25.01.2013 - Russian MNRE Meeting for the Prevention of Ozone-Depleting Substances Trafficking and Decrease of Their Releases and Leakages

On January 25, in the Hall of Russian MNRE Board, meeting “Prevention of Illegal Import of Ozone-Depleting Substances into the Russian Federation and Decrease of Their Releases and Leakages at Maintenance of Equipment Containing Such Substances” was held. The meeting was attended by more than 60 persons including representatives of federal executive bodies (MNRE of Russia, MIT of Russia, MOI of Russia, FCS of Russia, and FTS of Russia); heads of major manufacturers and suppliers of refrigerants; industry associations and self-regulated organizations working in the field of HVAC&R equipment installation and maintenance.

The participants of the meeting were welcomed by S. Levi, the Deputy Minister for Natural Resources and Environment of the Russian Federation, who specified the national importance of the ozone-depleting substances (ODSs) phase-out and the call for active cooperation between representatives of executive and legislative bodies and business in this field.

D. Bryunin, the Head of the Department of the State Policy and Regulation in the Field of Hydrometeorology and Environment Monitoring of MNRE of Russia, informed the participants on the measures taken by MNRE of Russia in 2012 for the prevention of ODS illegal importation: limitation of the number of customs posts for importing the substances; criminalization of their illegal import to the country and prohibition of importation of hydrochlorofluorocarbon (HCFC)-containing equipment to the territory of the Customs Union member states. The draft Federal Law “On amending Federal Law “On Environment Protection” and Article 82 of the Russian Code of Administrative Violations in part of ensuring fulfillment by the Russian Federation of its obligations under the Montreal Protocol on Substances That Deplete the Ozone Layer to the Vienna Convention for the Protection of the Ozone Layer” has been completely agreed upon and presented to the State Duma of the Russian Federation due to which all concerned market players will have the opportunity of taking part in the preparation of relevant bylaws preparation.

V. Tselikov, the Senior Technical Advisor of the United Nations Industrial Development Organization (UNIDO), presented international experience in the field of preventing illegal importation and leakages during equipment installation and maintenance. This includes such measures as (mainly lacking at present in the Russian Federation): ODS import/export licensing system; ODS import/export/manufacture quota allocation; obligatory (annual) reporting of importers/exporters; marking system; reporting system; in-country circulation control system; training/certification for specialists engaged in installation and maintenance of HVAC&R equipment; prohibition of expendable cylinders for refrigerants, and state-and-private partnership in the field of refrigerant circulation control.

A. Lyubeshkin, the Coordinator of UNIDO/GEF and MNRE of Russia Project for HCFC phase-out in the Russian Federation, told about main components of the Project being implemented in Russia: conversion of Russian industrial enterprises to the manufacture of ozone-friendly products with relevant personnel training; aid of MNRE of Russia through the development of the legislation basis; aid in law enforcement departments equipping and training; pilot project for the creation of a network for ODS collection and disposal; educational component including translation and adaptation of international training and certification programmes on HVAC&R systems; creation of information source, www.ozoneprogram.ru and holding of the All-Russia Contest “Protect Earth’s Ozone Layer and Climate” (Order of the Chairman of the Government of the Russian Federation of November 26, 2012, No 2189-р). He called the participants to take part, within the framework of a workgroup of UNIDO-MNRE of Russia, in preparation of institutional suggestions, support the activities of law enforcement agencies in preventing ODS illegal importation to the country, and to take part in creating civilized forms of work at the market of refrigerants.

G. Osadchiy, the member of the Board of NP ISZS-Montazh, made a report on the role of self-regulated organizations in decreasing ODS emissions and leakages. NP ISZS-Montazh is the largest self-regulated organization uniting specialists in installation and maintenance of engineering systems, mainly HVAC&R systems. He supported completely the set of measures presented by UNIDO experts and noted that, besides ODS emissions issue, there are at least as important safety issues at maintenance of such systems, especially due to their transfer to the use of natural refrigerants. Self-regulated organizations have vast experience in developing standards and draft technical regulations for the Customs Union and could participate actively in the development of a domestic system for specialists’ certification.

M. Doroshkevich, General Director of the largest Russian refrigerant manufacturer OAO GaloPolymer, called the present representatives of federal executive bodies to initiate timeless prohibition for HCFC-22 importation and use of HCFC-141b use inside Russia, for the purposes of observing Russia’s international obligations. To fight ODS trafficking he also suggested to equip customs posts with relevant devices, train officers to use them, and make such measures common for all countries of the Customs Union, and to prohibit importation of refrigerants in expendable small-volume cylinders (up to 30 liters).

N. Ratanov, Deputy General Director of ZAO Markon-Kholod, specified the main problems experiences by refrigerant distributors. They are: ODS illegal importation from China (mostly through Kazakhstan) and artificial barriers for good suppliers of refrigerants. For instance, the cost of Russian HCFC-22 sold by the largest Russian manufacturer, OAO GaloPolymer, is 2440 rubles, while in China this refrigerant costs 22-24 US dollars per cylinder. The price of this refrigerant imported to Russia, with illegal payments taken into consideration, would constitute about 900 rubles, which predetermines the attractiveness of its illegal importation.

It is implicitly confirmed by the increased importation of HCFC-22 under the guise of allowed HCF-125, which is imported in 20-ton isotanks in unreasonably large quantities exceeding the country’s needs; and by the increased number of short-living companies creased for solving short-term tasks of illegal importation. So, the legal import of HCFC-141b according to the quotas set by MNRE for permitted use becomes disadvantageous for good distributors since illegal importers offer faster delivery at significantly lower prices. Besides, in the reporter’s opinion, officers of FCS of Russia rarely monitor price dynamics and do not trust official contracts executed even with verified suppliers (such as DuPont), and refrigerants customs value adjustment takes long time, months, sometimes. Another potential source of illegal refrigerants is their importation (transit) through the borders of member states of the Customs Union.

T. Markina , Senior Marketing Specialist of Fluoroproducts division of OOO DuPont Science and Technology, noted in her report devoted to the protection from DuPont’s refrigerant counterfeit noted that counterfeit refrigerants are not only harm the environment, but are also dangerous for the business and customers. Cases exist when such counterfeit refrigerants contained fire- and explosion-hazard gases, such as: methane, ethane, propane, or butane, and constituted a direct hazard for the life of customers (toxic, self-igniting and plastic and aluminum corrosive refrigerant R-40, or methyl chloride). Specifically, in 2011 in the ship-building industry there were four explosions due to the use of illegally imported R-134a refrigerant (which actually was a mixture of R-134a and R-40): two explosions in Vietnam, one, in China and one, in Brazil. Also, three deaths were registered and more than one thousand refrigerating installations were put out of operation. In the opinion of T. Markina, 13,62 kg expendable cylinders are most commonly counterfeited; the counterfeit refrigerants are supplied from China, and the cylinders are filled again in UAE, Indonesia, and Philippines. She informed the attendees on the DuPont’s counterfeit fighting programme, and told about DuPont’s products official distribution channels, and expressed readiness to support the activities of law enforcement agencies for refrigerant illegal importation prevention.

I. Mikhailov, General Director of Transcool Group, devoted his report to five main issues which lead not only to environmental damage, but to enormous underpayment of customs and tax duties to the Russian budget.

The first issue is the open import of hydrofluorocarbons (HFC) in the situation of prohibition for HCFC importation. This caused in adjacent Ukraine and Kazakhstan, where no strict limitations for HCFC importation exist, 4-fold increase of HCFC-22 and 141b importation which then imported illegally to Russia. The supplies of prohibited products under the guise of allowed have also increased (HCFC-22 under the guise of HFC-134a), and market have become crowded with poorly-controlled importers.

The second and the third issues are transfer pricing by HCF manufacturers affiliates and the use of short-life companies by importers; this leads to low tax and customs duties inflow to the budget of the Russian Federation.

The fourth issue is the poor qualification of the personnel having access to environmentally hazardous and dangerous (pressure gases) substances, HCFC and HFC.

The fifth issue is the circulation of expendable cylinders which is not subject to duties leading to increased emission of HCFC and HFC to atmosphere and accumulation of huge quantities of hard-to-dispose industrial wastes.

The overall list of measures suggested by the reporter included: introduction of obligatory certification of personnel working with dangerous substances, HCFC and HFC; information exchange organization between FCS of Russia and FTS of Russia regarding HCFC and HFC importers and exporters within the framework of their registration; increased attention of FCS of Russia and FTS of Russia to the issues of transfer pricing by HFC manufacturers’ affiliates; inclusion into the Project of UNIDO/GEF and MNRE of Russia of suggestions for collection, disposal, and recovery of not only HCFC, but of HCF as well; strengthening of requirements of FCS of Russia for HFC importers (checking permissions of HFC importation, checking the availability of quality certificates and laboratory testing protocols, training for the officers of FCS of Russia in using refrigerant express-analyzers).

The reporter recommended to MNRE of Russia to prohibit statutorily the trans-border HCF transfer in case of absence of the relevant permission (similar to EU); initiate strengthening of requirements for importers during permission issuance; demand obligatory written reporting (manufacture, import, export, consumption, and sales of HCFC, HFC and other fluorine-containing substances, for instance, of sulfur hexafloride); join the European Regulation for Controlling the Circulation of Fluorine-Containing Gases; initiate prohibition of expendable tare circulation for all types of refrigerants including hydrocarbons (isobutane), and to demand obligatory written reporting to MNRE of Russia (manufacture, import, export, consumption, and sales of HCFC, HFC and other fluorine-containing substances).

A. Skorenko, who represented the Russian Union for the Refrigeration Industry, announced that the scale of ODS in the refrigeration industry have not been yet comprehended in full. Their deletion in industry sectors with state participation, where this issue is not paid relevant and timely attention, represents a very hard issue. In particular, the issue of fail-free operation of special-purpose refrigerating equipment should be addressed comprehensively within the nearest future.

After the reports, a discussion took place, when the participants of the meeting discussed the issues raised during the meeting and agreed on the creation of a workgroup under the auspices of UNIDO to prepare institutional suggestions for MNRE of Russia.