SUGGESTED ISSUES FOR RTF BY CATEGORY

ADDITIONAL SCENARIOS / USA / The funding requirements for non-HCFC ODS phase-out and supporting activities comprise a substantial portion of the estimated replenishment. Moreover, many of these costs are increasing, some at 3%/year. There may be a need to consider not only reduced growth rates for these elements, but even reductions from current levels. Can the RTF provide estimates of the impact on the replenishment under two additional scenarios: if those costs are assumed to remain constant and, say, decreased by 3%/year?
ADDITIONAL SCENARIOS / EU / Regarding the substantial assumptions taken by TEAP in their assessment of the potential costs during the next replenishment period we wish to point out that two sub-sector models proposed by TEAP: 90-0-10 and 75-15-10 may not be the only ones which could be suggested. Taking into account that the reduction measures in the servicing sector are essentially relevant for most Group 2 to Group 4 countries to reduce demand for imported equipment and that infrastructure has been built up in all countries under the NPP and provides a platform for immediate action, it seems rational to consider also 75-0-25 or 75-5-20 sub-sector models. The question to TEAP is then what would the financial implications for funding be if the servicing share was increased, as shown in those two scenarios. It would also be most useful if TEAP could compare various scenarios (including those two) in terms of climate impact.
Further on modelling issue, the Parties have indeed requested climate considerations to be taken into account since decision XIX/6. The TEAP report gives details concerning the market penetration estimates of low-GWP alternatives, but then omits to provide figures as to avoided emissions in its modelling scenarios of the replenishment. Question to TEAP: Could TEAP provide this information in the Addendum report? It would be of value to columns added to the summary table, which would summarize the following for the (3*2) funding requirement scenarios for the respective sectors:
reduction amounts in metric tonnes
reduction amounts in terms ODP tonnes
emission reductions in CO2-eq
BASELINE / COLOMBIA / 1. Have TEAP any consideration with regard to the possible implications, if any, from the adjustment of the consumption baseline for Article 5 countries when the figures are already available?
CARRY-OVER / USA / Can the Replenishment Task Force (RTF) update its calculations and estimate based on projects approved through the 64th Executive Committee meeting? In particular, the following should be updated:
the amount of carry-over
CE / USA / Rather than assuming that the cost-effectiveness remains constant, can the RTF provide an estimate of the replenishment that accounts for likely improvements in cost-effectiveness, as we have seen in phasing out CFCs?
CE / USA / The Executive Committee has approved HPMPs that went beyond 10% reductions on a case-by-case basis. Many of those HPMPs have been particularly cost-effective. Rather than assume an uniform cost effectiveness, can the RTF assume that some Parties will achieve the freeze and 10% reduction at the cost effectiveness assumed in the report, while those Parties that reduce a higher percentage (15% and 20%) do so at improved cost effectiveness?
CE CONSUMPTION / CANADA / With respect to 2012-2014 requirement:
- Review the cost effectiveness figures constructed for the consumption sector by taking into account that economies-of-scale can be achieved in very large consuming countries, especially with respect to capital costs.
CE FOAM / CANADA / With respect to 2012-2014 requirement:
- If possible, update calculations of funding for the foam sector, by developing a cost-effectiveness figure for the XPS sector.
CE FOAM, RAC, ICR / USA / Can the Replenishment Task Force (RTF) update its calculations and estimate based on projects approved through the 64th Executive Committee meeting? In particular, the following should be updated:
the average cost-effectiveness of projects in the foam, RAC and ICR sectors. On this note, we believe it would be helpful if the RTF could provide an updated estimate of the replenishment based on the average cost-effectiveness of projects approved to date.
A number of projects have been approved by the Executive Committee at substantially better cost-effectiveness than assumed by the RTF. For example, the RTF assumed a cost-effectiveness of $7.21/kg for PU foam, while the PU foam project in Egypt that was approved by the Executive Committee had a cost-effectiveness of $4.57. Similarly, the RTF assumed an average cost-effectiveness of $11.10/kg for commercial refrigeration, but the Executive Committee approved a project in Syria for $9.02/kg. Can the RTF provide an updated estimate based on these improved cost-effectiveness, which we are seeing in approved projects?
CE RAC / CANADA / With respect to 2012-2014 requirement:
- Review the cost-effectiveness figures for the refrigeration and air conditioning sector by fully applying decision 60/44 of the ExCom, which states that funding up to 25% could be provided above cost-effectiveness thresholds for low-GWP alternatives, and taking into account that no cost-effectiveness threshold has been agreed for the air conditioning sub-sector
CONSUMPTION GROWTH / USA / Can the RTF provide a revised estimate that gives time for the policies funded by the Multilateral Fund and implemented by Parties to take effect and that accounts for the global economic downturn, and so rather than assuming continued growth in HCFC consumption, assumes zero growth and perhaps even a small decrease in HCFC consumption?
CONSUMPTION GROWTH / EU / We also wish to note that the important assumption taken by TEAP concerning HCFC consumption growth by 8% in the period 2009-2010 (i.e. the baseline) has been made with a “confidence level of 85 %” and because not all data were available. Since any change in this assumed growth percentage affects the projected funding calculation, we would like to request TEAP to update this calculation before the Meeting of the Parties in November in the light of newly reported data.
DISCREPANCY PROD CON / USA / The RTF report highlights an apparent discrepancy between reported HCFC production and consumption. For example, global HCFC-22 consumption exceeded global production by 30,000 tons in 2009. Similarly, the discrepancy between global consumption and production for HCFC-142b in 2009 appears to be very large: consumption is reported to be 63% larger than production. Can the RTF provide a revised estimate of the replenishment assuming that some of the reported consumption is in error?
DISCREPANCY PROD-CON / EU / We wish to note further that the report revealed a number of uncertainties in data available on consumption and production of HCFCs in A5 countries, in particular regarding HCFC-141b and HCFC-22 in between the 2008 and 2009 global consumption and production data: consumption exceeds production by 20 000 tonnes in 2008 and by 30 000 tons in 2009; TEAP indicates that they are not in a position to investigate the matter further. This could result in overestimation of the cost calculated for some sectors or sub-sectors. Specifically, it can be noted that data on percentage of production designated for feedstock uses and data on foreign ownership share of production plants are missing for some producing countries. Given these uncertainties, we would note that a statement like “the funds estimated for production closure constitute between 37 and 46 percent of the total funding requirement” seems to be premature. In our view, at this point in time, any calculation of costs associated with HCFC production closure is hardly impossible. It is therefore suggested that TEAP identifies those gaps in data and undertakes all possible efforts (optionally with assistance of the Ozone Secretariat) to verify the data and collect that missing information before XXIII MOP and – on that basis - amend the Replenishment Report accordingly, if needed. In particular, we welcome the planned production sector technical audit of China to enable a more comprehensive examination of funding requirements.
FERM / COLOMBIA / What is the possible tendency of flow of resources aviability during the given triennium from the application of the FERM mechanism for contributions to the MLF?
FOAM / USA / While the capitol costs needed to convert to hydrocarbon blends are significant (due primarily to safety-related issues), there are savings in terms of the operating costs. Can the RTF provide a revised estimate for the foam sector that would follow the example of Bay Systems highlighted in the RTF's report, where capital investments were made in one blending facility (system house) only, which then supplies manufacturers with the pre-blended polyols?
FUTURE REPLENISHMENTS / CANADA / With respect to 2015-2017 and 2018-2020 and future requirements:
Consider options to ensure more even (i.e. stable) replenishments, by considering, for example: (a) back-loading the disbursement of some payments for the production sector, taking into account that the funding for this sector principally consists of compensation and, therefore, does not need to be paid prior to phase-out; (b) back-loading the disbursement of a portion of operating costs to be approved and paid for projects, considering only capital costs are generally needed upfront to begin conversion.
HCFC SUPPLY SHORTAGE / EU / In the report and its presentation TEAP has indicated shortages of Global and /or A5 production of HCFCs versus global and/or A5 HCFC consumption. The short term production phase out of HCFC in A2 will further contribute to global and regional shortages putting supplies in A5 at risk and lead to high costs. As an effect we may face accelerated transition to high GWP substances, such as 404a in the commercial sector, while climate friendly alternatives are being developed and about to be deployed in A5 markets soon.
Therefore, we would like to ask TEAP whether they had taken into account the possible supply shortages, globally and in A5 countries, in specific considering the accelerated closure of HCFC production in A2, and the possible consequences for A5 in terms of economic and supply constraints for maintaining consumption not being obligated for phase out, and to request TEAP to describe potential development and consequences of production shortages globally or in A5 in the supplement report.
HPMP I TRANCHES FUNDING / AUSTRALIA / Section 6.1 notes that funding for all elements for stage 1 HPMPs is assumed to be funded from the 2011-2014 period. The Executive Committee has however been reserving some funding components to be paid in 2015, and it would be useful for the RTF to further review possible funding for the State 1 HPMPs in light of these different tranche arrangements.
HPMP II PREPARATION / USA / Can the RTF consider reduced second-stage HPMP preparation costs, which may be lower than the current HPMP preparation costs as the implementing agencies will have gained experience and knowledge in preparing HPMPs.
IS / ARGENTINA / Calculate adjustment for inflation for Institutional Strengthening
( which has had no adjustment at least in the last ten years)
IS / VENEZUELA / Calculate the inflation adjustment for Institutional Strengthening
(That has had no adjustment at least the last ten years)
IS / COLOMBIA / We also want to highlight the proposal made by Argentina in Plennary yesterdy, with regard to include an estimation of the inflation for institutional strengthening projects.
IS / GRULAC / To request TEAP to conduct an assessmentof IS funding levels forLVCs and to considerthe necessary adjustments, whereby it is ensured that possible adjustments in the funding levels will not be less than the current ones
LOW GWP ALTERNATIVES / EU / Table 5–1 lists the specific cost effectiveness (CE) for project conversions in the foam sector. Table 5–2 lists preferred alternatives in the foam sector for all applications, basically hydrocarbon and water based technology.
Taking into account all information, it is suggested that there are sufficient options at hand, being cost effective and climate friendly at the same time. Evaluating tables 5–3 to 5-5 shows that more than 67 % of the consumption is in medium or large enterprises with good cost effectiveness.
Questions – for further elaboration by TEAP:
  • What is the percentage of 141b consumption for foam in A5 Countries that is technically feasible for short term conversion to the alternatives, based on an average cost effectiveness of 7,21 USD/kg, keeping in mind an additional 25% increase for low-GWP alternatives?
  • What would be the range of cost and consumption if all technically feasible medium and large productions units would be converted to low-GWP alternatives as listed in table 5 -1 in order to meet the reduction step in stage 1 HPMPs ?

LOW GWP CE / EU / Regarding approach taken by TEAP to low GWP alternatives to HCFCs
According to the Study, the cost and the prospective market penetration of alternative refrigerants, including natural refrigerants and unsaturated HFC (“HFOs”) have been examined. Cost effectiveness values have been determined based on the individual sub-sector cost-effectiveness values and the minimum and maximum penetration rates for those alternative options. The Study states further, that options for the use of unsaturated HFCs and their blends are as yet largely unknown and that the estimated costs for these technologies are less certain. The Task Force concludes, that the “analysis of the cost-effectiveness of the various options is subject to a substantial level of uncertainty for a variety of technical reasons.”
Question – for TEAP to elaborate further:
Could TEAP provide a list of the alternatives that had been included under „low-GWP“ cost calculations and provide an overview on how the ICC and IOC in table 5–7 were calculated for low-GWP alternatives, explaining the reasons for the excessive range of cost?
LOW GWP MARKET PENETRATION / EU / Cost effectiveness
The RTF report indicates (p69) that the CE of different sub-sectors is likely to decrease, given that market penetration of certain alternatives is likely to increase, as shown in Table 5-6. But then, the RTF concludes that it is not possible to “determine the extent to which this might occur. For this reason the cost effectiveness values for the periods 2012-2014 and 2015-2017 have been kept constant”.
Could TEAP also provide a sensitivity analysis by weighting this result in order to reflect the likeliness of market penetration of low-GWP alternatives?
PRODUCTION / CANADA / With respect to 2012-2014 requirement:
- Revise requirement for production sector by: (a) allocating annual tranches of funding to be paid after 2014, including one to be paid after verification that 2015 targets has been met, as per usual practice; (b) not including any compensation for swing plants.
PRODUCTION SWING PLANTS / ARGENTINA / Calculate compensation for swing plants: estimated amounts for
different scenarios –closure, conversion, etc…-, items or activities
to be covered, forms of calculation, percentage swing plants representof total funding for production sector.
PRODUCTION SWING PLANTS / VENEZUELA / Calculate the compensation for the plants of swing: the estimated quantities for different closure scenarios, conversion, etc ... - Items or activities cover, forms of calculation, a percentage of total Total funding for the production sector
3) Consider the labor indegnizaciones.
4) The elimination of environmental liabilities and clean the area de planta
PRODUCTION SWING PLANTS / USA / Can the RTF provide an estimate that does not include any compensation for swing plants?
PRODUCTION SWING PLANTS? / AUSTRALIA / Requests that the TEAP remove non-eligible HCFC-22 production facilities from its calculations for the production sector
PRODUCTION CDM / EU / Still on the HCFC production sector – we would welcome more detailed analysis of CDM crediting issue (section 3.6.1) and associated issues, if any.
PRODUCTION CLOSURE SCENARIOS / USA / The RTF assumed that production costs would be exclusively due to plant closure. We believe it would be useful to consider a wider variety of production closure funding scenarios. Can the RTF estimate production sector costs assuming conversion of plants from dispersive to feedstock production?
PRODUCTION CLOSURE SCENARIOS / USA / Can the RTF estimate whether Parties can achieve their freeze and 10% obligations by only addressing HCFC-22 and HCFC-142b production, and whether any changes in production of those substances can be offset by increased feedstock use?
PRODUCTION CLOSURE SCENARIOS / USA / To the extent that any early production closure were to happen, the most cost-effective approach would be to start with decommissioning of older plants. Can the RTF provide an estimate of production sector costs that excludes swing plants and assumes that any production closure were only to occur at older production facilities?
PRODUCTION CLOSURE SCENARIOS / USA / The report notes that the average level of utilization of production is believed to be less than two-thirds of capacity. Rather than assume the Multilateral Fund would compensate for plant closure, can the RTF estimate how much it could compensate facilities for a small change in under-capacity, for example, if on average production plants went from 35% under-capacity to, say, 37%, 39%, and 41%.
PRODUCTION CLOSURE SCENARIOS / USA / We believe it would also be useful to consider scenarios where production reductions are related but perhaps not identical to consumption reductions. Can the RTF provide a revised estimate based on the assumption that the 10% compliance obligation is met in 2015, and where those costs are incurred by the Multilateral Fund only after verification that the 2015 targets have been met, as per usual practice.