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In this section, the broader policy considerations cutting across all HFC applications are discussed. General topics addressed include the overall greenhouse gas (GHG) emission picture and the part played by HFCs in this picture, a brief summary of the Montreal Protocol CFC and HCFC phase-out schedules, economic constraints on wasteful use of HFCs in the future, and general safety considerations.

The purpose of this section is to provide some overall perspective on the global climate change issue and the impact of current levels of HFC production and the likely impact of future levels of HFC production on overall global climate change.

Figure 2-1 is a pie chart that allocates the global warming impact among U.S. emissions of the major greenhouse gases in 1999 and among projected U.S. GHG emissions in 2030. The breakdown of current (1999) emissions is based on the annual U.S. Environmental Protection Agency (EPA) figures [EPA, 2001], and the projected breakdown of greenhouse gases in the U.S. in 2030 is explained in 2.1.1. Currently carbon dioxide emissions due to the combustion of fossil fuels is by far the largest contributor at 82%. The remaining warming impacts are caused by methane, nitrous oxide (together 16% of the total), and HFC/PFC/SF6 emissions, accounting for 2.0% of the overall total. HFCs used for specific end-uses --- refrigerant, foam blowing, solvent, aerosol, and fire protection applications --- are only 0.8% of the warming impact of total GHG emissions. The projected breakdown in 2030 is similar, with HFCs used for specific end-uses rising to 2.4% of the warming impact of total GHG emissions, as the process of substitution of HFCs for CFCs, HCFCs, and other ODS is completed.

Figure 2-1: Breakdown of Greenhouse Gas Emissions in the United States

Globally, the breakdown of the warming impact of GHG emissions is shown in Figure 2-2. In 1997, carbon dioxide emissions were 89% of the total while PFCs, SF6, and HFCs were only 1%, only half of which is HFCs for refrigerant, foam blowing, etc. applications. The projected share in 2030 of the warming impact of emissions from HFC end-uses rises to approximately 2%, as the process of substitution of HFCs for ODS is completed.

Figure 2-2: Breakdown of Global Greenhouse Gas Emissions

Figures 2-1 and 2-2 include gross HFC emissions. As discussed throughout this report, in most applications HFC technology provides the least warming impact as measured by LCCP. This means that the reduced lifetime energy consumption of the HFC technology reduces lifetime CO2 emissions and the associated warming impact by more than the warming impact of the lifetime HFC emissions for that application.

Table 2-1 summarizes the greenhouse gas emissions in the U.S. and globally, for 1990 (based on reported data) for 1999 (based on EPA estimates for the U.S. and other estimates) and for 2030 (based on the assumptions discussed below). For each time period, GHGs are broken down into the major categories, with HFCs produced for specific end-uses broken out as a separate category.

Note that the units are Tg CO2 equivalent, instead of million metric tonnes of carbon equivalent (MMTCE) reflecting the change in units used by the EPA to report U.S. greenhouse gas emissions.

Table 2-1: Summary Breakdown of Greenhouse Gas emissions in the U.S. and Global, at Several Points in Time

Year	Greenhouse Gas Category	Emission, MMTCE
		USA	Global
1990	Carbon Dioxide  Methane  N2O  PFCs, SF6, HFC-23  HFCs Subst. for ODS	4,9131 6451 3971 83.01 0.91	16,5004   2,200    < 46
	Total	6,0381	18,700
	CFCs and HCFCs		4,8203
1999	Carbon Dioxide  Methane  N2O  PFCs, SF6, HFC-23  HFCs Subst. for ODS	5,5581 6201 4331 79.01 56.71	20,9004   2,400    956 1997
	Total	6,7461	23,400
	CFCs and HCFCs		2,1603
2030	Carbon Dioxide  Methane  N2O  PFCs, SF6, HFC-23  HFCs Subst. for ODS	5,6002 5502 5052 502 1652	29,0005   2,900    5906
	Total	6,87032	32,500
	CFCs and HCFCs		< 400

In Table 2-1, the figures for the U.S. are based on EPA figures [EPA, 2001]. The projection for the U.S. in 2030 is based on assuming:

• Stabilization of carbon dioxide emissions at 1999 levels
• Extrapolated growth (-0.4%/yr) of methane emissions 1990-1999
• Growth of N2O extrapolated at half the 1990-1999 growth rate (1/2 of 1%/yr), in line with assuming stabilization of energy consumption
• No net change in PFC, SF6 from 1999 levels
• Improved control of fugitive emissions of HFC-23 from HCFC-22 production

The global figures for CO2 are based on the Energy Information Administration (EIA) projection through 2015. Growth in CO2 emissions was extrapolated to 2030, based on a 1% annual growth rate, half the growth rate projected by the EIA between 2005 - 2015. Global values for methane, N2O, and for PFCs, HFC-23, and SF6 were assumed to be, in the aggregate, approximately double the U.S. values for these substances. Global HFC emissions were based on the 1998 Report of the TEAP, assuming that HFC emissions are approximately 2/3 of HFC consumption. HFC consumption in 2030 was projected by extrapolating the TEAP figures forward from 2015, probably overstating likely consumption in the process, because much of the substitution for ODS will already have occurred by 2015. Carbon equivalent emissions of ODS (CFCs 11, 12, 113, 114, 115, and HCFCs 22, 142b, and 141b) for 1990 and 1997 were based on AFEAS data, which covered about 90% of global production in 1990 and virtually all developed country production in 1997. It is noteworthy that in the seven years between 1990 and 1997, when the CFC phaseout took effect in the developed countries, the warming impact of ODS emissions fell by more than 50%. The transition from CFCs to HFCs will provide substantial benefits. [AFEAS, 2002] shows the extent to which the warming impact of fluorochemical production already has been reduced. By 2030, ODS releases to the atmosphere globally should be down to negligible proportions. The warming impact of projected HFC emissions in 2030 is only 12% of the warming impact of CFC emissions in 1990 (one of the peak years for CFC emissions).

Figure 2-3: GWP Weighted Fluorocarbon Production from 1980 - 2000
(source: AFEAS Production and Sales of Fluorocarbons)

This subsection is included as background information on stratospheric ozone depletion and global climate.

For a recent historical perspective, the evolution of the CFC phase-out is depicted graphically in Figure 2-4. With limited exceptions, the production of CFCs in developed countries, including the U.S., ceased at the end of 1995. CFCs will continue to be available from stocks existing as of January 1, 1996 and from reclamation of CFCs recovered from equipment being serviced or scrapped, albeit in decreasing quantities and at increasing prices, according to generally available market information.

Figure 2-4: Historical Perspective of CFC Phase Out

In addition to the CFCs per se, early phase-out times were also established for halons, 1,1,1 trichloroethane (a.k.a. methyl chloroform), and several other chlorinated or brominated compounds.

The EPA developed regulations to comply with the CFC phase-out in the U.S. The basic approach, which is detailed in Federal Register publications, has been to allocate production and consumption quotas to existing fluorochemical manufacturers and importers, based on pre-phase-out market shares.

Simultaneous with the CFC phase-out, an excise tax was imposed on CFCs. The first year of the tax was 1990, at $1.37/ODP-lb ($3.00/ODP)-kg). The tax automatically increased each year by $0.45/ODP-lb ($1.00/ODP-kg) and in 2002 reached $8.50/ODP-lb ($18.80/ODP-kg). Stocks held over from one calendar year into the next (so-called floor stocks) are also subject to the tax increase, if being held for further sale or manufacture.

The Copenhagen Amendments to the Montreal Protocol in November, 1992 established an HCFC phase-out timetable, as shown in graphical form in Figure 2-5. The basic approach is to establish a "Cap" based on combined CFC and HCFC usage, and then periodically to phase down consumption as a percentage of the Cap. The Cap is expressed in terms of ODP weighted consumption (units: ODP-kg) and was established as 3.1% of ODP weighted CFC consumption plus ODP weighted HCFC consumption in 1989. As shown in Figure 2-5, consumption is limited to the Cap beginning in 1996, and stepped reductions from the Cap occur in 2004, 2010, 2015, and 2020, with a final phase-out in 2030.

Figure 2-5: The Montreal Protocol HCFC Phase-out Timetable for Developed Countries

In December, 1995, at the Seventh Meeting of the Parties, an adjustment was adopted reducing the cap by approximately 5% overall --- the new formula being 2.8% of ODP weighted CFC consumption plus ODP weighted HCFC consumption. In addition, HCFC consumption from 2020 to 2030 is restricted to servicing existing air conditioning and refrigeration equipment.

The Montreal Protocol HCFC phase-out schedule seems to have stabilized in terms of both the timing of phase-out steps and the associated consumption limits (i.e., the formula for determining the Cap).

Developing countries (as listed in Article V (1) of the Montreal Protocol) must stop producing CFCs by 2010. HCFC production and consumption will continue until 2040.

The U.S. EPA published a final rule establishing an HCFC phase-out to comply with the Montreal Protocol phase-out. As shown in Table 2-2, the approach has been to phase-out specific HCFCs on specific dates. The key features of this approach are:

• HCFC-141b, which is being used primarily as a foam blowing agent (replacing CFC-11), will be phased-out at the beginning of 2003 to meet the first Montreal Protocol HCFC phase down step
• HCFC-22 will continue to be produced for use in new equipment until the end of 2009, when the next Montreal Protocol phase-down step occurs. HCFC-22 will continue to be produced for servicing existing equipment through 2019, when allowable HCFC consumption under the Montreal Protocol is reduced to 0.5% of the Cap
• HCFC-123 and 124 can be produced for sale for use in new equipment through 2019 and can be produced for sale to service existing equipment through 2029, subject to a maximum use of 0.5% of the Cap.

Specific provisions relating to stratospheric ozone depletion in the Clean Air Act Amendments of 1990 established a ban on intentional venting of refrigerants. The EPA has promulgated extensive regulations in this area, addressing refrigerant recovery system certification, technician certification, and requirements to find and repair leaks. As of late 1995, intentional venting of CFCs, HCFCs, and HFCs is prohibited and the EPA has assessed some rather onerous fines on a number of violators.

A system of CFC warning labels was set up requiring products containing CFCs and/or processed with CFCs to be labeled as such.

The Significant New Alternatives Policy (SNAP) Program was established, under which all substitutes for CFCs and HCFCs are subject to a broad EPA safety (including "environmental safety") review, on an application-by-application basis. The practical impact in terms of limitations on HCFC and HFC usage have been limited. Specific areas impacted are:

• The use of HCFC-141b as a cleaning solvent (replacing CFC-113 and methyl chloroform) was prohibited, with some limited exceptions for a short time period.
• The use of perfluorocarbons as large-scale replacements for either CFCs or HCFCs was restricted.
• While the EPA has been generally supportive of "natural" refrigerants, including hydrocarbons, highly flammable refrigerants have not been approved for automobile air conditioning.

Policy makers should recognize that another significant restraint on the careless use of HFCs is the inherently higher cost of these materials compared to CFCs and HCFCs. The out of chlorinated halocarbons to ones using only fluorine has perforce resulted in a from the relatively simple methane based compounds to more complex ethane and propane based compounds, and to larger percentages of high cost fluorine (compared to chlorine) in these compounds. Table 2-3 compares the bulk quantity costs of HC1 and HF and shows that the cost of fluorine is approximately 4 times the cost of chlorine. The impact of the need to synthesize more complex molecules, with specific isomeric arrangements, causes a significant increase in both capital costs and in raw material and other operating costs. According to generally available market data, the useful HFCs as a group cost considerably more than either the CFCs or HCFCs as a group. A couple of generally available example comparisons of wholesale prices to the refrigeration and air conditioning trades are:

• CFC-12 refrigerant at 1.00/lb. wholesale vs. HFC-134a @ $4.00
• HCFC-22 refrigerant at $2.00/lb. wholesale vs. HFC-410A at $8.00

Table 2-2: Fluorochemical Raw Material Prices

During the first half of the 1990s, CFC-12 was phased-out on an aggressive timetable (Figure 2-4) and a steeply increasing excise tax was also imposed (Section 2.2.2). At the time, there was intense concern whether the phasedown steps that were imposed could be met. In fact, CFC-12 consumption fell farther than the phasedown steps due to the simple disincentive to waste the material that the rapidly increasing excise tax caused, and in spite of an inventory build-up that occurred as the January, 1996 production phase-out date approached.

In the United States and other countries, stringent regimes of "no-vent" regulation have been in place since the early part of this decade. The regulations apply not only to ODS, but also to HFCs. In the U.S., these regulations have been enforced with draconian fines. Specific provisions include:

• Prohibition of deliberately venting refrigerant from a system or from a refrigerant container. As a minimum, recovery of all but a minimal level of residual vapor is required, and recycling or reclamation are encouraged.
• Operators of some categories of equipment are required to maintain leakage rates below permissible levels
• When automobile air conditioning systems are serviced, the leak tight integrity of the system must be verified prior to recharging the system
• End of life recovery of the refrigerant charge is mandated for most product categories.

The US Environmental Protection Agency and the Alliance for Responsible Atmospheric Policy, an industry coalition, announced the following HFC Responsible Use Principles in February 2002. They will establish a worldwide partnership of industry and government that endorse the following principles:

• Select HFCs for applications where they provide health, safety, or environmental, technical or economic advantages, or unique societal benefits
• Minimize HFC emissions to the lowest practical level during manufacture of the chemical, and during use and disposal of equipment using cost-effective technology
• Design and operate HFC-producing plants with the goal of achieving zero HFC emissions
• Engineer, operate and maintain HFC-using systems to minimize emissions and maximize energy efficiency
• Recover, recycle, reclaim and/or destroy used HFCs where technically and economically feasible
• Promote comprehensive technician training in HFC handling to assure compliance with regulations and stewardship practices
• Meet all appropriate regulatory standards governing HFC equipment installation and maintenance, HFC transport and storage, and where applicable exceed such standards with voluntary initiatives
• Accurately report HFC production and promote models, that accurately estimate emissions

The comparative (not absolute) safety with which the CFCs could be handled accounts in large part for their rapid acceptance following their introduction in the 1930s and for accelerated market development and public acceptance of a wide range of refrigeration and air conditioning products. The safe handling characteristics are also a major reason for the emergence of CFC applications ranging from solvents to foam blowing agents to aerosol propellants to fire extinguishents.

To a large degree, the major HFCs retain the fire safety and low toxicity features of the CFCs. In fact, the Program for Alternative Fluorocarbon Toxicity (PAFT) toxicity studies have subjected the HFC alternatives to a far more rigorous toxicity evaluation than the earlier CFCs were ever subjected to. In a number of applications, flammable alternatives have been considered, and in some instances, adopted (most prominently German refrigerators with isobutane refrigerant and cyclopentane foam blowing agent). It is clear that flammable substances, generally fuels, can be and are handled with "acceptable safety" throughout a modern industrial economy. Safety standards exist to guide the widespread industrial use, processing, handling, and transportation of flammable liquids and gases. Consumers purchase and handle propane on a large scale for use in soldering torches, backyard barbecues, and camping stoves and lanterns. A high degree of flammability is an inherent characteristic of a fuel, but it is not an inherent characteristic of a refrigerant. In most cases the associated risks and responsibilities (and benefits) of handling flammable fuels are assumed voluntarily.

In the preceding paragraph, "acceptable safety" was placed in quotation marks to draw attention to the fact that a precise definition of this term is not as obvious as one might think. A basic problem lies with the difference between risks that are accepted voluntarily by individuals and those that individuals are subjected to involuntarily. This difference plays out in the essentially political determination of the "acceptable safety" for a particular activity, in the nature of the safety and performance standards and regulations that apply, and in the likelihood that injuries that result will result in expensive litigation.

The basic point of this is that "safety" and "acceptable safety" are terms that do not have clear-cut definitions and, in essence, is a (perhaps technically informed) political determination. When a comparatively safe material, such as an HFC refrigerant, is replaced with a material having inherent hazards, such as a hydrocarbon refrigerant, the task of providing a comparable safety level is complex and expensive, involving:

• Theoretical risk assessment, design modification, and safety testing
• Working with applicable safety standard setting bodies and regulators for both design guidance and product approval
• Corporate risk management

Even when a manufacturer has made and documented a competent, good faith effort to achieve comparable safety and comply with standards, accidents and resulting injuries can result in costly product recalls and litigation and tort losses whether or not the accident was caused by the use of the more hazardous material. In the product cradle-to-grave spirit of assessing the impacts of HFCs and alternatives, other potential safety issues involved in manufacturing, transporting, installing, field servicing, and disposal need to be recognized.

When an inherently safe HFC is replaced by an inherently hazardous substance, the process of redesigning for safety, any resulting cost increase of the product itself or its manufacturing environment, other cradle-to-grave safety costs, and the exposure to tort losses are all costs that must be bourne by the individuals buying and using the product and, in the aggregate, by society as a whole.

A detailed, application area by application area examination of the cradle-to-grave safety issues associated with alternatives to HFCs is well beyond the scope of this study. Where credible estimates of risks and cost are available from other sources, they have been cited and used as part of the estimate of the cost savings provided to society by HFCs, otherwise, the safety issues are identified and discussed qualitatively.

Hydrocarbons and ammonia can be used safely but not in all applications and not in all circumstances. The risks to be managed generally increase with increasing quantity (charge) and proximity to people. The cost of safety required for highly flammable or toxic refrigerants, which may involve system redesign, might be more effectively invested in improved HFC systems.

• Safety remains a fundamental issue when considering the use of alternatives in comparison to HFCs. Using hydrocarbons or ammonia requires additional risks to be managed.
• For many applications complete system design changes would be necessary if HFCs are not used. These generally add cost - the cost of safety, and can lead to lower efficiency and increased energy consumption.
• Utilizing HFC based refrigeration or air-conditioning systems may allow investment in further energy saving measures rather than investing in the mandatory and expensive safety measures required for toxic or highly flammable refrigerants.

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