August 2012
THE EQUIVALENT CARBON PRICE ON
SYNTHETIC GREENHOUSE GASES IN THE
REFRIGERATION AND AIR CONDITIONING
(RAC) INDUSTRY
Under the Australian Government’s Clean Energy Future Plan a levy incorporating an
equivalent carbon price applies to synthetic greenhouse gases.
The price per tonne of synthetic greenhouse
gas is based on the carbon price and the
global warming potential for each gas relative
to carbon dioxide. Applying an equivalent
carbon price to synthetic greenhouse gases
creates a financial incentive to reduce
emissions by placing a price tag on every
tonne of synthetic greenhouse gases.
Synthetic greenhouse gases are listed under
the Kyoto Protocol, and most have a high
global warming potential. They include most
hydrofluorocarbons and perfluorocarbons
used as refrigerants. For example, the most
common refrigerant in household
refrigerators, hydrofluorocarbon R134a, has a
global warming potential 1300 times greater
than that of carbon dioxide.
The introduction of a carbon charge based on
the equivalent carbon price applies to bulk
refrigerants and imports of all products
containing these gases, including refrigeration
and air conditioning equipment. The price is
calculated at the point of import of the
synthetic greenhouse gas refrigerant, either in
bulk form or contained in equipment, or
equipment, or manufacture of the gas (if in
Australia).
Licensees may claim a refund of the carbon
charge component if they export the synthetic
greenhouse gas or equipment within
12 months of its import, or if they on-sell to a
business which exports the gas or equipment
within 12 months of its import.
What effect will the equivalent
carbon price have?
Applying a carbon charge based on the
equivalent carbon price to synthetic
greenhouse gases provides an opportunity for
the industry to further promote correct
installation and regular maintenance of
affected equipment. Businesses should
discuss maintenance programs with clients
and help clients understand how to better
manage their systems. It also provides an
opportunity to discuss alternative technologies
when customers are considering system
options.
Who pays the equivalent
carbon price on synthetic
greenhouse gases?
Businesses that import regulated synthetic
greenhouse gases (in bulk or in equipment),
or manufacture synthetic greenhouse gases
are required to pay the carbon charge
component of the levy. Importers of bulk
refrigerant or equipment are now required to
have an import licence (either a Controlled
Substances licence or an Ozone Depleting
Substances/Synthetic Greenhouse Gas
Equipment licence) and manufacturers of
synthetic greenhouse gases are required to
have a licence allowing manufacture (a
Controlled Substances licence). These
businesses must be licensed under the Ozone
Protection and Synthetic Greenhouse Gas
Management Act 1989.
Can the carbon charge be
passed on?
Each business will need to make a
commercial decision about whether some, or
all, of the carbon charge component of the
levy based on the equivalent carbon price is
passed on to consumers or other businesses
dealing with products or services containing
these gases. The Australian Competition and
Consumer Commission has provided a guide
for businesses on determining carbon price
claims www.accc.gov.au/content/
index.phtml/itemId/1017091
What is my business required
to do?
As the value of synthetic greenhouse gases
will increase with the introduction of the
carbon charge, all businesses, including
refrigeration and air conditioning businesses,
will need to consider how their business uses,
stores, supplies, services, disposes of and
otherwise manages, these gases.
Refrigeration and air conditioning businesses
and technicians must continue to comply with
all legislative and regulatory requirements,
including refrigerant handling licence and
refrigerant trading authorisation conditions,
relevant codes of practice (such as the
Australia and New Zealand refrigerant
handling code of practice), work health and
safety legislation and with competition and
consumer legislation. As an example, it is
important to note that retrofitting any system
with an alternative refrigerant should only be
carried out based on written advice from
equipment manufacturers and in compliance
with applicable laws.
A compliance and audit team will oversee
compliance with the Ozone Protection and
Synthetic Greenhouse Gas Management
legislation. Authorised inspectors may visit the
premises of companies dealing with synthetic
greenhouse gases to do such things as
inspect, examine, test or take away samples
of gas for testing and/or view records relating
to the gases. Significant penalties apply for
breaches of the Act, such as importing
regulated gases without a licence.
Is the Goods and Services Tax
applied to the carbon charge?
List of some common synthetic
greenhouse gases refrigerant types
and their global warming potential
Information on the Good and Services Tax
(GST) can be found under the Frequently
Asked Questions available at
www.environment.gov.au/equivalent
carbonprice
Refrigerants
How can I estimate the equivalent carbon
price?
An online calculator is available at
www.environment.gov.au/equivalent
carbonprice to help calculate the carbon
charge on synthetic greenhouse gases,
including blends of these gases.
More information
For more information about the Australian
Government’s administration of synthetic
greenhouse gases, including licensing details
and an online calculator, please visit the
Department of Sustainability, Environment,
Water, Population and Communities’ website
at www.environment.gov.au/equivalent
carbonprice, email
ozone@environment.gov.au or phone the
department on 1800 803 772.
For more information about the Clean Energy
Future package, go to the website:
www.cleanenergyfuture.gov.au/cleanenergyfuture/our-plan
R23
R32
R134a
R152a
R227ea
R236fa
R404a
R407c
R407f
R408a
R410a
R412a
R413a
R416a
R417a
R419a
R422a
R422d
R424a
R426a
R427a
R428a
R434a
R437a
R438a
R507a
R508a
R508b
Global Warming
Potential*
11 700
650
1 300
140
2 900
6 300
3 260
1 526
1 555
1 944
1 725
350
1 774
767
1 955
2 403
2 532
2 232
2 025
1 352
1 828
2 930
2 662
1 567
1 890
3 300
10 175
10 350
*Global warming potential based on the International Panel on
Climate Change AR2 1995 Report
For a full list of synthetic greenhouse gases
subject to the equivalent carbon price on
synthetic greenhouse gases, refer to the
calculator available at
www.environment.gov.au/equivalent
carbonprice
List of some common refrigerant types
not subject to the equivalent carbon
price on synthetic greenhouse gases
R22
HCFC
R290
Propane Series
R406a
HCFC
R409a
HCFC
R409b
HCFC
R717
Inorganic compound
R744
Inorganic compound
These gases are not covered under the Kyoto
Protocol framework and therefore are not
subject to the equivalent carbon price.