UNEP/OzL.Pro/ExCom/78/11

UNITED
NATIONS / EP
/ United Nations
Environment
Programme / Distr.
GENERAL
UNEP/OzL.Pro/ExCom/78/11
13 April 2017
ORIGINAL: ENGLISH

EXECUTIVE COMMITTEE OF
THE MULTILATERAL FUND FOR THE
IMPLEMENTATION OF THE MONTREAL PROTOCOL
Seventy-eighth Meeting

Montreal, 4-7 April 2017

REPORT OF THE SEVENTYEIGHTH MEETING OF THE EXECUTIVE COMMITTEE

Introduction

  1. The 78thmeeting of the Executive Committee of the Multilateral Fund for the Implementation of the Montreal Protocol was held at the headquarters of the International Civil Aviation Organization, Montreal, Canada, from 4 to 7 April 2017.
  2. The meeting was attended by representatives of the following countries, members of the Executive Committee in accordance with decision XXVIII/14 of the Twenty-Eighth Meeting of the Parties to the Montreal Protocol:

(a)Parties not operating under paragraph 1 of Article 5 of the Protocol: Australia, Austria(Chair), Belgium, Germany, Japan, Slovakia and the United States of America; and

(b)Parties operating under paragraph 1 of Article 5 of the Protocol: Argentina, Bosnia and Herzegovina, Cameroon, China, Lebanon (Vice-Chair), Mexico and Nigeria.

  1. In accordance with the decisions taken by the Executive Committee at its Second and Eighth meetings, representatives of the United Nations Development Programme (UNDP), United Nations Environment Programme both as implementing agency and as Treasurer of the Fund, the United Nations Industrial Development Organization (UNIDO) and the World Bank attended the meeting as observers.
  2. The Executive Secretary and staff of the Ozone Secretariat and members of the Replenishment Task Force of the Technology and Economic Assessment Panel (TEAP) were also present.
  3. Representatives of the European Commission, the Alliance for Responsible Atmospheric Policy, the Environmental Investigation Agency, the Institute for Governance and Sustainable Development,theEnvironmental Protection Institute (IPA) of Mexico, the Kigali Cooling Efficiency Program, the Natural Resources Defense Council, the Refrigeration and Air-Conditioning Manufacturers’ Association of India,and the Refrigerant Gas Manufacturers' Association of Indiaalso attended as observers.

AGENDA ITEM 1: OPENING OF THE MEETING

6.The meeting was opened by the Chair, Mr. Paul Krajnik, who welcomed members to the special four-day meeting, the first of three meetings planned for 2017. He reminded members that the Executive Committee had decided to convene the 78thmeeting to address matters related to the Kigali Amendment and potential additional contributions to the Multilateral Fund. He further indicated that it was the first time since the Fourth meeting of the Executive Committee in June 1991 that an Executive Committee meeting agenda had included only policy matters. At the Fourth meeting, the challenge had been to kickstart the Interim Multilateral Fund to phase out CFCs; at the 78thmeeting, the challenge was to develop new guidelines for HFC phase-down within two years of the adoption of the Kigali Amendment. The Chair expressed the hope that the hallmark equal participation of Article 5 and non-Article 5 countries, which had underpinned the success of the Multilateral Fund for over two decades, would make it possible to achieve that goal.

7.The Chair went on to list the policy papers to be considered by the Executive Committee at the meeting, pointing out that the relatively small number of documents belied the extreme complexity of the agenda, with each item requiring careful consideration. While taking this unique opportunity to focus on HFC policy matters, it was important to keep in mind that a large number of HCFC phase-out projects would have to be approved before the end of the 2015–2017 triennium, which meant that the 79th and 80thmeetings would already have very full agendas. It was therefore of the utmost importance to make substantive progress on the crucial policy matters on the agenda of the present meeting.

AGENDA ITEM 2: ORGANIZATIONAL MATTERS

(a)Adoption of the agenda

8.One member said that, under agenda item 5, Available information on HFC consumption and production in Article 5 countries, he wished to discuss information on HFC consumption and production in non-Article 5 countries too. Furthermore, in relation to agenda item 7, Procedures for Article 5 countries that have HFC consumption baseline years from 2020 to 2022 in accessing additional contributions for enabling activities, he said that the Kigali Amendment did not differentiate between Article 5 group 1countriesand Article 5 group 2 countrieswith regard to access to funding. Funding should therefore be available to all Article 5 countries.

9.Following confirmation from the Chair that those matters could indeed be discussed under those agenda items, the Executive Committee adopted the following agenda for the meeting on the basis of the provisional agenda contained in document UNEP/OzL.Pro/ExCom/78/1:

1.Opening of the meeting.

2.Organizational matters:

(a)Adoption of the agenda;

(b)Organization of work.

3.Secretariat activities.

4.Status of additional contributions to the Multilateral Fund.

5.Available information on HFC consumption and production in Article 5 countries.

6.Elements for consideration of the Executive Committee related to the Kigali Amendment to the Montreal Protocol arising from decision XXVIII/2 of the Meeting of the Parties:

(a)Information relevant to the development of the cost guidelines for the phasedown of HFCs in Article 5 countries:

(i)Draft criteria for funding;

(ii)Enabling activities;

(iii)Institutional strengthening;

(b)Identification of issues to be considered in relation to existing HCFC phase-out activities;

(c)Key aspects related to HFC-23 by-productcontrol technologies.

7.Procedures for Article 5 countries that have HFC consumption baseline yearsfrom 2020to 2022 in accessing additional contributions for enabling activities.

8.Other matters.

9.Adoption of the report.

10.Closure of the meeting.

(b)Organization of work

10.One member, noting the overlap between the issues to be discussed under agenda item 6(a)(ii), Enabling activities, and agenda item 6(a)(iii), Institutional strengthening, proposed that the two topics be discussed together. The Chair clarified that the agenda items could be discussed separately or together, depending on the wish of the Executive Committee when the time came.

11.The Executive Committee agreed to consider under agenda item 8, Other matters, the dates and venue of the 80thmeeting of the Executive Committee in 2017.

AGENDA ITEM 3: SECRETARIAT ACTIVITIES

12.The Chief Officer welcomed the members of the Executive Committee and all other participants to the present meeting. He also extended a warm welcome to Mr. Munyaradzi Chenje, who had been selected for the post of Deputy Chief Officer of the Secretariat. Mr. Chenje would be taking up his duties in May 2017. The Chief Officer also welcomed Ms. Xiaofang Zhou, who had recently been appointed Director of the Montreal Protocol Unit of UNDP, and was attending her first Executive Committee meeting as the implementing agency’s representative. The Chief Officer then introduced documentUNEP/OzL.Pro/ExCom/78/2, which provided an overview of the work done by the Secretariat since the 77thmeeting to address decision77/59 on matters related to the Kigali Amendment arising from decisionXXVIII/2, and potential additional contributions to the Multilateral Fund by 16 non-Article 5 countries to provide fast-start support for the implementation of the Kigali Agreement. The Chief Officer also drew the members’ attention to the inter-agency coordination meeting that had been held in Montreal in February 2017, at which the Ozone Secretariat had provided information related to the Kigali Amendment and relevant decisions by the Parties. The Secretariat, together with the bilateral and implementing agencies and the Treasurer, had discussed matters linked to the Kigali Amendment and relevant Executive Committee decisions, which had facilitated preparations for the 78thmeeting of the Executive Committee.

13.The Executive Committee took note with appreciation of the report on Secretariat activities contained in document UNEP/OzL.Pro/ExCom/78/2.

AGENDA ITEM 4: STATUS OF ADDITIONAL CONTRIBUTIONS TO THE MULTILATERAL FUND

14.The Treasurer introduced the report on the status of additional contributions to the Multilateral Fund contained in documents UNEP/OzL.Pro/ExCom/78/3 and Corr.1. Of the 16 non-Article 5 countries that had agreed to make additional contributions, four had already signed bilateral agreements with the Treasurer and one had confirmed payment of its contribution. Another three countries had indicated the method and timetable for their contributions, while the Treasurer was waiting for a response from the remaining nine countries.

15.He also said that the Government of Germany had suggested using its additional contribution for bilateral projects and that that contribution amounted to US$3.2 million, on the basis of the distribution list outlining the share of contributions among the 16 countries.

16.Following a discussion on that distribution list and the amounts pledged, it was accepted that there might be differences between the amounts pledged and those actually received, owing, inter alia, to exchange-rate fluctuations or potential additional contributions. As none of the additional contributions had been received, the issue was hypothetical, and the Executive Committee agreed only to note with appreciation the status of pledged additional contributions as reported by the Treasurer as opposed to specifying their value.

17.In response to a query on how the additional funds would be processed, the Treasurer said that the same procedure as that used for other contributions received for the Multilateral Fund would be followed.

18.The Executive Committee decided:

(a)To note the report by the Treasurer on the status of the additional contributions to the Multilateral Fund as contained in documents UNEP/OzL.Pro/ExCom/78/3 and Corr.1;

(b)Further to note with appreciation the status of pledged additional contributions distributed among the 16 non-Article 5 Parties to provide fast-start support for implementation of the Kigali Amendment; and

(c)To request the Treasurer to report to the Executive Committee on the additional contributions received for fast-start support separately from the other pledged contributions to the Multilateral Fund at the 79thmeeting.

(Decision 78/1)

AGENDA ITEM 5: AVAILABLE INFORMATION ON HFC CONSUMPTION AND PRODUCTION IN ARTICLE 5 COUNTRIES

19.The representative of the Secretariat introduced documents UNEP/OzL.Pro/ExCom/78/4 and Corr.1, which had been prepared pursuant to decision77/59(b)(i). They presented an analysis of HFC consumption and production in Article 5 countries based on TEAP Task Force reports (section I) and preliminary information on HFC consumption from the ODS alternatives survey reports that had been submitted by implementing agencies as at 28 February 2017 (section II). In presenting the data from the ODS alternatives surveys, she said that it had not been possible to calculate an overall projection of HFC consumption in the countries concerned owing to the limited data available. A more comprehensive report comprising additional ODS alternatives surveys would be presented to the 79thmeeting, on the understanding that such analysis might still be limited by the absence of data from some of the largest HFC-consuming countries, where funding for the preparation of such surveys had not been requested.

20.Some members expressed concern at the limited number of ODS alternatives survey reports that had been received by the Secretariat. Assurance was sought that a sufficient number of surveys would be submitted to allow the Secretariat to make a more comprehensive report to the Executive Committee at its 79thmeeting. It was suggested that it might be more efficient for countries unable to complete such surveys to return any unspent funds and to reconsider the need to gather such data when developing enabling activities for implementation of the Kigali Amendment. The Secretariat was also asked to clarify how the reporting format had been used and how any gaps in information had been addressed, especially those relating to energy efficiency.

21.One member noted that, while the provision of information on HFC consumption as part of the ODS alternatives surveys was voluntary for Article 5 countries, it would be useful if data on HFC consumption and production from non-Article 5 countries could also be made available to ensure greater transparency. It was clarified that the subject under discussion was the availability of reports of surveys funded by the Multilateral Fund at the request of Article 5 countries. Furthermore, within the context of the Executive Committee, non-Article 5 countries had never been requested to provide detailed consumption and production data as it was not relevant for the operation of the Executive Committee.In this regard, the member further emphasized that there was no differentiationin the Montreal Protocol with regard to access to information. Article5 and non-Article 5 countries should therefore provide such information.

22.It was also observed that the reporting of HFC data by non-Article 5 countries was already being addressed at the meetings both of the Parties to the Montreal Protocol and of the Open-ended Working Group, and the Executive Committee did not have the mandate to request that information from nonArticle 5 countries.

23.One member proposed that the Secretariat obtain such data from reports provided by nonArticle5 Parties to the United Nations Framework Convention on Climate Change.

24.The representative of the Secretariat said that, in order for any additional information from the surveys to be included in the report being prepared for the 79thmeeting, the ODS alternatives survey reports would have to be received no later than 8 May 2017. She explained that the reports submitted had used the format agreed at the 75thmeeting, and noted that many reports had even included the data tables that were not required for submission, but which enabled more robust analysis. With regard to energy efficiency, she also clarified that, while there was also a column to report that information, on a voluntary basis, in the aforementioned format, no such information had been received. She confirmed that the data contained in the document consisted of preliminary estimates from the countries, as none had a licensing system that included HFCs.

25.The Executive Committee decided:

(a)To note the report on the available information on HFC consumption and production in Article 5 countries contained in documents UNEP/OzL.Pro/ExCom/78/4 and Corr.1;

(b)To urge bilateral and implementing agencies to work with relevant Article 5 countries to complete and submit, no later than 8May2017, as many ODS alternatives survey reports as possible; and

(c)To request the bilateral and implementing agencies to return to the 81stmeeting unspent balances for those surveys of ODS alternatives that had not been submitted to either the 79thor 80thmeeting of the Executive Committee.

(Decision 78/2)

AGENDA ITEM 6: ELEMENTS FOR CONSIDERATION OF THE EXECUTIVE COMMITTEE RELATED TO THE KIGALI AMENDMENT TO THE MONTREAL PROTOCOL ARISING FROM DECISION XXVIII/2 OF THE MEETING OF THE PARTIES

26.The Chair introduced the item, noting that it comprised three sub-items: information relevant to the development of the cost guidelines for the phase-down of HFCs in Article 5 countries; identification of issues to be considered in relation to existing HCFC phase-out activities; and key aspects related to HFC-23 by-product-control technologies.

(a)Information relevant to the development of the cost guidelines for the phase-down of HFCs in Article 5 countries

(i)Draft criteria for funding

27.The representative of the Secretariat introduced documents UNEP/OzL.Pro/ExCom/78/5 and Corr.1, which presented information relevant to the development of criteria for funding the phase-down of HFCs. He highlighted Table1 of document UNEP/OzL.Pro/ExCom/78/5 in which the elements of the cost guidelines for the phase-down of HFCs in Article 5 countries were listed, alongside the relevant paragraphs of decision XXVIII/2. Further information on specific elements was contained in documents UNEP/OzL.Pro/ExCom/78/6 (enabling activities), UNEP/OzL.Pro/ExCom/78/7 (institutional strengthening), and UNEP/OzL.Pro/ExCom/78/9 (Key aspects related to HFC-23 byproductcontrol technologies). Furthermore, Annex I of document UNEP/OzL.Pro/ExCom/78/5 contained a proposed template for draft cost guidelines for the phase-down of HFCs. The template included text relating to the following elements of decision XXVIII/2 already agreed by the Parties: flexibility in implementation, cutoff date, second and third conversions, other costs, and eligibility of Annex F substances subject to highambient-temperature exemptions.

28.Several members offered an overview of the task before the Committee. One member, supported by others, said that some of the issues would be relatively straightforward to address, while others were more complex and would require more time and support from the Secretariat in the form of additional, indepth evaluations and studies, some of which had been recommended by the Secretariat at the 77thmeeting of the Executive Committee. One member said that some aspects were of particular importance, including the matter of energy efficiency in the context of compliance.

29.One member said that the principle related to sustained aggregate reductions in HFC consumption in decisionXXVIII/2 should be marked in Table 1 as already agreed to by the Parties, as had been done for the other principles adopted by the Parties under that decision. Referring to information provided to Executive Committee members on the elements of decisionXXVIII/2, she added that those elements were clearly defined in the decision itself, and any reinterpretation or addition of unfamiliar concepts should be avoided, given the complexity of the task before the Committee and the relatively short time frame in which to achieve it. One member highlighted the particular challenge confronting small enterprises, which faced high levels of risk due to lack of access to funding and new technologies. In such matters, the Committee should adopt a cautious approach in order to avoid repetition of past errors.

30.One member said that, while application of the cost thresholds and principles followed in the phase-out of CFCs and HCFCs would simplify the discussions on cost guidelines for the phase-down of HFCs, they were not necessarily applicable, given the very different nature of the HFC challenge. He also expressed his dissatisfaction that information on consumptionand production of HFCs had been sought from Article 5 countries, but not from non-Article 5 countries, given the need to manage HFCs equitably across the globe.