On April 5, 2022, the EU Commission proposed two new regulations to restrict the emission and use of highly potent greenhouse gases, which heavily contribute to global warming, in order to limit global temperature rise and the objectives of the Paris Agreement and the Montreal Protocol to the Vienna Convention for the protection of the ozone layer.
The first proposal would replace Regulation (EC) No 1005/2009 of September 16, 2009, on substances that deplete the ozone layer ("ODS Regulation") currently in force, which prohibits production, trade, and use of ozone depleting substances ("ODS"), except for a few exempted specific uses, and limits the trade and use of products and equipment with ODS. Nonetheless, considering that most ODS have been phased out, the EU Commission has proposed to end now-obsolete exemptions and to shift from the current quota and registration system to a more operational licensing system. The proposal also includes new recovery obligations to prevent emissions from old products and equipment that still contain ODS (e.g., insulating foams in buildings) and new monitoring, reporting, and enforcement measures to fight illegal activities.
The second proposal would replace Regulation (EU) No 517/2014 of April 16, 2014, on fluorinated greenhouse gases ("F-Gas Regulation") currently in force, which aims at controlling the placement of fluorinated greenhouse gases ("F-gases") on the EU market, mainly through the implementation of a quota system for hydrofluorocarbons ("HFCs") to ensure their progressive phasedown. Nonetheless, in order to ensure that the EU stays in line with its international commitments, in particular the Kigali Amendment to the Montreal Protocol regarding HFCs, the EU Commission has proposed to tighten the phasedown of HFCs by strengthening the quota system, including with stricter registration rules and a fixed quota price. It also proposes to restrict the use of F-gases to new equipment where suitable alternatives are not available, while abolishing some existing exemptions. In addition, the proposal extends monitoring and reporting obligations to new activities and reinforces enforcement measures to fight illegal trade.
The revision of these two regulations will likely be a lengthy process with expected back-and-forth between EU institutions, which may bring changes to the proposed provisions. In any case, if the current proposals tend toward a more stringent legal framework for highly potent greenhouse gases, this will represent significant opportunities for industries, as the proposed measures favor alternative substances replacing ODS and F-gases as well as the development of more climate-friendly equipment and technologies.
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