Australia is phasing down the import of hydrofluorocarbons (HFCs) and has introduced a quota system for imports of HFCs as bulk gas.
To import bulk HFCs you must hold both a controlled substances licence for the import of synthetic greenhouse gases and an HFC import quota.
The material on this page is a summary and is intended for general information only. If you import or are considering importing bulk HFCs please refer to the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 and associated Regulations for full details and consider obtaining independent legal advice.
Allocation period 2022-2023
For the quota allocation period 2022-2023, 95% of total quota will be allocated to holders of grandfathered quota in the second allocation period, based on imports during the years 2019 and 2020.
In response to COVID-19, the Australian Government adjusted the HFC quota allocation method for the 2022-2023 allocation period. The changes allow grandfathered quota holders who import 75% or more of their import quota in 2020 to have this count as 100% towards their maximum quota allocation for the 2022-2023 quota allocation period.
The remaining 5% of total quota is non-grandfathered quota which is open to all applicants, including grandfathered quota holders. The method for allocating non-grandfathered quota for the 2022-2023 quota allocation period has been set by Ministerial Determination.
Allocation period 2024-2025 and all later periods
Changes to the HFC quota allocation method made in 2020 allow grandfathered quota holders who import 90% or more of their import quota in 2021 and later calendar years to receive their maximum quota allocation for the 2024-2025 quota allocation period and later periods.
The changes are designed to address logistical matters, such as delays in shipping and standard size containers, which can make it difficult for importers to import exactly 100% of their quota.
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How was quota allocated in earlier periods?
Quota allocation period 2018-2019
Quota was divided between grandfathered quota, allocated to established market participants, and non-grandfathered quota, open to new and established participants. The split between grandfathered quota and non-grandfathered quota was 90%/10% for the 2018–2019 allocation period.
Grandfathered quota was allocated to established market participants who held a licence under the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 and who imported HFCs or hydrochlorofluorocarbons (HCFCs) between 2009–2014.
For each quota allocation period, new and established participants are able to apply for non-grandfathered quota. In the 2018-2019 quota allocation period non-grandfathered quota was 10% of total HFC quota: 0.8 megatonnes (800,000 tonnes) carbon dioxide equivalent (CO2-e) in each year.
The method for allocating non-grandfathered quota for the 2018-2019 quota allocation period was set by Ministerial Determination.
Quota allocation period 2020-2021
For the second quota allocation period, 90% of total quota was allocated to holders of grandfathered quota in the first allocation period, based on imports during the first year of the first allocation period. 5% of total quota was allocated to holders of non-grandfathered quota in the first quota allocation period who opt to participate. In both cases, 2020-2021 grandfathered quota was allocated based on their total imports as a percentage of all grandfathered quota and non-grandfathered quota imports during 2018.
The remaining 5% of total quota was non-grandfathered quota open to all applicants, including grandfathered quota holders. The method for allocating non-grandfathered quota for the 2020-21 quota allocation period was set by Ministerial Determination.
HFC import quota - Frequently asked questions
Why is there a quota for HFC bulk gas imports?
Australia is phasing down the import of HFCs from 1 January 2018 through a quota system for imports of HFCs as bulk gas. The aim is to encourage industries to move to alternative substances that have less impact on the environment and have a lower global warming potential (GWP).
HFC quota is allocated to eligible importers of bulk HFCs for each two-year quota allocation period. Subject to meeting all legislative requirements, these importers are able to import up to the amount of quota allocated to them.
What unit of measure is the HFC quota expressed in?
HFC quota is expressed in carbon dioxide equivalent (CO2-e) megatonnes (million tonnes).
What are CO2-e megatonnes?
Carbon dioxide equivalent (CO2-e) is the measurement of the global warming potential (GWP) of a substance. The higher the GWP, or the more CO2-e a substance has, the more potential that substance has to increase global warming.
HFC quota and calculation of quota on import are measured in megatonnes (million tonnes) of CO2-e.
Here is an example of how to calculate the CO2-e megatonnes you are importing. This example uses HFC-134a as the imported gas:
HFC-134a has a GWP of 1430, which means HFC-134a has 1430 times the CO2-e of carbon dioxide.
- One isotanker of HFC-134a contains 15 metric tonnes of HFC-134a.
- Multiply the GWP by the tonnes to get the CO2-e tonnes of a tanker, 1430 × 15 = 21,450 CO2-e tonnes.
- Divide by 1 million to get megatonnes, 21,450 ÷ 1,000,000 = 0.02145 megatonnes
- An isotanker containing 15 tonnes of HFC-134a contains 0.02145 CO2-e megatonnes.
This example shows how to calculate how much gas you can import with one minimum viable allocation (MVA) of non-grandfathered quota, also using HFC-134a as the imported gas:
- 1 MVA in 2018-19 is 0.008 megatonnes. Multiply by 1 million to get tonnes, 0.008 x 1,000,000 = 8000 CO2-e tonnes.
- HFC-134a has a GWP of 1430, or 1430 times the CO2-e of carbon dioxide.
- Divide 8000 CO2-e tonnes by 1430 to get the tonnes of HFC-134a covered by 1 MVA, 8000 ÷1430 = 5.594 tonnes of HFC-134a.
- An allocation of 1 MVA for 2018-19 will allow import of 5.594 metric tonnes of HFC-134a.
Keep in mind that other HFCs have different GWP. For example, HFC-410a has a GWP of 2088, higher than the GWP of HFC-134a, and an allocation of 1 MVA for 2018-19 would have allowed import of 3.831 metric tonnes of HFC-410a.
What is the difference between grandfathered and non-grandfathered HFC quota?
Grandfathered quota is allocated to established market participants who held a licence under the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 and imported HFCs or hydrochlorofluorocarbons (HCFCs) in the period 2009-2014.
Non-grandfathered quota is open to anyone. You do not need to have imported HFCs or HCFCs in the past to be eligible to apply for non-grandfathered quota. However, applicants will need to satisfy all the requirements to hold an import licence, and be granted an import licence, in order to be eligible for non-grandfathered quota.
Importers allocated non-grandfathered quota in the 2018–2019 allocation period who import their full allocation in that period were able to convert half of their non-grandfathered quota allocation to grandfathered quota the next allocation period, meaning they had a guaranteed allocation if all other conditions were met.
For each quota allocation period, new and established participants are able to apply for non-grandfathered quota.
How will the Department work out what my grandfathered quota allocation is?
For the first quota allocation period (2018-2019), grandfathered allocations were based on licensed imports of HFCs and hydrochlorofluorocarbons (HCFCs) during the baseline years (2009-2014).
HFCs imported in the baseline period were given a 100% weighting. HCFCs imported in the baseline period were given a 75% weighting.
All eligible importers (those who held a controlled substances licence for importing HFCs and/or HCFCs during the baseline years) were invited to apply for a new licence and to claim their eligible grandfathered quota (GFQ) allocation.
In the second quota allocation period (2020-2021), grandfathered quota was allocated to both grandfathered quota and non-grandfathered quota holders from the first allocation period, based on imports during 2018. A licensee needed to import their full quota allocation during 2018 to retain their full quota proportion.
In the third quota allocation period (2022-2023), grandfathered quota will be allocated to grandfathered quota holders from the second quota allocation period, based on imports during 2019 and 2020. To retain their full quota proportion, a licensee will need to have imported their full quota allocation in 2019 and at least 75% of their quota allocation in 2020.
In the fourth and subsequent quota allocation periods (2024-2025 and after), grandfathered quota will be allocated to grandfathered quota holders from the previous quota allocation period, based on imports during the calendar years three and two years before the respective allocation period. To retain their full quota proportion, a licensee will need to have imported at least 90% of their quota allocation in each relevant earlier year.
How will non-grandfathered quota be allocated?
For each quota allocation period, new and established participants are able to apply for non-grandfathered quota.
The method for allocating non-grandfathered quota will be published prior to each quota allocation period.
The method for allocating non-grandfathered quota for the third quota allocation period (2022-2023) was set by Ministerial Determination.
What happens if I do not have quota for the current quota allocation period?
You must not import HFCs in a quota period unless you hold quota for that period.
You will still be able to apply for quota in the subsequent two year quota allocation period. Please contact the Department for more information about your options.
Applications for controlled substance licences for the import of synthetic greenhouse gases perfluorocarbons (PFCs), sulfur hexafluoride (SF6) or nitrogen trifluoride (NF3) can be made at any time and import of these gases is not affected by the HFC quota.
Can you tell me how much quota the other importers have been allocated?
No. This is commercial in confidence information. You will only be notified of your own quota allocation. Allocations will not be published.
The Department publishes a list of licence holders on its website.
Is quota transferable?
Yes. The scheme allows for quota transfer. Importers may trade their quota. Transfer of quota allocations (in part or full) must be confirmed with the Department and will permanently transfer quota rights. Contact the Department for more information.
If I am allocated quota, will I be able to offset my exports against my imports?
A quota allocation is the net allowance of HFCs after exports. Exports may only be offset against imports in the same calendar year.