At a glance
- What is the hydrofluorocarbon (HFC) phase-down? The HFC phase-down is a gradual reduction in the maximum amount of bulk HFCs permitted to be imported into Australia, which started on 1 January 2018. It is managed through a quota system on imports.
- What are HFCs? HFCs are a type of synthetic greenhouse gas, mostly used in refrigeration and air-conditioning equipment.
- Why a phase-down and not a phase-out? The phase-down provides for a residual amount of HFC imports from 2036 after the completion of the phase-down. HFCs available in Australia during and after the phase-down will not be restricted to particular uses or industries. The Department anticipates the available HFCs will be used in part for low volume uses where alternatives are not available, and for maintenance of equipment that has already been imported into Australia.
- What does the phase-down cover? The HFC phase-down covers only imports of bulk gas such as in cylinders. It does not cover gas imported in pre-charged equipment such as air-conditioners or refrigerators. HFCs contained in imported equipment are accounted for in the country of manufacture and are subject to the phase-down under the Montreal Protocol on Substances that Deplete the Ozone Layer (the Montreal Protocol).
- Who is directly affected by the phase-down? The refrigeration and air conditioning industry is the main user of HFCs. Importers of bulk HFCs are directly affected by the phase-down.
- Are there requirements for equipment importers and retailers? No. There is no import quota for HFCs in pre-charged equipment, such as air-conditioners, refrigerators and fire extinguishers. HFCs contained in imported equipment are accounted for in the country of manufacture and are subject to the phase-down under the Montreal Protocol.
- Will equipment owners have to replace their existing equipment as part of the phase-down? No. Existing equipment that has already been imported into Australia is not affected by the phase-down. HFCs for servicing existing equipment will be available as the overall pace of the phase-down is designed to match demand and end-of-life equipment replacement. If necessary HFC supply can be supplemented by recovery of used HFCs and reprocessing back to manufacturers’ specifications.
- Will equipment be banned in future? Bans on the import or manufacture of new equipment may be considered in future, where alternative technologies are readily available. This will only be implemented following a review and further consultation with industry. Any potential future bans would only apply to new equipment being imported or manufactured and not to equipment already installed in Australia.
- Are there requirements for refrigeration and air conditioning technicians? No. The national regulations and licensing for refrigerant handlers and technicians remain the same. Technicians installing or servicing equipment containing alternative gases should be appropriately trained.
- What alternative gases can replace HFCs? Several alternatives with no or very low global warming potential (GWP) are available in Australia, which may be appropriate for use in the same applications as HFCs. These gases are not regulated under the Ozone Protection and Synthetic Greenhouse Gas Management legislation unless they are in a blend containing an HFC. They include refrigerants such as ammonia, carbon dioxide and hydrocarbons (sometimes called ‘natural refrigerants’), as well as hydrofluoro-olefins (HFOs).
- How does the phase-down impact consumers? There will be no direct changes for consumers. Alternative technologies using different refrigerants are already available in Australia. The intent of the phase-down is to promote this transition, therefore the products available to consumers will gradually change over time but consumers will not be forced to change their existing equipment.
- What is happening globally? An HFC phase-down under the Montreal Protocol was agreed in Kigali, Rwanda, in October 2016. Developed countries will phase-down their production and imports of HFCs by 85% between 2019 and 2036. Developing countries will also phase-down their HFC production and imports.
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What is the HFC phase-down and how will it reduce emissions?
What are HFCs?
Hydrofluorocarbons (HFCs) are a type of synthetic greenhouse gas, mostly used in refrigeration and air-conditioning equipment. HFCs generally have a high global warming potential (GWP) which means they have a greater ability to trap heat in the atmosphere compared to a similar mass of carbon dioxide (CO2). For example, the release of one tonne of HFC 23 (which has a GWP of 14,800) is equivalent to releasing 14,800 tonnes of CO2 into the atmosphere.
Overview
The HFC phase-down is a gradual reduction in the maximum amount of HFCs permitted to be imported into Australia, which started on 1 January 2018. Reducing imports directly reduces emissions.
A phase-down, rather than a total phase-out, provides for a residual amount of HFC imports from 2036 after the completion of the phase-down. HFCs available in Australia during and after the phase-down will not be restricted to particular uses or industries. The Department anticipates the available HFCs will be used in part for low volume uses where alternatives are not available, and for maintenance of equipment that has already been imported into Australia.
The HFC phase-down was developed with industry, which supports the phase-down as it benefits the environment and provides long-term investment certainty. Industry has already driven significant change to reduce their direct and indirect emissions through changes in product design:
- Use of lower GWP gases means less harmful emissions if the gas is released to the atmosphere.
- More energy efficient equipment uses less power, therefore emissions from power production are reduced.
The HFC phase-down is being implemented through the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 and associated Regulations.
How are Australia’s synthetic greenhouse gas emissions calculated?
The Australian Government monitors the emission of synthetic greenhouse gas in Australia. Emission levels are calculated based on the estimated stock of synthetic greenhouse gas contained in equipment and default leakage rates by equipment type.
How will the phase-down contribute to Australia's emissions reduction target?
In 2015, synthetic greenhouse gas represented 2.2% of Australia’s carbon dioxide equivalent (CO2-e) emissions. The majority of synthetic greenhouse gas emissions are HFCs, and those emissions were projected to increase if the Government did not take action.
The HFC phase-down contributes to Australia’s 2030 greenhouse gas emissions reduction target and encourages industry to move to technologies using lower or zero global warming potential alternatives.
How does the phase-down work?
Key features of the phase-down
Starting point: The phase-down started on 1 January 2018 with an annual import limit of 8 megatonnes CO2-e.
Phase-down steps: The phase-down has reductions at the start of each two-yearly quota allocation period, in line with licensing periods under the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 and associated Regulations. (See ‘Australia’s phase-down schedule’ section), and Table 1 under ‘Quota allocations and limits’ section. Table 1 shows the amount of HFCs imports allowed for each quota period.)
End point: The end point of an 85% reduction will be reached on 31 December 2035 which equates to 1.607 million tonnes CO2-e annually from 2036 onwards. The end point is calculated by taking 15% of the baseline (average HFC imports and 75% of average hydrochlorofluorocarbon (HCFC) imports for the period of 2011–2013). This approach is consistent with the HFC phase-down agreement under the Montreal Protocol.
Australia is ahead of international agreements
Australia’s decision to implement an HFC phase-down from January 2018 was announced in June 2016, ahead of the agreement under the Montreal Protocol. The phase-down was designed to be ambitious but manageable for Australian industry. It allows for regular, even step-downs aligning with the existing two-yearly licensing periods under the Ozone Protection and Synthetic Greenhouse Gas Program.
In October 2016 a global phase-down of HFCs was agreed under the Montreal Protocol. The phase-down commenced from 2019 for developed countries, however, Australia started a year earlier.
Australia’s phase-down schedule
A phase-down schedule was developed for Australia, in consultation with industry, to meet Montreal Protocol requirements. Australia’s phase-down has regular, smaller step-downs than the Montreal Protocol requirements.
The annual starting limit of HFC imports was 8.0 million tonnes CO2-e. The 15% residual import limit from 2036 is 1.607 million tonnes CO2-e. This residual import limit will be an ongoing import limit.
The phase-down for Australia is shown by the blue line and Australia’s Montreal Protocol requirement by the orange line.
Figure 1: Aligning Australia’s HFC phase-down with the Montreal Protocol
Quota allocations and limits
| Quota allocation period | Year | Phase-down schedule for Australia (million tonnesCO2e) | Montreal Protocol phase-down schedule (million tonnesCO2-e) |
|---|---|---|---|
| 1 | 2018 | 8.000 | 10.813 |
| 2019 | 8.000 | 9.646 | |
| 2 | 2020 | 7.250 | 9.646 |
| 2021 | 7.250 | 9.646 | |
| 3 | 2022 | 6.250 | 9.646 |
| 2023 | 6.250 | 9.646 | |
| 4 | 2024 | 5.250 | 6.431 |
| 2025 | 5.250 | 6.431 | |
| 5 | 2026 | 4.250 | 6.431 |
| 2027 | 4.250 | 6.431 | |
| 6 | 2028 | 3.200 | 6.431 |
| 2029 | 3.200 | 3.215 | |
| 7 | 2030 | 2.900 | 3.215 |
| 2031 | 2.900 | 3.215 | |
| 8 | 2032 | 2.650 | 3.215 |
| 2033 | 2.650 | 3.215 | |
| 9 | 2034 | 2.100 | 2.143 |
| 2035 | 2.100 | 2.143 | |
| 10 and onwards | 2036 and onwards | 1.607 | 1.607 |
Quota allocation: The HFC phase-down is managed through a reducing import quota system. Quota is divided between a ‘grandfathered’ system and a ‘non-grandfathered’ system (further explained below). The intent is to both recognise established participants and provide opportunities for new participants. Imports are calculated as imports minus exports in the same calendar year.
Quota allocations are in million tonnes of CO2-e, not metric tonnes.
Grandfathered quota: Established market participants were eligible for grandfathered quota based on their past imports. To be considered as an established market participant, an importer must have held a controlled substances licence for HFCs or hydrochlorofluorocarbons (HCFCs) at some point between 1 January 2009 and 31 December 2014. The total HFC and 75% of HCFC imports in million tonnes of CO2-e during this period were the basis for quota allocation.
The period 2009-2014 accounts for distortions to the market from the carbon price in 2012–14 as well as technological advancements and international market developments.
75% of HCFC imports were included to represent the whole fluorocarbon market in Australia (recognising that HFCs generally replace HCFCs).
Non-grandfathered quota: For each quota allocation period, new and established participants are able to apply for non-grandfathered quota. The method for allocating non-grandfathered quota is published prior to each quota allocation period.
Applicants will need to satisfy all the requirements to hold an import licence under the Ozone Protection and Synthetic Greenhouse Gas Program and be granted an import licence to be eligible for quota.
Established grandfathered quota and new participant non-grandfathered quota split: The split of quota between grandfathered quota and non-grandfathered quota will vary in the first three quota allocation periods, beginning with a 90% / 10% split between grandfathered quota and non-grandfathered quota in 2018-2019, and moving to a 95% / 5% split from 2020-2021. The transition and how quota will be divided is outlined in the following table and illustrated in Figure 4.
A quota allocation period refers to a two-calendar-year period, aligning with the licensing periods under the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989.
| Grandfathered quota | Non-grandfathered quota | |
|---|---|---|
|
First quota allocation period (2018 – 2019) |
90% of total quota Percentage share based on total HFC and 75% of HCFC imports in CO2-e terms in the calendar years 2009–14 inclusive. |
10% of total quota Open to all applicants, including grandfathered quota holders Allocated equally to all eligible applicants |
|
Second quota allocation period (2020 – 2021) |
95% of total quota Made up of: 90% – allocated to holders of grandfathered quota in first quota allocation period, based on imports during the first year of the first quota allocation period 5% – allocated to holders of non-grandfathered quota in first quota allocation period who opt to participate in grandfathered quota. In both cases, to retain their full quota proportion a licensee will need to import their full allocation during the first year of the first quota allocation period (2018). |
5% of total Quota Open to all eligible applicants, including grandfathered quota holders Allocated equally to all eligible applicants |
|
Third quota allocation period (2022 – 2023) |
95% of total quota Grandfathered quota participants retain a quota percentage based on imports during the second year of first quota allocation period (2019) and the first year of second quota allocation period (2020). To retain their full quota percentage, a licensee will need to import their full allocation in 2019 and 75% or more of their allocation in 2020. |
5% of total quota Open to all eligible applicants, including grandfathered holders Allocated equally to all eligible applicants 0.04% of non-grandfathered quota to be allocated to the Commonwealth |
|
Fourth quota allocation period & onwards (2024 – 2025 & onwards) |
95% of total quota Grandfathered quota participants retain a quota percentage based on imports during the first year of the previous period and the second year of the period before that. To retain their full quota percentage, a licensee will need to import 90% or more of their allocation in each of the reference years. |
As above |
Figure 2. How quota is allocated in the first three quota periods
Is a quota transferable?
Yes. The scheme allows for quota transfer. This means businesses may trade their quota if it suits their needs to do so.
Quota transfers must be confirmed with the Department and will have the effect of permanently transferring quota rights to the transferee.
Can a quota be retired?
Yes. Quota-holders will be able to apply to the Minister to retire a portion, or all, of their quota. They will need to demonstrate that the amount of quota proposed for retirement is in excess of Australia’s total needs.
Industry stakeholders and other quota holders will be consulted on an application to retire quota.
What does the phase-down cover?
Bulk imports
The HFC phase-down only applies to bulk imports of HFCs such as in cylinders, and does not apply to HFCs imported in pre-charged equipment such as air-conditioners or refrigerators. The phase-down quota limits do not apply to HFCs imported in equipment such as refrigerators, air conditioners and fire extinguishers as HFCs in equipment will be included in the Montreal Protocol phase-down limits of the manufacturing country.
Bulk imports make up around two thirds of the HFCs brought into Australia. The phase-down does not apply to used or recycled HFCs, however, other restrictions may be applied to the import of used HFCs so that the total bank of HFCs does not grow.
Equipment manufacturers and importers are expected to gradually change their equipment range to align with the bulk HFC phase-down. This will happen as consumers demand up-to-date technology and manufacturers will want to ensure their products can be serviced for the entire equipment life. This was the experience with Australia’s successful phase-out of hydrochlorofluorocarbons (HCFCs) and HCFC equipment.
Which HFCs does the phase-down apply to?
The phase-down applies to all HFCs covered by the Montreal Protocol as shown in Table 2:
| HFC-23 | HFC-32 | HFC-41 | HFC-125 | HFC-134 |
| HFC-134a | HFC-143 | HFC-143a | HFC-152 | HFC-152a |
| HFC-227ea | HFC-236cb | HFC-236ea | HFC-236fa | HFC-245ca |
| HFC-245fa | HFC-365mfc | HFC-43-10mee |
How are blends treated?
The HFC portion of any blend is covered by the phase-down and counts towards HFC quota.
Hydrofluoro-olefins (HFOs) are not included in the phase-down. However, as with any other blend, if an HFC is part of an HFO blend the HFC component is counted in the quota.
Tables showing each pure HFC and common HFC blends that are subject to the phase-down along with their global warming potential can be found below:
Global Warming Potential of pure HFCs (PDF - 193.11 KB)
Global Warming Potential of pure HFCs (XLSX - 10.07 KB)
Global Warming Potential of HFC blends (PDF - 221.01 KB)
Global Warming Potential of HFC blends (XLSX - 11.52 KB)
Please note that the list may not be comprehensive as blends continue to be developed.
Other synthetic greenhouse gases
The HFC phase-down does not apply to all synthetic greenhouse gases. Perfluorocarbons (PFCs), sulfur hexafluoride (SF6) and nitrogen trifluoride (NF3) have limited use in Australia and are not subject to the phase-down. Licensing, reporting and levy requirements continue to apply.
What alternative gases can replace HFCs?
Several alternatives with no or very low global warming potential are available in Australia and may be appropriate for use in the same applications as HFCs. These gases are not regulated under the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 unless they are in a blend containing an HFC. They include naturally occurring substances known as ‘natural refrigerants’ including ammonia, carbon dioxide and hydrocarbons, as well as manufactured substances such as hydrofluoro-olefins (HFOs).
Natural refrigerants and HFOs may offer improved performance and energy efficiency in fit-for-purpose systems. In considering an alternative, it is important that it is used in appropriate equipment, not in equipment designed for a specific HFC. Use in inappropriate equipment could be hazardous as some alternatives can be flammable and some, such as ammonia, can be toxic. For some sectors where technology is hard to transition, such as medical metered dose inhalers, the use of HFCs may continue as the phase-down provides for a 15% residual from 2036 onwards.
Are there requirements for equipment importers and retailers?
No. There is no quota for HFCs contained in pre-charged equipment, such as air-conditioners and refrigerators. HFCs contained in pre-charged equipment are accounted for in the country of manufacture.
Bans on the import and manufacture of specified equipment containing specified HFCs may be introduced in the future. Provisions for equipment bans have been included in the Ozone Protection and Synthetic Greenhouse Gas Management legislation.
Any equipment bans will be considered through a review of the effectiveness of the phase-down and based on the availability of alternative equipment in the Australian market. Alternatives, for example, are already available for small split-system air-conditioners and some other countries have already discontinued the use of HFCs with a high global warming potential in automotive air-conditioners.
What does the phase-down mean for technicians?
Technicians will still be able to obtain HFCs to service equipment. Technicians should continue to keep up to date with alternative technologies available and be aware of any flammability or toxicity considerations for alternative gases.
The regulations applying to people who acquire, possess, dispose of or handle ozone depleting substances or synthetic greenhouse gases in the refrigeration and air conditioning and fire protection industries remain. This includes requirements for Refrigerant Handling Licences, Refrigerant Trading Authorisations, Extinguishing Agent Handling Licences and Extinguishing Agent Trading Authorisations.
Any individual (including a repairer or dismantler) who removes, handles or substitutes an HFC, hydrochlorofluorocarbon (HCFC), chlorofluorocarbon (CFC) or halon from any refrigeration and air conditioning or fire protection equipment must be licensed. Licences can be obtained from the Australian Refrigeration Council or the Fire Protection Industry (ODS & SGG) Board.
Does the phase-down affect other industries?
Yes. HFCs are also used for a range of other purposes including in fire protection, foam-blowing, aerosols, medical metered dose inhalers (such as asthma treatments) and as solvents. The phase-down of bulk HFC imports is expected to promote the replacement of HFCs in these industries too. The gradual nature of the phase-down will provide users sufficient time to transition to alternatives, and the 15% residual amount of HFC provides a safeguard for uses where alternatives are not available.
Will the phase-down mean changes for consumers?
There will be no direct changes for consumers.
The range of products available in Australia is likely to be as wide, or wider, than now. Equipment using alternatives is already commonly available in Australia. As an example, motor vehicle air conditioners using hydrofluoro-olefins (HFOs) (R1234yf) or carbon dioxide are the standard in Europe and are now being introduced into Australia. New products will also be developed and arrive in the Australian market within the next few years.
Consumers will be able to make product choices depending on their preferences such as prices, energy performance, maintenance costs and environmental considerations. Energy rating labels, information from retailers and product brochures assist consumers to make informed purchasing decisions. Information regarding refrigerant type is available on the equipment itself as well as in accompanying instruction material. More information is available at: Refrigeration and air conditioning - Consumers.
You can save money and help the environment by having your equipment installed, regularly serviced and repaired by a licensed technician. Products should be disposed of correctly at end of life, with refrigerants removed by a licensed technician for recycling or disposal. More information is available on the Australian Refrigeration Council website.
The Department will work with business to develop information to inform equipment owners of the benefits of proper installation and regular maintenance. Businesses and consumers will benefit through reduced electricity costs, reduced refrigerant use and longer equipment life and there will be less greenhouse gas emissions to the environment.
Will anyone be forced to change their equipment?
No. The overall pace of the phase-down is designed to match demand and equipment replacement at end of life. The intention is to align demand for HFCs with supply to avoid spikes in the price of HFCs that might lead to equipment being retired prematurely.
Any future equipment bans would only apply to new imported or manufactured equipment, not to equipment already imported into Australia.
Further information
- HFC phase-down
- Review of the Ozone Protection and Synthetic Greenhouse Gas Management Program
- What are synthetic greenhouse gases?
- What are ozone depleting substances?
- The Montreal Protocol
- International hydrofluorocarbon (HFC) phase-down
- Electrical Regulatory Authorities Council for more information on electrical equipment safety
- Safe Work Australia to find the relevant work health and safety authority in your state or territory