Technical Analysis Report
Review of the Ozone Protection and Synthetic Greenhouse Gas
Management Programme
(covering the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989, associated
Acts, Regulations and administrative policy)
1
Purpose
The purpose of this document is to provide in depth analysis of the Ozone Protection and Synthetic
Greenhouse Gas Management (OPSGGM) Programme.
This Report includes additional analysis to measures outlined in the Options Paper to the OPSGGM
Programme Review, as appropriate.
2
CONTENTS
Purpose .......................................................................................................................................... 2
ABBREVIATIONS AND ACRONYMS ................................................................................................... 6
1.
Background ............................................................................................................................. 9
1. 1 The Ozone Act ............................................................................................................................ 9
1. 2 The future of ODS and SGG use in Australia ............................................................................ 15
1. 3 Industry .................................................................................................................................... 16
2.
Operation of the LEGISLATIVE OBJECTIVES ............................................................................. 20
2.1 Mechanisms to achieve the legislative objectives ..................................................................... 20
2.2 Gases covered ............................................................................................................................ 21
2.3 Import, manufacture and export controls ................................................................................. 21
2.4 End-use controls......................................................................................................................... 26
2.5 Product stewardship and destruction facilities approvals ......................................................... 31
2.6 Halon .......................................................................................................................................... 32
2.7 Methyl bromide ......................................................................................................................... 34
2.8 Compliance and enforcement .................................................................................................... 35
2.9 Cost recovery arrangements ...................................................................................................... 36
3.
Scope .................................................................................................................................... 37
4.
Emission Reduction Opportunities ......................................................................................... 38
4.1 Emission reduction measures .................................................................................................... 38
4.2 Maintain current end-use licensing and product stewardship and improve their effectiveness
and efficiency ................................................................................................................................... 40
4.3 Selective high-GWP equipment import bans ............................................................................. 41
4.4 Reducing indirect and direct emissions—RAC maintenance ..................................................... 43
4.5 Reducing indirect and direct emissions—leak reduction........................................................... 44
4.6 Emission reduction of other SGGs—SF6 and PFC ...................................................................... 46
5.
Efficiency and Effectiveness Measures .................................................................................... 48
5.1 Meeting international obligations – regulation of new gases ................................................... 48
International developments ............................................................................................................ 48
Montreal Protocol.................................................................................................................... 48
UNFCCC and the Kyoto Protocol .............................................................................................. 48
5.2 Phase-out of HCFCs .................................................................................................................... 50
5.3 Import, Manufacture and Export Controls................................................................................. 52
5.3.1 Mechanical Changes ....................................................................................................... 52
5.4 Destruction and approval of destruction facilities ..................................................................... 71
5.5 End-use licensing schemes ......................................................................................................... 72
5.5.1 Analyses of WHS issues facing the RAC industry ............................................................ 72
3
5.5.2 Options for addressing industry concerns ...................................................................... 77
5.6 Compliance and Enforcement .................................................................................................... 92
5.7 Cost recovery.............................................................................................................................. 98
Appendix 1: Fire protection and refrigeration and air-conditioning permits .................................. 103
Licence 4......................................................................................................................................... 103
Appendix 2: Greenhouse and Energy Minimum Standards Act 2012 (GEMS) ................................. 105
Appendix 3: List of Global Warming Potential for SGGs in Regulations .......................................... 107
4
FIGURES
Figure 1 What is ozone and why it is important ................................................................................ 9
Figure 2 Decline of ODS imports into Australia between 1995 and 2012 under the Montreal Protocol
11
Figure 3 Predicted refrigerant bank transition from 2013 to 2030 by gas species in Mt CO2-e .......... 15
Figure 4 Bank of refrigerants by major segment, 2012 (total of 43 500 tonnes)................................ 19
Figure 5 ODS and SGGs used in fire protection industry (2013)........................................................ 20
Figure 6 Licences under the Ozone Act ........................................................................................... 21
Figure 7 Mt CO2-e over the modelling period 2003–2030 ............................................................... 29
Figure 8 Key facts for methyl bromide use and the Montreal Protocol ............................................ 35
Figure 9 Responsive Regulation—compliance pyramid ................................................................... 93
TABLES
Table 1 Summary of import, manufacture and export obligations under the Ozone Act................... 25
Table 2 End-use controls under the Ozone Act and regulations ....................................................... 27
Table 3 Number of RAC and fire protection permits held by industry members, as of January 2015 . 28
Table 4 Estimated consumption in the fire protection industry by gas type in 2013 and ODS/GWP
properties ..................................................................................................................................... 29
Table 5 Estimated future civilian essential use halon requirements................................................. 34
Table 6 North American Amendment Proposal and Australian Accelerated phase-down schedule,
2015Error! Bookmark not defined.
Table 7 Emission reduction potential from continuing and new policy interventions, cost–benefit and
regulatory burden measurement ................................................................................................... 39
Table 8 Summary of the estimated and projected direct and indirect emissions, 2003 to 2030 (in Mt)
41
Table 9 Abatement from leak reduction to 2030 for ODS and SGGs ................................................. 45
Table 10 Abatement from maintenance to 2030 for ODS and SGGs by major commercial equipment
classes .......................................................................................................................................... 44
Table 11 Summary of areas of the Ozone Act for improvement .............. Error! Bookmark not defined.
Table 12 Total gas imports by Equipment Licence holders, years 2012 and 2013 .............................. 60
Table 13 Proposed import, export and manufacture licensing structure .......................................... 71
5
ABBREVIATIONS AND ACRONYMS
ABS
Australian Bureau of Statistics
ACCC
Australian Competition and Consumer Commission
AAT
Administrative Appeals Tribunal
AHMS
Australian Halon Management Strategy
AIRAH
Australian Institute of Refrigeration, Airconditioning and Heating
APVMA
Australian Pesticides and Veterinary Medicines Authority
ARA
Australian Refrigeration Association
ARC
Australian Refrigeration Council
C02-e
Carbon dioxide equivalent
CFC
COAG
Chlorofluorocarbon
Council of Australian Governments
CUE
Critical use exemption
CUN
Critical use nomination
ERF
Emissions Reduction Fund
EQPL
Equipment licence
FPAA
Fire Protection Association Australia
GEMS
Greenhouse and Energy Minimum Standards
GDP
Gross domestic product
GWh
Gigawatt-hours
GWP
Global warming potential
HCFC
Hydrochlorofluorocarbon
HFC
Hydrofluorocarbon
HFE
Hydrofluoroethers
HFO
Hydrofluoroolefin
HTOC
Halon Technical Options Committee
HVAC&R
ICAO
LCC
Heating, ventilation, air conditioning and refrigeration
International Civil Aviation Organization
Life cycle cost
LCCP
Life cycle climate performance
LVIL
Low volume import licence
MAC
Mobile air conditioning
MBTOC
MEPS
Methyl Bromide Technical Options Committee
Mandatory Energy Performance Standards
MT
Megatonnes
NAA
North American Amendment
NABERS
The National Australian Built Environment Rating System
NGERS
National Greenhouse Energy Reporting System
ODP
Ozone depleting potential
ODPT
Ozone depleting potential tonnage
ODS
Ozone depleting substances
PFC
Perfluorocarbon
PFPE
Perfluoropolyethers
QAP
Quarantine Approved Premises
QPS
Quarantine and Pre-shipment
RAC
Refrigeration and air conditioning
RCFC
Refrigerated cold food chain
RHL
Refrigerant handling licence
RRA
Refrigerant Reclaim Australia
RTA
Refrigerant Trading Authorisation
RTO
Registered training organisation
S40
Section 40 of the Ozone Act
SF6
Sulfur hexafluoride
SGG
Synthetic greenhouse gas
TEWI
Total equivalent warming impact
UNEP
United Nations Environment Programme
UNFCCC
UV
United Nations Framework Convention on Climate Change
Ultraviolet
7
WHS
Work health and safety
8
1. BACKGROUND
1. 1
The Ozone Act
Scope
Ozone depleting substances (ODS) and synthetic greenhouse gases (SGGs) are used in a range of
applications including refrigeration and air conditioning (RAC), fire protection, aerosols, electricity
distribution, foams, medical and veterinary, smelting, solvents, niche processing (such as plasma
etching and semiconductor manufacture), and for laboratory and analytical purposes. Parties to the
Montreal Protocol and Kyoto Protocol have responsibilities for these gases because of their chemical
potential to cause damage to the ozone layer and the climate system.
Australia’s use of gases has transitioned from halons and chlorofluorocarbons (CFCs) to
hydrochlorofluorocarbons (HCFCs), and then to
hydrofluorocarbons (HFCs) and low or no-Global
Warming Potential (GWP) alternative gases in
response to significant technology change. Globally
this trend has been driven first by the Montreal
Protocol which mandates the phase out of ODS, and
now by international policy shifts to reduce the use
of high-GWP gases, such as the F-gas rules in the
European Union (EU) and action on HFCs in the
United States (US) and Japan and energy efficiency
improvements. At the same time, equipment design
and manufacture has improved to reduce leakages
and to increase energy efficiency.
Figure 1
What is ozone and why it is important
Australia, as primarily a technology taker,
Figure 1 What is ozone and why it is important
has adopted many new technologies and will do so in the future as the global market evolves. In
Australia, the challenge is for training, standards and regulatory focus for all technicians to keep pace
with the rate of change and the different risks of new technology.
The Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 (Ozone Act) regulates the
manufacture, import, export, use and disposal of ODS and SGGs and equipment containing these gases
through import, export and domestic use licensing systems. There are around 1200 import licences
issued and around 80 000 businesses and technicians licensed to trade in and handle ODS and SGGs in
the RAC and fire protection industries.
Objectives
The objectives of the Ozone Act are to give effect to Australia’s international obligations to phase out
the production and consumption of ODS under the Vienna Convention for the Protection of the Ozone
Layer (Vienna Convention) and the Montreal Protocol on Substances that Deplete the Ozone Layer
(Montreal Protocol). The Ozone Act gives effect to Australia’s international obligations under the
United Nations Framework Convention on Climate Change (UNFCCC) and its Kyoto Protocol with
respect to reducing emissions of SGGs and reporting on Australia’s emissions of these gases.
The legislation states in Part 1, section 3, that:
9
‘the objectives of the Ozone Act are:
(a) to institute, for the purpose of giving effect to Australia’s obligations under the Vienna
Convention and the Montreal Protocol, a system of controls on the manufacture, import
and export of substances that deplete ozone in the atmosphere; and
(b) to institute, and to provide for the institution of, specific controls on the manufacture,
import, export, distribution and use of products that contain such substances or use such
substances in their operation; and
(c) to use the best endeavours to encourage Australian industry to:
(i)
replace ozone depleting substances; and
(ii)
achieve a faster and greater reduction in the levels of production and use of ozone
depleting substances than are provided for in the Vienna Convention and the
Montreal Protocol; to the extent that such replacements and achievements are
reasonably possible within the limits imposed by the availability of suitable
alternate substances, and appropriate technology and devices; and
(d) to provide controls on the manufacture, import, export and use of SGGs, for the purposes
of giving effect to Australia’s obligations under the framework convention on Climate
Change and the Kyoto Protocol; and
(e) to promote the responsible management of scheduled substances so as to minimise their
impact on the atmosphere.’
The Montreal Protocol on Substances that Deplete the Ozone Layer
The Montreal Protocol sets binding progressive phase-out obligations for developed and developing
countries for all major ODS, including CFCs (chlorofluorocarbons), halons, methyl bromide and less
damaging transitional chemicals such as HCFCs (hydrochlorofluorocarbons). Emissions are stopped
over time by prohibiting the new production of these chemicals. The Montreal Protocol provides longterm certainty for business through a mandatory timetable for the phase-out of ODS. All 197 United
Nations member states have committed to phase-out obligations under the Montreal Protocol.
10
Figure 2 Decline of ODS imports into Australia between 1995 and 2012 under the Montreal Protocol
The Montreal Protocol targets 96 chemicals in thousands of applications across more than 240
industrial sectors. The Montreal Protocol has been further strengthened through five amendments—
London 1990, Copenhagen 1992, Vienna 1995, Montreal 1997 and Beijing 1999, and one adjustment,
Montreal 2007—which have brought forward phase-out schedules and added additional ODS to the
list of controlled substances.
Australia was one of the early countries to ratify the Montreal Protocol. Australia has met or exceeded
all of its phase-out obligations under the Montreal Protocol. This has been achieved through a
cooperative partnership between industry, community and all levels of government.
The graph in Figure 1 shows that Australia has progressively reduced levels of ODS imports in advance
of Montreal Protocol requirements. For example, Australia will largely phase out consumption of
HCFCs by 2016, four years ahead of the schedule required under the Montreal Protocol. In doing so,
Australia will consume 61 per cent less HCFCs in the period to 2020 than permitted under the
Montreal Protocol—even after the Parties to the Montreal Protocol agreed in 2007 to accelerate HCFC
phase-out globally.
Ozone scientists predict that as the result of action taken under the Montreal Protocol, the ozone layer
will be repaired by the middle of this century.
Mr Achim Steiner, the Executive Director of the United Nations Environmental Programme, stated in a
speech at the Joint 10th Meeting of the Conference of the Parties to the Vienna Convention and the
26th Meeting of the Parties to the Montreal Protocol, on 17 November 2014, that:
‘Without the Protocol, we would probably have seen large ozone layer depletions
around the globe and the Antarctic ozone hole would be larger and deeper today.
And with it, we are starting now to see encouraging signs that the ozone layer is on
track to recovery by the middle of this century.’
The importance of this achievement is underlined when it is remembered that ozone is the
atmospheric chemical that blocks ultraviolet (UV) radiation, protecting us from skin cancer and
11
damage to our eyes and immune system while also protecting terrestrial and aquatic plants from
damage. Without the action taken under the Montreal Protocol, health problems resulting from
extreme UV exposure would have accelerated demand on health systems and further impaired
population health and workforce productivity, both in Australia and internationally.
Extreme UV exposure impacts on agricultural productivity impairing developmental processes
including reduced leaf area in crops such as rice (The United Nations Environment Programme (UNEP)
Stratospheric Ozone and Human Health Project) and degrades materials such as plastics in the built
environment. Mr Steiner also stated in his speech on 17 November 2014 that:
‘By 2030 the Montreal Protocol may be preventing 2 million cases of skin cancer
each year. It will have prevented significant loss of food crops which in turn would
have compounded future food security challenges.’
The Secretary-General of the United Nations in a media release of 11 September 2014 stated that:
‘Without the Montreal Protocol and associated agreements, atmospheric levels of
ozone depleting substances could have increased 10 fold by 2050.’
The action taken under the Montreal Protocol has had and will continue to have a major impact on the
economic wellbeing, health profiles and national productivity of 1Australia. The Cancer Council of
Western Australia’s Report Occupational exposure to ultraviolet radiation advises that Australians
experience higher levels of UV exposure because of its clear atmosphere, high sun elevation and
outdoor lifestyle. Increasing extreme UV intensity imposes economic and health costs on Australia not
born by other countries to the same extent, which in turn reduce Australia’s national productivity and
international competitiveness. The report notes that the melanoma rate in Australia is estimated to be
two to five times higher than those found in Canada, the US and the United Kingdom.
The Australian scientific community including the CSIRO, the Australian Antarctic Division and the
Bureau of Meteorology contribute to Australia’s understanding of the impact of ODS and SGGs on the
atmosphere.
The Cape Grim Baseline Air Pollution Station facility is located in
remote north-western Tasmania and was the first facility to
provide continuous measurement of ODS in the Southern
Hemisphere. Cape Grim detects atmospheric changes as part of a
scientific research programme established by the Bureau of
Meteorology and the CSIRO.
The CSIROcommenced atmospheric measurement in 1976 in a
caravan donated by NASA and began the Cape Grim air archive in
1978. Measurements of ODS and SGGs are taken twelve times a
day, 365 days a year. The facility now holds extensive
longitudinal data of worldwide value on the composition of our
Cape Grim facility
1
WMO (World Meteorological Organization), Assessment for Decision-Makers: Scientific Assessment of Ozone Depletion:
2014, 88 pp., Global Ozone Research and Monitoring Project—Report No. 56, Geneva, Switzerland, 2014, available at:
www.esrl.noaa.gov/csd/assessments/ozone/2014/assessment_for_decision-makers.pdf.
12
atmosphere.
The data recorded and work undertaken at the Cape Grim facility demonstrates the significance of the
Montreal Protocol in reducing Australia’s greenhouse gas emissions and confirms that ozone recovery
has commenced above the Antarctic and at mid-latitudes. Further information on the work, data and
findings of the Cape Grim facility is available on the CSIRO’s website.
The Australian Academy of Science’s Shine Dome in
Canberra was the setting for the 25th-anniversary
commemoration of the Montreal Protocol on 13
September 2012. Australia’s scientific community has
made a substantial contribution to the implementation
of the Montreal Protocol and the Kyoto Protocol and to
global understanding of how these gases work and their
Australian Academy of Science’s Shine Dome
effects combatted.
Many of the gases phased out under the Montreal Protocol are also potent SGGs. The Assessment for
decision-makers—scientific assessment of ozone depleting: 2014 undertaken by the Montreal
Protocol’s Scientific Assessment Panel notes that the Montreal Protocol has provided substantial
climate co-benefits as well as significantly repairing the ozone layer. Their report notes a significant
global achievement as a result of the efforts under the Montreal Protocol:
‘In 2010, the decrease of annual ODS emissions under the Montreal Protocol is
estimated to be about 10 gigatonnes of avoided CO2 equivalent emissions per year,
which is about five time larger than the annual emissions reduction target for the
first commitment period (2008–2012) of the Kyoto Protocol.’
Health costs
The World Health Organization states in the paper Health Effects of UV Radiation that:
‘prolonged human exposure to solar UV radiation may result in acute and chronic side effects
on the skin, eye and immune system. Over the long term, UV radiation induces degenerative
changes in cells of the skin, fibrous tissue and blood vessels leading to premature skin ageing,
photodermatoses and actinic keratoses.’
Australians are vulnerable to overexposure to UV and the associated health risks due to Australia’s
outdoor working and recreational lifestyle.
The Cancer Council of Western Australia in
its 2011 Report Occupational exposure to
ultraviolet radiation advised that:

Australia has some of the highest
skin cancer rates in the world, and it
affects at least two in three
Australians before the age of 70

As many as 34 per cent of Australian
13
workers are exposed to direct sunlight during working hours

Around 200 melanomas and 34 000 non-melanoma skin cancers per year can be attributed to
occupational exposures to UV radiation

Each year around 440 000 people in Australia are treated for skin cancer and over 1850 people
lose their lives to the disease

Skin cancer incurs greater costs than any other cancer in Australia costing the health system
more than $300 million per year

A total of 360 workers compensation claims has been made in Australia for sun-related injury
between the years of 2000 and 2009.
Increasing extreme UV in Australia would require a significant and additional health prevention and
treatment response. The cost of funding new health resources or of diverting existing health resources
to new tasks would be high and growing in a higher or more extreme UV scenario. Elements of an
elevated response to extreme UV would need to include more population health screening
programmes, more extensive community education programmes, and enhanced occupational, health
and safety training for those industries with a workforce regularly exposed.
Without the ameliorating trends and impacts of the Montreal Protocol, extreme exposure to high UV
conditions would become the norm rather than the summer exception.
The result of a longer and more constant extreme risk UV under a non-Montreal Protocol environment
would lead to higher costs for businesses, the health sector and the Australian economy overall.
Australia has been a strong supporter of the Montreal Protocol. By doing so, it is avoiding substantially
escalated economic and health costs.
UNFCCC, the Kyoto Protocol and SGGs
Australia is a party to both the UNFCCC and its Kyoto Protocol. The Kyoto Protocol gives effect to the
UNFCCC’s key principle of assigning legally binding greenhouse gas emissions targets to developed
countries. Australia ratified the Kyoto Protocol in 2007 and has inscribed amendments in the Kyoto
Protocol for the second commitment period.
While the Australian Government has not yet ratified the Doha Amendment to the Kyoto Protocol
which establishes the second commitment period, it will consider ratification at an appropriate time.
The Australian Government is committed to achieving a five per cent reduction on 2000 emissions
levels by 2020 and the target under the second commitment period of the Kyoto Protocol to reduce
emissions to 99.5 per cent of 1990 levels from 2013–2020. The first target is equivalent to a reduction
of 13 per cent below 2005 emissions levels and a 19 per cent reduction from projected business as
usual emissions. Australia’s target poses a challenge because emissions are projected to increase
without further action. On current trends, Australia faces a cumulative emissions reduction task of
around 236 MtCO2-e from 2013 to 2020, or 126 MtCO2-e in 2020.2
Action to reduce the emission of SGGs covered by the Ozone Act contributes to Australia’s efforts to
meet its existing targets and build towards a post-2020 target as well.
2
Department of the Environment, Emissions Reduction Fund green paper, Australian Government, December
2013, available at: www.environment.gov.au/climate-change/emissions-reduction-fund/green-paper. 3 Council of
Australian Governments (COAG), National licensing system for specified occupations –
14
SGG emissions accounted for around 1.9 per cent of Australia’s annual net CO2-e
emissions (excluding emissions from land use, land use change and forestry) in 2013.
By gas types, HFC emissions account for 1.8 per cent, PFCs for 0.04 per cent and SF6
for 0.02 per cent of Australia’s total annual emissions in 2013.
The Emission Reduction section considers several options to reduce both direct SGG emissions and
indirect greenhouse gas emissions, through avoided electricity use in RAC equipment, including
through amending the Ozone Act. The ultimate policy objective is to support a shift towards a lowGWP, energy efficient future for industries that use ODS and SGGs.
1. 2
The future of ODS and SGG use in Australia
The use of ODS and SGGs in Australia is changing. Generally, SGG use is increasing as domestic air
conditioning becomes more prevalent, while total emissions of these gases, in CO2-e terms, are
expected to fall over time. This is due in large part to improved containment, a more skilled workforce
and changing technology, with a predicted transition from high-GWP SGGs to lower or no-GWP SGG
alternatives. Figure 2 shows the potential refrigerant bank transition by gas species in Mt CO2-e.
While equipment entering the market is progressively more likely to have a lower or no-GWP working
gas, new equipment containing high-GWP gases will continue to enter the market and there is a large
installed bank of equipment containing ODS and SGGs that requires management to reduce the
emissions during life and at the end of life. The largest sector of the bank is stationary air conditioning
while the largest annual service demand is in the mobile air conditioning sector. Using end-use
controls as an effective and appropriate way of delivering emission reduction into the future will be
discussed in later sections.
70,000
GWP <10
60,000
GWP <1000
GWP <2150
Refrigerant bank
50,000
HFC-Mix
40,000
HFC-32
HFC-407C
30,000
HFC-410A
HFC-404A
20,000
HFC-134a
10,000
HCFC-Mix
HCFC-22
0
2003
2006
2009
2012
2015
2018
2021
2024
2027
2030
Figure 3 Predicted refrigerant bank transition from 2013 to 2030 by gas species in Mt CO2-e
Source: The data used to produce this graph was sourced by the Expert Group from departmental imports data
and industry data.
Advances in gas and equipment technology will impact on the role of industry, consumer demand and
the need for environmental regulation. The increasing availability of lower or zero GWP refrigerant gas
options will have implications on the need for environmental regulation or how environmental
15
regulation is applied. As the GWP of ODS and SGGs is reduced and the bank of higher GWP gases
decreases, two trends emerge:

the environmental benefits from reducing emission of ODS and SGGs through end-use
licensing decrease over a long period

technicians increasingly face challenges associated with low-GWP alternatives such as
increased flammability and toxicity.
In transitioning to low-GWP technology, the effectiveness of regulating the use of ODS and SGGs in the
RAC and fire protection industries through end-use licensing under the Ozone Act will diminish, albeit
many years in the future. However, there may be benefits from regulating these activities into the
future as a means of providing optimal energy efficiency benefits, consumer protection, work health
and safety (WHS) and/or public safety.3
These trends suggest that the role of the Australian Government in regulating industry to reduce
emissions of ODS and SGGs will progressively reduce over a long period. While this stage is still some
time away, the Ozone Act Review offers the opportunity to consider how a reduction in regulatory
requirements, and the timeframe in which they are likely to occur, can best be managed by
government and industry. It also provides the opportunity to identify the challenges arising from
replacements to ODS and high-GWP SGGs, and regulatory and non-regulatory options to manage these
risks including using the systems developed under the Ozone Act.
Managing the end-use licensing schemes into the future is considered further in the End-Use sections.
Managing issues associated with workplace health and safety and/or public safety is also considered
further in the End-Use sections.
1. 3
Industry
The RAC sector is the predominant user of ODS
and SGGs in Australia, using over 80 per cent of
the gas imported.
The RAC industry has provided strong support
for the Montreal Protocol and has played an important role in helping Australia to achieve and exceed
its Montreal Protocol obligations. Australian industry has been responsive to reducing the emissions of
SGGs. It has addressed environmental impacts ahead of action elsewhere in the world and government
intervention.
Cold hard facts 2: A study of the refrigeration and air conditioning industry in Australia 4 provides a detailed
examination of the RAC industry in Australia. It provides information on the role of the RAC industry
and related industries and how they provide essential services within the Australian economy. The
report5 notes that:
3
Council of Australian Governments (COAG), National licensing system for specified occupations –
decision regulation impact statement, April 2009, p. 7.
4 Department of the Environment, Cold hard facts 2: A study of the refrigeration and air conditioning industry in Australia,
Australian Government, July 2013, available at: www.environment.gov.au/protection/ozone/publications/cold-hard-facts-2.
5 ibid., p. 12.
16
“The refrigeration and air conditioning industry is an essential part of the Australian
economy. Without its services our major cities and much of our agriculture,
telecommunications sector and health sector would not be able to function as they
presently do.”
first commitment period (2008-2012) of the Kyoto Protocol.
The statistical snapshot in Cold hard facts 2 reports
the following:

The refrigerated cold food chain transports
nearly $30 billion worth of perishable food
annually.

There are more than 140 million square
metres of air conditioned, commercial and
other non-residential buildings in Australia.

Air conditioning is estimated to be installed in
the majority of Australia’s 8 million homes.

Air conditioning is installed in the majority of the 16 million registered road vehicles.

Around 173 000 people are employed in more than 20 000 businesses operating in the RAC
industry

These employees are earning approximately $13.3 billion in wages and salaries per annum.

Nearly $5.9 billion was spent purchasing and installing new equipment in 2012 with a further
$533 million spent on refrigerant gas.

An overall expenditure figure of some $26.2 billion was spent on RAC equipment and services
in 2012.

There are more than 45 million individual pieces of RAC equipment operating in Australia
consuming more than an estimated 59 000 gigawatt-hours (GWh) of electricity in 2012,
equivalent to more than 22 per cent of all electricity used in Australia that year. (Figure 7
extracted from the Cold Hard Facts 2 report indicates where RAC sector electricity is
consumed.)

RAC owners spent an estimated $14 billion to pay for that electricity.

RAC technology in all its forms is the single largest electricity consuming class of technology in
Australia.

More than 4800 tonnes of low-GWP
refrigerants was in RAC equipment.

As a result of the huge quantity of electricity
used and the significant bank of high-GWP
refrigerant gases used RAC equipment is one
of the largest single sources of greenhouse
emissions in Australia.

Total indirect greenhouse gas emissions
resulting from the energy required to power
Refrigerated trucks are an essential element of
perishable food distribution across Australia
Bayswater Power Station Muswellbrook
17
RAC systems is equivalent to more than 10 per cent of Australian greenhouse emissions.

Total economic spending in the sector is equivalent to 1.7 per cent of Australia’s gross
domestic product (GDP).
18
5%
2175t
11%
4785t
Stationary AC
Mobile AC
21%
9135t
Domestic refrigeration
63%
27,404t
Refrigerated cold food chain
Figure 4 Bank of refrigerants by major segment, 2012 (total of 43 500 tonnes)
Source: Cold hard facts 2 stock model.
Fire protection
The fire protection industry represents a smaller component of Australia’s total consumption of ODS
and SGGs. Based on bulk import data collected by the Department and consultation with industry
representatives, it is estimated that fire protection applications in 2013 represented approximately 54
tonnes6 or 1.3 per cent of Australia’s annual consumption (excluding halon sourced from the National
Halon Bank).
ODS and SGG use in the fire protection industry is generally for special hazard systems (systems that
cannot use more traditional extinguishing agents such as water, carbon dioxide or dry powder). These
systems are predominantly used for telecommunications and data centres; transport infrastructures
such as aircraft, marine vessels and trains; and the niche application of protecting fragile cultural
assets housed in galleries and museums. The most common extinguishing agent is FM-200, a HFC.
Figure 7 below illustrates the relative proportions of ODS and SGGs used in the fire protection industry
based on estimated consumption of bulk gas in 2013.
6 This total does not include halon for fire protection which is sourced from halon already recovered from the
existing stocks within Australia.
19
4%
Halon-1211 (2%)
Halon-1301 (4%)
NAF-S-III (0.2%)
NAF-P-III (0.2%)
FM-200® / FE-227TM (92%)
Other HFCs (<1%)
92%
Figure 5 ODS and SGGs used in fire protection industry (2013)
Source: The data used to produce this graph was sourced by the Expert Group from departmental imports data
and industry data, and verified through consultation with fire protection industry representatives.
2. OPERATION OF THE LEGISLATIVE OBJECTIVES
2.1 Mechanisms to achieve the legislative objectives
The Ozone Act seeks to reduce the emission of ODS and SGGs to the atmosphere. While emissions
reduction for both ODS and SGGs is a unifying objective, the internationally prescribed mechanisms
are different. As a result, the Ozone Act balances both sets of international requirements through its
provisions.
The Ozone Act achieves its objectives by regulating the manufacture, import, export, use and disposal
of ODS and SGGs through import, export and domestic use licensing systems through several pieces of
legislation. The legislation also includes provision for levies on the import and manufacture of ODS and
SGGs to fund the programme. The full suite of Commonwealth ODS and SGG legislation is:
 Ozone Protection and Synthetic Greenhouse Gas Management Act 1989
 Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Act 1995 and Ozone
Protection and Synthetic Greenhouse Gas (Import Levy) Act 1995
 Ozone Protection and Synthetic Greenhouse Gas Management Regulations 1995
 Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Regulations 2004 and Ozone
Protection and Synthetic Greenhouse Gas (Manufacture Levy) Regulations 2004.
20
2.2 Gases covered
The Ozone Act covers the scheduled substances listed under the Montreal Protocol and synthetic
greenhouse gases listed under the UNFCCC and its Kyoto Protocol. The scheduled substances are listed
in Schedule 1 (scheduled substances) of the Ozone Act.
Parties to the Montreal Protocol may consider controls on additional ODS in the future if they are
likely to have a material impact on the recovery of the ozone layer. Australia’s obligations under the
Kyoto Protocol’s second commitment period will expand to include three high-GWP gases not
currently covered by the Ozone Act: HFC-41-10mee, PFC C10F18 and nitrogen trifluoride.
2.3 Import, manufacture and export controls
Australia is required to have an import and export licence scheme (licence scheme) under Article 4B of
the Montreal Protocol. The licence scheme, which also covers manufacturing, has enabled Australia to
meet its ODS phase-out obligations and facilitates the collection of data reporting under the Montreal
Protocol. The licence scheme also satisfies Australia’s reporting obligations for SGGs under the
UNFCCC7.
The Ozone Act bans the import, export and manufacture of regulated bulk ODS or SGGs and import of
regulated ODS/SGG equipment unless an appropriate licence is held (Section 13). There are four types
of licences under the Ozone Act (section 13A, Figure 2). Some bulk gas and equipment is exempted
from the operation of the Ozone Act.
Import, manufacture and export licences under the Ozone
Act
Equipment or
products containing
ODS or SGGs
Bulk ODS and SGGs
Controlled
substances licence
Essential uses
licence
Used substances
licence
Exempted or
unregulated
bulk ODS/SGG
and ODS/SGG
equipment
import,
manufacture
and export
ODS/SGG
equipment licence
Figure 6 Licences under the Ozone Act
Importing bulk ODS and SGGs
Bulk ODS can be imported under a controlled substances licence, used substances licence or essential
uses licence. Bulk SGG (there is no distinction between new or used) can only be imported under a
controlled substance licence. While the term bulk is not defined in the Ozone Act, it is widely
understood to mean gas that is not contained in equipment, for example, it is in a storage container.
Additional conditions are placed on controlled substances licences for bulk ODS licences under section
18 of the Ozone Act to meet Montreal Protocol obligations including that trade is not conducted with
7
Explanatory Memorandum, Ozone Protection and Synthetic Greenhouse Gas Legislation Amendment Bill 2003
available at: www.comlaw.gov.au/Details/C2004A01211.
21
non-parties to the Montreal Protocol 8 and the requirement to hold a HCFC quota. The trade
restrictions are consistent with Australia’s obligations under the Montreal Protocol.
HCFC phase-out quota:

The phase-out of HCFCs is managed through the quota system set out in Part IV of the
Ozone Act, attached to controlled substance licence conditions (section 18(1) and sections
23-35).

Quota is granted on a grandfathered system based on the ODP (ozone depleting potential)
tonnes of the HCFCs imported. The ODP of a chemical compound is the relative amount of
degradation to the Ozone layer it can cause.

Quota is allocated every two years and is calculated based on ODP tonnes, rather than
metric tonnes. This approach has allowed the industry to progressively transition to
alternatives.

It is illegal to import bulk HCFCs without adequate quota.

The quota system has demonstrated to be an efficient and effective intervention to
progressively phase out the import of ODS.

A quota system is required by all parties to the Montreal Protocol. Australia’s quota
approach is similar to most developed countries to meet their Montreal Protocol
obligations.
There are several exemptions to the requirement to hold a licence to import, manufacture or export
bulk SGGs and ODS including:

the manufacture of SGGs during aluminium production (regulation 3)
Aluminium production is the largest source of perfluorocarbons (PFC) emissions in Australia.
PFCs are released during aluminium production if the alumina ore content of the electrolytic
bath used in manufacture falls below levels required for electrolysis resulting in anode effects.
The manufacture of PFCs as a by-product of the manufacture of aluminium is automatically
exempted from the licensing scheme (section 13 and regulation 3(1) (b)). Emissions of PFC
from aluminium manufacture are captured under the National Greenhouse and Energy
Reporting Act 2007 (NGER Act). This satisfies the reporting requirements under the UNFCCC.
The aluminium industry has worked to reduce emissions from production.

the manufacture or import of SGGs for use in magnesium smelting and casting (regulation 3A)
Sulfur hexafluoride (SF6) is used in magnesium smelting and casting. This is an emissive use of
SF6. Imports of SF6 are exempted from the licensing scheme if a permit is granted by the
Minister. There are currently no permits granted under this provision. Based on Australia’s
National Greenhouse Accounts’ National Inventory Report 2013, there is no magnesium
smelting in Australia.
8
This requirement only applies if the ODS is halon, CFC, carbon tetrachloride, methyl chloroform and
bromochloromethane. It does not apply to the import or export of HCFCs.
22

Scheduled substances used to manufacture other chemicals and feedstocks (section 12A and
regulation 3AA)
Section 12A of the Ozone Act provides that scheduled substances imported or manufactured
exclusively for use as an intermediate substance to manufacture other chemicals are not
subject to all the controls in the Ozone Act. These substances are called feedstocks, and
licensing and levy requirements do not apply. This is because the substances are transformed
in manufacture and are not expected to be emitted to the atmosphere. There is a requirement
for manufacturers or importers of feedstocks to report on imports to the Department to
enable Australia to comply with international reporting obligations. Similarly, SGGs destroyed
in a manufacturing process are exempted from the requirement to hold a licence if Ministerial
approval is given (regulation 3AA).

scheduled substances imported or exported on board ships or aircraft and used exclusively to
service the air conditioning or refrigeration equipment aboard the aircraft or ship (section
12B,) where the ship or aircraft is transiting between Australia and a place outside Australia or
transiting between two places outside Australia.
Importing equipment containing ODS and SGGs
The Ozone Act bans the import, export and manufacture of equipment containing a SGG and
refrigeration and air condition equipment containing a HCFC unless an ODS/SGG equipment licence
(section 13A (5)) is held. This enables the collection of data for international reporting and to support
efforts in emissions reductions.
There are a series of exemptions to the requirement to hold an appropriate licence and includes:

low volume equipment imports (currently imports of up to five pieces of equipment in a single
consignment containing up to 10 kilograms of gas in a two-year period)

equipment that is kept for household or domestic use (section 13(6A) and regulation 3)

medical and veterinary equipment that contains a SGG (section 8D and regulation 2A)

imported foam products containing SGGs (section 8D and regulation 2A).
To support the phase-out of bulk ODS, a licence will not be granted for products or equipment listed in
Schedule 4 of the Ozone Act unless an exemption applies. The import of the following equipment is
banned under Schedule 4:

specified equipment containing CFCs, halon, carbon tetrachloride, methyl chloroform and
bromochloromethane—this includes dry cleaning machinery, automotive air conditioning
maintenance kits, extruded polystyrene packaging and insulation, aerosol products, rigid
polyurethane foam products, moulded flexible polyurethane foams, disposable containers of
CFC refrigerants

equipment containing halon (not limited to equipment types in the above list)

RAC equipment containing CFC or HCFC, unless an exemption to this ban applies.
An exemption to this ban may be granted if the product is essential for medical, veterinary, defence,
industrial safety or public safety purposes and no practical alternative exists (section 40).
23
Regulations 70 to 73 provide limited exemptions for the Schedule 4 ban on the import of RAC
equipment charged with or containing HCFCs. These exemptions progressively sunset up to
31 December 2019 when import of all HCFC RAC equipment will be banned under Schedule 4 of the
Ozone Act.
Operation of import, manufacture and export licences
The licences, notices or permits issued under the Act contain additional obligations including quarterly
reporting obligations, requirement to participate in a product stewardship scheme, requirement to
pay an import levy and requirement to pay a licence application fee.
Manufacturers, importers and exporters of ODS and SGGs are required to provide a quarterly report
on the quantity and species of scheduled substance manufactured, imported or exported. This
reporting directly supports Australia’s international obligations under the Montreal Protocol and
UNFCCC9.
Controlled substances and ODS/SGG equipment import licence holders are required to participate in
an approved product stewardship scheme (if one exists) as a condition of their licence. There is only
one product stewardship scheme for some ODS and SGGs in Australia, namely Refrigerant Reclaim
Australia (RRA) which provides product stewardship for ODS and SGGs used as refrigerants. There are
approximately 1200 licence holders most of whom are required to be members of RRA.
Controlled substances and ODS/SGG equipment licence holders are required to pay levy (section 69
and the Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Act 1995 and the Ozone
Protection and Synthetic Greenhouse Gas (Manufacture Levy) Act 1995). Levies will be considered in
more detail within the context of the Ozone Protection and SGG Special Account (Cost Recvoery
Section).
Table 4 summarises obligations against the different licence types and exemptions from the Ozone
Act.
9
Article 7 of the Montreal Protocol requires Parties to report data on ODS produced and consumed on an annual
basis to the Ozone Secretariat. This obligation includes amounts of ODS imported or manufactured for feedstock
purposes. Article 12 of the UNFCCC requires Parties to provide a national inventory of anthropogenic emissions.
SGG import, export and manufacture data is used to generate or verify Australia’s emissions inventory for
emissions in this sector.
24
Table 1 Summary of import, manufacture and export obligations under the Ozone Act
Exempt from
obligations
Bulk HCFCs—controlled
Substance licence
Methyl bromide—controlled
substance licence
Bulk SGGs—controlled
substance licence
Used substances licence
Essential use licence
Imported or manufactured
for use in magnesium
production
Feedstock
SGG destroyed in a
manufacturing process
Manufacture as by-product
of aluminium smelting
Bulk gas on ships and aircraft
ODS equipment—ODS/SGG
equipment licence
SGG equipment—ODS/SGG
equipment licence
Section 40 exemption
Regulation 73 exemption
Low volume importers and
personal imports
Medical and veterinary
equipment
Foams containing ODS and
SGGs
Aerosols containing ODS
Apply for a licence,
notice, permit or
Ministerial approval



Hold
import
quota

Import/Export to
country on Montreal
Protocol register
Pay
application
fee
Pay levy
Quarterly reporting
obligations
Product stewardship
scheme membership
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2.4 End-use controls
RAC and fire protection end-use controls complement the import and manufacture controls and are
the primary policy intervention to achieve emissions reduction under the Ozone Act once these
gases are present in the Australian market. End-use controls are designed to improve industry
standards as a way to reduce preventable emissions. The emission reduction potential of the RAC
and fire protection end-use licensing schemes is considered further in the Emission Reduction
section.
The end-use controls regulate how ODS and SGGs are traded, stored, handled and disposed of in
specific Australian industries. The significant majority of ODS and SGGs are used in long-lasting
equipment—sometimes over decades. The purpose of the end-use controls is to minimise emission
of these gases through the supply chain, during equipment installation and maintenance and when
equipment reaches end of life.
The interaction and consistency of the regulation of ODS and SGGs with other Commonwealth,
state and territory policies and legislation
At the time of evaluating the Ozone Act ahead of amendments in 2003, states and territories had
complementary legislation placing some controls on the use and emission of ODS, some of which
included or referred to other provisions for regulating the sale, handling, decanting, storage and
transport of gases in a way that minimised emissions to the atmosphere. In some states and
territories, these controls incorporated a system of training and licensing through registered
training organisations nationally while others required technicians to complete awareness training.
The Regulation Impact Statement prepared in 2003 to articulate this evaluation recognised the
complementary nature of the controls in place at the time, but also highlighted the transition at
that time from ODS to SGGs as alternatives with a lesser impact on the ozone layer. It was
acknowledged that, with the exception of Western Australia, there were no requirements for
managing SGGs in the same way. There was a regulatory gap at the state and territory level that
was filled by the introduction of end-use controls at the national level in 2004.
In 2003, the Ozone Act was amended to include provisions for Regulations to be made to regulate
the sale, purchase, acquisition, storage, use, disposal and labelling of ODS and SGGs. The policy
intention was to implement nationally consistent regulation of these gases, replacing individual
state and territory environmental regulatory requirements. The aims of introducing end-use
licensing controls included delivering environmental gains more efficiently, and realising benefits to
industry in terms of increased certainty and consistency. Some state and territory governments
continue to administer individual occupational licensing schemes to regulate work health safety
and consumer protection matters to differing degrees.
The interaction of other state, territory and Commonwealth policies and legislation is considered
further below in regard to the structure of end-use licensing and safety considerations.
26
Unregulated
handling of
ODS and SGGs*
Regulated end use for ODS and SGGs
Refrigeration
and air
conditioning
Fire protection
Methyl bromide
record keeping
and reporting
ODS/SGG
destruction
facility approval
Table 2 End-use controls under the Ozone Act and regulations
*Unregulated end-uses include SF6 use in switchgear, laboratory, analytical and medical uses, and
feedstock use. It is an offence to discharge an ODS or SGG unless the discharge is in accordance
with the Regulations.
Refrigeration and air conditioning licensing
Under the end-use licensing arrangements, the use of ODS and SGGs in the RAC industry and the
use of ODS and SGG extinguishing agents in the fire protection industry are regulated through two
separate licensing schemes which reflect the very different scales and nature of gas usage between
the two industries.
The RAC licensing scheme is administered by the Australian Refrigeration Council (ARC) on behalf of
the Australian Government. The scheme is structured to restrict access to these gases to businesses
and individuals that are competent to store and handle them. It is essentially a competency-based
permit scheme.
For the purposes of the scheme, a refrigerant is a CFC, HCFC, HFC, PFC and halon that is, or has
been, used in RAC equipment and is a listed controlled substance under the Ozone Act. The scheme
does not cover compliance with occupational, safety and fair trading requirements as these areas
fall within the legislative powers of state and territory governments but it complements and
supports high standards and safe work practices, for example, by referencing codes of practice.
The Regulations require technicians who work on equipment containing refrigerants to hold a
refrigerant handling licence (RHL) and businesses that store, possess or dispose of ODS and SGG
refrigerants to hold a refrigerant trading authorisation (RTA). RHL holders are often affiliated with
RTA holders or, as sole traders, may hold both an RTA and RHL.
A RTA is required by any business or individual who acquires, stores, sells or disposes of an agent
that is a scheduled substance under the Ozone Act. It is an offence under the regulations to
undertake any of these activities without the relevant trading authorisation (regulation 112). RTAs
are issued to business owners or managers for a period generally of two years. There are three
types of RTAs, depending upon the type of business activity for which they are required:

a RTA that permits the holder to buy, sell and store refrigerant for stationary and
automotive RAC work

a RAC equipment manufacturing authorisation that permits the holder to acquire
refrigerant for use in the manufacture of RAC equipment

a restricted RTA which permits the business to recover refrigerant.
27
An RTA is subject to conditions which, among other things, prescribe equipment that must be
owned to avoid emissions in the handling of gas, require records to be kept of refrigerant bought,
recovered, sold or otherwise disposed of, and require that gas is only handled by RHL holders
(regulation 141).
RHLs are based on nationally endorsed trade qualifications—overseen by the Industry and Skills
Council Advisory Committee—and issued to technicians who handle refrigerant. There are four
main and twenty-one restricted RHL types which are specific to the sector or type of work being
undertaken and, accordingly, have different evidential requirements to demonstrate competency
to do the work specified in the licence. Technicians are required to undertake work consistent with
the conditions of their licence (regulation 135). The conditions relate to, among other things,
carrying out work in accordance with Australian Standards and Codes of Practice to reduce the
emission of gases and return of recovered gas for disposal.
Fire protection licensing scheme
The fire protection industry permit scheme is a separate competency-based scheme administered
by the Fire Protection Association Australia (FPAA), on behalf of the Australian Government.
Regulation 301 defines an extinguishing agent as scheduled substances, listed under the Ozone Act
that can be used to prevent, control or extinguish a fire, or suppress an explosion. Under regulation
303 it is an offence to possess or trade extinguishing agent without holding an extinguishing agent
trading authorisation (EATA). Under regulation 302 it is an offence to work with an extinguishing
agent without holding an extinguishing agent handling licence (EAHL). Under regulation 304 it is an
offence to possess halon without a halon special permit unless the individual is in the process of
transferring the halon to the operator of an approved extinguishing agent destruction facility.
Licences are issued to technicians who work on equipment containing controlled fire extinguishing
agents; authorisations are issued to businesses that acquire, possess and dispose of controlled fire
extinguishing agents; and ‘halon special permits’ are issued for the possession of halon for use in
fire protection equipment. There are six types of fire protection licences distinguished by the type
of work to be undertaken on specific types of equipment in addition to halon special permits.
Appendix 1 provides a table of end-use authorisation and licence types and the types of activities
allowable under each.
Table 3 Number of RAC and fire protection permits held by industry members, as of January 2015
RAC permit numbers
Fire protection permit
numbers
Trading authorisations
17 241
145
Handling licences
58 873
1 359
Halon special permits
40
Analysis by the Expert Group in its 2015 report indicates that, excluding halon which is sourced
domestically from recovered stock, fire protection in Australia uses less than 1.3 per cent of the
bulk gas imported to Australia for all end-use. Industry transition to low-GWP alternatives indicates
that over the next five to ten years, halon and, potentially for a shorter period of time, FM200/FE270 gases will remain the key substances still requiring tight controls and reporting around
28
their volume and use in Australia. In the case of halon this is to ensure Australia can continue to
meet its Montreal Protocol commitments to restrict halon essential uses. In the case of FM200/FE270 gases, which constituted approximately 92% of the scheduled extinguishing agent
consumed in Australia 2013, the need for controls is based on its high-GWP of 3 220.
Table 4 Estimated consumption in the fire protection industry by gas type in 2013 and ODS/GWP
properties
Substance
ODP
AR4 GWP-100
2013 consumption
(tonnes)
Halon-1211
3
1890*
~ 1 tonne or 2%
Halon-1301
10
7140*
~ 2 to 2.5 tonnes or 4%
NAF-S-III
~ 0.036
~1444*
~ 0.1 tonne or 0.2%
NAF-P-III
~ 0.014
~340*
~ 0.1 tonne or 0.2%
FM-200®/FE-227TM
0
3220
= 50 tonnes or 92%
Other HFCs
0
-
<0.5 tonnes or <1%
> 161 000
tonnes
~ 54 tonnes
Total all ODS and SGGs
* These gases are regulated under the Montreal Protocol and are not counted towards Australia’s Kyoto Protocol
targets. Nevertheless, these substances do have a significant GWP.
By comparison, the RAC industry is expected to remain the heaviest user of ODS and SGGs over the
next two decades. While RAC, too, is undergoing a transition to lower GWP refrigerants there is a
need to continue to manage their use in a targeted way.
100.00
90.00
GWP <10
80.00
GWP <1000
GWP <2150
Refrigerant bank
70.00
HFC-Mix
60.00
HFC-32
50.00
HFC-407C
40.00
HFC-410A
30.00
HCF-404A
20.00
HCF-134a
HCFC-123
10.00
0.00
2003
HCFC-22
2006
2009
2012
2015
2018
2021
2024
2027
2030
Figure 7 Mt CO2-e over the modelling period 2003–2030
29
Environmental benefits of end-use licensing
Direct emissions reduction of 24.7 Mt CO2e (16.7ODS/8.0SGG) has been achieved as a result of the
end-use controls for both fire protection and RAC introduced with the 2003 amendments to the Act
(24.37 Mt CO2-e as a result of the RAC licensing scheme and 0.33 Mt CO2-e as a result of the FP
licensing scheme10). These controls have been effective in reducing direct and indirect emissions,
and it is expected that they would reduce direct emissions by a further 59.3Mt CO2e
(18.0ODS/41.3SGG) when modelled out to 2030 (58.02 Mt CO2-e as a result of the RAC licensing
scheme and 1.28 Mt CO2-e as are result of the FP licensing scheme).
Ancillary benefits of end-use licensing: Complementary to other legislation
The RAC and fire protection industries are regulated by some states and territories variously
through regulations for the built environment and, to some extent, work on motor vehicles. These
regulatory platforms cover WHS and consumer protection matters. Similarly, the Commonwealth
agencies responsible for regulating the aviation and maritime industries, as well as Defence, have
their own regulatory frameworks to cover work standards and safety which interacts with the
Ozone Act.
The goal in designing, installing and maintaining RAC and fire protection equipment is to retain the
charge of working gases inside the equipment so that it is able to function as intended. Effective
and reliable fire protection relies on equipment that maintains its charge of extinguishing agent so
that it is ready to use if and when required. Similarly, effective and reliable air conditioning and
refrigeration uses a continuous cycle of gas inside a closed system to continue to cool or heat.
For both the RAC and the fire protection industries, the assessment of a technician’s competence to
undertake specific tasks allowed under a licence defines eligibility for that licence type. The
rationale for this approach is that if a technician is trained to be able to install, maintain and
decommission equipment and to handle the gas component according to the standards taught
through trades courses then they would be able to undertake their work in a way that minimised
emissions to the atmosphere. Further, if the conditions of that licence were based on work being
undertaken in accordance with the Australian and New Zealand Standards and codes of practice
accepted for RAC and fire protection work, then compliance with those conditions would also mean
that gases and the equipment designed to contain and use them would be treated in a way that
minimised emissions to the atmosphere.
The way in which administration of end-use licensing has developed over the decade
since its inception has helped to establish a highly skilled workforce that applies
good trade practices and is aware of the occupational health and safety implications
of the work that they undertake. By placing an industry-based administrator at the
national level for the RAC and fire protection industries respectively, the licensing
schemes have established a coordination point for communicating the regulations
with the backing of legislative power in relation to gas emissions.
These implicit assurances of work quality and work safety that are built into the end-use controls
under the Ozone legislation are important ancillary benefits of the end-use licensing schemes that
10
Expert Group, Assessment of environmental impacts from the Ozone Protection and Synthetic Greenhouse
Gas Management Act 1989, April 2015, p. 15.
30
have a much narrower primary purpose. There are, however, limitations to the legislative power
behind some of these benefits. The schemes were designed, as noted above, to reduce the
emission of ODS and SGGs and the legislative basis for end-use controls does not extend to
occupational matters such as WHS or consumer protection, or to indirect greenhouse gas emissions
from energy consumption.
Due to the way that end-use licensing is structured and administered (since its inception in 2005),
there is a perception within some areas of the fire protection and RAC industries and other
government agencies that the Ozone end-use licensing schemes regulate work practices in the
trades that incorporate fire protection work and RAC work—in essence it has come to be viewed as
a national occupational licensing scheme, rather than an environmental scheme limited to direct
emissions of ODS and SGGs.
The Ozone Act does not provide the required powers to regulate activities beyond actions to
prevent direct emissions. Further analysis is being undertaken to establish the degree to which
there are gaps or overlaps in regulation of the RAC and fire protection industries and if significant
overlaps are found, will be addressed after the Ozone Act review has been completed.
Safety issues in the RAC industry
All refrigerants have some hazard characteristics, such as toxicity or flammability, under certain
conditions and should, therefore, be handled in accordance with state and territory WHS,
dangerous goods and other relevant requirements.
A key attribute of many of the high-GWP SGGs is that they are not flammable or are mildly
flammable11. Some alternatives with low or no-GWP have hazardous properties different to the
commonly used high-GWP SGGs and require suitable controls for their safe use. Some of these
properties include flammability, explosiveness, toxicity, corrosiveness and/or operation under high
pressure.
2.5 Product stewardship and destruction facilities approvals
The product stewardship scheme for end-of-life management of ODS and SGG refrigerants has
several parts: importer licence obligations, a ban on emission of ODS and SGGs, and control of enduse handling that requires the return of waste ODS and SGG refrigerants for disposal. Destruction
of ODS and SGGs is carried out at approved destruction facilities to ensure the process meets
international and domestic standards.
There are approximately 1200 import licence holders who have product stewardship obligations
imposed through their licence. There are approximately 60 000 individuals and 18 000 businesses
who participate in this scheme through end-use controls.
There is only one approved product stewardship scheme for ODS and SGGs in Australia: Refrigerant
Reclaim Australia (RRA). RRA itself is an industry-led not-for-profit organisation that finances its
operations by charging a fee to importers based on the quantity of gas imported. RRA manages the
collection, transport and destruction of waste gas.
Since 1993 RRA has recovered and destroyed around 4500 tonnes of ODS and SGGs, which is the
equivalent of preventing well over the equivalent of 10 million tonnes of CO2 being emitted into the
11Flammability ratings are coded for industry identification and for regulatory purposes in terms of A3 which
is highly flammable; A2 and A2L which are flammable and mildly flammable; and A1 which is not flammable.
31
atmosphere. This intervention alone has reduced emission of ODS and SGGs by 9.4 Mt CO2-e
(6.0ODS/3.43.4SGG) between 2004 and 2014 and is expected to contribute a further 12.74 Mt CO2-e out
to 2030.
2.6 Halon
Halons are potent ODS. The production and consumption of halons were phased out in developed
countries from 1 January 1994 and in developing countries from 2010, except for essential uses,
under the Montreal Protocol. Australia has satisfied its obligations under the Montreal Protocol by:

banning the import, export and manufacture of bulk new halons from 31 December 1992—
the import of used or recycled halon is allowed if a used substance licence is held

developing the Australian Halon Management Strategy to manage Australia’s essential
civilian halon stocks until alternatives are available for all applications.12
Australia supports emission reduction of halon, consistent with obligations under the Montreal
Protocol13 by:

banning the import and manufacture of halon equipment, unless the product is essential
(s38, 40 and Schedule 4). (One example of a product that may meet the criteria is a halon
fire suppression system aboard an aircraft if required under Australian airworthiness
standards.)

implementing an end-use domestic permit scheme for fire protection and licensing
requirements for the handling and sale of halon

administering the National Halon Bank for decanting, purification, storage and disposal of
halon from decommissioned halon equipment.
Halon is no longer used in the majority of fire
protection applications where previously it was in
common use for fire protection. However, there still
remain applications where there is no practical
alternative.

Civil aviation: Halon is used as a fire
extinguishing agent in certain areas of most
aircraft. There are no viable alternatives for
some civil aviation applications, such as for
cargo compartment fire suppression.
Halon extinguishers returned for halon
reclamation/destruction
Civil maritime: Halon is also used in some civilian ships as it is impractical to replace a halon
system in these vessels. The demand for halon for this purpose has progressively reduced
as ships constructed from the early 1990s did not contain halon systems.

12
13
Defence: Some aircraft, helicopters, ships, submarines and land vehicles use halon systems
as there are currently no viable alternatives.
Decision X/7.
ibid.
32
The International Civil Aviation Organization (ICAO) has mandated the phase-out of halon products
and equipment for a wider range of civil aviation uses. In June 2011, the ICAO Council approved
amendments to the Chicago Convention on Civil Aviation, which established requirements and
timeframes for the use of halon alternative fire-extinguishing agents in most civil aviation
applications. In Australia, this is managed domestically by the Civil Aviation Safety Authority. There
are still a limited number of aviation applications where ICAO has not mandated a timeframe for
halon replacement due to lack of suitable alternatives such as in engine nacelles and cargo bays.
Halon under the Ozone Act and Ozone Protection and Synthetic Greenhouse Gas Management
Programme (Ozone Programme)
The Ozone Act regulates the import, export and
manufacture of halon, used halon and
equipment. These controls satisfy Australia’s
obligations under the Montreal Protocol (Article
2B). The use of halon is regulated through the
fire protection end-use licensing scheme. Enduse licensing supports the appropriate handling
of ODS and SGGs to reduce their emission to the
atmosphere. This intervention is supported by
Decision X/7 of the Parties to the Montreal
Protocol.
Storage of halon containers at the Australian National
Halon Bank in Melbourne; halon is a damaging ODS if
emitted
The Department also manages the Australian
Halon Management Strategy (AHMS) required under Decision X/7 of the Parties to the Montreal
Protocol. The strategy provides a framework for the responsible management of Australia’s
essential civilian halon stocks in the lead up to replacement of all remaining halon uses once
alternatives are commercially available. The AHMS has not been reviewed since it was developed in
2001. It is being reviewed as part of the Ozone Act review to reflect a whole-of-programme and
whole-of-government approach.
Australia maintains a stock of halon, accumulated through collections of halon from
decommissioned equipment, to meet essential (where no alternative exists and is required to
safeguard health and safety and essential property) civilian requirement. The halon is stored in the
National Halon Bank, which is administered by the Department. The main civilian user of halon
stocks is the aviation sector. The Department of Defence has a separate stock for defence uses.
Halon stocks and future requirements
As Australia is largely a technology taker, the transition from halon systems will be dependent on
the development of alternative technology and take up in key markets such as the US and the EU.
Australia may be able to influence accelerated take-up through international fora including the
Montreal Protocol and ICAO.
In 2012, the Department commissioned a report by Energy International Australia titled Review
of Australia’s halon essential uses requirements to better understand Australia’s projected
halon essential uses. The report found that halon would be required beyond 2030 to meet
servicing demand arising from current airframe designs. It further found that there were sufficient
stocks of halon held at the National Halon Bank to satisfy essential civilian usage in the medium
term based on past sales and predicted equipment usage.
33
Table 4 below provides estimates of civilian essential use requirements. The report assumes that no
significant new uses of halon are introduced. If equipment requiring halon is introduced to the
market, this may impact on the estimated strategic stock requirements. Projections have been
confirmed by government and industry. Australia is therefore well positioned to meet future needs
for bulk halon from the stock held at the National Halon Bank.
Table 5 Estimated future civilian essential use halon requirements
Potential future requirements
Halon 1211 (tonnes)
Halon 1301 (tonnes)
35 tonnes (to year 2040)
139 tonnes (to year 2060)
To 55 tonnes (to year 2100)
To 229 tonnes (to year 2100)
99 tonnes
189 tonnes
Potential surplus to 2100
Potential shortfall before 2100
Current NHB stocks
(December 2014)
Surplus/Shortfall
*Current consumption figures in the table above are presumed to include some Australian Defence
Force essential use.
2.7 Methyl bromide
Methyl bromide is used primarily as a fumigant.
Controls differ depending on its use in
quarantine and pre-shipment (QPS), non-QPS or
feedstock applications. Key facts relating to
QPS, non-QPS and feedstock use for methyl
bromide are set out in Figure 5. The definitions
for each type of use or application are set out
under the Montreal Protocol and reflected in
the Ozone Act or Regulations.
Bottles of bromomethane in storage; bromomethane is
commonly known as methyl bromide
34
QPS
•QPS is controlled under the Montreal Protocol but is not being phased-out.
•Amounts used for QPS purposes are reported under Article 7 of the Montreal
Protocol but do not count towards Australia's annual consumption limits.
•Methly bromide for QPS use must be imported, exported or manufactured
under a controlled substance licence.
Non-QPS
•Non-QPS use has been phased-out under the Montreal Protocol except for
critical use exemptions approved annually by the Parties to the Montreal
Protocol.
•Amounts used for non-QPS purposes are reported to the Montreal Protocol and
count towards Australia's consumption of methyl bromide.
•Must be imported or manufactured under a controlled substance licence.
•If required, emergency use can be approved by the Minister and must be
reported to the Montreal Protocol.
Feedstock
•Feedstock use is not being phased-out under the Montreal Protocol.
•Amounts used as feedstock are reported under Article 7 of the Montreal
Protocol but do not count towards Australia's annual consumption.
•Exempted from licensing requirements unless imported with gas for other
purposes, in which case a controlled substance licence must be held.
Figure 8 Key facts for methyl bromide use and the Montreal Protocol
A controlled substance licence for methyl bromide stipulates the maximum amount allowed for
QPS, non-QPS and feedstock uses (section 16 (3)). This condition, along with end-user reports,
allows Australia to identify non-QPS use and provide detailed reports to satisfy its Montreal
Protocol Article 7 obligations.
Under the regulations, methyl bromide feedstock use requires a permit issued by the Department
on an annual basis. There are controls over feedstock use that are built into the permit approval
process under the regulations.
2.8 Compliance and enforcement
The Department undertakes compliance and enforcement of the Ozone Act to achieve the
objectives of the legislation to reduce emissions of ODS and SGGs. For the industry, enforcement is
regarded as an important part of maintaining a level playing field for business and an essential
element of fair and competitive arrangements.
Compliance and enforcement is connected to all activities covered by the Ozone Act, with
requirements on licensed entities to manage and handle scheduled substances lawfully. This
includes providing education, information and training support on user obligations under the Act,
including, for example, how to comply with licensing requirements and through attending industry
events.
35
There are criminal offences and civil penalties relating to breaching requirements under the Ozone
Act. In addition, breaching the Ozone Act can result in cancellation or suspension of licences and
the forfeiture of imported goods. These provisions are supported by a range of enforcement
powers for inspectors under the Ozone Act.
The compliance and enforcement provisions in the Ozone Act interact with other Commonwealth
legislation, including the Customs Act 1901, Crimes Act 1914 and Criminal Code Act 1995
2.9 Cost recovery arrangements
The Ozone Protection and Synthetic Greenhouse Gas Management Programme (Ozone
Programme) operates on a cost recovery basis with a range of fee and levy revenue streams,
through the Ozone Protection and SGG Special Account (the Special Account). The Special Account
is established under Part VIIIA of the Ozone Act. The Special Account provides for the payment of
the Australian Government’s costs associated with the administration of the Ozone Programme.
This includes administration of the Ozone Act, programmes to support an ODS phase-out and ODS
and SGG emission reduction, managing the National Halon Bank, and research relating to ODS and
SGGs (section 65D).
The Special Account holds money collected through application fees, levies, penalties and income
received from the operation of the National Halon Bank (section 65C). The import levies are
currently set at $165 a tonne for SGGs, $3000 per ODP tonne for HCFCs and $135 a tonne for
methyl bromide. The maximum levy rates are set by the Ozone and Synthetic Greenhouse Gas
(import and manufacture) Levy Acts, and the current levies are at their maximum. The application
fees for the various licences, approvals and authorities under the Ozone Act and regulations are
also set in regulations. Cost recovery arrangements are set out in the Department’s Cost Recovery
Impact Statement January 2012 to June 2016. The levy rate and import licence fees have not varied
since the Act was amended in 2003. Further details are available on the Departments website at:
www.environment.gov.au/about-us/accountability-reporting/cost-recovery.
36
3. SCOPE
Many public submissions to the Ozone Act Review suggested additional coverage of refrigeration
and air conditioning gases under the Ozone Act. Industry views on this issue included:
-
providing a broad coverage of refrigerants to cover all gas
types used in the RAC industrythis would include both
synthetic and natural refrigerants, including HFO-1234yf,
hydrocarbons and ammonia
-
increasing the scope of the Ozone Act to impose import and
end-use controls on blowing agents, aerosols and anaesthetics,
some of which are also not scheduled substances.
One rationale put forward for regulating refrigerant gases, other than
controlled ODS and SGGs, is that emission reductions could be
achieved through improved equipment performance. Currently many
classes of RAC equipment must comply with the Greenhouse and
Product containing hydrocarbons
Energy Minimum Standards Act 2012. This sets minimum efficiency
standards for equipment that is sold in the Australian market.
However, there are no requirements for the equipment to be
installed or serviced by a technician in a way that preserves the energy performance of the
equipment.
It has also been suggested that regulating additional gases would provide a level playing field for
industry members by ensuring oversight and competitiveness within the industry, with all
equipment manufacturers, importers and technicians required to operate under the same
regulatory conditions, not just when ODS and SGGs are being used.
The regulation of safety aspects for technicians and for consumers has been put
forward as a further reason for regulation. As the GWP of refrigerant gases is
decreased there is a trend towards increased flammability. Many of the alternatives
to high-GWP refrigerants have hazard characteristics including varying degrees of
flammability or toxicity.
However, other industry submissions specifically noted they did not want additional gases covered
in the Ozone Act. These included not supporting the addition of:

low-GWP synthetic refrigerants

natural refrigerants.
Some industry views suggest that the Ozone Act is not the appropriate legislation to cover lowGWP refrigerants as regulation associated with management of these substances may result in
greater emissions. For example, destroying a low-value GWP refrigerant gas once it has been
recovered from a piece of equipment may result in greater emissions resulting from gas
transportation or destruction processes. A differentiated system would need to be developed to
manage the characteristics of different chemicals should low or no-GWP chemicals be included
under the Ozone Act.
37
It has also been suggested that while natural refrigerants may have safety concerns they are not
harmful to the environment, and, therefore, the Ozone Act is not the appropriate legislation to
regulate these gases. State and territory jurisdictions already regulate WHS, consumer protection
and transport of dangerous goods. To include non-ODS and SGG refrigerants under the Ozone Act
would increase regulation and could be introducing duplicate regulation.
Limitations for regulating non-ODS and SGG gases
The power of the Commonwealth to enact the
Ozone Act is based on the external affairs power
clause in s51 of the Australian Constitution, which
allows the Commonwealth to legislate on matters
related to external affairs including international
treaties. This report details Australia’s international
obligations to manage ODS and SGGs and the basis
for the Ozone Act.
Ammonia system (courtesy of WorkCover Qld)
There is potential to regulate maintenance and
installation of equipment where the gases used are not scheduled substances under the Montreal
Protocol or listed in the Kyoto Protocol in certain circumstances. However, if the regulatory scheme
extended beyond Australia’s international obligations—such as to cover safety or consumer
protection—the Commonwealth could only regulate corporations and activities carried out on
Commonwealth property, in a territory, or by a Commonwealth agency. There would be significant
limitations to who would be covered by those regulatory requirements. The increasing use of nonODS and SGG gases through maintenance of RAC equipment and management of end-use licensing
in the longer term within the context of deregulation is considered in relevant sections.
4. EMISSION REDUCTION OPPORTUNITIES
4.1 Emission reduction measures
Table 8 summarises the emission reduction options considered in addition to a HFC phase down,
their cost–benefit ratios and their regulatory burden. The estimated emission reduction from each
option is modelled separately. It is anticipated that the emission reduction potential of each
measure would change if more than one policy were adopted.
38
Table 6 Emission reduction potential from continuing and new policy interventions, cost–benefit
and regulatory burden measurement
Measure name
Emissions reduction potential
between 2017–2030 Mt CO2-e1
Direct
emissions
Indirect
emissions2
Total
39.813
7.0
46.81
Improved handling practices with
mobile air-conditioning service
3.01
-
3.01
Ban import of equipment with
high-GWP gas
6.77
-
6.77
Preliminary
Cost–
benefit
ratio
SGGs
Continue current emission
reduction schemes (end-use
licensing and product
stewardship)
2.9-0.45
1. Emission reduction estimates have been drawn from the Expert Group, Assessment of environmental impacts from the
Ozone Protection and Synthetic Greenhouse Gas Management Act 1989, 2015.
2. Indirect emissions avoided over the projection period as a result of the improved efficiency of certain classes of hard
working commercial refrigeration and AC are projected to be at least 7 Mt CO2. This represents reductions in electricity
consumption of at least 7600 GWh of electricity that would cost more than a billion dollars at 15 cents per kWh as an
average electricity price.
3. This figure includes 29.82 Mt CO2-e in emissions reduction from the RAC end use licensing scheme and 1.31 Mt CO2-e
from fire protection. It also includes 8.68 Mt CO2-e from continuing the product stewardship and destruction scheme.
4. This assumes that the administration of this scheme is streamlined. Further discussion on how the end-use licensing
scheme could be streamlined is presented in the End Use section.
5. Cost– benefit ratio for MAC equipment ban is 0.4 (NPV 2016-2030), supermarket equipment is 2.9 (NPV 2016–2030).
To ban both categories of equipment the ratio is 0.4 (NPV 2016–2030).
Three policies are not considered in detail here: the Emissions Reduction Fund, the introduction of
a product stewardship scheme foer end of life RAC equipment and banning the import of high-GWP
gases.
The Emissions Reduction Fund is the centrepiece of the Australian Government’s plan to meet the
UNFCCC Cancun Agreement target to reduce emissions by 5 per cent below 2000 levels by 2020
(2020 target). It creates incentives for businesses and communities across the economy to reduce
greenhouse gas emissions.
The Emissions Reduction Fund implements a long-term framework for stable and sustainable
climate change policy. The Emissions Reduction Fund offers strong incentives to seek out actions
that are in the interests of business as they reduce costs and in the interests of the environment as
they reduce emissions. Specific additional methodologies under the ERF could be developed to
reduce direct emission of SGGs and indirect emission from the use of RAC equipment. These
methodologies will be considered through the established methodology process for the Emissions
Reduction Fund and are not considered here.
39
The introduction of a product stewardship scheme for stationary domestic RAC equipment is not
considered in this report. In 2013, the Department undertook a study into the feasibility of a
product stewardship scheme for end-of-life stationary domestic RAC equipment (mainly
refrigerators and air conditioners), including the materials and the gas. As part of the study, the
Department commissioned a material flow analysis and cost-benefit analysis, as well as undertaking
extensive industry consultation in relation to regulatory, co-regulatory and voluntary schemes. The
study found that it would not be cost effective to introduce such a scheme at this time.
Opportunities to improve the rate of refrigerant recovery from end-of-life equipment through the
existing mechanisms, that is, the Ozone legislation and Refrigerant Reclaim Australia, may be
harnessed through targeted communications, compliance and enforcement work. This is
considered further in the next section on improving the effectiveness and efficiency of the current
end-use licensing and product stewardship scheme.
The Department initially considered the feasibility of banning certain high-GWP gases to reduce
emissions of HFCs. However, this policy control yielded only modest emission reduction. In initial
stakeholder consultation implementing this option to reduce emissions was also not supported. A
cost–benefit analysis of banning the import of HFC-407C and HFC-410A in 2026 was also
undertaken. The cost–benefit ratio for this policy intervention was 0.3.
4.2 Maintain current end-use licensing and product stewardship and
improve their effectiveness and efficiency
RAC and fire protection end-use controls, including the product stewardship scheme for ODS and
SGGs, could be maintained into the future and improved to achieve additional emissions reduction
under the Ozone Act. The end-use licensing schemes alone are estimated to have reduced emission
of SGGs by 6.83 Mt CO2-e and 3.6 Mt CO2-e indirect emissions between 2003 and 2013 and are
estimated to contribute a further 46.81 Mt CO2-e in emissions reduction to 2030 if maintained in
their current form14. The cost-benefit analysis undertaken by Jacobs also found that the costs of
removing or transferring the end-use licensing schemes outweighed the benefits of doing so.
Table 5 sets out how each part of the current end-use controls contribute to reducing emissions.
Industry feedback during the course of the Ozone Act Review has highlighted an opportunity to
reduce emissions across end-use sectors by improving the level of compliance with the current
regulations, including in regard to recovery of gas from end-of-life equipment. Some who provided
this feedback recommended steps to improve compliance with the Ozone Act and to focus on areas
where there is a perceived high degree of end-of-life issues. Table 5 includes additional measures
that build on existing end-use licensing schemes.
One option is to improve refrigerant recovery from the MAC sector. The small MAC sector
(characterised by private and light commercial vehicles) comprises approximately 21 per cent of
Australia’s overall refrigerant bank (2012). Annual imports to service this equipment, replacing
leaked refrigerant, are disproportionally high in this sector. The Expert Group’s modelling indicates
that in a ‘business as usual’ (BAU) scenario, emissions from small MAC equipment to 2030 will
amount to 20 Mt CO2-e. This estimate accounts for expected transition over the coming years to a
greater proportion of low-GWP refrigerants. The Expert Group suggests that improved practices
14
39.81 Mt CO2-3 in direct and 7.0 Mt C02-e in indirect emissions.
40
within the existing regulatory framework could reduce emissions by 3.01 Mt CO2-e between 2017
and 2030. Improving practices means improving compliance and greater enforcement activity.
Table 7 Summary of the estimated and projected direct and indirect emissions, 2003 to 2030 (in
Mt)
Emissions avoided (Mt CO2e)
2003 to 2013
Direct emissions by improvement measure
2014 to 2030
SGG
SGG
Total
Improvements in reducing handling losses and leaks
from all classes of RAC equipment
5.36
29.82
The continuation of Refrigerant Reclaim Australia’s
industry stewardship scheme and its expansion to
SGGs
1.14
8.68
Improvements in reducing handling losses and leaks
from all classes of fire protection systems
0.33
1.31
-
3.01
6.83
42.82
3.6
7.0
10.42
49.82
Improved handling practices in the MAC sector
Total direct emissions
Indirect emissions reductions, as a result of reduced
energy use
Grand totals
Options to either transfer these end-use licensing schemes to the states and territories, to continue
them on a voluntary basis or to remove them are considered in further detail in the End Use
section.
4.3 Selective high-GWP equipment import bans
Emissions reductions could be achieved by banning the import and manufacture of equipment
containing high-GWP HFCs. A decision to ban types of imported equipment containing high-GWP
HFCs would reduce the bank of gas that could potentially be released into the atmosphere.
Equipment bans have been used internationally as a mechanism to reduce emissions of SGGs.
The EU has imposed mobile air conditioning bans for equipment designed to use a
refrigerant with a GWP higher than 150. The ban is gradual. The first phase prevented
car manufacturers from obtaining approvals for new vehicles types with air condition
equipment containing gases with a GWP higher than 150. This was followed by a
requirement that all new car types be fitted with a refrigerant gas lower than 150. By
2017, the ban will apply to all new vehicles placed on the European market. This
means that from 2017 no new vehicle with an air conditioner containing a high-GWP
air conditioning system can be registered, sold or enter into service in the EU.15
15
European Directive 2006/40/EC.
41
This policy has seen the MAC market trend strongly towards low-GWP alternatives
with one early estimate from a leading gas manufacturer indicating that there are now
over two million vehicles worldwide using low-GWP refrigerants, including R-1234yf.
A decision to ban equipment in Australia could be based on the following considerations:

banning equipment type would lead to emissions reductions

equipment type uses a high-GWP gas, banning could push transition to low-GWP

leak rate of equipment is high leading to high emission from the equipment type

large bank of gas that is likely to grow into the future without intervention

safe and efficient alternatives exist and are available on the Australian market or soon will
be.
If equipment bans were selected as an effective policy mechanism to reduce emissions of HFCs,
then legislation could be developed to allow additional bans to be added over time as appropriate.
Alternatively, the Department could work to encourage voluntary or industry-led bans.
In the first instance, two equipment bans are presented for consideration:

high-GWP MAC equipment in passenger vehicles and light commercial vehicles

high-GWP commercial refrigeration.
High-GWP mobile air conditioning ban from 2017
Australia could implement import and manufacture bans of new high-GWP MAC equipment in
passenger vehicles and light commercial vehicles. The ban could be imposed from, for example,
1 January 2017, an expected realistic timeframe for ability to implement the required legislative
changes. The ban would be limited to MAC equipment in passenger vehicles and light commercial
vehicles manufactured after this date. Similar to the ODS equipment bans imposed through the
Ozone Act in the past, spare parts to allow for the servicing of existing equipment would also be
exempted from the ban.
The MAC sector has been selected as equipment tends to have a higher leak rate and a reportedly
poor recovery rate for refrigerant gas at end of life. Also, many global automotive manufacturers
have agreed on a single platform for future MAC—R1234yf that has a GWP of less than 1, although
some European manufacturers are now exploring CO2 systems. This sector also represents a large
proportion of the total bank in equipment and consumes large quantities of bulk gas. The Expert
Group estimates that the MAC sector will continue to consume approximately 550 tonnes per
annum16 to service the existing bank of equipment i.e. the high level of bulk gas consumption will
continue into the future.
Even though there is a trend away from high-GWP equipment in this sector, emission reduction
potential of the ban would be 4.13 Mt CO2-e from 2016–2030 by bringing forward its introduction.
The barriers to transition by original equipment manufacturers in this sector to some low and no-
42
GWP alternatives are low, and replacement gases are available in international markets. By 2025,
approximately 26 per cent of registered vehicles are modelled to be using low or no-GWP
refrigerant gases without the equipment ban. Even taking this into account the Cost Benefit
Analysis indicates that the costs of imposing this ban outweigh the benefits.
Based on current licence numbers, approximately 265 importers and manufacturers might be
affected by this change. The actual number of businesses impacted is likely to be less as this figure
includes all importers of MAC, including importers of second-hand vehicles and niche products.
Assuming that they these importers no longer have to hold a licence under the Ozone Act, this ban
presents a regulatory saving of $143 350.
Supermarket equipment containing gas with a GWP >2500 in 2020
An import and manufacture ban on specified commercial refrigeration equipment used in the cold
food chain charged with gas with a GWP >2500 could be introduced from 2020. This would ban the
import of equipment that uses of R404a in this sector. R404a is a potent SGG with a GWP of 3800
and is commonly used in this sector. The sector contains approximately 5070 tonnes of refrigerant
gas with the majority being HFC-404a. Leak rates in the sector range between 3 per cent and 15 per
cent, which are high when compared with other sectors.
Based on the current licence numbers, selectively banning equipment containing HFC-404a would
affect up to approximately 215 licence holders. Similarly, with the MAC ban described above,
replacement parts and servicing of existing equipment would not be banned under the option.
The direct emissions reduction from this policy intervention would be 2.42 Mt CO2-e for HFC-404a
between 2016 and 2030. Unlike banning the import of MAC equipment, the benefits of banning
supermarket equipment outweigh the costs. The ban also reduces the regulatory burden on the
importer, assuming that all of them would no longer have to hold a licence by $100 363.
4.4 Reducing indirect and direct emissions—RAC maintenance
Regular maintenance of refrigeration and air conditioning systems will improve system
performance, and, therefore, reduce indirect emissions from energy consumption. This provides an
economic benefit to systems owners by reducing energy costs and prolonging equipment life.
The Expert Group study shows that imposing maintenance requirements for medium and large
commercial RAC equipment containing scheduled substances may account for approximately 46.52
Mt CO2-e in emission reduction to 2030 across commercial air conditioning.
Regular equipment maintenance requirements could be limited to classes of systems where
emission reduction gains are the greatest. The Expert Group found that the largest emissions
reduction potential from maintenance was for medium air conditioning, commercial refrigeration
with remote condensing units and large air conditioning. Table 13 summarises the direct and
indirect emissions by equipment class.
The emissions estimates are based on the EU’s leak reduction requirements and ISO 5149-4: 2014
Refrigerating systems and heat pumps—Safety and environmental requirements—Part 4:
Operation, maintenance, repair and recovery.
43
Table 8 Emission reduction from maintenance to 2030 for ODS and SGGs by major commercial
equipment classes
Equipment class
Estimated number of
Direct emission
pieces of equipment reduction (Mt CO2-e)
SGG
RCFC: remote
Indirect
emission
reduction
(Mt CO2-e)
Total
emissions
reduction
(Mt CO2-e)
285,100
4.44
10.8
15.24
1900
0.48
1.1
1.58
1,495,200
3.10
18.2
21.3
Large AC
27,500
0.24
8.1
8.34
Large MAC
69,800
0.06
-
0.06
1,879,500
8.32
38.1
46.52
RCFC: supermarket
Medium AC
Grand total
The benefits of imposing a maintenance regime significantly outweigh the costs to industry (ratio
6.7) primarily due to energy savings. The cost–benefit ratio is so high for this option that it is
questionable if regulation is required to ensure equipment owners undertake maintenance activity.
The regulatory cost burden for a maintenance scheme is high at approximately $634 000 000. This
cost would reasonably prevent the Department from regulating maintenance testing unless a very
large regulatory offset could be found.
Non-regulatory mechanisms may be more appropriate to support increasing maintenance activity.
The regulatory burden of undertaking a targeted education campaign is estimated to be
$2 900 000. Targeted communications could focus on raising the awareness of equipment owners
as to the environmental and economic advantages of regular maintenance. Good practice guides
for both equipment owners and technicians could also be developed to promote awareness within
the industry.
Similar to the leak testing scheme, the maintenance option does not cover fire protection
equipment. As fire protection systems do not normally consume energy, the environmental
benefits from intervention are likely to be the same as that for the leak testing option above. As
such as similar approach could be taken.
4.5 Reducing indirect and direct emissions—leak reduction
Indirect emissions from the RAC sector contribute around 11 per cent to Australia’s
total emissions profile. RAC equipment consumes approximately 22 per cent of
Australia’s electricity annually.
Refrigeration and air conditioning equipment is inherently leaky. Leak monitoring can reduce direct
emissions by identifying and repairing the leak earlier than otherwise would have occurred. Leak
monitoring could reduce indirect emissions from electricity production as systems operate less
efficiently when the refrigerant charge is below the optimal level. Regular leak monitoring also
44
benefits equipment owners by reducing the costs of stock loss and unproductive down time when
equipment fails unexpectedly.
The Expert Group estimates that introducing leak reduction strategies, similar to those being
introduced in the EU, could reduce emissions in high gain equipment types by 12.02 Mt CO2-e. The
intervention involves a mix of routine inspections (6- to 12-month frequency) and automatic leak
monitoring equipment depending on the amount of refrigerant gas. The emission reductions
achievable from this type of intervention in Australia are set out in Table 12.
Remote condenser units used in medium-sized commercial refrigeration applications consumed
about 20 per cent of Australia’s total imports of high-GWP gases in 2013. This may be due to the
high leak rates for this equipment type. The Expert Group estimates that emissions could be
reduced by 5.54 Mt CO2-e if regular leak testing was introduced for this equipment class.
Medium air conditioning systems have average lower leak rates at approximately 4 per cent/per
annum. However, with approximately 1 495 200 pieces of equipment using approximately 23 500
tonnes of refrigerant in Australia, this sector also has strong potential for additional emission
reduction. The Expert Group estimated that by minimising leaks and improving the life-long running
efficiency of equipment, for medium commercial air conditioning equipment there is the potential
to avoid emitting a further 5.5 Mt CO2-e between 2017–2030.
Table 9 Emission reduction from leak reduction to 2030 for ODS and SGGs
Equipment class
Annual leak rates (%)
2013
2030
Direct
emission
reduction
(Mt CO2-e)
Indirect emission
reduction
(Mt CO2-e)
Total
emissions
reduction
(Mt CO2-e)
SGG
RCFC: remote
15.0
7.5
4.44
1.10
5.54
RCFC: supermarket
12.5
6.0
0.48
0.1
0.58
Medium AC
3.0
2.0
3.10
2.40
5.50
Large AC
4.0
3.0
0.24
0.1
0.34
12.0
6.0
0.06
-
0.06
8.32
3.7
12.02
Large MAC
Grand total
The Department has examined taking a regulatory approach to supporting leak testing. This would
require equipment owners to regularly test their equipment, supported by having this work
undertaken by an appropriately skilled and trained refrigeration and air-conditioning workforce. It
would also require equipment owners to repair leaky equipment—this could be done by tightening
the existing emissions ban.
The costs of imposing a leak testing scheme outweigh the benefits from reduced maintenance and
gas leakage costs. The regulatory cost burden for a leak testing scheme is high at approximately
$634 000 000. This cost would reasonably prevent the Department from regulating leak testing
unless a regulatory offset could be found.
45
As the regulatory cost of requiring equipment maintenance is high, non-regulatory mechanisms
may be more appropriate. The regulatory burden of undertaking a targeted education campaign is
estimated to be $2 900 000. Targeted communications could focus on raising the awareness of
equipment owners to the environmental and economic advantages of regular leak testing. Good
practice guides for both equipment owners and technicians could also be developed to promote
awareness within the industry.
This measure does not consider how a leak testing scheme could apply to fire protection
equipment. Fire protection equipment is generally thought to have a lower leak rate than
refrigeration and air-conditioning equipment due to equipment design and to the public safety
requirements placed on fire protection equipment to ensure it functions as and when required.
Further analysis of both the environmental gains and cost to industry would be required before the
efficacy of a leak testing scheme or a targeted communication campaign could be accurately
evaluated.
Where there is existing data relating to accidental discharges, and not leaks, from fire protection
equipment, there may be cause for targeting existing communications efforts as a means of
improving compliance with the regulatory requirements. If further regulation were to be proposed,
however, particular effort would be made not to duplicate any existing state and territory building
code and safety requirements or specific fire safety requirements in place for the aviation, mining
and maritime industries.
4.6 Emission reduction of other SGGs—SF6 and PFC
The Ozone Act controls sulfur hexafluoride (SF6) and perfluorocarbons (PFCs). These gases form a
very small part of Australia’s overall emissions profile, even with their very high-GWPs. SF6, for
example, has a long atmospheric lifetime of around 3000 years and a global warming potential of
22 800. PFCs generally have GWPs, ranging from >7500 to 10 300.
SF6 is predominantly used in electrical switchgear equipment associated with the generation,
transmission and distribution of electricity across Australia. It is estimated that the leak rate from
small gas insulated switchgear is very low (<0.1% per year) with a leak rate from larger equipment
that is not sealed slightly higher between <1 to 5% per year.
SF6 can also be used in medical and veterinary applications, used in the manufacture of semiconductors and is produced as a by-product of manufacturing processes. These are minor uses
when compared to its use in electrical switchgear equipment.
Emissions from SF6 are projected to increase gradually over the period to 2030. The main driver of
this increase is the continuing additions of circuit breakers to the national electricity grid and the
projected emissions rate from operating these circuit breakers. Historically the emissions rate has
declined significantly but recent National Greenhouse and Energy Reporting Scheme data suggests
the emissions rate has been stable over the period 2009 to 201317. The emissions rate, however, is
projected to remain stable over the period to 2030. A projected gradual increase in the number of
circuit breakers, along with projected increasing use in other applications such as medical and
industry uses, produces the projected emissions increase.
17
In 1990 SF6 emissions accounted for 0.009 giga-grams, dropping to just under 0.006 in 2012
(http://ageis.climatechange.gov.au/Chart_KP.aspx?OD_ID=37948353079&TypeID=2).
46
Overall, there are very few issues associated with the treatment of SF6 under the Ozone Act with
respect to emissions reduction. The leak rates associated with SF6 equipment are already very low,
and maintaining low leak rates is supported by voluntary industry action (refer to the ENA Industry
Guideline for SF6 Management, below), and appropriate training for end-use technicians through
State and Territory-based occupational licensing schemes18. The industry has also taken leadership
in developing SF6 recycling. Selected equipment bans could be considered in the future when
alternatives are available and if industry is not voluntarily moving to alternatives. None-the-less the
Government should continue to work with industry to improve gas containment and end-of-life
practices.
ENA Industry Guideline for SF6 Management
In 2008, the Department along with the Energy Networks Association, whose membership covers
large energy providers, developed the ENA Industry Guideline for SF6 Management. The guide
complements existing regulation, Australian Standards, Codes and organisation policies and
practices. It seeks to promote effective management of SF6 and includes responsible use principles,
leak detection, decommissioning, recycling and disposal.
Import data also shows that PFCs are used for laboratory and analytical purposes19 and in specialist
manufacturing20. PFCs can also be produced as a by-product of aluminium production. The
aluminium industry has introduced initiatives to reduce PFC by-product production. There is
insufficient data on the bank of PFC to determine if additional, specific additional intervention to
reduce emissions is appropriate at this time.
Additional emission reduction intervention is not considered a priority at this time for either SF6 or
PFC.
18
Training is covered Electrical Supply Industry and Electricity Generation Industry training requirements.
Reported as research, research testing, test and research, medical nanofabrication.
20
For example, spectacle and semiconductor manufacture.
19
47
5. EFFICIENCY AND EFFECTIVENESS MEASURES
5.1 Meeting international obligations – regulation of new gases
The Montreal Protocol, the UNFCCC and its Kyoto Protocol cover a specific set of ODS and SGGs. This
section considers regulation of new ODS and SGGs. This section also considers the regulation of low
and no-GWP alternatives under the Ozone Act.
International developments
Montreal Protocol
The Ozone Act covers all the gases Australia is obligated to regulate under the Montreal Protocol.
Parties to the Montreal Protocol may consider controls on additional ODS in the future if they are
likely to have a material impact on the recovery of the ozone layer. There are a number of
uncontrolled ODS identified on the Ozone Secretariat’s website including countries where production
is taking place. However, there is no information on sales or imports of these substances. There are
over 50 ODS that are not controlled under the Montreal Protocol due to their low ozone-depletion
potential or limited use. Controls have not been introduced due to their estimated limited impact on
the ozone layer.
Decision X/8 of the Meeting of Parties notes that parties should report on new ODS being produced or
sold in their territories. There is no provision in the Ozone Act to obtain information on uncontrolled
ODS being imported or sold in Australia. In the past, the Department has obtained information on
imports through a combination of Customs data and communication with importers and users.
Responses have been useful but not of sufficient detail to inform policy. As an example, the two
surveys on n-propyl bromide, which has an ODP of 0.013 to 0.018, to date indicate a wide discrepancy,
with one showing imports at around 1 tonne and the other at 40 tonnes.
It is important for the integrity of the Montreal Protocol that any threats to the
recovery of the ozone layer are identified, including the increased use of
uncontrolled ODS. It is also important for Australia’s national interest to have access
to data to inform future negotiating positions.
In the event of negotiations to regulate additional ODS in future, the current situation leaves Australia
without reliable information to inform negotiations. It is important from a national interest
perspective that reliable information is held on the type, quantity, location and use of ODS species in
Australia.
UNFCCC and the Kyoto Protocol
Australia’s obligations under the Kyoto Protocol’s second commitment period, if ratified, will include
three high-GWP gases not currently covered by the Ozone ActHFC (HFC-41-10mee), PFC C10F18 and
nitrogen trifluoride. The inclusion of these gases in the second commitment period was made
following recommendations from the UNFCCC Subsidiary Body for Scientific and Technological Advice.
New recommendations are generally made as a result of new information. For example, increased use
of the gas; identification of the gas in the atmosphere and/or affirmed high-GWP values.
48

HFC-41-10mee or decafluoropentane is a zero ozone-depletion alternative to HCFC and has a
GWP of 1640. It is generally used as a carrier fluid, solvent, cleaning agent, aerosol and heat
transfer agent.

PFC C-10F-18, or perfluorodecalin, has a GWP of 7200. It is generally used in medical
applications that make use of its ability to dissolve gases. It is also reportedly used in cosmetics
and beauty products to dissolve and deliver oxygen to the skin. It is currently known to be used
in such small quantities that its emissions are not estimated in Australia’s National Inventory.

Nitrogen trifluoride has a GWP of 17 200. It is used in the electrical and semiconductor
industries for the purpose of etching and chamber cleaning as an alternative to
perfluorocarbons (PFCs). It is also reportedly used in the manufacture of some electronic
applications including computer chips, flat-screen LCD televisions and roof-top solar systems. It
is currently known to be used in such small quantities that its emissions are not estimated in
Australia’s National Inventory.
At the Conference of the Parties to the Kyoto Protocol in November 2013, a decision
was adopted on revised UNFCCC reporting guidelines. As part of this decision,
Parties are strongly encouraged to report on hydrofluoroethers (HFEs) and
perfluoropolyethers (PFPEs). The gases are considered likely to have reporting and
emission reduction obligations in future.

HFEs have very low GWPs. They were originally developed as a replacement for CFCs, HFCs,
HCFCs, and PFCs. HFEs have been developed for commercial uses as cleaning solvents,
blowing agents, and dry etching agents in semiconductor manufacturing

PFPEs are reportedly used as industrial heat transfer fluids, in electronic reliability testing,
metal and electronics cleaning, and lubricant applications. There is a scarcity of readily
available information on the GWPs and information on use is not considered reliable. For
these reasons, greater understanding of these gases is important.
The TWG was broadly supportive of a collection of data on these gases. However, it has been
suggested that the use of existing reporting mechanisms, such as customs data, should be investigated
before establishing new regulations.
Australia could maintain the status quo with respect to legislating these gases by not placing any new
licensing requirements on additional ODS and SGGs (HFEs, PFPEs, HFC-41-10mee, PFC C10-F18 and
nitrogen trifluoride). A non-legislative approach to collecting data on these substances that could
involve accessing customs data, voluntary surveys of known businesses, cold calling of likely importers
and reliance on anecdotal information. This will not provide the consistency and completeness of data
that could be obtained through legislative means, but would provide a snapshot or overview of the
situation.
Alternatively, uncontrolled ODS and HFE, PFPEs at this stage, could remain without licensing controls.
HFC-41-10mee, PFC C10-F18 and nitrogen trifluoride as scheduled substances under UNFCCC could be
covered under the legislation. It is not known how many importers there are of these gases. However,
research undertaken by the Department suggests there are few importers of these gases as they are a
speciality area, and it is likely that these importers will already be licensed under the Ozone Act. This
option, therefore, would likely only increase the administrative requirements on businesses already
49
subject to Ozone Act requirements. The proposed legislative change would require businesses
importing HFC-43-10mee, PFC C10-F18 and nitrogen trifluoride to report imports.
The current risks to Australia if no action was undertaken, or if a non-regulatory course of action was
taken, relate to the ‘new’ SGGs. The risks entail potential non-compliance with Australia’s reporting
obligations under the UNFCCC and its Kyoto Protocol, and misrepresentation of its progress towards,
and achievement of, international emissions reduction commitments under these treaties.
Each year, Australia must report to the UN estimated emissions of the ‘new’ SGGs that meet quality
criteria including accuracy and minimisation of uncertainty. These reports provide the official basis to
track Australia’s progress towards its international emission reduction commitments.
Future risk relates to the possibility of new ODS and SGGs controls being negotiated, without Australia
having an informed negotiating position based on a full knowledge of its domestic situation and could
lead to Australian industry being disadvantaged by a modified international agreement. In such an
instance, Australia would not ratify any amendment until appropriate legislation was enacted, which
would enable sufficient and targeted information to be collected to inform the regulatory impact
assessment process. However, if a new ODS were to be added, Australia would likely eventually need
to ratify the amendment due to the universal membership of the Montreal Protocol and and its
restrictions on trade with non-parties.
5.2 Phase-out of HCFCs
The Australian Government and industry agreed an accelerated phase-out of HCFCs in the early 1990s.
The accelerated phase-out will see Australia achieve 99.5 per cent phase-out from 2016, four years
ahead of the Montreal Protocol obligations. The phase-out is managed through the quota system set
out in Part IV of the Ozone Act. Quota is granted on a grandfathered system based on the ODP
tonnage.
The quota system has demonstrated to be an efficient and effective intervention to
progressively phase-out the import of HCFCs. Quota are required for all countries to
meet Montreal Protocol obligations.
While Australia’s phase-out of HCFCs is progressing well, there are additional obligations in relation to
HCFCs contained in the Montreal Protocol relating to:

restricting use of HCFC imports from 2020 to only servicing of existing refrigeration and
air conditioning equipment (Montreal Protocol Article 2F, paragraph 6(a))

limiting HCFC use to applications where more environmentally suitable alternatives are not
available (Montreal Protocol Article 2F, paragraph 7(a))

endeavouring to ensure that HCFCs are not used outside sectors where CFCs and halons were
used (Montreal Protocol Article 2F, paragraph 7(b))

endeavouring to ensure that HCFCs are used in a manner that minimises ozone depletion
(Montreal Protocol Article 2F, paragraph 7(c)).
50
These obligations are partially addressed through section 38 and section 45B of the Ozone Act,
however, more specific action could be undertaken with respect to these obligations. The obligations
under paragraph 7 of Article 2F to limit HCFC uses and emissions are best effort obligations, and,
therefore, there is no effect on our obligations should Australia deviate from the requirements
outlined. However, Ozone Act requirements that make it an offence to emit ODS (unless in accordance
with the regulations) go part way to addressing obligations under paragraph 7.
In relation to paragraph 6(a) of Article 2F of the Montreal Protocol to limit imported HCFC to servicing
RAC equipment from 2020 onwards, the Ozone Act currently has no specific requirements which
would give effect to this Montreal Protocol obligation. Further measures to require that HCFC
imported from 2020 were not used for a purpose other than servicing of existing RAC equipment
would be needed to ensure compliance with the Montreal Protocol from that date. While it is likely
that most HCFC imported after 2020 would be used for servicing RAC equipment, there are no controls
in place currently which would prevent HCFC from being used for other purposes. For example, it is
not clear to what extent the fire or solvent sector will be relying on new HCFC imports post-2020.
In order to address this, an additional legislated licence condition (e.g. through Section 16 or 18 of the
Act) stipulating that HCFC imported after 2020 be supplied to service only existing RAC equipment
could be imposed. This has the advantage of being visible (i.e. it is clear that Australia is addressing this
particular Montreal Protocol obligation) and transparent (i.e. all importers and sellers of HCFC are
aware from the outset of their obligations). This is also an advantage when it comes to compliance and
enforcement activities. This option may require an adjustment of the licence application process to
ensure full commitment to these obligations by a company executive. This approach was favoured by
the TWG.
To support this legislative change, additional bans on the import and manufacture of equipment
containing HCFCs could be imposed as well a new regulatory offence provision banning the use of
HCFC for a purpose other than servicing HCFC RAC equipment imported or manufactured before 1
January 2020. The first complementary measure would reduce demand for use of HCFC for servicing
purposes. In order to manage future uncertainty, limited exemption for essential equipment could be
made available after 2020. The second complementary measure would reflect the Montreal Protocol
obligation in regulation and provide a basis for clear enforcement action.
It is unclear whether by 2020 all HCFC use will be limited to the RAC sector, although it seems likely.
This view has been supported by the TWG and Aerosol Association of Australia. The FPAA has
indicated that NAF-S-111 and NAF-P-111 (which are HCFC blends) were common from the mid-1990s.
However, these were being voluntarily phased out. The FPAA was not aware of any new systems being
installed with these gases and estimated that around 80 per cent of installed systems used FM200, a
HFC. An Australian business has established a bank of recovered HCFC for fire protection use and the
FPAA considers that this bank will be adequate to meet future servicing requirements.
An alternative low-regulatory approach to addressing the obligation contained in 6(a) would be to add
a licence condition to the current HCFC controlled substances licences to make it a condition of import
that the HCFC being imported can only be supplied for servicing existing RAC equipment. This option
has the advantage of not requiring legislative or regulatory change. Its administration would be
handled more flexibly by the Minister. However, this option would be less transparent than a
legislative approach and more difficult to ensure compliance.
51
To support this low-regulation approach, a complementary condition could also be included in end-use
licences that new HCFC be used to service only existing RAC equipment. This condition would largely
reflect the existing situation and not be a significant burden on most end users who already use HCFC
to service existing RAC equipment.
As with the legislative option, this non-regulatory option could also be supported by extending the
current HCFC equipment bans.
5.3 Import, Manufacture and Export Controls
The Ozone Act bans the import, export and manufacture of bulk ODS or SGGs and equipment
containing these gases unless a licence is held or an exemption is available.
Australia is required to have an ODS import and export licence scheme under Article
4B of the Montreal Protocol.
The licence scheme also satisfies Australia’s reporting obligations for SGGs under the UNFCCC and its
Kyoto Protocol21.
This section considers the appropriateness and efficiency of the operation of the import, manufacture
and export controls. This section includes consideration of minor mechanical issues including:

determining the need for the fit and proper person test in the licence assessment process

consideration of how unpaid levy debts should be treated in the context of granting a
licence

minor administrative changes to allow the Minister to address potential errors in HCFC
quota allocation

definition of date of import, export and temporary import

definition of refrigeration/air-conditioning products, equipment and bulk scheduled
substances

Clarifying the definition of stage-1 and stage-2 substances through restructuring Schedule 1
to the Act

ensuring aggrieved persons can have decisions made under the Ozone Act reviewed.
5.3.1 Mechanical Changes
In order for the licence scheme to operate efficiently, its operation needs to be clearly defined. The
Ozone Act calls up the definition of import and export in the Customs Act 1901. However, the terms
‘import’ and ‘export’ are not defined. In practice, this means that it is necessary to rely on judicial
consideration to define the point of import and the point of export. These common law definitions
may change with judicial interpretation over time.
52
The absence of a clear definition has led to importers not seeking an appropriate licence at the correct
time leading to inadvertent non-compliance, importing without a licence which is a contravention of
the Ozone Act, or attempting to use a different entities’ licence to import the goods. The definition
also does not make it clear that ships may be considered as imported into Australia.
There are similar problems associated with the absence of clear definitions for the terms ‘bulk’ ODS
and SGG and ‘equipment’ or ‘product’.
In order to support an effective and efficient import licensing scheme based on clear
definitions, the Ozone Act would require amendment. The intent of the
amendments is to clarify when a licence is required, clarify who needs to hold a
licence and reduce the risk of illegal imports and non-compliance with the Ozone
Act.
The licensing scheme needs to be flexible enough to accommodate these uncertainties without unduly
affecting importers or the integrity of the licensing scheme itself. It is important that there is a
mechanism for importers to become compliant and join the licensing scheme in a timely manner.
Delays at the border are costly for the importer and exporter as goods have to be warehoused before
being entered for home consumption or released for export. The licensing scheme should aim to
minimise such delays.
The Ozone Act controls imports, exports and manufacture of ODS and SGGs and equipment containing
those gases. These gases are called ‘scheduled substances’ and are listed in Schedule 1 to the Act.
An effective and efficient way of structuring Schedule 1 is along the lines of phase-out schedules. This
is not how schedule 1 is currently structured. One option is to develop a phase-out based structure,
which best reflects what gases are being and have been phased out. This streamlined schedule would
better mirror scheduled substance definitions in section 7 of the Act. This structure would link to
licensing and bans under the Act in the most logical manner and would clarify the definition of stage 1
and stage 2 scheduled substances as per the Montreal Protocol.
Date of import
The date of import is currently defined under Common Law as being the date on which the goods are
brought into a port with the intention of landing or when the goods are landed. This definition could
be reflected in the Ozone Act. If this definition were to be brought into the Ozone Act, the associated
offence provision might also need to be adjusted so that the provision can be appropriately enforced.
A strict liability offence is not appropriate where it is necessary to prove intent. Alternatively, the date
of import could be defined as the day the goods land in Australia.
A clear definition assists licence holders to understand when they need to hold a licence, report and
pay the levy, all of which hinge from the date of import. Specific provision for ships is required under
either definition.
Altering the date of import will affect all importers. These changes are minor and mechanical in
nature.
53
Date of import and requirement to hold a licence
Some importers are unaware of the need under the Ozone Act to possess a licence to import ODS,
SGGs or equipment containing these gases and fail to apply for a licence prior to import. In other
cases, a licence application may be received too late to be processed by the Department prior to the
date the goods land in Australia. These scenarios are more likely to apply to first-time importers.
Failure to obtain an import licence is a breach of the Ozone Act. In order to educate and encourage
compliance a flexible approach is taken to bringing importers into the licensing scheme. This approach
helps to balance the integrity of the licence scheme with its practical operation and avoids using
enforcement powers as a first option. This could provide for the formal recognition of import licence
backdating in the Act to maximise import licence compliance by importers, such as by clarifying that a
licence may take effect from a date earlier than the decision to grant the licence.
In cases where the importer is unwilling to apply for the appropriate licence, the compliance and
enforcement powers would continue to apply.
Definition of temporary import
The definition of import does not consider temporary imports, for example, ships that sail into
Australia’s territorial waters for a limited period of time, the movement of military equipment and the
temporary import of cars. This means that an import and, for bulk gases, an export licence is required.
This is a costly and time-consuming requirement for importers and exporters while having little
environmental value. This policy does not align with other Commonwealth legislation and policies,
such as the Coastal Trading (Revitalising Australian Shipping) Act 2012.
Making allowances for temporary imports would also clarify the treatment of foreign
flagged ships and appears to be consistent with the United Nations Convention on
the Law of the Sea to which Australia is a party.
One option is where goods are imported temporarily (see indicative list below) a licence would not be
required. Any import/export that is not temporary in nature will require the appropriate licence under
the Ozone Act. This would formally reduce the regulatory burden on approximately 600 importers per
year who are currently captured by the scheme but are not subject to regulatory burden under an
administrative arrangement with the Australian Customs and Border Protection Service.
Temporary imports to be included in regulation might include:

goods in transit—goods not intended to remain in Australia and which do not change
ownership during the voyage—for example, refrigerated shipping containers, known as
reefers, unloaded from one ship and transferred to another, or goods unloaded to bonded
storehouse and then shipped out

products that are imported under Carnet or other international agreements relating to
temporary imports

products that are regularly imported and exported from Australia, without changing
ownership, for example, mining /earth moving equipment
54

products that are exported and re-imported (or vice versa) for repairs or exchange

importers who bring in a mix of ‘temporary’ and ‘permanent’ imports would still require a
licence for ‘permanent’ imports. Only ‘permanent’ imports would be included in their
quarterly activity statements (this is in line with the treatment of medical/veterinary
equipment importers reporting obligations)

vessels engaged in a short period of coastal trade, for example, those which have been issued
a 12-month temporary licence under the Coastal Trading (Revitalising Australian Shipping) Act
2012. This Act does not however cover the full range of vessels or circumstances that the
Ozone Act requires, and it may be necessary to amend the Ozone Act to make it clear that all
vessels are covered

extending the exemption for foreign ships and aircraft in section 12B of the Ozone Act so that
it applies to vessels that are foreign flagged and temporarily operating within Australia (i.e. will
operate for 12 months or less) regardless of voyage patterns. It is not intended that temporary
importers would require HCFC quota to cover this type of import. This will provide for bulk
scheduled substances (i.e. spare gas) on board the ship or aircraft, used to service the vessel’s
air conditioning or refrigeration equipment to be considered as a temporary import. This
would provide for consistent treatment of bulk gas and equipment in these circumstances.
Consideration would need to be given to compliance of imported temporary goods to ensure that the
goods were not permanently imported. Further consideration of how the compliance and
enforcement provisions apply is required.
Definition of export
There are nineteen licensed exporters of bulk gas under the Ozone Act. Exporters of ODS/SGG
equipment do not require a licence to export, nor are there any export reporting requirements. The
export licence is an extension of the import licence and no further fees apply. The definition is most
relevant to licence holders who are eligible to apply for a refund under the Export Refund Scheme. The
scheme ends on 31 December 2015.
‘Export’ is not currently defined in the Ozone Act, which could give rise to
uncertainty about reporting and the actual point of export. This uncertainty means
that the compliance and enforcement provisions are weakened.
Each of the options affects the reporting obligations of exporters and the ease with which the
provisions can be enforced. The date of export could be defined as the day on which the goods are
loaded onto a ship or aircraft with the intention of landing them in a place outside Australia. This
definition allows for expedient processing of the remainder of the export refund applications, as there
would be no time lag between loading of the goods onto the vessel and the actual landing of the goods
outside of Australia. This definition also is most suited for use in Australia’s international reporting
obligations.
This definition may, however, compromise Australia’s ability to comply with Montreal Protocol
requirements through the ability to enforce the bans on exporting without a licence set out in section
13 of the Ozone Act as strict liability offences. This is because the Department would need to
demonstrate that the person in question intended that the goods be landed outside Australia.
55
Alternatively, export could be defined as the date on which the goods are landed outside Australia.
Under this definition it is likely that the Department could continue to enforce the offence provision
on exporting without a strict liability offences, and would need to prove that the goods were loaded
onto a vessel and were subsequently landed outside Australia.
Option 5.1.13 defines export as either the date on which the goods are loaded with the intention to
land them or when they are actually landed. This is effectively the current implied definition of export.
This may compromise the Department’s ability to enforce the offence provisions of exporting without
a licence set out in section 13 of the Ozone Act as strict liability offences, because the Department
would need to demonstrate that the person in question intended that the goods be landed outside
Australia and as such would need to be altered so that it was not a strict liability offence.
Definitions of ‘RAC (refrigeration and air conditioning)’, ‘equipment’, ‘product’ and ‘bulk’
While the Act provides specific definitions for ODS equipment and SGG equipment, these are defined
primarily in relation to whether they contain certain types of scheduled substances. The definitions do
not provide a general definition of equipment or product separate from the gas types that they might
contain.
Various parts of the Ozone Act qualify the nature of the equipment as relating to refrigeration and air
conditioning equipment (RAC equipment); while others describe non-RAC equipment interchangeably
as products or equipment (e.g. aerosols are described as products in schedule 4 but fall within
categories of reportable equipment for the purposes of section 46). Further, the term ‘RAC equipment’
is not defined in the Ozone Act, but is in the Ozone Regulations as equipment used for the cooling or
heating of anything that uses a refrigerant. Therefore for ease of interpretation of the Ozone Act it is
considered beneficial to establish a definition of ‘RAC equipment’ in the Ozone Act and include one
definition of ‘equipment’ and ‘product(s)’ in the Ozone Act.
‘Bulk’ is not referenced at all in the Ozone legislation. It is, however, used informally as a useful
catchall term for differentiating imports requiring a controlled substance licence (HCFC, SGG, methyl
bromide) from imports that should be made under an ODS/SGG equipment licence. This reflects the
clarification of the definition of controlled substances (in bulk) in Article 1, paragraph 4 of the
Montreal Protocol made at the first Meeting of the Parties in Decision I/12A, which agreed:
‘(a) Article 1 of the Montreal Protocol excludes from consideration as a “controlled substance” any
listed substance, whether alone or in a mixture, which is in a manufactured product other than
a container used for transportation or storage;
(b) any amount of a controlled substance or a mixture of controlled substances which is not part
of a use system containing the substance is a controlled substance for the purpose of the
Protocol (i.e. a bulk chemical);
( c) if a substance or mixture must first be transferred from a bulk container to another container,
vessel or piece of equipment in order to realise its intended use, the first container is in fact
utilised only for storage and/or transport, and the substance or mixture so packaged is covered
by Article 1, paragraph 4 of the Protocol;
(d) if, on the other hand, the mere dispensing of the product from a container constitutes the
intended use of the substance, then that container is itself part of a use system and the
substance contained in it is therefore excluded from the definition;’
56
While in most cases there is little ambiguity in the use of the terms ‘RAC’, ‘equipment’,‘product’, or
‘bulk’, the inclusion of specific and consistent definitions would clarify the type of licence required. It
would also clarify when import quota is required.
Control of disposable containers
Non-refillable cylinders are specifically manufactured, single use cylinders that are filled with ODS or
SGGs and sold and used for servicing or commissioning equipment. After use, the cylinders should be
sent for disposal and deliberately punctured, in accordance with pressure vessel regulations. However,
puncturing the cylinder allows the residual amount of ODS or SGGs to be emitted to the atmosphere.
Disposable, non-refillable cylinders are environmentally undesirable due to emissions, as well as being
a wasteful form of packaging and contributing to the volume of waste going to landfill.
The Customs (Prohibited Imports) Regulations 1956 ban the import of HFC in non-refillable cylinders.
In addition, it is a condition of Controlled substance licences granted under the Ozone Act that ODS
and SGGs not be imported in disposable cylinders. Compliance and enforcement outcomes based on
licence conditions and regulations under other legislation may be less reliable than if a ban on
disposable cylinders was established under the Ozone Act.
Internal review of decisions under Ozone Act
Currently, decisions relating to the import, export and manufacture licensing system can only be
appealed directly to the Administrative Appeals Tribunal (AAT). It may be more efficient and effective
to allow for the internal review of these decisions prior to their review by the AAT. The option for an
internal review is consistent with other legislation and the main Ozone Regulations that allow
decisions made in relation to the end-use licensing schemes to be reconsidered by the relevant
authority.
Section 66 of the Ozone Act currently provides that applications may be made to the AAT for the
review of the decisions listed in that section. Appealable decisions include:




decisions refusing to grant licences or exemptions
decisions in relation to HCFC quota
decisions to revoke, vary or impose conditions
decisions to terminate or cancel a licence or exemption.
The suggested amendment to the Ozone Act would insert an internal review procedure for the import,
export and manufacture licensing system. This would allow an officer independent of the original
decision to review the original decision. The option to seek review by the AAT would remain available,
but only after an internal review procedure has been completed.
Requirements for low volume importers of equipment containing ODS and SGG
The primary purpose of licensing is to enable Australia to meet its international obligations to
phase out bulk ODS and to report on our progress in meeting this goal and to report on SGG emissions.
The specific purposes for controlling equipment import through the licence scheme have been to:

support Australia’s phase-out of HCFCs by providing a mechanism to assess and manage
demand for bulk HCFCs

meet Australia’s greenhouse gas emission reporting requirements under the UNFCCC

support emission reduction from product stewardship arrangements.
57
Low volume exemption criteria
The Ozone Act contains a refgulation making provision to exempt low volume imports. A low volume
importer is considered as an importer who imports up to five pieces of equipment containing up to ten
kilograms of gas once in a two year period. The TWG has indicated support for lifting the threshold.
Further general consultation has indicated some dissatisfaction with licensing being placed on small
imports.
The qualifying criteria for this exemption could be changed to focus import requirements on larger,
regular importers, and remove the administrative burden on importers of low levels of gas that do not
significantly impact on emissions and reporting. There are two steps to ensure that regulation is
appropriately applied to low volume importers of ODS and SGG equipment: determining the
mechanism and setting equipment thresholds. The following section considers whether the current
criteria provide suitable mechanisms for the application of a low volume equipment exemption.
The TWG saw value in basing the low volume exemption on the Global Warming Potential (GWP) of an
import rather than on its metric weight. The advantage of using a GWP based threshold is that it is
based on the emissions capacity of an import. The disadvantage of using a GWP threshold is the
difficulty importers may experience in calculating a GWP threshold. Each HFC has a specific GWP. This
can be further complicated where the gas is a blend of scheduled and non-scheduled substances. The
administrative burden on low volume importers of the GWP model could be high, though it could be
reduced through access to an online GWP calculation tool (e.g. the existing online equipment licence
application form).
Setting a threshold based on weight, that is, metric tonnes, removes the need to
consult tables and is administratively simpler for low volume importers.
If the current low volume equipment exemption retains a metric threshold of imports of up to 10
kilograms of gas once in a two-year period, it could be simplified by removing some of the criteria such
as the restriction on the number of items that could be imported. There has been feedback from both
general consultation and the TWG that the current restriction on the number of items allowable under
the exemptions should be removed. This is because the number of pieces of equipment has little
correlation to either the gas species or the resulting emission potential.
There is no definition of consignment in the Ozone Act but in practice a consignment has been
understood as a single shipment. Customs and Border Protection, however, consider a consignment to
be goods that are shipped from one (1) consignor to one (1) consignee as a single consignment but
which may not be packed in a single package or arrive in Australia at the same time. Using this
definition, there is a risk that importers may attempt to avoid detection of cargos that exceed the low
volume exemption thresholds by splitting consignments into separate cargos that can pass individually
through Customs control. Customs data suggests that this risk is small. In March 2011, Customs22
undertook a compliance assessment of the use of the low-value threshold that exempts the collection
of customs duty on goods imported into Australia with a value of less than $1000. This assessed the
extent to which goods imported from overseas were being undervalued to avoid GST and duty; and
the extent that shipments were being deliberately broken down into smaller imports to take
22
http://www.border.gov.au/Dutyratesandtaxes/Documents/cbpresponsestopc.pdf
58
advantage of this threshold. Results from the random sampling element of the campaign showed
under-reporting rates of up to 9 per cent in air and sea cargo.
HFC equipment maximum metric weight threshold
An option is to set a metric tonnes threshold. The metric weight threshold could be raised from the
current maximum of 10 kg per two years to 100 kg per two years. Based on 2012–2013 reporting data,
the combined GWP of imports less than 100 kg was less than 1 per cent of total equipment imports by
GWP. Extending the exemption to these importers would not have a significant effect on Australia’s
ability to meet its international reporting obligations and is unlikely to provide a competitive
advantage for the exempted importers. Removing these imports would exempt approximately 700
importers from the licensing scheme (Table 15).
59
Table 10 Total gas imports by Equipment Licence holders, years 2012 and 2013
Import
brackets
Gas
metric
tonnes
CO2-e tonnes
% CO2-e
tonnes
Running totals
% CO2-e
Thresholds
Number
EQPLS
Number If
Exempted
Remainder
Licensed
0-20 kg
2.88
4,753.40
0.06%
0.06%
32.74%
405
832
>20-50 kg
5.76
9,780.27
0.12%
0.17%
46.40%
574
663
>50-100 kg
10.44
16,894.62
0.20%
0.38%
58.04%
718
519
>100-200 kg
18.05
29,541.18
0.36%
0.73%
67.91%
840
397
>200 kg
5,245.83
8,248,630.23
99.27%
100.00%
100.00%
1237
0
Total
5,282.97
8,309,599.67
100.00%
Options—Setting an appropriate low volume threshold for SGG equipment
Option 5.2.3: No change to current arrangements.
Option 5.2.4: Change the low volume import exemption threshold based on metric weight imported,
initially set at 100kg per year.
HCFC equipment threshold
Australia has introduced a complementary approach to supporting the phase-out of bulk HCFCs by
banning the import and manufacture of HCFC RAC equipment. There are some exemptions to this ban,
including for low volume importers of this equipment. In contemplating an appropriate threshold for
HCFC RAC equipment, it is important to not encourage commercial import activity which would be
counter to efforts supporting the phase-out of bulk HCFCs, noting that most commercial import of
HCFC equipment has ceased.
Currently, the low volume equipment threshold is 10kg, five pieces of equipment once every two
years, which applies to the sum of SGG equipment and HCFC RAC equipment. Setting an appropriate
low volume threshold for SGG equipment is considered at option 5.2.3. The 100kg threshold proposed
at 5.2.3 may be counter to HCFC phase-out efforts if applied to HCFCs.
One option, therefore, is to separate the HCFC equipment threshold from the SGG equipment
threshold. This could be applied to a new low volume equipment threshold of 10kg, five pieces of
equipment once every two years, which applies to the sum of HCFC RAC equipment, CFC equipment
and Halon.
CFC equipment threshold
A small number of vehicles containing CFCs (vintage cars manufactured before 1990) and to a lesser
extent older refrigerators are stopped at the border each year. This equipment must have the CFC
removed and retrofitted, so it is no longer top operate using a CFC and, if it retrofitted to a controlled
substance, an Equipment licence obtained before it is able to be imported. The Department estimates
that there are approximately 10 of this type of import annually.
Given the low number of items, the likelihood of depleted charges, and low likelihood of being able to
recharge the goods in Australia, an option is that such goods be allowed under a low volume
threshold. No new equipment is manufactured containing CFCs and therefore allowing import of this
60
type of equipment, within a threshold, is unlikely to impact on Australia’s ODS phase-out or impact on
the phase-out in other countries.
However, it is worth noting that CFCs have been phased out in developing countries since 2010. There
may be some possibility of dumping of CFC equipment in Australia. An appropriately low threshold
may minimise this possibility.
One option is to apply a low volume equipment threshold of 10kg, five pieces of equipment once every
two years, which applies to the sum of HCFC RAC equipment, CFC equipment and Halon equipment.
Halon equipment threshold
Under Montreal Protocol, the import of new bulk halon was phased out in developed countries from
1994. Under section 38 and Schedule 4 of the Ozone Act, products containing halon are prohibited
from being manufactured or imported, except if a section 40 exemption has been granted. This and
earlier state and territory bans on non-essential uses of halon have seen a shift away from using halon
in applications where there are commercially available alternatives.
The provision of a section 40 exemption allows certain equipment that is necessary for medical,
veterinary or defence uses, and there are no alternatives, to be imported or manufactured. Current
exemptions are limited to halon fire systems.
The great majority of equipment imported under a section 40 exemption is either fire extinguishing
systems aboard aircraft, as spare parts for existing equipment, or for defence purposes.
The section 40 exemption allows the import and manufacture of certain equipment
where alternatives are not available and the equipment is essential for medical,
veterinary, defence or public safety purposes. It also allows the Department to
collect data on imports of equipment containing halon. It is important that the
Australian Government is able to access accurate data on halon import and use
patterns in Australia. This helps inform Australia’s engagement on halon under the
Montreal Protocol, such as understanding the global availability and sources of used
and recycled halon and determine Australia’s future halon needs. Sound data is also
important in informing domestic treatment of the halon stock.
Imports of halon in equipment into Australia amounted to less than 1.4 metric tonnes in 2013 (around
12 ODP tonnes), most being halon 1301. There are currently 24 exemption holders bringing in
products containing halon, mostly for use on board aircraft. These companies are required to apply for
a Section 40 exemption ‘licence’ at a cost of $3000 for two years. There are currently 24 section 40
exemption holders. The Department estimates there are approximately two instances annually of
section 40 exemption holders who could be classified as one-off importers (where only one import is
reported and the importer reports nil in the subsequent reporting periods).
One option is to apply a low volume equipment threshold of 10 kg, five pieces of equipment once
every two years, which applies to the sum of HCFC RAC equipment, CFC equipment and halon
equipment. This option reduces the regulatory burden on low volume importers while retaining the
ability to collect halon data from larger importers and appropriately manage essential uses.
Under option 5.2.6, the Schedule 4 prohibition would be retained with an exemption for essential uses
such as known aviation and defence uses where the essential use criteria have been satisfied. This
differs from current arrangements in that a section 40 exemption with its associated fee would not
61
need to be applied for. While this would reduce costs to businesses that import halon products for
aviation or defence uses, there would be no clear mechanism for collection of import data or to enable
the government or industry to properly assess the volume and impact of activity on Australia’s phaseout.
Option 5.2.11 considers introducing a single equipment licence that includes coverage of appropriate
halon equipment as well as RAC equipment. This would provide for data from larger importers to be
collected through their quarterly activity reporting, as well as reducing compliance costs and
application fee costs to business as a single licence may be required. For example, an aircraft currently
requires a licence to cover air conditioning equipment and an s40 exemption to cover the halon
equipment prior to import. A low volume halon equipment threshold as outlined at option 5.2.9 could
also be included in this model.
Trade with Montreal Protocol Parties
The Ozone Act imposes a licence condition on ODS controlled substances licences, essential uses
licences, used substances licences, and ODS equipment licences that the import is from or export is to
a country that is listed on the register of Montreal Protocol Countries (section 18).
This requirement is consistent with Australia’s obligations under the Montreal Protocol with respect to
controlled substances licences and essential uses licences. Under the Montreal Protocol, Parties to the
Protocol are not permitted to trade with non-Parties. As an example, Australia would not be permitted
to engage in the trade of HCFCs with any country that has not ratified the Beijing Amendment.
Even though all of the countries in the region have ratified the Montreal Protocol and relevant
amendments, there remains the chance that a country in the region may be found non- compliant with
its Montreal Protocol obligations and subject to the non-compliance procedure, which could result in it
being treated as a non-Party for the purposes of Article 4. In this case, all countries would be obliged
to suspend some or all trade of ODS with this Party, or risk their own non-compliance. Therefore,
Australia should maintain the ability to restrict trade with a Party in the case of non-compliance, which
is permissible under Section 41. This section allows the Minister (or delegate) discretion to remove
Parties or substances from the register of Montreal Protocol Countries, should that be required. This
provision should be carried forward in its current form.
HCFC quota allocation
The quota periods are described under the Ozone Act as a period of two years, or such longer or
shorter period (if any) as the Minister determines in writing.
Under the current quota system, the quota is allocated in set two-year periods, with imports
undertaken in the first year used to calculate the next two-year quota allocation. The Minister has no
explicit power to retrospectively vary the size of quotas allocated to individual licensees in order to
correct for a reporting error in a base year, whether the error is from the importer’s or the
administrative side. Any error made in the base year discovered after quota allocation cannot be
remedied and has an impact on all quota holders (as the percentage of quota has been distributed
incorrectly).
The HCFC quota is coming to the final tail end following the 2016/17 quota allocation each year’s
allocation will be the same, 2.5 ODP tonnes, to 2029, when the quota ends.
62
The objective of this proposal is to establish a mechanism that allows a fair, efficient and effective
allocation of HCFC quota into the tail end of the phase-down and allow for possible redistribution of
HCFC quota if satisfied that the circumstances on which its allocation was based have changed or were
incorrect.
An option to meet the above proposal criteria is to amend the Ozone Act to allow one Quota allocation
for the 13-year period starting 2016 based on the 2014 base year. This would impact a total of six
entities, who are current quota holders.
A further option is to include a percentage based ‘margin of error’ in quota allocation and international
reporting based on HCFC quota holders reporting. This would account for small reporting errors and
situations in which small amounts of gas are imported in parts of containers.
A further option is to allow importers to ‘offset’ any over-quota imports with exports, or through other
mechanisms, while preserving the overall industry limit.
Administration of equipment import bans and exemptions
Under section 38 of the Ozone Act, the import and manufacture of some types of equipment listed in
Schedule 4 of the Act is banned. The ban under Schedule 4 was introduced to support the phase-out of
bulk ODS by restricting import and manufacture of equipment, thereby constraining demand for bulk
gas for servicing.
There are limited exemptions to the Schedule 4 bans:

Section 40 exempts products from the Schedule 4 bans where a product is essential for
medical, veterinary, defence, industrial safety or public safety purposes and no practical
alternative exists. Current section 40 exemptions apply to halon fire extinguishing equipment
(on board aircraft).

Regulations 70-73 provide a limited exemption for the import of RAC equipment charged with
or containing HCFCs. The exemptions provided for HCFC equipment will be removed in a
staged process.
There is currently a requirement to gazette and lay before Parliament section 40 exemptions when the
exemption is granted or whenever a section 40 is varied (for example to change the end date as there
is no provision to surrender a section 40 exemption). This is a time consuming and inefficient process
and is inconsistent with how other exemptions in the Ozone Act are applied. The administration could
be streamlined to remove the requirement to gazette and lay before Parliament section 40
exemptions. Instead, the information could be published on the department’s website.
While it is possible to surrender a licence under section 21 of the Ozone Act, there is no similar
mechanism to surrender an exemption granted under section 40. It may be useful for businesses to
have this option in response to changing circumstances.
Option 5.5.2 considers that the tabling and gazettal provision be removed and replaced with a
requirement to publish on the Department’s website, and a new surrender provision be inserted. This
aligns treatment of section 40 exemptions with licensing provisions
Option 5.5.3 considers introducing a single equipment licence that includes coverage of essential halon
equipment as well as RAC equipment. Under this option provisions for transfer, amendment,
cancellation, surrender and publication would apply under Part III of the Ozone Act. Gazettal and
tabling requirements are removed under this option also.
63
Exemptions from the import licensing scheme
The import licensing scheme does not cover certain types of bulk gas and equipment imports, exports
and manufacture. Any import, export or manufacture of ODS, SGGs and equipment that is exempt,
falls out of the scope of the Ozone Act. This section assesses the appropriateness and efficiency of
these exemptions to the licensing scheme. The options would require minor or mechanical changes to
the Ozone Act. The exemptions include:

import of bulk gas for use as feedstocks where they meet the requirements under section 12A

bulk gas for use on a ship or aircraft travelling to and from Australia under section 12B

SGG that will be destroyed in a manufacturing process (regulation 3AA)

SGGs formed as a by-product of the manufacture of aluminium (regulation 3(1)(b))

SGGs used in the production or casting of magnesium (regulation 3A)

medical or veterinary equipment containing SGGs (regulation 2A)

foam equipment or products other than expanding polyurethane foam aerosols (regulation
2A)

foam equipment or products (other than expanding polyurethane foam products) included in
other imported products or equipment (regulation 2A)

ODS and SGG equipment that is kept by the importer, or by a member of the person’s
household as personal equipment (section 13 (6A) (b)).
Feedstock
Feedstock use occurs where a chemical is used as an intermediate substance to manufacture other
chemicals. Section 12A of the Ozone Act provides that scheduled substances exclusively for use as an
intermediate substance to manufacture other chemicals are not subject to all of the controls in the
Ozone Act. These substances are called feedstocks, and licensing and levy requirements do not apply.
There is still a requirement for manufacturers or importers of feedstocks to report to the Department
on the species and quantity imported each quarter. This requirement supports Australia’s
international obligations under the Montreal Protocol.
Importers often use larger containers called ‘ISO tanks’ (15 000 to 40 000 litres) for the transport and
storage of scheduled substances. Levy requirements are not intended to apply to any portion of the
gas in an ISO tank that is used for feedstocks. However, due to the narrow reading of the Act importers
of larger containers where only a portion of the gas is intended for feedstock use are in fact subject to
the import levy for the feedstock portion.
The narrow reading of Section 12A also has an unintended flow-on effect for importers of
hydrochlorofluorocarbon feedstock. Any non-feedstock import of bulk hydrochlorofluorocarbon
requires a quota allocation under the Ozone Act. However, due to the narrow reading of the Act
importers of larger containers where only a portion of the gas is intended for feedstock use are in fact
subject to the hydrochlorofluorocarbon quota requirement. Due to the strict quota requirements
under the Act, this effectively bans the import in these circumstances. This is not the intent of the
Section 12A provision.
While it is important to ensure that importers bringing in a mix of gas for both feedstock and nonfeedstock use are licensed, scheduled substances for feedstock use should not have levy applied,
64
consistent with the wider approach to feedstock in section 12A. Similarly, HCFCs imported for
feedstock use should not be included in quota calculations. Section 12A of the Ozone Act is unclear in
this regard and should be amended to clearly indicate an exemption.
Feedstock definition
There is also an opportunity to further clarify the definition of feedstock in the Ozone Act. This would
align the definition with Montreal Protocol reporting requirements23 and advice from the Technology
and Economic Assessment Panel24. The change would clarify that a feedstock is transformed in the
manufacturing process of a new chemical or converted from its original composition. As well as further
aligning the Act with international obligations, the intent of the proposed amendment is to clarify
circumstances where a feedstock licensing exemption may apply. The amendment will assist in
identifying when a licence is or is not required, and reduce the risk of illegal imports and noncompliance with the Ozone Act.
Ships and aircraft
Section 12B of the Ozone Act regulates scheduled substances carried by, and used to, service air
conditioning or refrigeration equipment aboard ships or aircraft. Section 12B has proved to be
narrower in scope than intended because it does not cover coastal journeys or temporary imports.
This issue has been examined in the context of temporary import above.
Substances destroyed in a manufacturing process, produced as a by-product of manufacture or used
in the production or casting process
There are several provisions exempting SGGs from the licensing requirements: substances destroyed in
a manufacturing process; substances manufactured as a by-product of aluminium manufacture; and
substances used in the production or casting of magnesium. Each of these exemptions has different
application and approval processes. At the time each was made, there was a valid policy reason for
requiring higher levels of approval. For example, provision of exempt substances destroyed in a
manufacturing process was introduced to ensure importers or manufacturers of this gas did not have
to pay the equivalent carbon tax.
As the reasons for imposing higher levels of approvals have ceased, an option is to streamline the
administration of these approvals by removing the requirement to hold a permit or seek Ministerial
approval. Instead, there would be a provision for a general exemption, in line with the general
exemption provided for SGGs manufactured as a by-product of aluminium production. This would
remove the requirement to apply for an exemption for one entity.
A second option is to remove the requirement to hold a permit or seek Ministerial approval. However,
in the case of SGGs, which will be destroyed in a manufacturing process, this option does not include
replacing approval requirements with a general exemption. Instead, these importers would bring these
substances in under a feedstock licensing exemption. Importers of SGG feedstock would be exempt
from licensing but would be required to report imports.
23 Annex VII in UNEP, Report of Ninth Meeting of the Parties to the Montreal Protocol, UNEP/OzL.Pro.9/12,
2009,.
24 TEAP, Report of the Chemical Process Agents Working Group, section 2.1May 1995, p. 3.
65
Medical and veterinary equipment exemption
From 1 July 2013 medicines, veterinary medicines, medical devices and veterinary devices containing
SGGs were exempted from the licensing and levy provisions of the legislation. Similar provisions were
made to cover bulk SGGs imported for medical and veterinary purposes. This covers a broad range of
apparatus and medicines including for the diagnosis, prevention, monitoring and treatment of
diseases, disabilities or injuries25. The exemption was made so that importers and manufacturers of
this type of equipment did not have to pay the equivalent carbon tax. The exemption was made so as
to not impact on the cost of these products, which might discourage people from accessing necessary
and life-saving medicines.
Importers who import exempted goods only are not required to hold a licence or to report on their
imports. This removes the regulatory burden for people importing necessary and life-saving medical
and veterinary equipment.
Even though the equivalent carbon tax has now been repealed, the exemption is still considered an
appropriate measure for veterinary or medical equipment and medicines.
Payment of small levy and levy penalty amounts and setting of levies
The Ozone Act currently imposes a levy on imports and manufacturing based on quarterly reporting of
activity, and a penalty for late levy payments. Many of these levy and penalty debts are for very small
amounts, and these small value transactions can impose a significant cost on import and manufacture
licence holders. Administration of these debts is also not cost efficient for the Department.
A threshold for waiving small value debts under the Ozone Act could be introduced. Enabling
provisions could be included in the Ozone Act to waive charges of $50 or less. This would save an
excess of 2200 non-cost effective transactions per year between business and the Australian
Government. Changing this requirement is consistent with the Australian Government’s deregulation
agenda and would contribute to lower business costs. These small amounts would no longer require
recording, invoicing, banking or debt management with efficiencies for both licensees and the
Department. There should be a capacity to vary the threshold amount through the regulations to
maintain the waiver amount at a reasonable level.
This change would not impact on the Special Account because the reduction in funds received would
be offset by a corresponding reduction in the need for Departmental resources to administer small
levy and penalty debts.
Alternatively, the Ozone Act could continue to require small amounts to be paid. Depending on the
treatment of low volume importers under the Ozone Act, many small invoices may automatically be
removed.
Maximum import and manufacturing levies are set in the import and manufacturing levy Acts, with the
rate then determined through the Regulations. Removing these limits from the acts will allow timely
adjustment to these if and as necessary consistent with the Australian Government’s cost recovery
policy.
25
Medical devices are defined in the Therapeutic Goods Act 1989 and are eligible for inclusion on the Australian
Register of Therapeutic Goods Register.
66
Methyl bromide
The current treatment of methyl bromide (CH3Br) under the Ozone Act and Regulations is generally
considered appropriate. However, there are some options identified where minor change could be
considered. Methyl bromide is used in Australia:

as a quarantine and pre-shipment (QPS) fumigation treatment for imports and exports

for non-QPS purposes that have been approved by Parties to the Montreal Protocol as a
critical use exemption (CUE) for fumigation

as a feedstock in chemical reactions to create other chemicals.
Since 1 January 2005, all uses of methyl bromide—other than for certified QPS,
approved feedstock applications, or approved CUEs—have been prohibited in
Australia under the Ozone Act and Regulations.
The Ozone Act implements Australia’s obligations as a Party to the Montreal Protocol to:

control imports, exports and uses of methyl bromide

report on imports, exports and uses of methyl bromide (QPS, non-QPS and feedstock).
A controlled substances licence for methyl bromide,
issued under section 13A(2)(b) of the Ozone Act must
be held by any person intending to manufacture, import
or export methyl bromide.
As there is no manufacture of methyl bromide in
Australia, the licence sets limits on the amounts of
methyl bromide the licence holder is permitted to
import and, if required, export each year, by type of
methyl bromide use (i.e. QPS, non-QPS or feedstock).
The licences also specify certain conditions that the
Critical use exemptions for methyl bromide use
licence holder must comply with. These include the
where no technically or economically viable
provision of quarterly import/export reports and
alternatives are available—strawberry runners in
Australia
payment of an activity fee (levy) on all imported methyl
bromide. There are currently five businesses that hold
licences for the commercial import, and if required, export of methyl bromide in Australia.
The Ozone Act also requires records to be kept by suppliers and users of methyl bromide, and for a
variety of reports to be submitted to the Department, including reports given by:

suppliers detailing the sale of methyl bromide

exempt persons (CUE users), detailing the use of methyl bromide for the exempt application

buyers of methyl bromide who have a stockpile of the substance at time of purchase

holders of feedstock permits on the use of methyl bromide as a feedstock.
The majority of users of methyl bromide in Australia are QPS fumigation businesses operating at a
Quarantine Approved Premises (QAP) as approved by the Department of Agriculture. There is one
industry group representing ten businesses with an approved CUE for the use of methyl bromide in
67
Australia as a soil fumigant. There is also one business that currently has a permit for the use of methyl
bromide as a feedstock. These users are all subject to the requirements of the Ozone Act and
Regulation
Laboratory and analytical use of methyl bromide
There is currently no allowable use of methyl bromide for laboratory or analytical purposes under the
Ozone Act or Regulations. The Montreal Protocol, however, does provide for specific exempt uses of
methyl bromide under Decision XXVI/5: Global laboratory and analytical-use exemption, which
extended the exemptions for such uses to 31 December 2021. The Department has received several
enquiries about the use of methyl bromide for laboratory and analysis purposes, including skin
exposure research into products containing methyl bromide. A change to the current ban arrangement
would enable appropriate laboratory and analytical activities to occur if required.
The first option is to maintain the existing approach, which will result in ongoing regulatory
uncertainty for those seeking approval to use methyl bromide for laboratory and analysis purposes.
The second option suggests that the Ozone Act or Regulations be amended to allow the import and
use of methyl bromide for laboratory or analytical purposes, in line with the exemption under the
Montreal Protocol.
Record keeping requirements for methyl bromide-QPS use
The requirement to keep summary records of use duplicates information already required under
records of use (Regulation 221). The provision of summary records has not to date been requested by
the Australian Government casting doubt on the need for ask business to continue to keep these
records.
The first option is to maintain the existing approach, which will maintain a duplicate reporting
requirement.
The second option of removing the requirement to maintain ‘summary records of use’ reduces an
unnecessary regulatory burden on users of methyl bromide saving compliance time and effort.
Methyl bromide stockpile reports
The first option maintains the existing approach, whereby retention of the requirement to submit
stockpile reports would have no practical effect on buyers as the absence of stockpile capacity in
Australia means there has been no need to provide these reports since 2005.
The second option would remove the requirement for stockpile reporting because Australia has no
stockpiles of methyl bromide to be reported under this Regulation. Any savings from removing this
regulatory requirement would be nominal due to the redundant nature of the Regulation itself.
Retaining the requirement for stockpile reports has no impact on current requirements.
Licence requirements for methyl bromide import
Section 16 (3) of the Ozone Act imposes a limit on the amount of methyl bromide that may be
imported for QPS applications. Any request for an increase likely to be approved by the Department,
subject to undertaking due diligence, as there are no limits on
QPS under the Montreal Protocol. Seeking to maintain current restrictions that require a licence holder
to apply for amendments to their licence when they intend to import additional amounts of methyl
bromide for QPS purposes places an unnecessary administrative burden on the licence holder.
68
The first option maintains the existing approach. As the import, export and use of methyl bromide for
QPS purposes are not limited under the Montreal Protocol this option maintains an unnecessary
regulatory burden on the licence holder. Any request to increase the maximum amount of methyl
bromide to be imported or exported for QPS purposes only is therefore likely be approved by the
Department after undertaking due diligence.
The second option would maintain licence conditions relating to amounts of methyl bromide for nonQPS uses (CUE, emergency and potentially feedstock) because they provide an important control over
these particular uses, to help Australia meet relevant obligations under the Montreal Protocol.
Removing licence conditions for QPS only would reduce the compliance burden on business because
they would not have to submit an application for a variation and reduce the administrative burden on
licence holders.
Reporting under import, export and manufacture licences
Manufacturers, importers and exporters of ODS and SGGs are required to provide a quarterly report
on the quantity of scheduled substance manufactured, imported or exported. The data collected in the
reports must be consistent with Australia’s international treaty obligations and considered in
conjunction with the data needed to reflect claimed emission reductions in the National Greenhouse
Accounts.
The reports are required before the fifteenth day after the end of the quarter. The Department
assesses the reports, issues invoices, statements, receipts payments and manages debtors quarterly. A
quarterly reporting process requires licence holders to take compliance action four times a year.
While there is the need to have this information, the level of regulatory burden could be reduced.
Changing reporting obligations to annual or six monthly would reduce business reporting requirements
by up to three reports annually and would provide a benefit to licence holders as it is likely to reduce
the time required to comply with the legislation. There could be some flexibility if reporting frequency
requirements were reduced, with a voluntary option for more frequent reports a possibility,
particularly for larger businesses.
The Department could also work with the Department of Industry to share information collected
under the Ozone legislation and the Greenhouse and Energy Minimum Standards Act 2012 to reduce
reporting requirements. Potential reporting under the GEMS Act is not regular and focuses on
equipment sales rather than gas imports. Therefore, in order to satisfy Australia’s international
reporting requirements, the current reporting framework would need to continue. However, there
may be an opportunity in the future for equipment importers to use one reporting portal to satisfy
both requirements.
The current reporting framework could be maintained. This recognises that reporting businesses are
familiar with the current quarterly reporting requirement, and their business model is structured to
comply with it. For example, some members of the TWG have indicated that quarterly reporting fits in
with other reporting cycles, particularly Business Activity Statements, and helps them to progressively
update their record keeping and compliance obligations while avoiding a more major annual effort to
catch up. A change may have costs associated with implementing it, and while long-term costs may be
reduced, short-term costs may increase.
If a change to reporting periods is pursued, it will be important to maintain clear compliance and
enforcement provisions to ensure that the integrity of licence data collected under the Ozone Act
remains at a high standard.
69
Restructure of the Act
The Ozone Act has been amended over time in response to Australia’s evolving international
obligations. The Act has been amended in an incremental nature in response to those changing
demands.
This has resulted in an Act where imports, exports and manufacture of gases and equipment
containing those gases are controlled through a complex mixture of licensing, licensing exemptions,
bans, and exemptions to those bans. These are scattered throughout the Ozone Act and associated
regulations. This legislative structure is complicated and difficult to navigate and understand for users
and does not always support efficient and effective administration. Its complexity also increases the
risk of inadvertent non-compliance.
An option is to simplify the import, export and manufacture licence scheme by using two streams:
goods that require a licence and goods that do not.
The intent and administrative changes described above would be reflected in a new structure. A new
structure would also continue to reflect and support Australia’s international obligations under both
the Montreal Protocol and the climate change treaties.
Any new structure should be sufficiently flexible to adapt to further changes in Australia’s international
obligations as they occur so that the Australian Government can efficiently manage ODS/SGGs into the
future.
Improved legislation that more accurately reflects import patterns and business
practices will allow for Australia to better manage ODS and SGGs at its borders.
Taking a streamlined approach when restructuring the Ozone Act will support
understanding and reduce complexity and the risk of non-compliance. It will also
allow for more effective management of goods in a manner which imposes only an
appropriate level of regulatory burden.
There are several minor changes required that have not been considered already, specifically:

changing the current section 40 exemption to an equipment licence. This will reduce the
regulatory burden on approximately 24 entities that currently hold ODS/SGG equipment
licences and section 40 exemptions and how they are applied for and report under each
separately. The anticipated saving for streamlining these provisions is $1006 per year
The current criteria ensuring only essential equipment is imported under the new
equipment licence would be retained. This ensures that equipment that is currently banned
continues to be banned, with limited low volume exemption.

applying a levy to equipment imported under an equipment licence, including equipment
that would have been imported under a section 40 exemption. This is consistent with the
treatment of other imports and the purposes of the Ozone Protection and SGG Special
Account.
70
Table 11 Proposed import, export and manufacture licensing structure
Regulated goods (ODS/SGG equipment, products and bulk gas
No licence is required
Goods that are regulated but allowed without a
licence:
Temporary imports/returned goods
Personal imports
Medical and veterinary equipment
Foams blown with SGGs
Ships and aircraft
Feedstock
HCFC fire extinguishers, aerosols and HCFC-blown
foam
Manufacture of SGGs as a by-product of magnesium
manufacture
Manufacture of SGGs as a by-product of aluminium
manufacture
SGGs destroyed in a manufacturing process
Import of ODS/SGG equipment below the licensing
thresholds.
HCFC—e.g. commensurate with non-commercial
importation and HCFC equipment phasedown
-
Licence is required
(Goods that are regulated but only allowed with a
licence)
Bulk Licences
Bulk Licences
Equipment licence
ODS
SGG
- Controlled
substances
HCFCs
- Controlled
substances
methyl
bromide
- Essential
uses
- Used
substances
(ODS)
- Controlled
substances –
HFCs
- Controlled
substances
other SGGs—
(PFCs, SF6 and
any new
gases)
- ODS/SGG
equipment
- Special equipment
licence (e.g. halon
equipment for use
onboard aircraft)
CFC—e.g. to cover non-commercial import of
vintage cars or fridges

5.4 Destruction and approval of destruction
facilities
To reduce emissions of waste ODS and SGGs the Ozone Act
allows regulation of the disposal of scheduled substances and
requires destruction facilities to be approved. The Montreal
Protocol provides guidelines for the destruction of CFCs, halon,
carbon tetrachloride, methyl chloroform and HCFCs, including
approved destruction technologies. Consistent with these
guidelines, the Ozone Regulations allow the Minister to
approve the operation of facilities for the destruction of
refrigerant and extinguishing agents.
Destruction of gases
Destruction facilities for refrigerants and extinguishing agents
must be approved separately. This requires applicants to submit two applications if they would like to
71
destroy gas that has been used for different purposes. The prior use of the gas is largely irrelevant as it
is the specific destruction technology that must be in accordance with Montreal Protocol guidelines
and destruction efficiency.
5.5 End-use licensing schemes
5.5.1 Analyses of WHS issues facing the RAC industry
In 2012, the Department engaged Health, Safety and Environment consultants David Caple &
Associates Pty Ltd to provide an independent baseline analysis of the WHS data and information for
SGGs and their alternatives (including hydrocarbons, ammonia and carbon dioxide), and equipment
containing these gases within Australia between 2007 to 2011 (the baseline WHS analysis).
Commonwealth, state and territory work health and safety regulators participated in the analysis as
well as a variety of industry organisations, including equipment manufacturers and retailers of SGGs
and alternative gases and a number of tradespeople from various industry sectors.
The baseline WHS analysis found that SGGs and natural gases have been used extensively and safely in
Australia for many years, and there was, at that stage, little formal evidence of WHS incidents
associated with replacing SGGs with alternative gases in Australia. It identified that the probability of
future WHS incidents is most likely in the RAC industry, given the increased exposure to gases with
different hazard properties as that industry transitions to low-GWP technologies.
The response to date
Ten recommendations were made in the baseline WHS analysis. They focused on raising awareness of
potential safety issues when using alternative gases; improving training, education and communication
of appropriate workplace procedures and regulatory obligations to manage WHS risks; and increasing
controls on the use of alternative gases including through a licensing scheme and specific codes of
practice.
In 2014 the Department supported the Australian Institute of Refrigeration, Airconditioning and
Heating (AIRAH) to develop fact sheets and run national seminars to inform technicians about the
properties and risks of flammable refrigerants and to ensure technicians are aware of how to find
accurate and trusted information on flammable refrigerants. AIRAH’s Flammable Refrigerants Safety
Guide (2013) was developed by industry and with the support of the Department as a guide for
technicians on how to safely handle flammable refrigerants in stationary RAC applications and on
which regulatory frameworks and requirements applied to technicians when handling these
substances. Although not endorsed by WorkSafe Australia as a formal code of practice, the guide
provides a similar service. In the same year, the Department supported Refrigerants Australia to host a
forum with mobile air conditioning and transport refrigeration and air conditioning sector
representatives to discuss the current technological changes and issues affecting their industries.
In early 2015 the Department commissioned a review of the baseline WHS analysis to determine
whether the risk profile of the RAC industry has changed since the repeal of the carbon tax; whether
the recommendations of the first review have been adequately actioned and if not, whether they
continue to be appropriate; and whether there is more required of regulators to address the current
range of risks.
72
Current issues and risks and the 2015 review of the baseline analysis
In 2014 Caple & Associates successfully tendered to undertake a review of the first report and to
gather and analyse the current issues and risks associated with ODS and SGGs and alternative gases
used in the RAC industry. Caple & Associates consulted with over 80 government agencies, industry
associations, gas and equipment suppliers, trainers, unions and international experts as part of the
review.
The resulting 2015 report identified that there still have been no or very few notifiable WHS incidents
in Australia’s states and territories. This observation was ostensibly supported by statistics from the
workers’ compensation industry who indicated that the RAC industry has a notably lower rate of
claims for workplace injury (between 1.05–1.68% claim rate) compared to higher-risk industries with a
claim rate of high-risk industries which attract claim rates of up to 8 per cent. 26
Nevertheless, Caple & Associates recognised that, although currently low, there remains a growing risk
of such incidents occurring with increased uptake of lower GWP refrigerants and that the
consequences of realising this risk can be very serious.
The 2015 Report supported the notion that:
‘Since 2012, there have been two major industry changes in terms of WHS risk. There has been
an expansion of the mid-range stationary RAC systems with the introduction of systems
containing A2L (mildly flammable) gases, including consumer products such as split system air
conditioners. More recently Australia has seen the commencement of imports of new vehicles
from the United States (US), Japan and Europe which contain mildly flammable refrigerant as
the new standard gas in car air-conditioning systems.’27
The introduction to the Australian market in 2013 of the mildly flammable refrigerant R32 heralded
growing concern about the industry’s readiness to work with new refrigerants, particularly with
flammability properties. A range of alternative, low-GWP synthetic refrigerants is expected to enter
the Australian market over the next few years, both in the stationary and automotive sectors, as
overseas manufacturers seek to meet strict regulatory requirements in the EU and consumer demands
for more environmentally conscious products. Further, as consumer consciousness in Australia
becomes increasingly concerned with environmental protection there is also a growing market for lowGWP ‘natural’ refrigerants, such as hydrocarbon, carbon dioxide and ammonia in OEM (original
equipment manufacturer) and retrofit refrigeration and air-conditioning systems in both the stationary
and the automotive sectors.
RAC technicians consulted as part of the review indicated that most technicians have continued to use
the same refrigerants since 2012 and would only use alternatives that have been confirmed as safe to
use by the manufacturer or gas supplier. Instead, the main risk identified by these technicians lay with
unknown and unlabelled mixtures of gases being introduced to systems without adequate risk
assessments and engineering modifications.
26
David Caple & Associates, Analysis of work health and safety data for the use of synthetic
greenhouse gases and substitutes in the refrigeration and air conditioning industry, 2015, p. 16.
27 ibid., p. 5.
73
Industry experts in the EU, USA and Japan indicated that in those jurisdictions there are tight controls
placed on retrofitting equipment still within warranty. Similarly, in Australia, manufacturers place tight
controls on maintenance, including refrigerant choice, in equipment under warranty.
The greatest risks for the Australian market are in older equipment outside of the warranty period.
Greater cultural similarities between the US and Australia indicated there are similar risks faced in the
aftermarket sector, particularly in the automotive air-conditioning sector, where people are more
likely to use cheaper alternatives to the gases recommended by the manufacturer. Representatives of
the EU and Japanese RAC industries indicated that culturally their technicians tended to follow the
manufacturer’s recommendations and, therefore, the risk of incidents occurring is considered to be
very low.
As the RAC industry moves towards lower GWP refrigerants, there is a growing need for technicians,
consumers and WHS agencies in all jurisdictions to be aware of the risks and how to use these
refrigerants safely. This is a major theme of many of the submissions to this review and warrants
specific consideration as part of the review of the Ozone legislation.
Industry concerns about the safe use of flammable refrigerants in Australia
Some groups within industry have voiced strong concerns about the ability to assure the safety of
technicians and consumers in instances where natural refrigerants are used as replacements for ODS
and SGGs. There is broad support within the refrigeration and air-conditioning industry for including
alternative gases in the existing end-use licensing scheme. Industry’s support for end-use controls on
all refrigerant gases is due to workplace health and safety concerns and, for some, a desire for
regulatory equality across the refrigeration and air-conditioning industry. Some industry participants
have also highlighted that end-use controls can reduce indirect emissions through improved
equipment operation.
In regard to the automotive RAC industry, one suggestion by industry has been to ban all refrigerants
where their use is not approved by the original equipment manufacturers. To enforce such a ban is
outside the scope of the Ozone legislation. However, there are currently controls in place which, if
considered in terms of improved communications and focus of compliance activity, may address many
of the concerns raised by industry.
Any technician removing SGGs while undertaking modifications on a piece of RAC equipment requires
a refrigerant handling licence under the Ozone Regulations. Further legislative and accountability
requirements for technicians are detailed below.
Manufacturers are able to set the terms of their warranty arrangements as long as they do not unduly
restrict consumer choice or mislead consumers about their rights under the Australian Consumer Law.
To void a warranty on equipment that has been modified to use different refrigerants to those
specified by the OEM is an option available to manufacturers. However, the circumstances where a
warranty can be voided are limited.
Further, the Department is advised by the Australian Competition and Consumer Commission (ACCC)
that where a service provider undertakes equipment modifications that may potentially impact a
warranty against defect, the repairer needs to exercise due care and skill and make the consumer
aware of this. Under the consumer guarantees, service providers must use an acceptable level of skill
or technical knowledge when providing their services, and take all necessary care to avoid loss or
damage. If a repairer indicates that they will service equipment according to the manufacturer’s
74
specifications but does not do so, or does not perform the service satisfactorily, the consumer has
rights and remedies against the technician under the Australian Consumer Law.
An alternative suggestion from industry was for the Department to implement and enforce a
requirement that if a retrofitted refrigerant is used all scheduled substances must first be removed by
an appropriately licensed person, and it is required to have a label and unique gas fitting. As detailed
below, it is already a requirement under the current regulatory framework through a provision in the
ozone regulations to implement listed Australian and New Zealand Standards and codes of practice to
be licensed and to appropriately label equipment that has been modified to use an alternative
refrigerant.
A separate suggestion through industry consultation recommended regulation amendments covering
both stationary and automotive RAC applications to address the lack of clarity about the contents of
serviced RAC systems. The amendment would require technicians to assume that a system designed to
use a scheduled substance contains a scheduled substance unless it is clearly labelled and has been reengineered with new fittings suited to the labelled gas.
Natural refrigerants—such as carbon dioxide, ammonia and hydrocarbon—are not scheduled
substances and as such are not subject to regulation under the ozone legislation. Many of the
submissions in response to the terms of reference for the Review support the extension of the current
end-use controls to encompass all refrigerants as a means of bringing the regulation of the whole
refrigerant industry under a single set of training and regulatory requirements, reducing indirect
emissions and to creating ‘a level playing field’ for the industry.
There is not the Constitutional power to regulate substances under the ozone legislation that do not
fall within Australia’s international obligations under the Montreal Protocol, UNFCCC or Kyoto
Protocol. To expand the scope of the current RAC end-use licensing scheme to cover all refrigerants
would necessitate a change to the legislative basis of the scheme.
Some industry representatives have also raised concerns about growing, unregulated use of natural
refrigerants in automotive air conditioning systems that have not been properly re-engineered to the
specifications of the different gas. These concerns were also identified in the baseline analysis review:
‘Since 2012 changes are evident across all RAC sectors as the move to lower GWP gases is
driving changes to plant designs. The gaps that relate to WHS risks arise from technicians using
substitute gases in RAC systems not designed for their use and modified engineering systems
not integrating intrinsically safe designs for flammable gases. This requires the elimination of
leaks and removal of potential sources of ignition for the gases.’28
The reported increase in the amount of ‘mixed refrigerant’ being returned to Refrigerant Reclaim
Australia in recent years29 supports some concerns within the RAC industry that some technicians are
‘topping up’ systems with refrigerant that is different to the original refrigerant for which the systems
were designed. Pieces of equipment with unknown and unlabelled mixtures of scheduled and nonscheduled refrigerants present a risk to the technician, their colleagues, consumers and the recipients
of reclaimed gas at end of life. Further, technicians’ ability to identify and safely recover A3 rated gases
28
29
ibid., p. 32.
Ibid., p. 34.
75
is currently highly compromised by the availability in Australia of equipment to carry out these
processes. This technical challenge is the subject of work parallel to the review of the Act.
Current regulatory controls: Ozone and other legislation
Regulation 135 of the Ozone Regulations sets out the Australian and New Zealand Standards and codes
of practice that licensed technicians must adhere to when they carry out their work on RAC equipment
or in handling scheduled substances. Regulation 135 includes the Australia and New Zealand
Refrigerant Handling Code of Practice 2007 and the Australian Automotive Air Conditioning Code of
Practice 2008 covering work on RAC equipment during manufacture, installation, maintenance,
decommissioning, retrofitting or re-engineering and the handling of refrigerants.
Together these documents detail the practices required of technicians to ensure they are meeting
both their safety and their environmental obligations. These requirements are not able to be enforced
on technicians who do not hold an RHL and who choose to use only alternative refrigerants that are
not ODS or SGGs; however, they do specify that if a retrofitted refrigerant is used all scheduled
substances must first be removed by an appropriately licensed person, and the system is required to
be clearly and accurately labelled. The label not only needs to identify the type and quantity of the
new refrigerant and oil, but, under the automotive code of practice, the label must also include the
company and licence number of the technician and the date on which that technician performed the
retrofit work.
It is also a requirement of the codes of practice for the technician using an unscheduled substance to
comply with the relevant state or territory legislation. The codes of practice also specify the handling,
labelling and storage requirements for scheduled gases and call up relevant Australian and New
Zealand Standards as the guide for practices in keeping with the codes of practice. Calling up these
codes of practice in WHS legislation could strengthen their application across the industry as a whole.
Regulation 135 also places upon licensed technicians the obligation to appropriately store, maintain,
leak test, label and handle gases they use in accordance with Australian and New Zealand Standards.
Enforcement under the Ozone legislation of behaviour in relation to these standards is limited to
environmental matters; however, in requiring technicians to operate in accordance with these
standards for an environmental benefit they can help to ensure they are operating in a way that also
assures workplace safety, in support of state and territory WHS requirements.
In addition to the Ozone legislation, technicians and others who handle, transport and use refrigerant
gases under pressure are required to adhere to the WHS legislation in their state or territory; to the
Australian Consumer Law under the Competition and Consumer Act 2010 which prohibits businesses
from engaging in misleading or deceptive conduct or making misleading representations about some
the good or service they are providing30; and the national model Dangerous Goods Code which sets out
strict labelling and safe transport requirements for substances with include SGGs and alternative
refrigerants.
Recommendations from the 2015 review of the WHS baseline analysis
In light of their observations, Caple & Associates’ key findings from the 2015 review focused on a need
for active collaboration between the RAC industry associations and state and territory WHS; gas and
30
Further to this, the ACCC advises in relation to the ACL that an intention to mislead someone is not required to
establish a breach and silence may even constitute misleading conduct in certain circumstances.
76
electrical regulators to identify the most appropriate governance model for the sector; and the need
for an extensive awareness and education programme for Australia’s RAC industry. Specifically:

Communication, education and regulation need to be coordinated and comprehensive,
covering the whole supply chain, from supply, transport and storage through to end-use and
destruction.

The key regulators for WHS, gas and electrical sectors from each jurisdiction should meet
with the RAC industry to identify the respective roles they could undertake to ensure a
nationally consistent approach to implement and enforce safe systems of work.

WHS regulators, gas regulators and electrical regulators should collaborate to develop
nationally consistent WHS guidance for the RAC industry. This should clearly articulate what
WHS compliance looks like in relation to the hazards relevant to the RAC industry.

Ensure equipment designers understand the engineering and user requirements for the safe
use of new and emerging gases.

Registered training organisations (RTOs) should be provided support to understand and be
able to teach the new requirements to trainees and updating technicians.

Training modules for the use and handling of hydrocarbons (UEENEEJ174A – ‘Apply safety
awareness and legal requirements for hydrocarbon refrigerants’ and UEENEEJ175A—
‘Service and repair self-contained hydrocarbon air conditioning and refrigeration systems’)
should be mandated parts of RAC Certificate II and III training courses, and the module
currently under development to cover flammable (A2) and low flammability (A2L)
refrigerants should be fast tracked to be included in this list of mandated units.
Consideration should be given to requiring trained technicians to update their qualifications with
relevant modules to supplement their understanding of the safe use of alternative gases.
5.5.2 Options for addressing industry concerns
In applying the Ozone legislation, the Department seeks to avoid exposing technicians to additional
WHS matters. However, it is critical to note that the power and responsibility to regulate occupational
matters—including WHS—rests with state and territory agencies.
There is scope to improve and increase communication activity and raise awareness about this issue
that does not require amendments to the Ozone legislation. It is considered that an effective approach
can be targeted communications that clearly set out for all stationary and automotive technicians
what the requirements of the Ozone legislation are. Coupled with a revised approach to compliance
and enforcement on the basis of risk, it is considered that the current regulatory framework exists to
address these concerns to the extent possible under the objectives of the Ozone Act.
This work must not happen in isolation from state and territory regulators who have the greater role in
informing businesses and individuals undertaking work in the RAC industry of their obligations under
WHS and consumer law and that they are operating in accordance with those requirements.
There will continue to be a role for the RAC industry itself to provide businesses and technicians with
up-to-date information about changing practices and properties of RAC equipment and the gases they
77
use to operate. A cooperative approach across government and industry is necessary in what remains
a complex regulatory setting.
It is clear from the 2015 Caple Report and consultation with members of the RAC industry that an
agreed regulatory approach and targeted, carefully coordinated communications programme are
priorities that require urgent attention.
The widening gap in the regulation of gases used in the RAC industry is with non-ODS and non-SGG
substances. It is proposed that WHS regulators, gas regulators and electrical regulators meet with RAC
industry associations and with the Department soon to agree on the most effective approach to
regulation, communication and education in the safe use of the growing range of alternative
refrigerants.
This conversation between regulators could also mark the beginning of longer term discussions about
a future phase out of the Department’s role in regulating the RAC industry.
Addressing the longer term focus of RAC and fire protection licensing
Australia is undergoing a transition to gases with low or no GWP. The international
manufacturers of gases and equipment are driving a trend towards lower-GWP
gases and equipment that use them. International manufacturers supply Australia’s
increasing appetite for air conditioning and, as largely an importer of those products,
Australia’s bank of gases and stock of equipment is increasing and its
composition is changing.
Alternatives to ODS and high-GWP SGGs will often have a higher risk due to flammability and/or
toxicity. Efforts in Australia and overseas to reduce the environmental effects of emissions are seeing
an increase in the number and prevalence of gases with flammable and/or toxic characteristics, for
example, hydrofluoroolefins (HFOs), lower GWP HFCs, hydrocarbons, CO2 and ammonia. The global
drive to reduce environmental impact is increasing the use of flammable and toxic gases being used in
both new equipment and, to some extent, retrofitted to existing equipment.
With this transition, the effectiveness of regulating the use of ODS and SGG in the RAC and fire
protection industries through end-use licensing under the Ozone Act will diminish but the benefit of
licensing in these industries will continue and possibly grow as a means of providing optimal energy
performance benefits, consumer protection, WHS and/or public safety.31
Over time the opportunity to achieve emissions reduction through end-use intervention will decline as
the CO2-e value of the bank reduces, and as such the regulation supporting end-use intervention for
emissions reduction should also decline and be targeted towards the sectors that continue to use highGWP substances. This draws the question: ‘at what stage of this process should Regulation for
emissions reduction cease?’
Transitioning the regulatory basis for end-use controls
Responsibility to regulate the RAC and fire protection occupations rests with state and territory
jurisdictions and, prior to the introduction of end-use licensing under the Ozone legislation in 2004,
this included the regulation of environmental protections associated with those occupations. After a
decade of end-use licensing the skills base of technicians has been established; and the structures,
31
COAG, ibid., p. 7.
78
communication networks and ‘brand recognition’ associated with the schemes are in place. It could be
argued that the schemes are now mature and are ready to hand back to industry and the jurisdictions
to integrate with the way the broader industries are managed.
To continue to control emissions, however, without the current end-use controls there would be a
need for training requirements to enforce work standards in all states and territories. Even then, it
could be argued that to remove the regulatory requirements for minimising emissions would create a
disincentive for industry participants to retain work practices such as recovering gases rather than
venting them to the atmosphere. Regulatory requirements by state and territories may be a solution.
Australia’s bank of refrigerants and extinguishing agents is set to peak in terms of GWP by 2018 then
commence a decline as alternative gases become the norm.32 The extent and pace of change will
depend on regulatory or other incentives to encourage the transition. Further, with most equipment
lasting from three to longer than 20 years, the need to maintain end-use controls for installed and
end-of-life equipment will continue well beyond the transition of imported gases to low-GWP.
Transition, then, is a matter of timing. As Australia’s bank of working refrigerant and, to a lesser
extent, extinguishing agent gases transitions to low-GWP alternatives there is a need to transition the
focus of end-use licensing for RAC and fire protection to better reflect this trend. While there will still
be a need to manage ODS and SGGs in these industries for some years, the time is right for considering
how this transition can be efficiently and effectively managed.
There are three high-level options for consideration as a means for achieving this transition:

remove end-use licensing requirements under the ozone legislation but continue to provide
transitional support for industry and the jurisdictions to ensure the benefits of the schemes
are retained (non-regulatory)—this approach could be applied to one or both schemes

remove end-use licensing requirements under the ozone legislation and provide transitional
support for handover of the schemes to jurisdictions (regulatory) – this approach could be
applied to one or both schemes

retain end-use licensing requirements under the ozone legislation and refocus to maximise
emissions reduction—this could be achieved using existing regulatory powers and functions
(BAU or non-regulatory) and would apply to both schemes but would be tailored to suit
different conditions for each scheme.
Transition out of end-use licensing under the legislation
This option would remove the end-use licensing provisions from the legislation and provide an
opportunity for continuation of licensing and/or industry accreditation schemes on a voluntary basis.
This could be implemented for either the RAC industry or the fire protection industry or both. A
voluntary certification scheme was established under the National Refrigeration and Air Conditioning
Council prior to the establishment of national RAC system.
Remove end-use licensing for RAC, or for fire protection, or for both industries
79
The Act provides for the regulations to specify end-use controls for the acquisition, storage, handling,
sale and disposal of ODS and SGGs. The Regulations currently specify that these requirements will be
met through separate but similar licensing schemes for RAC and fire protection. The Regulations set
out governance arrangements, administrative requirements and licensing/authorisation requirements.
This option removes the end-use licensing provisions from the Regulations so that the operation of
one or both of these licensing systems is no longer a regulatory requirement under the ozone
legislation.
Implementing the option effectively and responsibly would require a significant transition period
during which the scheme/s would continue to operate but licence and authorisation end dates and
application fees would need to be determined. The earliest the scheme could be discontinued is 2018
which would be a minimum timeframe for giving industry and regulators sufficient time to adapt.
For the duration of the transition period, the Department would engage both with industry and with
the relevant state and territory agencies responsible for regulating the industry or industries on
occupational matters. For a period, potentially of two years, following the removal of the licensing
requirements under the Regulations, the Commonwealth could continue to fund the ARC and FPAA to
in an advisory capacity and as a coordination point for industry to raise emerging issues and to
communicate to industry members.
By implementing the change over a two-year transition period and so that support for the ARC and
FPAA is retained, it leaves open the option for transition to an industry accreditation model. This
approach would enable industry to address one of the major issues raised during this review process
and apply an industry-led scheme to all refrigerants, removing the limitation of the current regulatory
framework which can only cover ODS and SGGs. The ancillary benefits of the scheme could be
retained.
Treatment of fire protection controls and the role of halon management
The application of the Ozone Act to the fire protection industry is limited in scope and scale. At
approximately 1500 members, the scale of the industry currently licensed under the Ozone Act is
small. As alternatives for high-GWP gases continue to be developed this component of regulation
under the Ozone Act will also diminish and focus more on the use of halon.
Regulation of the fire protection industry as a whole in Australia is covered by states and territories
under building and plumbing regulations due to the clear link between fire protection and safety
regulations. As detailed earlier in the report, the Expert Group’s modelling indicates that the scale of
ODS and SGG consumption in the fire protection industry is small and limited to niche applications.
Halon special permits provide an important and effective mechanism for recording halon purchase and
usage figures within Australia. As a substance in limited supply, it is important that usage be accurately
tracked and limited to approved essential uses. With international expectations that the use of halon
will cease where there are suitable alternatives available, the information collected through the
administration of the halon special permit is an important resource. It is therefore assumed that if
halon special permits were removed there would be a need to replace them with a similar alternative
at a similar regulatory cost.
Removing end-use licensing for fire protection (although still retaining halon special permits) presents
an opportunity particularly in relation the fire protection industry to reduce the regulatory burden for
80
the industry sector that is regulated under the legislation while maintaining sufficient coverage to
continue to reduce emissions across end-use.
The reduction in regulatory burden for business by removing end-use licensing requirements is $6.04
million per annum: $5.9 million for RAC and $114 000 for fire protection. These costs are
predominantly due to the time required by technicians to stay up to date with the requirements of the
scheme and to apply or reapply for a licence.
A cost–benefit analysis of the options to remove end-use licensing concluded that costs exceed
benefits in both the RAC and FP sectors. For RAC, the potential increase in carbon emissions and
energy costs outweigh the potential benefits in terms of savings to technicians through reductions in
administrative cost and licence fees, and reductions in scheme costs to the Australian Government.33
There are other options for change set out below which mitigate the time costs to business associated
with membership of these schemes without removing the environmental protections that the schemes
provide.
Remove end-use licensing requirements except for technicians who handle halon
Similar to extinguishing agent handling licences, halon special permits place controls, including
reporting requirements, upon businesses storing halon and providing it to technicians for essential
use. It could be argued that to effectively implement the controls on halon it would be necessary to
ensure that technicians who handle halon continue to be licensed, and newcomers continue to be
trained to avoid emissions of halon to the atmosphere. Jacobs’s modelling estimated that by removing
controls on halon it could result in an increase in halon emissions alone of approximately 0.93Mt Co2-e
between 2017–2030.34
Almost half of the technicians who hold an EAHL also handle halon as part of their work (based on the
number of licensees listed on halon special permits). An assessment of the reduction in the regulatory
burden currently imposed on permit holders by the end-use licensing schemes indicates that the small
reduction in the regulatory burden of approximately $68 600 per annum. Currently, there is some
economy of scale brought by the number of licence holders. There would be little change in the cost to
administer the scheme as it would require similar resources to administer a scheme half the size of the
current membership.
It is worth noting in this context that, had end-use controls not been introduced for fire protection,
modelling predicts that by 2030 Australia’s bank of extinguishing agents would have included at least
an additional 197 tonnes of FM-200®/FE-227TM35 or the equivalent of more than 0.6Mt of CO2e.36
Voluntary end-use licensing
Should industry decide to continue the scheme/s on a voluntary basis it could retain national
coordination by industry and would mitigate the risk of losing the benefit of national consistency.
33
Jacobs, Cost benefit analysis of ODS and SGG reduction policies, 2015, p. 9.
ibid,p. 63.
35 Expert Group, op. cit., p. 87.
36 Based on the Fourth Assessment Report by the International Panel on Climate Change (IPCC), the GWP of
FM200/FE 227 is 3 220, less than 2.2 times that of halon 1301 for which it is considered a replacement in some
settings but still a potent greenhouse gas. IPCC, Climate change 2007: Synthesis report, Cambridge University
Press, 2007, available at: www.ipcc.ch/publications_and_data/ar4/wg1/en/ch2s2-10-2.html.
34
81
Depending upon how industry chose to implement the change the option to move end-use licensing to
a voluntary basis would reduce the regulatory burden on businesses and technicians to varying
degrees. It is assumed for this option that the administrative and compliance costs for business owners
or technicians who choose to remain with the voluntary scheme would remain the same. The option
would result in no fees for businesses or technicians who opted out.
By removing the regulatory backing for end-use licensing there is a risk that it will introduce a free
rider effect and open the market for RAC and/or fire protection services to less skilled technicians. This
could also put pressure on currently licensed technicians to reduce some standards to compete. There
is a greater level of consumer awareness of the professionalism that comes with scheme membership
than may have been the case before mandatory licensing commenced. However, the risk of
undermining the highly skilled segment of the industry would not be entirely removed. This report asks
stakeholders the question as to whether the current level of ‘brand recognition’ associated with the
current licensing systems would mitigate this free rider effect.
If end-use licensing provisions were removed from the regulations without the licensing schemes
being taken up by industry on a voluntary basis it is anticipated that emissions at end-use would
quickly revert to what the Expert Group described as a ‘no measures scenario’. This would see
additional emissions between 2014–2030 of as much as 59.3 Mt CO2e (18ODS/41.3SGG) compared to
business as usual. 37
Further research would be needed to estimate the likely level of emissions if licensing or an industry
accreditation scheme is continued on a voluntary basis. However, given the current level of maturity of
the schemes, it is anticipated that membership, and the standards associated with membership would
not decline significantly for some existing participants. However, new entrants without the
appropriate skills will have an impact, both from their work quality and reducing the quality of more
skilled technicians work as they compete on a cost basis. The performance of the former voluntary
scheme, the National Refrigeration and Air Conditioning Council, could be considered to gauge the
success of voluntary schemes.
Cost-benefit analysis of the options to remove end-use licensing at this stage revealed that for both
RAC and fire protection the costs would outweigh the benefits of maintaining the current regulatory
requirements.
The reduction in the regulatory burden of pursuing voluntary licensing is calculated to be $1.76 million.
This reduction is based on the relatively conservative estimate of 30 per cent of current scheme
members choosing not to participate while the costs to business of being a member of the scheme
would not change.
By applying this 30 per cent proportion of licensed technicians to the predicted increase in emissions
under a no measures scenario, this option could result in an increase in emissions of at least
510 000 tonnes C02-e by 2030.38
37
Expert Group, op. cit., p. 47.
Based on figures presented by Jacobs, Cost benefit analysis of ozone depleting and synthetic greenhouse gas
reduction policies, 2015, p. 62.
38
82
Transfer the end-use licensing structures to state and territory jurisdictions
An alternative option for transitioning end-use licensing is to remove the licensing provisions of the
ozone legislation and transfer to state and territory jurisdictions the end-use licensing schemes,
allowing for better integration of the regulatory frameworks for the RAC industry, the fire protection
industry or both, where they exist.
The process of transitioning one or both of the schemes to state and territory jurisdictions would be
very similar to that for the option above. The Department would engage with industry and the
relevant agencies within the jurisdictions to ensure a well-supported and smooth handover. There are
some differences, however.
It is likely that each jurisdiction would need to administer and support its own licensing schemes. The
alternative approach of retaining a centralised body or organisation to administer a scheme with
support from and responsibilities to eight different jurisdictions is likely to be a more difficult option to
implement due to governance and coordination challenges. This is, however, an option that is posed
for comment.
A greater allocation of Departmental resources would be required to adequately support liaison with
jurisdictions and with industry to ensure that licensing could be transferred successfully and effectively
to each state and territory.
Each jurisdiction would need to review and amend legislation to accommodate the licensing schemes.
Where occupational licensing for RAC is already in place, this may be a simpler process than for states
and territories that regulate RAC less directly. Each jurisdiction would also need to increase resourcing
to administer licensing schemes, including the provision of compliance and enforcement resources.
This change would provide a means for transitioning away from regulation for ozone and climate
protection to a more occupational licensing basis while retaining the mechanism for regulating that
the industry is familiar with.
The key advantage of this option is that it creates an opportunity for states and territories to integrate
end-use licensing with their own regulatory frameworks that cover elements of RAC and fire
protection but which aren’t currently comprehensive. If integrated in this way, the option would
reduce duplication of licensing requirements across state and territory and Commonwealth tiers of
government.
In order to carry out their day to day work as tradespeople, technicians and businesses are already
required to be trained and to work in accordance with the relevant Australian and New Zealand
standards. If the schemes were to be integrated into existing regulatory frameworks in each state and
territory, it is likely that the administrative burden of the current schemes would be removed from
businesses and technicians.
In relation to the RAC industry specifically, industry feedback throughout the review process has
strongly supported coverage of all refrigerant gases under the end-use licensing scheme for RAC.
While this is outside the scope of the Ozone Act, the option to transfer end-use licensing to the states
and territories could be an opportunity to pursue this further.
The option would reduce the administrative burden on the Commonwealth in the medium to long
term. Depending upon how the schemes are implemented, there may be little change to the
83
administrative burden on states and territories in the medium to long term. However, in the short
term it would increase administrative costs both for the Commonwealth and for state and territory
governments as administrative, and governance arrangements were established in addition to
business as usual during the transition period.
One of the key criticisms contained in the 2003 Regulation Impact Statement that informed the
Regulation changes to bring in end-use licensing was the lack of consistency between state and
territory systems. There is a risk with this option that, as individual state regulatory environments
changed over time, this lack of consistency would resume and grow. This argument is consistent with
the National Occupational Licensing Authority (NOLA) Consultation RIS39.
If a level of national coordination by industry is maintained, it will mitigate the risk of losing the benefit
of national consistency. If the existing licensing structures maintained and handed over to states and
territories to legislate, the benefit of investment over the past decade in publicising the licensing
schemes and their benefits would be retained.
By handing over end-use licensing to the states and territories without national coordination, there is a
risk that the national consistency achieved through end-use licensing under the Ozone legislation
could be eroded. However, given the level of maturity of both schemes and the continued interest in
promoting best practice by national industry bodies, it could be argued that the nationally consistent
elements of standards and eligibility could be maintained and that any changes made to the schemes
could better integrate the requirements of allied occupational regulations in each jurisdiction.
If state and territory jurisdictions incorporated the current licensing requirements into their regulatory
frameworks for RAC and fire protection, it is anticipated that emissions would remain at business as
usual levels. Careful consideration of regulatory requirements by state and territory governments and
the legislative amendment would be required to ensure that the environmental controls were not lost
with the transfer.
Cost-benefit analysis found that the additional administrative cost for state and territory governments
as well as some licence holders who operate across jurisdictions would be significant. The analysis
found that the cost of transferring the current licensing framework across to individual state and
territory governments would far outweigh the benefits of maintaining the status quo. The analysis
found that the current regulatory framework has an economy of scale that could not be achieved with
multiple jurisdictions operating individual licensing schemes. Jacobs did indicate that where state and
territory governments could find ways to integrate licensing requirements with their existing
regulatory frameworks the cost benefit could be markedly different.
Modelling for the cost-benefit analysis assumed that the requirements for technicians would not
change under this scenario, and so it was assumed that carbon emissions would not change. The
administrative burden to technicians was assumed not to change, although it is possible that the
administrative burden increases for technicians working across multiple jurisdictions and alternative
modelling through the regulatory burden measure which does assume some duplication demonstrated
a significant increase in the burden on businesses that operated in more than one jurisdiction.
To transfer either the fire protection, RAC or both licensing schemes to state and territory
governments would result in a large increase in cost for these governments, relative to a minor
reduction in Australian Government costs. Jacobs modelling indicated an average increase in
39
COAG, op. cit., p. 17.
84
administrative costs for each state and territory government of approximately $3.5 million per annum
in order to achieve a cost reduction for the Commonwealth of approximately $95 000 per annum.40
In addition, the regulatory burden for business of this measure would be approximately $101 000 per
annum, split evenly between the Commonwealth and the state and territory jurisdictions as a whole.
The costs are due mostly to the cost to some businesses of needing to apply for and hold multiple
permits across different states and territories.
Retain end-use licensing with greater focus on significant emission reduction
The final option posed here is to retain the end-use licensing schemes with the Commonwealth and
refocus their intent and structure to ensure they are achieving environmental outcomes at low cost for
technicians and consumers. In this case, changes to the way in which the current Regulations for enduse licensing are implemented would be non-regulatory. A key part of this approach would be
implementing a targeted communications campaign to raise awareness among technicians and
consumers about good gas handling practices and responsibility for gases at the equipment end of life.
This could consider both environmental and economic motivations.
This option recognises the need to ensure that the focus of the legislation remains on reducing
emissions and does not stray into the regulation of occupational matters that rest within the powers of
state and territory jurisdictions. It also recognises the need to focus regulatory efforts on the sectors of
the RAC and fire protection industries and stages of the equipment lifecycle where there is the
greatest potential to further reduce emissions.
In refocusing end-use licensing, further work could be undertaken to align training requirements for
licence holders with potential emission reduction opportunities. For example, additional training and
awareness-raising could be focused towards appropriate sizing of equipment, decommissioning
equipment, reducing leakage rates in some sectors or working with alternative refrigerants with
different hazard characteristics.
Compliance and enforcement powers would be retained, and the focus of compliance would be on
effective steps applied on the basis of risk. This could be achieved by reviewing the compliance and
enforcement role of the ARC and FPAA and balancing this with federal government enforcement
action.
A broader understanding within the community of the reasons for regulating ODS/SGG use and the
importance of the scheme would support compliance. Targeted communication of the end-use
licensing scheme, including to consumers and equipment owners, to support its effective operation
could be implemented. The details of this approach and reasons why this is considered an effective
option are set out above as a non-regulatory option for achieving emissions reduction.
The Australian Government could continue to work as appropriate with industry and state and
territory governments to ensure the RAC and fire protection sectors are regulated in a way that
supports appropriate coverage without regulatory duplication.
Further, emission reduction interventions with a low benefit—such as the domestic refrigeration
sector with low leak rates and increasing use of low-GWP refrigerant—could be progressively repealed
and redundant licence types be removed.
40
Jacobs, op. cit., p. 60.
85
Each of these proposed interventions would be achieved either without regulatory change, or they
suggest regulatory change into the future. These options are put forward for consultation. However,
consideration of how these outcomes could be achieved will be considered subsequent to the Ozone
Act review process.
Streamlining the structure and scope of current end-use licensing
The current structure of end-use licences is complex and can be duplicative. Options to reduce this
level of complexity and to potentially re-scope the structure of end-use licensing provide an
opportunity to streamline the administration requirements for business and regulators alike.
Eligibility for particular licences is determined by relevant trade qualifications and units of
competency. By establishing a number of specific licence types, and especially restricted licence types,
a balance could be reached whereby technicians with very limited roles in using RAC or fire protection
equipment could undertake training that was limited to their work needs. In some cases, where
participation was limited, specialised training was tailored to the role and not necessarily nationally
endorsed.
The RAC licensing scheme establishes a different restricted
licence type for each restricted activity within the RAC
industry. When a new, specialised activity emerges that does
not require the skills of a fully qualified RAC technician,
generally a new licence type is created.
While there are some practicalities to this approach, its level
of complexity has helped to develop the perception and
some of the attributes of an occupational licensing scheme,
rather than focusing only on the objectives of the Ozone Act.
Its level of specialisation means that there is scope for some A complex RAC system
industry sectors to use the system to create a barrier to entry
and reduce competition. Finally, the system of establishing a specialised licence type for each specialty
application has entrenched a need for ever-increasing licence types. This complexity places a
significant administrative burden on the body that administers the scheme, which may not be the
most effective use of resources. There is currently a benefit for technicians in niche industries or highly
specific applications whereby their training requirements can be limited to only what they need to do
their work. Any restructure would need to retain these benefits.
By focusing the scope of end-use licences on reduction of emissions of ODS and SGGs, the role of the
licence could be made clearer, and the process of ensuring that licence holders were acting in
accordance with the relevant standards and codes of practice becomes a clearer issue of
communication targeted to industry sectors. For RAC licensing in particular, it could reduce the time
required by applicants and administrators to navigate the system, thereby reducing the level of
administrative burden without compromising the regulatory basis for the scheme.
Restructure of end-use licensing, simplifying licences to a basic ODS/SGG licence
One option raised during industry consultation is to simplify all end-use licensing to a single permit
with conditions placed upon the holder to restrict them to certain activities. The eligible permit holder
would need to have completed one or more units of competency which are structured to inform the
technician of how to minimise emissions during the course of their work and explain their legal
86
obligations and the environmental reasons for doing so. Eligibility to undertake RAC or fire protection
work would continue to be regulated by the states and territories.
A key benefit of this approach would be the avoidance of perceived or actual duplication in the
regulation of activities undertaken in the course of a technician’s work. Breaches of WHS legislation
would have a clear link to the state or territory agency responsible for WHS matters. Actions such as
poor installation or maintenance would have a clear link to consumer protection laws in the relevant
state or territory. By structurally separating the regulation of ODS and SGGs from regulation of these
other matters the regulatory lines of enquiry could be more easily communicated to licence holders
and consumers alike.
Industry consultation has revealed a preference of some industry organisations for installation and/or
maintenance to be better regulated. While the option proposed here would clarify the role of
consumer protection as opposed to environmental regulation, it does not offer a means of improving
standards of workmanship. Some licence holders will be competent but choose not to apply some
relevant work standards where there may be a stronger financial incentive to emit. Options that may
offer a better assurance of installation and maintenance are proposed in section 2 of this report in
relation to emissions reduction and would not be mutually exclusive to changing the scope of end-use
licences.
Regulation of the technician’s activities in their trade—including WHS and quality of
installation, service and maintenance work—would continue to be the responsibility
of state and territory WHS and consumer protection legislation.
This option would require a combination of administrative and legislative change. Simplifying the enduse licence structure to a single ‘ODS/SGG licence’ could reduce the scope of administrative work for
the organisations contracted to administer the schemes, thereby reducing the administration costs of
the schemes. Further, the proposed new structure of two-year licences only; and support systems to
allow for fire protection scheme members to apply online could significantly reduce the regulatory
burden for business.
Including the additional costs associated with learning about changes to the scheme and introducing
some additional training requirements focused on reducing emissions, this option would reduce
regulatory burden for business by over $66 000 per annum.
Allow for a single ‘licence card’ that includes all licence types in one place and retain licence
conditions in supplementary material to avoid duplicative administration
One means of maintaining the current level of regulatory coverage but potentially streamlining the
administrative burden on businesses and individual technicians is an option to replace the range of
over 30 individual physical licence cards with a single licence card. This option would enable licence
and trading authorisation holders to show their ‘licensed status’ to customers or salespeople.
One card would be issued to each trading authorisation holder and one card would be issued to each
licence holder.


Trading authorisations would be reduced to a single type for RAC, a single type for fire
protection and a halon special permit.
RAC licence types would be reduced to a single licence and a trainee licence.
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
Fire protection licence types would be reduced to a single licence type and a trainee licence
type.
The current range of regulatory conditions set out for authorisation and licence holders would remain
with all relevant licence types and conditions placed on a licence would be provided to the holder in
supporting documentation and retained for compliance purposes by the relevant authority and
potentially linked via a quick response code (QR code), a form of graphical barcode that links the
reader, via their mobile device, to a web page. The code would be printed on the licence card to
enable licensees to easily share the details of their licence conditions with salespeople and customers,
if required.
Currently, almost 1400 RAC licence holders hold two separate physical licences for which they need to
apply separately. There is potential for this number to increase and also for licence holders to obtain
more than two licences, in which case the benefits of this approach would increase.
As with all options to change the way in which licensing is currently administered would come at some
regulatory and direct financial cost. The regulatory burden for scheme members to become familiar
this option with such changes would be a one-off time cost of $57 000, however, taking this cost into
account, the minimum reduction in regulatory burden is calculated at approximately $21 500 per
annum.
Minor changes to the current end-use licence structure to streamline the application process and
address compliance gaps
There is an option to make relatively minor changes to the current structure for RAC permits which still
presents an opportunity to streamline the administrative burden for business.
Under the RAC end-use licensing scheme there are currently twenty-eight different permit types: three
trading authorisations, four main licences and twenty-one restricted licence types. In cases where
technicians seek to undertake a range of restricted activities, they need to either train to be eligible for
a full RAC licence or apply for multiple restricted licences to suit their workplace requirements over
time.
One option suggested through industry consultation is to condense the restricted licence types into a
single restricted licence, instead of applying conditions progressively to define what the licence holder
is eligible to do. This would eliminate the need for multiple restricted licences, which would reduce the
administrative burden on applicants and potentially also prevent applicants from needing to undertake
more formal education than they need to do their work.
The approach of adding conditions to a single restricted licence type increases the flexibility of defining
eligibility requirements and, therefore, provides a mechanism for ensuring that restrictions are not
used as a barrier to entry.
Industry consultation indicated that a streamlined but not over-simplified system of licences for RAC
would allow for sufficient differentiation between licensing for different industry sectors. Industry
consultation also revealed support for maintaining the current fire protection licensing structure
without change. The reduction in regulatory burden for business would be small, approximately $3 900
per annum. However, it would also reduce the administrative costs associated with regular, minor
changes to licence administration in response to small changes to the industry over time.
88
Maintain the current licence structure for RAC and fire protection without change
There are benefits to maintaining the current structure of licensing for RAC and fire protection. A
common theme of industry feedback, particularly from the RAC industry, was general support for the
schemes. Analysis of the effectiveness of end-use licensing indicates that the schemes are successfully
reducing emissions.
The schemes have been in operation for almost ten years, and technicians are familiar with the
requirements and processes for complying with the conditions of their permits and, in doing so, with
the regulations.
This option would avoid the cost of changing end-use licensing. However, the drawback of maintaining
the status quo is that a number of options to reduce the regulatory and administrative burden for
businesses, individuals and government could not be realised. There is some duplication in
administering two separate schemes and there is a level of complexity in the current structure—
particularly for RAC licences—that could be reduced to gain efficiency in the way the Ozone Act is
administered.
Improve the flexibility of administering licence requirements
Section 45A of the Act provides that the regulations may make provision for the end-use of scheduled
substances. The regulations provide the terms and conditions of licences for the RAC and fire
protection industries. This includes the training requirements to be eligible for a licence and the
standards and codes of practice to which licence holders must adhere.
Rapid technology change, particularly in the RAC industry, can mean that the training and standards
set out in the regulations can quickly become outdated. This results in the need to frequently make
minor updates to the regulations and risks the provision of outdated information. There is a need to
enable amendments to be made to licence requirements more quickly than the regulation amendment
process allows for. However, these requirements must retain the same level of legitimacy.
One simple way to streamline and improve the way in which licence requirements are maintained and
updated is to make a minor amendment to Part VIA of the Act to allow for the making of legislative
instruments as well as Regulations. The intention of allowing for legislative instruments is to maintain
oversight of licence requirements but introduce a greater level of flexibility around when it can be
amended.
This amendment would not change the regulatory requirements that business is already obliged to
meet. The amendment would not result in a change to regulatory burden but rather a potential
reduction in delays to updating details of regulatory requirements.
Reporting under end-use licences
The Ozone Regulations set out separate conditions for holders of refrigerant trading authorisations
(RTA) and holders of extinguishing agent handling authorisations (EATA). The reporting requirements
for RTA and EATA holders are inconsistent and, for EATA holders, place administrative requirements
on businesses and on the Fire Protection Industry Board that may be unnecessary.
Under Regulation 141, RTA holders are required to record any checks, leak testing, maintenance or
other relevant activity relating to storage cylinders and the specific equipment they need to keep so
that anyone handling their refrigerant can carry out their work in a way that minimises emissions. It
also requires RTA holders to list any licensees working under their RTA for the relevant quarter. These
89
records must be kept on a quarterly basis and, if requested, each RTA holder must be able to provide
the records of the previous quarter to the RAC Industry Board.
Under Regulation 332, EATA holders are required to collect and provide to the Fire Protection Industry
Board records of their usage of regulated extinguishing agents on a quarterly basis. It does not require
EATAs to record maintenance activity in the same way as the RAC requirements specify.
The fire protection quarterly usage reports are collected and entered into a database by the Fire
Protection Industry Board, however, to date this information has yet to be used in any significant way.
Therefore, there is a need to change the way in which reporting is conducted for end-use to remove
the unnecessary administrative burden.
There are three broad options proposed for public consultation to address these issues of
inconsistency and potentially excessive administrative burden. A definitive answer to the problems
requires further analysis that is beyond the scope of this Review; however, it is important to seek the
feedback of those in the industry who must meet the regulatory requirements as well as those who
may utilise the data collected through those requirements. The options below are therefore put
forward for public consultation.
Remove the requirement for fire protection permit holders to report extinguishing agent usage to
the Board.
This option would reduce the regulatory burden on businesses needing to report extinguishing agent
usage. It is expected that businesses would continue to record their usage as part of normal business
practice, however, the option would remove the need to understand the process of reporting and the
time taken to provide those reports to the Fire Protection Industry Board. It would also reduce the
administrative burden on the Board which would enable the allocation of those resources to other
priorities. This option would reduce the regulatory burden on fire protection businesses by
approximately $18 200 per annum.
The drawback of this option is the loss of what is potentially a valuable source of data on the trends of
extinguishing agent usage in Australia. This could meaningfully inform a better understanding of the
industry in the present time and allow for much more accurate forecasting of extinguishing agent
usage into the future. Further analysis is needed to determine the value of this data source and
whether the most appropriate approach is to retain it in its current form; to retain it but amend the
way it is recorded or reported to reduce regulatory burden; or remove the requirement to collect this
data because its value is outweighed by the burden of collecting it.
Retain the usage reporting requirements for fire protection and extend them to RAC businesses.
There may be significant benefits to collecting usage data for scheduled substances and the options set
out above for amendments to the fire protection are equally applicable to the RAC industry. There may
be value in extending the quarterly usage reporting requirements to RTA holders. If the quarterly
usage reporting requirements for fire protection were to be extended to the RAC industry without
changing the nature of those requirements the regulatory cost of this additional requirement would be
approximately $5 312 100 per annum.
There may be nee efficiencies in lengthening the duration of usage reporting period to an annual or
even five-yearly basis to provide a census-style snapshot of gas usage across both industries. If the
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reporting period for both fire protection and RAC businesses were to be extended to an annual basis,
this option would result in an additional regulatory cost of approximately $1 336 000 per annum.
Harmonise the reporting requirements for RTA and EATA holders
The intention of the quarterly reporting requirements for RTA holders and EATA holders to encourage
good storage and maintenance activity and ensure there is a record of compliance and enforcement of
the regulatory requirements for trading authorisation holders to minimise the emission of the
substances they store and provide for their employees to use. It may be beneficial to harmonise the
reporting requirements for end-use trading authorisation holders. What these requirements should be
is dependent upon further analysis, as outlined for the options detailed above. Regardless of what are
the most appropriate requirements for reporting, there are ways in which the process of collecting and
organising the information is done. This can be addressed through regulatory change, non-regulatory
changes to administrative processes, or a combination of the two. A detailed evaluation of the options
available will be included in the final report for this Review, taking into account stakeholder feedback
on the options suggested above.
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5.6 Compliance and Enforcement
The Ozone Act review and industry feedback has highlighted opportunities to improve compliance and
enforcement actions taken under the Ozone Act. These relate to the:

range of offences included in the Ozone Act and Regulations

powers available to enforce the offences

implementation of the compliance and enforcement regime.
Several industry bodies have noted that some of their members hold a perception that the
Department could do more to detect and enforce breaches of the Ozone Act and Regulations.
Submissions to the Ozone Act Review have suggested changes to the existing compliance and
enforcement levels and put forward ideas to amend the Ozone Act, which are set out below. Many of
these ideas will increase compliance and enforcement provisions while others are requesting
consideration for exemption from certain compliance and enforcement provisions.
The Department undertakes compliance and enforcement of the Ozone Act to promote the protection
of the environment, support compliance with our international obligations and achieve the objectives
of the legislation to reduce emissions of ODS and SGGs. For the industry, enforcement is regarded as
an important measure in ensuring a level playing field and an essential element of fair competitive
arrangements between businesses.
Compliance and enforcement is connected to all activities covered
by the Ozone Act, requiring industry to manage their interaction
with scheduled substances in a lawful way.
The Ozone Act sets out the requirements for stakeholders to follow when dealing with scheduled
substances and equipment containing scheduled substances including:

import, export and manufacture of scheduled substances and/or equipment containing
scheduled substances

acquisition and storage of scheduled substances

disposal of scheduled substances

use and handling of scheduled substances

reporting

payment of levies and fees

record keeping.
There are criminal offences and civil penalties relating to breaching requirements under the Ozone
Act. Criminal offences may include imprisonment for up to two years. Depending on the provision
breached, civil penalties range from 1 penalty unit ($170 presently, increasing to $180 from 31 July
2015) for individuals and up to 10 000 penalty units ($1 700 000 presently, increasing to $ 1 800 000
from 31 July 2015) for corporations. In addition, breaching the Ozone Act can result in cancellation or
suspension of licences (only end-use licences can be suspended) and in the forfeiture of imported
92
goods. These provisions under the Ozone Act are supported by a range of enforcement powers for
inspectors under the Ozone Act.
Compliance and enforcement provisions in the Ozone Act interacts with other Commonwealth
legislation, including the Customs Act 1901, Crimes Act 1914 and the Criminal Code Act 1995. There are
also potential synergies with the Regulatory Powers (Standard Provisions) Act 2014 which will be
investigated.
Appropriate mechanisms are required to identify breaches of the Ozone Act and ensure that breaches
are dealt with appropriately under Australian law. It is important that compliance provisions are
consistent and easy to understand, and enforcement activities are consistent, transparent and
appropriate.
As indicated in Figure 11 in the top of the inverted compliance pyramid, the Department’s primary
focus is to encourage voluntary compliance with the Ozone Act. Educating users of the Ozone Act and
providing support and encouragement to comply helps to increase compliance and limit the need for
government intervention. However, the regulatory response from the Australian Government should
be responsive to the attitude to compliance shown by users. Increasing penalties and enforcement
options must be progressively available so the Department can pursue those disengaged or unwilling
to comply as indicated in the lower levels of the compliance pyramid diagram below.
Figure 9 Responsive Regulation—compliance pyramid
93
The range of offences in the Ozone Act
Provisions to penalise breaking or destroying goods to prevent seizure
The Ozone Act currently includes a provision to seize goods but none that prevent a person from
breaking or destroying goods to prevent seizure. A new offence relating to destroying or breaking
goods to prevent their seizure can be considered. This provision exists in other Commonwealth
legislation and could be adapted for the Ozone Act.
This provision could be used to cover other goods, for example, computers and record-keeping
systems, in addition to ODS and SGG equipment. This will provide the Department with additional
enforcement options for suspected breaches.
Penalties already exist in the Ozone Act for the deliberate discharge of substances, and this offence is
dealt with separately below.
Reviewing penalties for breaches
The Department is reviewing penalty units for breaches of the Ozone Act. This will help ensure
available penalties remain a deterrent to illegal activity.
When setting penalties for breaches of the Ozone Act the Department must consider several areas.
These include what penalties are allowable under Commonwealth law, the interaction of other
Commonwealth legislation with the Ozone Act, existing penalties for similar acts in other
Commonwealth legislation, and the appropriateness of a penalty for an act in terms of true costs of
avoiding compliance and impact/damage to the environment.
Expansion of the infringement notice scheme
In 2010, a civil penalty regime, including an infringement notice scheme, was introduced to mirror the
criminal offence provisions. The infringement notice scheme allows ‘on the spot fines’ to be issued for
breaches. Its operation is currently limited to offences included in the Ozone Act (import and export
provisions). The scheme could be expanded to domestic end-use in the associated Regulations.
Industry representatives have suggested that infringement notices should be issued by the ARC and
FPAA, who administer the end-use permit schemes for RAC and fire protection. Giving powers to the
ARC and FPAA is considered further below.
The introduction of a notice to undertake additional training
Some industry representatives have raised concerns that lack of training may lead to breaches of the
Ozone Act. They have requested that those in breach be required to undertake additional training. This
type of requirement can already be included, where appropriate, in existing compliance and
enforcement undertakings by the Department, the ARC or FPAA.
Addressing allowable emissions
The discharge of a scheduled substance, unless in accordance with the Regulations (including
regulation 400–500), is illegal. The list of exemptions is managed to ensure that the appropriate
handling of scheduled substances is supported and emissions are avoided.
Regulations 400 and 500 include a list of circumstances where discharge is allowable. The list does not
currently contain several circumstances where emissions could be allowed including, emissions during
the use of perfluorocarbon tracer technology to detect leaks in electricity cables, semiconductor
manufacture, and the operation of medical and veterinary equipment. The list can help manage
94
perverse outcomes or conflicting regulatory obligations, such as where avoiding emission would lead
to safety risks or where emission is required by other standards.
Provisions to penalise false representations for fire protection
There is currently no offence for a person who makes a false representation of an extinguishing agent
licence. Incorporating this provision would provide a penalty and would align provisions for fire
protection with those in place for RAC. Including this provision will help maintain the integrity of the
licensing system.
Powers available to enforce the Ozone Act
Suspending an import/export licence
There are currently provisions to cancel an import/export licence, but no provisions to suspend a
licence. An option is to amend the Ozone Act to allow the Minister or delegate to suspend a licence if
they are satisfied that the licensee has breached a licence condition or is not complying with the
Ozone Act, for example, by late or non-reporting and payment of levies. This provision would offer the
Minister or delegate the opportunity to suspend a licence to encourage compliance rather than the
more drastic action of cancelling a licence or prosecuting the licence holder.
Audits of individual end-use licence holders
Currently some RHL holders, including some sole traders and split system air conditioner installers, do
not require access to bulk stocks of refrigerant gas and, therefore, do not need to hold an RTA. Under
the current compliance and enforcement arrangements, these businesses are not covered by the ARC
auditing program that focuses on the premises and regulatory requirements of RTA holders. This
includes checks on maintenance and record keeping, risk assessment and functionality of specific
equipment required to be held by the RTA holder in order to minimise emissions of the gas they stock.
In most cases the businesses that do not require an RTA do not undertake activities that run the risks
of emissions that are controlled by the RTA. However, there may be some circumstances where there
are risks of emissions that are not subject to the same checks and balances as for RTA holders. The lack
of an equivalent check for businesses without an RTA has led to a perceived gap in compliance and
enforcement and may be a real gap in some circumstances. The Department is considering options for
broadening the ARC’s auditing scope to ensure appropriate/full coverage of RHL and RTA holders. This
may require changes to licence conditions where record keeping and/or monitoring requirements do
not adequately facilitate comprehensive auditing processes.
Increased enforcement powers to industry licensing bodies
Some submissions to the Review have suggested that licensing bodies be given enforcement powers.
This might include a right of entry, to be able to issue infringement notices and powers to cancel or
suspend licences, including doing this on the spot.
Auditors for the ARC and FPAA currently undertake compliance visits. Auditors employed by the ARC
and FPAA do not have any powers under the legislation, including right of entry or issuing of
infringement notices. Generally, the Commonwealth does not give coercive powers to nongovernment employees. This is to ensure there is proper accountability for the exercise of those
powers. Commonwealth employees are subject to a variety of accountability measures by virtue of
95
their employment (e.g. the Privacy Act 1988, the Freedom of Information Act 1982, the Public Service
Act 1999 and the Ombudsman Act 1976).
The introduction of ‘name and shame’ for breaches
The Department acknowledges the importance of the industry for having compliance and enforcement
activities publicised. However, additional ‘name and shame’ provisions are not considered
appropriate.
Generally, the Commonwealth does not release information on specific compliance and enforcement
activities, such as active investigations, to the public unless it is absolutely necessary or required by the
investigative process (e.g. to seek information from potential witnesses). Information may be shared
with co-regulators for the purpose of law enforcement and subject to relevant information security
and privacy provisions, as allowed by the information sharing provisions included in the Ozone Act.
Even after completion, the details of the investigative activities will normally remain confidential.
However, most court proceedings are open to the public. In this case, the enforcement outcome may
be publicised where appropriate.
Streamlining information sharing between the Department, state and territory and Australian
Government agencies
Amendments could be considered to allow for information sharing to facilitate other Commonwealth
and state and territory agencies to administer their legislation, for example, consumer protection law
or tax law. Similar provisions already exist in other Commonwealth legislation and could be adopted
for Ozone Act. A broad provision will enable the Department to disclose information to other agencies
if it falls within one or more categories of ‘authorised disclosure’. Disclosures could be made for the
purposes of:
1. performing a duty or function, or exercising a power, under or in relation to the Ozone
Act; or
2. enabling another person to perform duties or functions, or exercise powers, under or in
relation to the Ozone Act; or
3. assisting in the administration or enforcement of another law of the Commonwealth, a
state or a territory.
There is the potential for this provision to provide benefits to industry members by enabling entities to
report once to meet two legislative requirements. This could be achieved, for example, by allowing
information sharing on the manufacture, import, supply or export of products as required by the
Greenhouse and Energy Minimum Standards Act 2012 (GEMS Act).
Provisions that would allow the taking of samples for testing in a manner that would be defensible
in court
The capacity to sample and test ODS and SGGs will provide greater compliance and enforcement
options to the Department. This will enable the Department to examine the characteristics and type of
substances available in Australia, ensuring scheduled substances are not being used illegally or
imported without a licence. Provisions of the Ozone Act currently exist to allow for regulations to be
made to support sampling and testing of ODS and SGGs. Expanding these provisions will improve the
96
capacity of the Department to gather evidence on possible illegal behaviour with the manufacture,
import, export, distribution, use, handling and destruction of ODS and SGGs. The ability to prove
substance characteristics and type will assist the Department in undertaking proceedings for
infringement notices, civil penalty orders or criminal prosecutions.
Provisions to allow for Notice to Produce
There is no provision to allow for a Notice to Produce. Making this an explicit power in the Ozone Act,
and incorporating an offence provision for non-compliance, will assist the Department in undertaking
compliance activities.
A Notice to Produce provides time and money savings for both the licence holder and the Department.
These provisions would enable the Department to request a licence holder to provide documents to
the Department via the post or email rather than requiring an inspector to undertake a site visit to
look at paperwork. Similar provisions exist in other Commonwealth legislation.
Forfeiture and penalty for distribution of goods containing a scheduled substance
There are currently no provisions for the Department to prosecute a person who is distributing goods
containing a scheduled substance where they were illegally imported, and where the distributor is not
the importer. Unless a successful prosecution of the person is achieved, the goods cannot be forfeited
to the Commonwealth. Without forfeiture, the Department is unable to remove these goods from
distribution. Amendments to the Ozone Act are required to ensure that illegally imported goods can
be forfeited to the Commonwealth, even if they have entered the supply chain.
The management of seized and surrendered goods
Currently, some importers surrender unlicensed goods to Customs and Border Protection to avoid
becoming compliant by obtaining a licence, generally when the cost of compliance is greater than the
value of the goods. Those surrendered goods are given to the Department for removal and subsequent
destruction. The Department is currently limited in what action it can take with these goods. The
Department is unable to recoup costs incurred in disposing of these goods. This includes costs
associated with storage, transport and destruction. The Ozone Act may need to be amended to
provide greater guidance in this area.
Provisions to include requesting reasonable assistance from the owner/occupier during a search
A provision allowing inspectors to request reasonable assistance during a search could be included in
the Ozone Act. This provision exists in other Commonwealth legislation. It provides a mechanism for
inspectors to request assistance from owner/occupiers when searching for evidence in premises under
warrant. This provision would provide time savings for both the owner/occupier and the Department.
Implementation of compliance and enforcement
Increased compliance and enforcement resources
It has been suggested that increased compliance and enforcement resources could assist in to improve
the rate of compliance with the legislation. The costs of compliance and enforcement activities
undertaken by the Department and the education and awareness activities undertaken by the ARC and
FPAA come from the Ozone Protection and SGG Special Account. Any increase in any activity under the
97
Ozone Protection and Synthetic Greenhouse Gas Management Programme (Ozone Programme) has
cost implications.
Summary of options for changing compliance and enforcement provisions
The compliance and enforcement provisions of the Ozone Act could continue with no changes to
address the compliance and enforcement issues set out above. However, this would continue to
restrict the Department’s ability to manage issues arising from the current compliance and
enforcement regime. It is expected that some offences will continue, and those complying with the
requirements may continue to be discouraged by the perceived lack of punishment of offenders, this
may lead to increased breaches. This option is not preferred as some issues identified currently
prevent the Ozone Act from being enforced.
The Ozone Act could be strengthened and streamlined to address the issues set out above. This would
provide the Department with an enhanced ability to manage known risks. This would also make it
easier for industry to comply and for the Department to administer. Options to reduce the burden on
stakeholders to fulfil compliance requirements have also been considered.
Where appropriate, compliance and enforcement provisions will align with the Regulatory Powers
(Standard Provisions) Act 2014.
5.7 Cost recovery
Ozone Protection and SGG Special Account
The purpose of the Ozone Protection and SGG Special Account (the Special Account) is to allow for the
payment and reimbursement of the Australian Governments costs associated with the administration
of the Ozone Act and Programme. In particular, the purpose of the account is to pay or reimburse the
costs incurred by the Australian Government in administering the Ozone Act and Regulations,
including Australia’s international obligations to phase out ODS, minimise emissions, and undertake
related research. Financial details of the Special Account are published in the Department’s Portfolio
Budget Statements and annual reports.
The administration of Australia’s obligations under the Ozone Act operates largely
on a cost recovery basis with a range of fee and levy income streams through the
Special Account. It is essential that the Special Account operates on a sustainable
basis with income received covering the costs of running the various obligations
under the Ozone Act.
The Special Account balance is impacted by the annual shortfall between receipts and expenditure
arising from the operation of the National Halon Bank. Its sustainability is compromised by this.
Options to address halon management are addressed in the Halon Management section.
Under the Government’s cost recovery framework, the level of licence fees and levies should reflect
the efficient and effective cost of the services provided and activities funded. The current licence fees
and levy rates were established through the 2012–2016 Cost Recovery Impact Statement, now known
as the Cost Recovery Implementation Statement (CRIS), and implemented through the Ozone Act and
Regulations. A new CRIS will be developed in consultation with industry reflecting the outcome of the
98
Ozone Act review for consideration by Government. This review and the review of the Ozone Act may
lead to a change in the level of the levies and licence fees.
In advance of the CRIS review, there are two minor and mechanical amendments that could be made
to the Ozone Act to improve the efficiency of cost recovery activities:

remove the maximum levy rates set in the Ozone and Synthetic Greenhouse Gas (import
and Manufacture) Levy Acts and set in the Regulations

insert a provision for the Minister to determine minimum threshold for low-value levy
payments and penalty payments.
Methyl bromide
Importers of methyl bromide currently pay a levy of $135 per metric tonne. The import levies are
currently set at $165 a tonne for SGGs and $3000 per ODP tonne for HCFCs. There is not a clear
rationale for why this levy rate is different to that for other ODS and SGGs.
Members of the methyl bromide industry have been consulted on proposed changes and a variety of
responses on whether to increase, retain or decrease the import levy on this ODS have been received
to date. There is no clear consensus on the levy rate at this stage and no changes are proposed at this
time.
Halon management
The import and manufacture of halon equipment does not currently have a levy applied as the import
occurs under an exemption, rather than a licence. The management of the National Halon Bank is a
significant draw on the Special Account and as such, this part of the Ozone Protection and Synthetic
Greenhouse Gas Management Programme (Ozone Programme) may only be partly cost recovered.
Applying a levy to the import of halon equipment may support the administration of the National
Halon Bank, however revenue is likely to be insignificant if a similar cost structure is applied to halon
as for other controlled substances.
As is the case with changes to all of the levies and licence fees applied through the Ozone Act, the
appropriate rate for each will be set through a CRIS review process. Changes may be made to the
levies after this time.
Ongoing management of the National Halon Bank
Under the Montreal Protocol, the manufacture and import of halon has been phased out in developed
countries since 1994. The use of used halon is permitted to meet essential uses. A long-term supply of
halon is required in Australia to meet the needs of essential users where there are no alternatives are
available. Currently, the aviation sector is the primary user of halon where alternatives are not
available for cargo bays and engine nacelles. Modelling for the Department indicates one scenario
where halon could still be required until 2100.
The price of halon had only risen marginally since the National Halon Bank commenced when halon
1211 sold for $30 and halon 1301 sold for $50. The current price of halon 1211 is $32.57 and halon
1301 $54.28.
The National Halon Bank is a halon decanting, purification and storage facility. The halon held at the
National Halon Bank comes from decommissioned end-of-life halon fire protection systems, or
99
systems upgraded to non-halon alternatives. The fire protection industry has played a key role in
facilitating the return of used halon.
Stock held at the National Halon Bank can be bought by appropriately licensed civilian essential users.
Currently the major user of the National Halon Bank is the aviation industry, although the community,
in general, as airline passengers benefits from the protection afforded by halon systems. Some halon is
bought by civilian contractors for the Australian Defence Force.
The cost to the Department in managing the National Halon Bank is about
$1 900 000 per year. This cost is only partially offset (approximately $570 000)
by storage charges and sales revenue.
The excess costs of running the National Halon Bank are taken from the Special Account. Analysis of
total revenue and expense from all Ozone and SGG Programme activities indicates that the Special
Account reserves are likely to be fully depleted by 2020-2021 at the present level of revenue and
expenditure.
The National Halon Bank is operating at a significant annual loss. The cost of managing the halon
essential use stock is greater than revenue from halon sales, effectively providing a subsidy to the
businesses that continue to use halon.
However, operating the National Halon Bank also provides a public good, as:

the stock is managed to high environmental standards, minimising preventable emissions

it avoids demand for new production

it is a means for connecting high-quality recycled halon to appropriate users, for example,
aviation users both commercial and private can access stocks, reducing risks for all aviation
passengers

it is a place for unwanted halon to be surrendered, safely stored and not emitted

the halon available from the National Halon Bank meets the required standard of purity,
therefore enhancing air safety.
Managing the National Halon Bank into the future
Australia has met its international obligations with regards to halon, including from an environmental
perspective.

The phase-out of the import, export and manufacture of new bulk halon has been completed.

Halon equipment import is limited to essential uses under the Ozone Act.

Australia has developed a halon management strategy.

End-use licensing supports the appropriate handling of halons to reduce their emission to the
atmosphere.
100
The United Nations Environment Programme (UNEP)41 has raised the issue of the global strategic
approach to halon bank management in order to avoid a supply disruption that would lead to an
Essential Use Nomination for the production of new halon. It could be argued that the National Halon
Bank contributes to the international movement of halons for essential uses, thus minimising the need
for an Essential Use Nomination.
Legacy uses of halon remain. The aviation industry and defence sectors still require a domestic reserve
of halon stock to service/supply their essential use equipment. The National Halon Bank is serving
these industry and strategic sector needs, and not international obligations, which have already been
met. In this context, the Department may not be the appropriate entity to manage the National Halon
Bank with either other portfolios or private sector operators being more suitable. This raises the
question of how the halon stock should be managed and who should do it.
Future management options for the National Halon Bank include:
 the National Halon Bank remaining as a Commonwealth-managed facility. This might be through
the Department, the Civil Aviation Safety Authority, the Department of Infrastructure and Regional
Development or the Department of Defence, noting that the Australian Defence Force a is also a
user of Halon. If the management of the National Halon Bank remains with the Department, the
cost recovery arrangements to ensure the facility is sustainable will need to be revisited. Cost
recovery arrangements could include:
-
-
-
the imposition of a management fee on strategic users, based on covering the cost of running
the halon bank year by year. Airlines as strategic users could choose to recoup these costs as
suits their business needs. For example, a fee of ten cents added to every domestic airline
ticket would achieve cost recovery. It is assumed that airlines would already have
sophisticated ticketing systems in place and costs involved in administering such a fee would
be minimal
raising the price of halon. For example, to achieve cost recovery by this means only would
require the price of halon to increase from approximately $50 per kilogram to approximately
$550 per kilogram, assuming the same level of sales at approximately 3 tonnes annually
increasing import and end-use licence and levy fees associated with halon equipment. For
example, raising the cost of a halon special permit from $263 for the approximately 40 permit
holders to approximately $40 000 would achieve cost recovery

divest the halon stock to users for their own ongoing management and to satisfy their strategic
needs. For example, the stock could be divested to the aviation industry, as well as the
Department of Defence. There is a case for the current and potential users of the bank to be those
responsible for it. Divesting the stock could involve its sale. Private sector owners would be
required to adhere to handling and storage conditions consistent with the provisions of the Ozone
Act

privatise the National halon Bank to one or more halon suppliers. This option assumes all halon is
divested to one or more halon suppliers and not to halon users (airlines and Defence).
41
UNEP Halons Technical Options Committee, Report of the Halons Technical Options Committee,
(Volume 1: 2014 Assessment Report), December 2014, available at
http://ozone.unep.org/en/Assessment_Panels/TEAP/Reports/HTOC/HTOC%202014%20Assessment%2
0Report.pdf.
101
If the stock were to be divested to industry for management, some reporting requirements might be
required to support Australia’s estimation of annual usage and future strategic requirements.
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Appendix 1: Fire protection and refrigeration and airconditioning permits
Fire protection permits
Table A1
Fire protection permits—authorisations
Permits
1. Authorisations
Extinguishing agent handling licence (up 2. Buy, sell, possess ODS/SGG extinguishing agent or to fill/recover
to 24 months)
extinguishing agent
3. halon special permit
Table A2
4. Possess halon that is or is to be used in fire protection equipment
Fire protection permits—licences
5. Fire Protection Licences
6. Licence 1
7. Portable fire extinguisher maintenance
8. Licence 2
9. Fixed system installation and decommissioning
10. Licence 3
11. Fixed system testing and maintenance
Licence 4
12. Recovery, reclamation, fill and recycle
13. Licence 5
14. Warehouse maintenance
15. Licence 6
16. Control system installation, commissioning and decommissioning
Refrigerant and air-conditioning permits
Table A3
RAC permits—authorisations
17. RAC Permits
18. Authorisations
19. Refrigerant Trading Authorisation
(RTA)
20. For an individual or business that acquires, stores and/or disposes of
refrigerant (other than halon). For example, wholesalers, RAC and
automotive businesses, sole traders and contractors
21. Refrigeration and Air Conditioning
Equipment Manufacturing
Authorisation (RAEMA)
22. For businesses that need to acquire refrigerant (other than halon)
for use in the manufacture of RAC equipment
23. Restricted Refrigerant Trading
Authorisation (RRTA)
24. For businesses that are authorised to recover refrigerant from RAC
equipment, store and dispose of refrigerant. For example, metal
recyclers, auto parts recyclers and waste management businesses
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Table A4
RAC Permits—Licences
25. Licences
26. RAC01 27. Refrigeration Handling Licence –qualified persons (full refrigeration and air-conditioning licence)
28. AAC02 29. Refrigeration Handling Licence – qualified persons (automotive air conditioning licence
30. RSS03
Refrigerant handling licence—qualified persons (restricted heat pump—split systems—installation
and decommissioning licence: two years)
31. RDR04 32. Refrigeration handling licence – qualified persons (restricted domestic refrigeration and airconditioning appliance Licence
33. TL000
34. Refrigeration and air-conditioning trainee licence
35. CL000 36. Refrigeration and air-conditioning trainee licence classroom
37. ATL05 38. Restricted refrigeration and air-conditioning licence (aviation) —handling a refrigerant for any
work undertaken on air-conditioning equipment on aircraft
39. MTL06 40. Restricted refrigeration and air-conditioning licence (marine)—handling refrigerant on vessels at
sea (except AMSA certified vessels/technicians)
41. TRT07 42. Restricted refrigeration and air-conditioning licence (transport)—mobile refrigeration systems
other than air-conditioning systems in the cabin of a motor vehicle
43. RHTL09 44. Restricted refrigeration and air-conditioning licence (handler) – to handle a refrigerant while
decanting cylinders
45. RRR10 46. Restricted refrigeration and air-conditioning licence (recovery)—stationary and RAC recovery
47. RRR11 48. Restricted refrigeration and air-conditioning licence (auto recovery)—auto recovery only
49. RRR12 50. Restricted refrigeration and air-conditioning licence (auto recovery)—stationary recovery only
Note: In addition to the thirteen licence types above, there are nine ‘transitional’ licence types that
allow for very specific activities to be carried out in specific segments of the industry.
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Appendix 2: Greenhouse and Energy Minimum Standards
Act 2012 (GEMS)
Background
On 1 October 2012, the Greenhouse and Energy Minimum Standards (GEMS) Act 2012 (GEMS) came
into effect.
GEMS gives effect to Australia’s UNFCCC obligations to adopt national policies to mitigate climate
change, limit emissions and promote the development and application of technologies and practices
that control emissions of greenhouse gases. GEMS allows the Australian Government to set mandatory
minimum efficiency requirements for products, to drive great energy efficiency for regulated products.
GEMS also allows for a nationally consistent labelling scheme. The labelling requirements for energy
efficiency has been very successful with 83 per cent of Australian consumers surveyed reporting that
the scheme influenced their purchasing behaviour in 2005.
This Commonwealth legislation replaces complementary state and territory legislation that formed the
Mandatory Energy Performance Standards (MEPS) under the Equipment Energy Efficiency (E3)
Programme. The E3 Programme has also been found to be a very successful policy intervention to
reduce emissions. In 2010, the energy savings arising from the more energy efficient air conditioners
and refrigerators by the E3 Programme was calculated at 6.6 terawatt hours, a benefit of over $1
billion42.
The GEMS legislation provides:

a nationally consistent framework for the regulation of equipment energy efficiency

business certainty through consistency across all states and territories

strengthened monitoring, verification and enforcement activities

the foundation for expanding energy efficiency regulations into new product areas.
GEMS applies to a range of RAC equipment (regulated products), including:

commercial refrigeration

domestic refrigeration

air conditioners

chillers

close control air conditioners

spot coolers

heat pumps.
Obligations of manufacturers, importers and suppliers under the GEMS Act

42
The product must be tested to prove its energy performance. A test report demonstrates
whether a product meets minimum energy performance standards and determines what is
Explanatory Memorandum, GEMS Act, available at: www.comlaw.gov.au/Details/C2012B00107.
105
included on the product’s energy rating label. A test report may need to be provided with an
application for registration.

The product must comply with the requirements set out in the Australia and New Zealand
regulations and may include minimum energy performance standards. The product must also
be registered with the Australian and New Zealand Regulator

The Australian GEMS Regulator is currently considering data reporting requirements under
Section 56 of the GEMS Act for Australia.
There is a range of compliance activities to ensure that manufacturers and suppliers comply with the
regulations. These include monitoring, verification and enforcement activities including check testing.
Obligations of retailers
Retailers can only offer a product for supply if the product is registered with the Australian GEMS
Regulator and it complies with the regulations. When displayed, a retailer must ensure that an
approved label is affixed to the product, that label is not obscured when it is on display and that other
conflicting information is not shown near the label.
Reporting
Section 56 of the GEMS Act defines the requirement for a registrant to provide information on the
import and manufacture of products. It advises that the Regulator may require the registrant to
provide specified information on a periodic basis.
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Appendix 3: List of Global Warming Potential for SGGs in
Regulations
The relevant Regulation is the Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy)
Regulations 2004. (1) For subsection 2B (1) of the Ozone Act, the value is the GWP amount in the
following table for a kind of SGG.
Table A5
Value for calculation of carbon dioxide equivalence of an amount of SGG
Table A6
Item
Table A7
Kind of SGG
Table A8
GWP
(Value)
Hydroflurocarbons
1
2
3
4
5
6
7
8
9
10
11
12
13
HFC-23
HFC-32
HFC-41
HFC-43-10mee
HFC-125
HFC-134
HFC-134a
HFC-143
HFC-143a
HFC-152a
HFC-227ea
HFC-236fa
HFC-245ca
(CHF3)
(CH2F2)
(CH3F)
(C5H2F10)
(C2HF5)
(C2H2F4 (CHF2CHF2))
(C2H2F4 (CH2FCF3))
(C2H3F3 (CHF2CH2F))
(C2H3F3 (CF3CH3))
(C2H4F2 (CH3CHF3))
(C3HF7)
(C3H2F6)
(C3H3F5)
11 700
650
150
1 300
2 800
1 000
1 300
300
3 800
140
2 900
6 300
560
Perfluorocarbons
14 Perfluromethane
(tetrafluromethane)
15 Perfluroethane
(hexafluroethane)
16 Perfluropropane
17 Perflurobutane
18 Perflurocyclobutane
19 Perfluoropentane
20 Perfluorohexane
(CF4)
6 500
(C2F6)
9 200
(C3F8)
(C4F10)
(c-C4F8)
(C5F12)
(C6F14)
7 000
7 000
8 700
7 500
7 400
Sulfur hexafluoride
21 Sulfur hexafluoride
(SF6)
23 900
Note: The values in the table are derived from Table 4 of Climate change 1995—The science of climate
change: Contribution of Working Group I to the second assessment report of the Intergovernmental
Panel on Climate Change, Cambridge University Press, p. 22, 1996.