Changes from report parliamentary committee draft to plenary report

Fluorinated gases are powerful greenhouse gases, with a global warming effect up to 25 000 times greater than CO2, accounting for roughly 2,5% of the Union's GHG emissions. Thanks to the F-gas legislation, emissions of these gases have been falling since 2015. Europe's efforts to reduce these gases sparked international action under the Montreal Protocol, with the adoption of the Kigali Amendment, which it is estimated will prevent up to 0,4°C of additional warming by the end of the century. Several industries have transitioned rapidly, moving to low Global Warming Potential (GWP) or natural alternatives.

In order to comply with the international Kigali Amendment and to take action under the European Climate law, in April 2022, the European Commission published a revised proposal. The Commission, among other things, wants to tackle illegal trade by strengthening trade provisions, increases the climate ambition by accelerating the Hydrofluorocarbon (HFC) phase-down and provides investment certainty for several sectors by proposing placing on the market prohibitions.

In its Impact Assessment, the Commission argues that high ambition in the F-gas regulation will increase EU GDP and employment while, at the same time, not significantly affecting consumer prices. European manufacturers' export opportunities will be enhanced, as the Kigali Amendment will lead to worldwide demand for climate-friendly technologies. Moreover, an ambitious revision will put these sectors on track for climate neutrality. The rapporteur therefore recognises the Commission's proposal as a good basis for future discussions, but also highlights several aspects, which can be further improved.

With this report, the rapporteur wants to address the following challenges:

 Accelerate the transition to climate neutrality: while the accelerated HFC consumption phase-down proposed by the Commission would align the regulation with the Kigali Amendment, the proposal does not phase-out HFCs by 2050 and is therefore not aligned with the European goal of climate neutrality. While we are experiencing accelerating climate change, it is clear that we are only at the beginning of fully addressing this challenge. The sectors covered by this regulation have proven to be innovative and can benefit from swift climate action. Europe should therefore lead by example and phase-out both HFC production and consumption by 2050. Moreover, the rapporteur proposes to accelerate the HFC consumption phase-down in line with what is currently technologically feasible.

 Limit the risk of a lock-in to intermediate solutions and provide certainty for consumers and investors: the prohibitions in Annex IV have shown to be the most effective measure in the F-gas regulation, providing clear market signals and investment certainty for SMEs, while limiting demand for black market HFCs. The rapporteur therefore adds prohibitions for sectors for which, according to various studies, including the preparatory study for this proposal, it is technologically and economically feasible to move to F-gas free solutions. Other prohibitions are strengthened to overcome the growing risk of locking-in to intermediate solutions, which are in many cases per- and polyfluoroalkyl substances (PFAS). In order not to repeat mistakes from the past, the rapporteur proposes to move several (sub)sectors, such as refrigeration, air conditioning, heat pumps and switchgear, to F-gas free alternatives. The rapporteur is aware of the concerns of several stakeholders regarding these prohibitions. Nevertheless, environmental and health concerns, the ongoing adaptation of safety standards, technological developments, the availability of quota, increased training availability, increased funding from quota sale revenues, and the existing safeguards in the regulation, makes these prohibitions both effective and feasible.

 Take international responsibility by stopping the export of pollution: the Commission proposal outlines differentiated schedules for HFC production and consumption, resulting in an export surplus, which can be used to produce HFCs for the global market. Moreover, the export of high GWP gases in used equipment is a growing issue for developing countries who do not have the means to control, recycle or destroy these gases. In the view of the Rapporteur, Europe should use its common market to produce sustainable solutions for the rest of the world, not undermine climate ambitions in other countries with the export of polluting products and substances. Not only should the production and consumption phase-down be aligned, the rapporteur also proposes to stop the export of HFCs with a GWP higher than 2500.

 Prevent illegal trade: the Commission proposal already strengthens the regulation significantly. The rapporteur however, wants to take further action on illegal trade by proposing minimum penalties for non-compliance, eliminating out exemptions and thresholds for reporting, and increasing investments in customs and monitoring.

 Take action on high GWP gases: gases, such as trifluoromethane by-product, methyl bromide and sulphur hexafluoride, are not all included in the HFC phase down, but have a high GWP value. The rapporteur therefore deems it necessary to take additional action through the capture, reuse or replacement of these gases.

 Accelerate training and deployment: the implementation of this regulation is dependent on skilled technicians who are able to handle new substances; this will require additional training. Strengthening the training and certification requirements for natural refrigerants and increasing the quota allocation fee - thereby generating extra funding, which should partly be invested in training - should accelerate the deployment of new appliances. Governments should be actively addressing this challenge.