Why is the illegal trade in refrigerant gases important for Europe’s energy security? – POLITICS


In just one week of joint inspections in 2021, more than 4,200 cylinders of hydrofluorocarbons (HFCs), a class of illegally imported refrigerant gases, entered the European market. The European Union is moving in the right direction on preventing the black market with its renewed proposal on fluorinated gases, or fluorinated gases. However, Europe’s new priorities to ensure affordable, secure and sustainable energy for its citizens could exacerbate the problem. The challenge for the EU will be to achieve its twin energy and climate goals, securing energy supplies while remaining on track to reach net zero by 2050 by preventing imports illicit fluorinated gases and switching to low global warming potential (GWP) refrigerants. .

Ambitious and coherent climate and energy policies

With the EU’s ambitious Fit for 55 climate package and the more recent RePowerEU proposal, the EU aims to increase the uptake of energy efficient technologies in Europe, with targets targeting solar panels, heat pumps and even electric vehicles.

These technologies have been recognized by the EU as vital applications to ensure Europe’s energy sovereignty. They contribute to the ultimate goal of decarbonising our economy, with heat pumps alone estimated to contribute to an annual reduction of more than 9 million tonnes of CO2 emissions in the EU, according to the European Association of heat pumps.

An increased demand for energy efficient solutions will likely increase the demand for refrigerant gases which are essential for their application. This, in turn, could significantly increase the already active illegal market for fluorinated gases.

The persistence of the HFC black market

The illegal trade in HFCs is a major problem in the EU. Data from the European Fluorocarbon Technical Committee (EFCTC), a sector group of the European Chemical Industry Council Cefic, showed that illegal imports in 2018 could have accounted for up to a third of the legal European fluorinated gas market (analysis from Oxera Consulting LLP database). Reports from the European Anti-Fraud Office (OLAF) showed that more than 230 tonnes of illegally imported fluorinated gases were seized in several countries in 2021 alone.

Geographically, South-Eastern Europe is particularly marked by illegal imports. In 2021, almost half of the advertisements reported in violation of the EFCTC action line, a tool for reporting the illegal sale of fluorinated gas products, were published on online marketplaces operating in this field. A significant proportion has also been demonstrated in central and western Europe.

Illegal imports not only have an impact on the climate, but have economic repercussions on the tax revenues of member countries and on the economic viability of legitimate businesses.

Currently, roads in southeastern Europe are believed to be clogged, which could divert contraband to other routes. This only increases the urgency of raising awareness of the issue so that customs officers can spot black market HFCs at a time of increased pressure on border controls and opportunistic illegal trade. Despite some successes against this smuggling, many EU member countries are struggling to deal with the problem as criminal operations evolve. Illegal imports could further undermine the EU’s efforts to meet its 2050 climate targets, as these illegal HFCs undermine the quota system put in place to phase out the use of fluorinated gases with high global warming potential .

Illegal imports not only have an impact on the climate, but have economic repercussions on the tax revenues of member countries and on the economic viability of legitimate businesses that comply with EU rules. Improper storage, transport and installation of illicit HFCs can endanger public health due to unintentional leaks. Illegally purchased fluorinated gases can also be poor quality mixtures, which means that their effectiveness in many applications can be significantly reduced.

Finding the right approach to the energy transition

The proposed revision of the F-Gas Regulation marks a crucial step towards improving its enforcement, with the inclusion of new provisions for better enforcement and prevention of illegal trade in HFCs. However, the challenge ahead will be to ensure that the revision of the F-gas proposal does not undermine the efforts set out in the RePowerEU framework and the wider objectives of the EU Green Deal to improve energy efficiency. As things stand, an earlier and more severe phase-down of high-GWP HFCs could prevent the large-scale deployment of heat pumps and other energy-efficient technologies across Europe.

Similarly, new measures on illegal trade can be improved. Appropriate advice and funding to member country authorities on how to dispose of confiscated gas can help to strengthen provisions. Banning the sale of fluorinated gases on online marketplaces or introducing mandatory certification for companies selling bulk fluorinated gases online can help restore the confidence of consumers and supply chain actors for the fluorinated gases.

We believe that establishing deterrent minimum penalties rather than maximum penalties can help further deter illegal trade.

Furthermore, if a fee for quotas, as in the European Commission’s proposal, were to be accepted, part of the procedure should be used to strengthen actions against illegal trade and ensure the destruction of the seized product. Strengthened law enforcement must go hand in hand with any imposition of quotas or a faster phase-down of HFCs, as these could further stimulate illegal trade. Coupled with stronger enforcement at national level, the EU can help member countries prepare for the tougher illegal trade requirements under the revised proposal, especially for bordering countries.

We believe that establishing deterrent minimum penalties rather than maximum penalties can help further deter illegal trade.

F-gases can play a key role in Europe’s decarbonisation goals through critical industries relying on heating and cooling technologies. The revised F-Gas Regulation should facilitate this parallel objective, rather than undermine it. The European Commission must strive to strike the right balance between ensuring energy sovereignty and ambitiously phasing down high-GWP HFCs.

The HFC black market continues to be a threat to public safety, European industry and our continent’s climate goals.

The HFC black market continues to be a threat to public safety, European industry and our continent’s climate goals. This requires the engagement of all actors, policy makers, the supply chain, law enforcement authorities and citizens, if we are to stop this criminal activity.

If you hear or see anything that might be illegal trade in HFCs, report it immediately using our anonymous action line, or learn about the HFC black market in Europe at stopillegalcooling.eu.




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