European prosecutor urged to act on black market HFC trade report
August 11, 2022
Campaigners have called on European authorities to act on undercover investigation into illegal European sales of HFC published last year – citing a lack of action by national bodies.
Environmental campaigners have formally requested that the European Public Prosecutor’s Office (EEPO) launch an investigation into the black market trade of HFC refrigerant.
The Environmental Investigation Agency (EIA) said that it was calling for urgent action from the EPPO, which is responsible for investigating and prosecuting crimes against the EU’s financial interests.
An estimated €77m (£64.8m) in VAT and customs duties is lost annually across the EU as a result of illegally traded refrigerants that also contravene the requirements of European F-Gas Regulations that are also enshrined under UK law. The agency also warned that this black market trade of HFC refrigerants was associated with fraud, money laundering and organised crime,
The EIA’s request for EU-wide action aims to build on a series of findings and warnings from itself and other industry bodies about the possible scale of illegal refrigerant sales and smuggling.
From an environmental perspective, additional greenhouse gas emissions equivalent to 30 million tonnes of CO2 were believed to have been generated from the illegal trade of HFCs that are not be permitted under the current market quotas implemented under the F-Gas regulations.
A range of different methods are being used to smuggle illegal HFC into European and UK markets, the EIA stated. These include misdeclarations and incorrect reporting via the F-Gas portal, to abuse of transit regimes.
Investigations by the EIA have also identified issues with ‘back door’ smuggling. This is where HFCs are being concealed in passenger coaches or other vehicles, or being permitted via corruption.
A formal request to the EPPO for action on refrigerant trade was submitted by the EIA in late July and the organisation said it had not yet received a response at the time of going to press.
Fionnuala Walravens, senior climate campaigner for the agency, said the action was taken after it failed to receive a response from Romanian authorities about evidence it had submitted about black market refrigerants in the country more than 12 months ago.
It was unknown if any enforcement action had been taken by Romanian authorities following the publication of the EIA’s findings.
The publication of the EIA’s ‘Europe’s Most Chilling Crime – The illegal trade in HFC refrigerant gases’ last July identified Romania as a major entry point for illegal refrigerants.
An undercover investigation by the group argued that a failure to effectively penalise and tackle both the sale and handling of illegal refrigerant was driving further growth of the black market refrigerant trade across the EU.
The EIA said that it has submitted names of individuals and organisations it has evidence of being involved in black market trading to Romanian authorities.
Ms Walravens said the EIA was looking to European authorities to act on its findings.
She said, „The illegal trade not only jeopardises the achievement of the EU’s climate objectives, but it has also resulted in the loss of approximately €77m a year in VAT and customs duties.”
“So, in a first for EIA, we are now asking the European Public Prosecutor’s Office, which exists to protect EU taxpayers’ money from criminals, to investigate this growing black market in greenhouses gases.“
A comparison by the EIA of official data required under the F-Gas regulation against trade information from a range of other sources has been used to try and identify the official scale of the black market trade for HFC. These illegal sales are estimated to amount to around 20 to 30 per cent of the legal HFC trade across Europe.