Joint industry letter ahead of F-gas COREPER I meeting

 Dear Madam, Dear Sir,

In view of the announced COREPER I meeting this Wednesday April 5^th to discuss the F-Gas Regulation Revision, our industry alliance is extremely concerned that the adopted European Parliament Report and the recently published Swedish Presidency compromise text, dated 31^st March, are insufficient in building a successful, pragmatic and implementable Regulation. Such proposals would jeopardise the REPowerEU targets on heat pump deployments and slow down the energy transition.

Whilst we support this revision to further phase down higher global warming potential HFCs, and our industry supports new technologies -- already using alternative fluorinated and non-fluorinated options (as it is already the case in stationary refrigeration applications) -- we call on decision makers to focus on: 

• Making it right: include sufficient quotas, and achievable bans with reasonable timelines; 
• Making it precise: use clear definitions for banned products, which is an extreme technology prescriptive measure that cannot work without clarity;
• Making it pragmatic: adjust the laws to market realities of product development times, service needs, safety concerns and a skilled workforce; and
• Make it consistent: do not create a programmed obsolescence of existing equipment affecting all sectors.

Make it right: with granular bans, sufficient quotas, and realistic timelines

• Many product bans lack granularity and are not grasping the diversity and complexity of the sectors. As a result, several product bans are not feasible from a safety, efficiency, affordability, and timing perspective. 
• An example is the use of propane as a refrigerant in heat pumps, where it is not correct to assume that the potential application in some heat pump solutions can be simply “extrapolated” to all types of heat pumps. Although safeguard clauses such as “exempt when needed to meet safety requirements” are being proposed, there was no impact assessment done to evaluate in how many cases such exemptions would have to apply.
• Due to lack of granularity, timelines proposed often underestimate the impact on the whole supply chain, including the time needed for changing components, testing, upscaling and upskilling installers and service technicians.
• Sufficient quotas are essential for the servicing of existing equipment, for the “REPowerEU” growth of heat pumps and for EU-based factory investments. 
• Safeguard clauses such as giving the commission delegated power to add more quota would result in a “yo-yo” type of legislation which is not workable for the industry and its supply chain. We would like to point out again that companies investing in EU-based factories are put in a disadvantaged position as they cannot rely on the bank of quota authorizations. Shortage of quota simply makes investments in EU factories less attractive, which conflicts with the Net Zero industry Act.

Make it precise: unclear bans, unclear definitions, and unclear applications will lead to legislation that is not enforceable

• Legal certainty and market surveillance can only work if the product bans are properly defined in an unambiguous and granular language. We call on legislators to therefore consider the concrete proposals by the joint industry alliance (see attachment).  

Make it real: by really adjusting the laws to market realities of product development times, safety concerns and a skilled workforce

• It is unrealistic to propose quota readjustment because it will be impossible to do this early enough for businesses, consumers, and value chains to react and plan accordingly.
• The presence of the safety-related exemptions and quota readjustment clauses is a sign of a badly drafted regulation and a lack of understanding market realities.
• The proposals will make key equipment unaffordable for many consumers across Europe.
• New refrigerants require upskilling to install and maintain equipment safely and efficiently. Today, around 10% of technicians are currently able to work with non-fluorinated alternatives. The current proposals provide insufficient time for technician training, which creates considerable safety risks.
• Ecodesign and other energy efficiency legislation will be undermined by the current F-gas revision proposals. There has been inadequate cross-discipline analysis of the impacts.
• Refrigeration, air conditioning and heat pump equipment will be affecting residential, SMEs and small retail sectors, where investments in renewal of systems and equipment proceed at a low pace. 

Make it consistent: do not create a programmed obsolescence

• By banning spare parts and preventing repairability, the proposals are setting a trend to “programmed obsolescence”.
• Europe is working hard towards the so called “right to repair”, announced in the new Consumer Agenda and the Circular Economy Action Plan, where repairability and availability of spare parts are a must to avoid the replacement of equipment.

In conclusion, without addressing these very serious concerns, there will be the risk of increased illegal imports of HFCs, lower investments in EU manufacturing, considerable burdens on members states for market surveillance, and most worrying – a continued dependence on gas-fired boilers due to lack of affordable and diverse heat pump solutions  (not all heat pumps are monobloc types installed outdoors).

We, the undersigned, are fully committed to EU carbon neutrality by 2050 and represent the industries that will deliver on decarbonising buildings through innovative heating, cooling, refrigeration, and foam insulation solutions, as well as rolling out REPowerEU.  

On behalf of the alliance, we thank you for your attention and consideration. We would very much appreciate the opportunity to meet and discuss these points in the coming weeks to provide sound and factual information to inform your negotiations.

Please do not hesitate to contact us.

With kind regards,

The undersigned organisations