Surfboards 0.2 3 Industrial

Urethanes N/A Unknown

Mathote Modular Building Systems

Springs Modular Housing 5.2 80 Resichem Methyl formate 1 x 90 kg Lp Canon

Molan Pino South Africa

East London Expanded automotive

polypropylene components 0

N/A N/A N/A

National Urethane Industries (NUI)

Isando Systems House 6

Bayer N/A



MT

Consumption System

MT Supplier

Proposed New


Omega Refrigeration Midrand Commercial Refrigeration

1.4 25 Industrial Urethanes

Methyl formate Canon low pressure

Phoenix Furniture Mouldings

Booysens Furniture mouldings 1.8 60 Industrial Urethanes

Methyl formate 2 x 60 kg L.P. Reac foaming machines

Pilot Oaktree Furniture Manufacturing Pty Ltd

Temba Office Furniture 3 70 BASF HFA 245 / H₂O 1 x 60 kg HP Canon

Polymax Polyurethane Edenvale Solid cast elastomers 0

NUI N/A N/A

PUDTHANE (Polyurethane Developments)

Edenvale Systems House 0

N/A N/A

Rainbow Polyurethane CC

Ravensmead Spray linings for

delivery vehicle load beds

0

NUI H₂O N/A

Resichem South Africa Benoni Systems House 120

Bayer / Industrial

Urethanes / A-Gas

MF / H₂O

Rigifoam South Africa Benoni

Furniture, rigid moulding, Flex faced insulation board using

N-pentane

Bayer / Industrial Urethanes

N/A Henneke double flex faced continuous laminator; Discon. block moulding

Rockwood Mouldings Kwa Zulu

Natal Decorative Mouldings 2 75 Resichem N/A L.P. Reac 60 kg machine

SA Leisure Rosebank Cooler Boxes 2.4 30 BASF H₂O HP 30/60

Staycold Pty Ltd Centurion Commercial Bottle

coolers / Ice machines 7 120 Resichem N/A Methyl formate

Suntank (SWH Engineering)

Pretoria Solar water heating 1 15 Resichem Methyl formate L.P. Reac

Tag Africa Silverlakes Insulation Panels 0.4 5 BASF N/A 1 x 90 kg LP Canon



MT

Consumption System

MT Supplier

Proposed New


Takata Petri (South Africa) Pty Ltd

Western Cape

Automotive steering wheels

and OE equipment

0

N/A N/A Dedicated / specialised Henneke / ellastogran

Thermo Master Pty Ltd

Spray foam 2 30 Resichem N/A Unknown

Tooltech Cape Town Moulded furniture

components 0.7 25 Resichem H₂O 1 x 100 kg Canon HP

Ulrich Seats Pty Ltd

Clayville Commercial vehicle (Bus)

seats 85 10 Bayer H₂O

1 x 60 OMS H Pressure; 1 x 60 Reac L.P. Machine;

Vacuform Pretoria PU products for

Automotive Industry

Bayer / BASF N/A Not established

Volante Johannesburg Furniture Rigid

Mouldings 21 300 BASF HFA 245 / H₂O HP 100 Canon; 30/60 LP Canon;

W.E. Geyers Pty Ltd

Krugersdorp Domestic Hot Water Heating

Systems 6.2 100 Resichem Methyl formate Low pressure 60 kg Reac machine

Whirlpool South Africa Ltd

Kwa Zulu Natal Domestic

refrigerators & chest freezers

250 3,000.00 BASF Methyl formate 3 x 100 kg High pressure Canon Cabinets; 1 x 100 kg High pressure Canon Doors;

Zero Appliances Gauteng Domestic absorption

refrigerators 10 60 Resichem Methyl formate

1 x 100 kg HP Canon non pentanised; 2 x 60 kg low pressure Reac. Dispensers;


Timeline

Activity 2012 Q2

2012 Q3

2012 Q4

2013 Q1

2013 Q2

Approval

Detailed Design

Preparation of TORs for TA

Bidding

Systems House modifications

Enterprise modifications

Trials and commissioning

Training and safety assessment

Project completion


Annex 2: Phase-Out of HCFCs in Refrigeration Manufacturing

Investment project in RAC sector 5,855,394

Provision of basic equipment to replace HCFC-22 manufacturing with HFCs, Hydrocarbons and carbon dioxide technology

5,505,394

Demonstration project in commercial / supermarket refrigeration using non-HFC alternatives (CO2 and hydrocarbons)

350,000

TECHNOLOGY OVERVIEW AND SELECTION The primary alternatives available for replacing HCFC-22 in refrigeration and air-condition equipment are as follows:

Refrigerant Type GWP

(100y) Safety Class

Temp. glide (K)

Condensing temp. at

26 bar (°C)

Suitable Application

HCFC-22 HCFC 1810 A1 0 63 All

HFC-134a HFC 1,430 A1 0 80 Chillers

R-407C HFC 1,800 A1 7.4 58 All

R-410A HFC 2,100 A1 0 43 All

R-404A HFC 3,900 A1 0.7 55 Commercial ref

R-507A HFC 4,000 A1 0 54 Commercial ref

R-290 HC propane 20 A3 0 70 Room AC

R-600a HC- isobutane

20 A3 0 114 Domestic ref

R-717 Ammonia 0 B2 0 60 Chillers

R-744 Carbon dioxide

1 A1 0 -11 MAC, heat pumps, cascade

R-404A and R-507A are developed for low-temperature application and not suitable for air-conditioning application. R-290 is flammable and may be used only for small equipment and may be used as a potential replacement of HCFC-22 for vending machines. R-600a is a common refrigerant for domestic refrigerators. Ammonia (R-717) is used for big chillers, but its toxicity may limit the use. Carbon dioxide (R-744) is partially used for mobile air conditioners. Heat pump to heat water with carbon dioxide refrigerant is becoming popular as its performance for heating operation is quite high. However, its low efficiency for cooling operation may limit the use in air-conditioning applications. Recently low-GWP HFCs are being proposed such as R-1234yf mainly for MAC applications, though their potential for unitary air-conditioning application is yet to be investigated. Three key factors are important to determine performance of refrigerants, namely thermal efficiency (coefficient of performance, COP), volumetric efficiency (capacity) and operating pressure.


Proposed “drop-in” replacements such as R-417A, R-422A and R-422D are mixtures of HFCs with a small amount of hydrocarbon to ensure oil circulation in the refrigeration cycle. However, they are not considered as alternatives for newly designed HVAC equipment. They have certain degree of compromises regarding the performance, and have only limited market experiences. Furthermore the system with these drop-in refrigerants with existing mineral oil lubricant may not provide sufficient lubrication on wearing surfaces in the compressor and the system durability would be badly influenced. The components of HFC mixtures are summarized below.

Composition of Refrigerant Blends

Refrigerant R-32 R-134a R-125 R-143a R-600a GWP 100y

R-404A 4 44 52 3,900

R-507A 50 50 4,000

R-407C 23 52 25 1,800

R-410A 50 50 2,100

Drop-in

R-417A 50 46.6 3.4 2,300

R-422A 11.5 85.1 3.4 3,100

R-422D 31.5 65.1 3.4 2,700

Propane R-290 Conversion to propane was not favoured by enterprises as there is here is a very limited awareness of the technology in Cameroon or the region. Whilst propane is available enterprises are concerned about the quality and reliability of local supply and even more concerned about the availability of HC-290 compressors to suite their range of equipment. Taking into account the safety elated conversion costs and the large informal service sector which would give rise to further safety concerns, the Government of Cameroon considers the introduction of hydrocarbon refrigerants unfeasible at this time.

Carbon Dioxide CO2

Similarly, the level of technical capacity within the manufacturing and service sector and the availability of the technology in the region, coupled with expected high costs of conversion and equipment price, make CO2 unfeasible as an alternative to HCFC-22.

Ammonia R-717 A number of large industrial process and cold storage facilities already operate with ammonia in Cameroon, but these installations are limited to relatively large scale systems operating in controlled environments with trained operators. It is likely that ammonia will continue to be


used for these types of applications, but it is not considered suitable for the products currently manufactured by local enterprises. HFCs A number of well established HFCs including HFC-410A and HFC-407C as well as newer blends such as R-424A, R-428A and R-434A offer the potential to replace HCFC-22 in the refrigeration and air-conditioning applications covered by manufacturers in Cameroon. HFC-134a HFC-134a is globally available. It can be used for smaller room air conditioners, as well as where previously CFC-12 has been used and where HCFC-22 has been only an interim solution. HFC-134a is suitable for very high ambient temperatures. There is considerable practical experience in its use in Article 5 countries for refrigerators and freezers application. HFC-134a operating pressure is 50% lower than that of HCFC-22. Compressors and heat exchangers with thinner walls are used. However, HFC-134a has lower volumetric efficiency than HCFC-22, requiring larger compressor to compensate for 35% loss of capacity, giving rise to higher cost. It has roughly the same thermal efficiency and heat transfer property to HCFC-22, while current HFC-134a systems are more efficient than that of HCFC-22, due to improved compressor and heat transfer technologies, and controlling mechanism. In terms of long-term viability, HFC-134a is widely used for all chillers and large commercial systems as well as MAC, though it is being replaced in MAC application in Europe. There is substantial production worldwide and it is increasing. The direct greenhouse gas emissions are expected to be lower due to lower GWP, lower pressures and lower risk of pressure oscillations in the tubing compared to HCFC-22. Better emission control (leak tightness and charge reduction) along with reclaim and destruction program would be required to mitigate potential negative GWP impact adopting HFC-134a. R-407C HFC-407C has the closest performance characteristics to HCFC-22. It is a zeotropic blend of three refrigerants of different operating pressure. Temperature glide could occur and it is therefore not suitable for equipment with a large refrigerant filling or accumulators, such as condensing units, centralized systems and certain chillers. In other applications, the temperature glide still needs to be taken into consideration in design and service. Counter flow heat exchanger can improve system efficiency by making use of temp glide. It is used to retrofit HCFC-22 systems with minor loss of capacity and efficiency, for which it is needed to change lubricant from mineral to synthetic lubricants (POE). R-407C is widely used in Europe, but not popular in Americas and Asia, however, it is likely to be available in the medium to long term. The costs of manufacturing R-407C equipment are very similar to the costs for HCFC-22 equipment except they are not soluble in mineral and alkyl benzene lubricants and new synthetic oils have therefore been developed. These new lubricants are however hygroscopic and pick up moisture rapidly which can cause loss of performance or system failure if not properly controlled. Compressor and oil costs are therefore higher. In case of very high ambient temperatures the equipment might have to be built for higher working pressures than standard. The GWPs of HCFC-22 and R-407C are


similar; therefore the overall emissions of greenhouse gases attributed to the equipment should remain similar. R-410A R-410A is a near azeotropic blend of R-32 and R-124 and has been widely adopted as an alternative to R-22 in a variety of applications. The increased cooling capacity of HFC-410A compared to HCFC-22 at is regarded as a positive point but higher discharge pressures require stronger systems. R-410A has better volumetric efficiency than HCFC-22. The high refrigerating capacity permits smaller, more compact components to be used, a typical hermitic or semi-hermetic compressor designed for HCFC-22 cannot be used with HFC-410A, which might also be true for some other components in the system. An R-410A compressor is 2/3 of the volumetric capacity of HCFC-22, reducing system charge. Though the theoretical thermal efficiency is slightly lower, heat transfer characteristics are better. New R-410A systems tend to be are more efficient than that of HCFC-22 due to compressor type, heat exchanger selection, airflow systems and control systems. R-410A discharge pressure is 50% higher. Pressure limiting device used to enable standard copper tubes is to be applied. Compressors with thicker walls are used, but applicable to scroll, reciprocating and rotary compressors. Installer/service shops require high pressure gauge manifold, leak detector, and other service tools designed for high-pressure refrigerant. Current system costs about 10%-15% higher than HCFC-22 equipment. Higher cost is due to higher R-410A refrigerant cost, high-pressure cutoff device, higher compressor cost because of thicker shell (though smaller). Higher cost also may be also due to lower production volumes and higher efficiency. However R-410A is not universally accepted for use in high ambient temperatures due to its elevated pressures and relatively low critical point, which might lead to lower energy efficiency at such temperatures as compared to e.g. HFC-134a or HC-290. R-410A equipment has been commercially available within the capacity range of 2 kW to 175 kW from major manufacturers for a number of years. It is likely that this refrigerant will be available in the medium to long term. In terms of long term viability, no better alternative exists at present compared to R-410A. Continuous improvement in better emission control (leak tight and charge reduction) as well as reclaim/recycle/destruction program will help to mitigate negative GWP impact by reducing direct emission of refrigerant during equipment manufacture, operation and at the equipment disposal. Note: It has been reported that HC-290, HC-1270 and HC-290/HC-170 blends have been used as drop-in replacements for HCFC-22 in some locations. While these refrigerants may provide capacity and efficiency close to HCFC-22, this practice creates a significant safety concern because of the high flammability of these refrigerants. If hydrocarbons are being considered; all relevant safety standards and codes-of-practice should be strictly followed. In many cases, the costs of meeting safety standards and codes-of-practice have been found to be too costly to justify a retrofit to a hydrocarbon refrigerant


GENERAL Refrigerants are one of the most important Greenhouse Gasses (GHG). Furthermore, and UNIDO will pay a further 25% premium for phase-out alternatives with lower carbon emissions. Furthermore, GHG emissions and the impact on climate change are already under separate discussion in South Africa.


Annex 3: Phase out of HCFC-22 and HCFC-142b in Extruded Polyurethane (XPS)


Annex 4: Refrigeration and Air-conditioning Service Sector

Assistance to the Refrigeration Service sector 1,385,892


735,892




Annex 5: Demonstration Project

Conversion of Commercial Refrigeration to Carbon Dioxide Refrigerants in

Supermarkets

Phoenix Racks – Supermarket Refrigeration HCFC Conversion Proposal Purpose To assist Phoenix Racks to convert from the manufacture of HCFC supermarket refrigeration systems to natural refrigerant carbon dioxide (CO2) and ammonia (NH3) cascade systems and full CO2 systems Objective To reduce the use and emissions of HCFC in Africa by facilitating the conversion of Phoenix Racks production capacity with funding for factory conversion and training expenses and to offset higher system costs. Baseline Phoenix Racks currently produces around 100 racks a year, with supermarkets using between 2-5 racks, with an average charge of 600 kgs of HCFC R-22 per store. There are around 2,200 supermarkets in South Africa and this number is growing by 5% per year (110 stores). The biggest are Shoprite, Pick ‘n Pay, Spar and Woolworths. There are a further estimated 200 stores in the Southern African neighbours run by these companies. Assuming that the average store refrigeration system is replaced after 15 to 20 years, this implies at least 110 store refurbishments take place per year. These are mostly replacing old R22 systems, and the majority of new systems currently use R22, R404 and 134A. Proposed solutions – two natural refrigerant options Overview: ETA/Phoenix proposes to offer two alternative system concepts to the market: CO2/NH3 cascade systems and full CO2 systems. CO2/NH3 cascade systems are best suited to larger supermarkets, are more capital intensive but offer supreme energy efficiency benefits. Full CO2 systems are suited for a wide range of store sizes, but can be economically scaled down to very small supermarkets or corner-stores. Full CO2 systems are potentially less capital intensive, but offer lower (but still substantial) energy efficiency gains that CO2/NH3 systems. The two systems together offer a comprehensive solution for retail food marketing, from small sales outlets to large mega-stores, and hence a comprehensive alternative to conventional R22/R404a systems. CO2/NH3 systems: These systems consist essentially of a CO2 system for all low temperature / freezer systems in the store, a glycol reticulation system to provide cooling to all medium/high temperature systems in the store and to the CO2 system, and an ammonia plant to refrigerate the glycol system.


The ammonia system consists of several ammonia compressors, vessels and evaporative condenser, and is restricted to the plant room and condenser deck area and is typically located at roof level. The CO2 system consists typically of a rack containing three low pressure CO2 compressors, heat exchangers and CO2 vessels, and can be located at any convenient location to suit store arrangement. Glycol and CO2 lines supply the coolant to the evaporators in the various display cases and freezer/cool rooms throughout the store. CO2/NH3 systems typically offer energy savings in the order of 30-50% over conventional plant. Full CO2 Systems: These systems consist typically of one or two two-stage CO2 systems that provide CO2 to all low and medium temperature systems in the store. The CO2 system can be located in a plant room at ground or roof level, and is connected either to a cooling tower or an air-cooled gas cooler unit located at roof or condenser deck level. In most cases the plant will include a roof-mounted compound booster unit using a small amount of either R290 or HFC refrigerant. The CO2 racks typically contain three low pressure compressors and three or more high pressure compressors, in additional to a liquid receiver and other vessels, heat exchangers and control devices. CO2 suction and liquid lines supply the coolant to the evaporators in the various display cases and freezer/cool rooms throughout the store. Full CO2 systems typically offer energy savings in the order of 10-30% over conventional plant, depending on the detail of the design and location. Both CO2/NH3 and full CO2 systems are fully natural solutions, if R290 standby or compound booster systems are applied. Costs The direct costs of conversion to CO2 manufacturing by Phoenix Racks include the following: Estimated factory cost for conversion and training:

Training factory staff for coded welding and working with stainless steel R300.000

Training engineering and support staff, including new quality systems and customer support

R120.000

Workshop modification to accommodate new manufacturing lines R140.000

Re-tooling R260.000

Engineering costs - System design and optimization for the range of racks, both sub and trans-critical (2 months of engineering time of a team of four (two engineers, one technician and one draughtsman). Estimated 1280 man hours at an average of R650 per hour)

R832.000

Total R1 652.000

Support for additional capital cost Depending on the type of system, the additional cost currently in South Africa for using natural


refrigerants over synthetics is between 20% and 35%. This needs to be reduced to 10% to achieve good market penetration.

It is estimated that the initial penalty in transitioning to CO2/NH3 will be between R800,000 to R1,200,000, and between R500,000 to R800,000 more for a full CO2 system. As the production volumes rise, and the installing contractors become familiar with installing these systems, these costs could reduce substantially. However, cost parity will not be possible with a CO2/NH3 system, and the additional capital cost should always be considered against the substantial energy savings. Cost parity with a full CO2 system may eventually be achievable, but not in the short term. Hence both technologies will result in a capital cost penalty that cannot be fully recovered on the basis of reduced energy costs within a short period (3-5 years) initially, and this is where funding support is required. After around 3 years, this situation is likely to have improved, and storeowners should be prepared to pay the reduced penalty to gain the energy savings and not be exposed to the refrigerant costs inherent with R22/R404a systems. By that time enough evidence of the energy and other running cost savings inherent with CO2/NH3 and full CO2 systems will be visible to the market, and installation costs will have been minimized.


Phoenix Racks - Project Summary 1. Company Name Phoenix Racks Pty Ltd

2. Contact person

Kevin Schlemmer, Sales and Marketing Manager, Phoenix Racks [email protected] +27 21 712 22 88 (land line) +27 82 55 55 660 (cell)

3. Date company was established / date started using HCFCs

November 2000

4. Address of factories to be converted

20 Estmil Road, Diep River, Cape Town 7801, South Africa

5. Description of production using HCFCs (provide representative model details and quantities used per unit if appropriate)

Phoenix Racks produces approximately 150-200 supermarket refrigeration racks per year, with each rack containing between 2-4 compressors of a range of capacities for low and medium temperature applications. Depending on their size, supermarkets use between 2- 5 racks per store. As these are produced to order, there is considerable variability in production.

6. Total annual HCFC consumption for each HCFC used (HCFC-22, HCFC-141b, HCFC-142b etc) for the years 2007, 2008, 2009 and estimate for 2010.

The average refrigerant charge of each supermarket system installed is approximately 600kg. Precise consumption data of equipment is difficult to obtain as external contractors charge the systems with refrigerant, but assuming production of 150 R22 racks each year is used in 40 supermarkets, HCFC2-22 consumption of this equipment is around 24 tonnes per annum. Taking into account an average 38% leakage rate, over 15 years, each HCFC-22 system consumes approximately 4,000 kgs, so therefore one year’s production of 40 new CO2 or NH3 supermarket systems would avoid HCFC-22 emissions of around 160 tonnes.

7. Description of key equipment used for the production of products or equipment containing HCFCs, indicate age, capacity manufacture where possible

The equipment is between 5 and 1 years old. The factory’s capacity is 200 racks per year. a. Steel fabrication department: i. Cut-off saw.

ii. Welding equipment. iii. Grinding and finishing equipment.

b. Spray painting department: i. Spray booth with air filter and extract system. ii.Air pressure paint spraying equipment.

c. Copper pipe department: i. Header manufacturing – tee pullers, soldering equipment. ii. Hydraulic pipe benders.

d. Assembly department: i. General hand tools. ii. Pressure testing (leak) equipment. iii. Electrical hand tools. iv. Electrical testing equipment.


8. Indicate where possible the alternative being considered to phase out the use of HCFCs and the main implications for manufacturing and performance of products

CO2/NH3 systems: These systems consist essentially of a CO2 system for all low temperature / freezer systems in the store, a glycol reticulation system to provide cooling to all medium/high temperature systems in the store and to the CO2 system, and an ammonia plant to refrigerate the glycol system. CO2/NH3 systems typically offer energy savings in the order of 30-50% over conventional plant. Full CO2 Systems: These systems consist typically of one or two two-stage CO2 systems that provide CO2 to all low and medium temperature systems in the store. The CO2 system can be located in a plant room at ground or roof level, and is connected either to a cooling tower or an air-cooled gas cooler unit located at roof or condenser deck level. In most cases the plant will include a roof-mounted compound booster unit using a small amount of either R290 or HFC refrigerant. Full CO2 systems typically offer energy savings in the order of 10-30% over conventional plant, depending on the detail of the design and location. Significant modifications required to factory plant and equipment are outlined below.

9. Provide is possible a list of the key equipment / components that would have to be modified to convert production to the chosen technology alternative

a. Steel fabrication department: i. Cut-off saw. ii. Welding equipment. iii. Grinding and finishing equipment

b. Copper pipe department: i. Header manufacturing – tee pullers, soldering equipment. ii Hydraulic pipe benders.

c. Assembly department: i. General hand tools. ii. Pressure testing (leak) equipment. iii. Electrical hand tools.

10. Indicate the potential for improving energy efficiency of products at the same time as phasing out HCFCs where appropriate or relevant

Both the CO2/NH3 and the full CO2 system are expected to be substantially more energy efficient than a conventional air-cooled R22 or R404a system. The CO2/NH3 system with evaporative condensers is likely to offer 30-50% annual energy savings, and the full CO2 system with water-cooled gas cooler something like 20-30% savings. An air-cooled CO2 system will offer 10-30% energy savings over an air-cooled conventional system. This depends much on the store usage profile, location, and other variables.


11. Please indicate you would be willing to host a site visit to collect further information and discuss phase out options in more detail.

Yes, at the earliest convenient opportunity.


Appendix 1 Customs Tariffs

The following is an extract from the SARS Tariff schedule for organic compounds:

Code Sub-code Description

29.03 2903.11 Chloromethane (methyl chloride) and chloroethane (ethyl chloride) R-40

29.03 2903.12 Dichloromethane (methylene chloride)

29.03 2903.13 Chloroform (trichloromethane)

29.03 2903.14 Carbon tetrachloride

29.03 2903.15 Ethylene dichloride (ISO) (1,2-dichloroethane)

29.03 2903.19.10 1,1,1-Trichloroethane (methyl chloroform)

29.03 2903.19.90 Other

29.03 2903.21 Vinyl chloride (chloroethylene)

29.03 2903.22 Trichloroethylene

29.03 2903.23 Tetrachloroethylene (perchloroethylene)

29.03 2903.29 Other

29.03 2903.31 Ethylene dibromide (ISO) (1,2-dibromoethane)

29.03 2903.39 Other

29.03 2903.41 Trichlorofluoromethane CFC-11

29.03 2903.42 Dichlorodifluoromethane CFC-12

29.03 2903.43 Trichlorotrifluoroethanes

29.03 2903.44 Dichlorotetrafluoroethanes and chloropentafluoroethane

29.03 2903.45.05 Chlorotrifluoromethane CFC-13

29.03 2903.45.10 Pentachlorofluoroethane CFC-111

29.03 2903.45.15 Tetrachlorodifluoroethanes

29.03 2903.45.20 Heptachlorofluoropropanes

29.03 2903.45.25 Hexachlorodifluoropropanes

29.03 2903.45.30 Pentachlorotrifluoropropanes

29.03 2903.45.35 Tetrachlorotetrafluoropropanes

29.03 2903.45.40 Trichloropentafluoropropanes

29.03 2903.45.45 Dichlorohexafluoropropanes

29.03 2903.45.50 Chloroheptafluoropropanes

29.03 2903.45.90 Other

29.03 2903.46 Bromochlorodifluoromethane, bromotrifluoromethane and dibromotetrafluoroethanes

29.03 2903.47 Other perhalogenated derivatives

29.03 2903.49.01 Chlorodifluoromethane HCFC-22

29.03 2903.49.03 Dichlorotrifluoroethanes


Code Sub-code Description

29.03 2903.49.05 Chlorotetrafluoroethanes

29.03 2903.49.07 Dichlorofluorethanes HCFC-141b

29.03 2903.49.09 Dichlorodifluoroethanes

29.03 2903.49.10 Chlorodifluoroethanes

29.03 2903.49.11 Dichloropentafluoropropanes

29.03 2903.49.19 Other derivatives of methane, ethane or propane halogenated only with fluorine and chlorine

29.03 2903.49.20 Derivatives of methane, ethane or propane, halogenated only with fluorine and bromine

29.03 2903.49.90 Other

The code system does not capture HCFC-141b which is pre blended with polyol for foam manufacturing. It was also suggested by some stakeholders that the HCFCs and HCFC containing blends are potentially being wrongly coded or are not visible due to the nature of some of the generic codes for compound families. As there are currently no restrictions on these substances and they are duty free, this area has not been considered a priority. The current data collection process also does not capture the volume of HCFCs entering South Africa pre-charged in refrigeration and air conditioning equipment. Although this does not constitute consumption it does significantly increase the service demand.

hydrochlorofluorocarbons (hcfc) phase out plan...

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