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Levy Increase and Rebate Decrease On 1 October 2008 the levy applied to new ozone depleting and synthetic greenhouse gas refrigerants will rise to $2.00 per kilogram + gst, and the rebate paid to contractors for recovered refrigerant will fall to $3.00 per kilogram + gst. These decisions have been made by the Board of Directors of RRA, comprised of representatives of the major industry associations, only after detailed consideration, analysis and consultation. You need to know why. Sustainability At the heart of RRA’s decision is the need to ensure the long term success and sustainability of a low cost industry-wide product stewardship scheme: a scheme that meets Australian regulatory and environmental requirements; a scheme that will be sustainable in the very challenging environment of increasing volume and costs pressures; and where the future is remarkably uncertain. This brochure seeks to describe the pressures and drivers that have brought about the changes to the levy and rebates. Growth in Recovered Refrigerant Returns The amount of unwanted and contaminated refrigerant recovered by the industry that has been collected and destroyed by RRA has been growing strongly, as can be seen in the graph titled Recovered Volume and Annual Increase. The amount collected is doubling about every three years and this financial year totalled 470 tonnes.
The implementation of the Ozone Protection and Synthetic Greenhouse Gas Management Act that includes licences for technicians and authorisations for purchasers of refrigerants has much improved industry practises. Unusable refrigerants must not be emitted but recovered and returned for safe disposal. This change has impacted strongly on the rate of recovery. Current volume projections indicate that 1,000 tonnes will be recovered annually in just five years time, which will see a doubling of program costs from today’s level. Increasing Costs Almost all costs increase over time but the cost of destroying recovered refrigerant is increasing rapidly. RRA uses the argon plasma-arc process to destroy recovered refrigerant. This process transforms the fluorocarbons into salts and water. The costs of the main inputs to the process – electricity, sodium hydroxide, expert labour – are all rapidly increasing. In 2007/2008 RRA paid out $2.1 million in rebates to Contractors, up from $0.6 million five years ago. The fast growing rate of recovery, 1,000 tonnes in five years, means that maintaining the rebate at its current level and maintaining a low cost program are incompatible outcomes. Increasing Liability The quantity of refrigerant installed in the Australian market place, and for which RRA is responsible, has been growing strongly. Recent research estimates there is now about 31,100 tonnes. This liability means the RRA product stewardship program will need to be operating a long way into the future to ensure the industry is able to meet its obligations.
As industry practises improve further and end-of-life management and recycling of equipment such as split air conditioners and motor vehicles becomes more prevalent, the amount of refrigerant being recovered and returned will increase. There are approximately 7 million split air conditioners installed in Australia that will need to come out of service in 10-15 years, with many retaining most of their refrigerant charge. Much of RRA’s anticipated growth in recovered refrigerant will be provided by programs established to properly recycle these systems and other types of equipment. Uncertain Future The growing uncertainty of the future operating environment complicates planning and managing for a sustainable product stewardship program. Two initiatives in particular will impact strongly on the industry broadly, and RRA quite specifically: the Carbon Pollution Reduction Scheme (CPRS); and low global warming potential (gwp) refrigerants. The CPRS will impact significantly on the industry and RRA but it is not possible to determine what those impacts will be right now. Fluorocarbon refrigerants are scheduled to be included in the CPRS from the start but this may not be the final position. At this stage we cannot know whether the safe disposal of recovered refrigerant will generate carbon credits, who they may belong to, or how much they might be worth. The lack of certainty creates risk for the long term viability of a low cost product stewardship scheme and the RRA Board must be appropriately cautious. The development and introduction of fluorocarbon refrigerants with global warming potentials less than 10 is a reality, although the range and availability is still speculation at the moment. Already, a replacement for HFC134a in automotive air conditioning has been announced and is in the latter stages of testing. Low gwp refrigerants have the potential to dramatically reduce the industry’s environmental impact, but the legacy of the installed bank will remain to be cleaned up over many years. And RRA will need to continue operating to take back and safely dispose of these legacy products. The RRA Board has acted prudently and responsibly by increasing the levy and reducing the rebates, and seeking to ensure the long term sustainability of the RRA product stewardship program. No-one else is going to take responsibility for taking back and destroying the 1000’s of tonnes of refrigerant that will be recovered in the future. As an industry we install it today, taking it back tomorrow is also up to us. If you would like further information or would like to make any comments regarding these changes please contact us as follows: Email: info@refrigerantreclaim.com.au Tel: 02 6230 5244 Fax: 02 6230 4533 |
