Brexit Readiness Notice on Fluorinated Greenhouse Gases

The European Commission published a Brexit readiness notice in July in respect of F-gases (it refers to gases listed in Annex I and II of REGULATION (EU) No 517/2014).

In assessing the implications of Brexit from the specific point of view of your business, it is important that you study the notice carefully to ensure that you are prepared for the changes brought about by the end of the Brexit transition period on 31 December 2020.

While you should read the notice fully, the points listed below are of particular importance for Irish traders and include specific actions you should take in order to get ready for the end of the transition period.

Traditionally, companies in Ireland have sourced their quota from UK based companies and, as a result, very few companies in Ireland hold their own quota allocation. The readiness notice outlines that, after the end of the transition period, UK companies who intend to continue to place HFCs on the EU market require an “only representative” (OR) established in the EU. Such companies continue to receive quotas based on their historic market shares in the EU-27 market or based on a declaration of intent as regards the placing on the market of HFCs. If you are reliant on a UK supplier, it is important that you keep in contact with your supplier to ensure that they intend to continue to supply the EU market and have quota to do so, thus maintaining your supply chain.

This is particularly important as there will be a further reduction in available quota in 2021 under the F-Gas Regulation for the period 2021-2023. This is not Brexit related, but the normal implementation of the F-Gas regulation. Under the F-Gas Regulation (517/2014) there is a phase down of the quantities of HFCs that can be placed on the EU market (based on CO2 equivalents). This involves a stepwise reduction of 79% over the period 2015 to 2030 and is aligned with a broader global reduction in the use of F-gases.

Within the EU, quotas are determined by the Commission on a company basis, and are based on the annual average of the quantities of HFCs the producers or importers have reported to have lawfully placed on the market from 1 January 2015 onwards. The reference value is set for three year intervals to align with the HFC phase down steps in the Regulation and the next reference value will cover the period 2021–2023. The quota available for the 2021 – 2023 period will be 45% of the quota that was available for the baseline year of 2015 as outlined in Annex V of the regulation. This is in line with the objectives of the F-Gas regulation to phase down the use of HFCs and, compared to the 63% availability in the 2018-2020 quota allocation, represents a reduction of 18 percentage points.

Quota is needed for the import of bulk gas only. Importers of HFCs in precharged equipment require a quota authorisation, as any HFCs placed on the EU market must be part of the quota system with the exception of imports of less than 100 tonnes of CO2 equivalent of HFC per year (in equipment or as bulk gas).

We would also encourage you to consider applying directly to the EU in 2021 for 2022 quota and each year thereafter if this is warranted, albeit that the amount available for new entrants is limited and is allocated on a pro rata basis. Further information on the Quota system and how to apply for quota is available on the Commission website.

We would like to emphasise that the most important action is to reduce HFC usage in line with the objectives of the Regulation. When sourcing new equipment, non F-Gas alternatives should be sought where possible. This is of particular importance in the context of the bans outlined in Annex III of the Regulation most of which come into force between 2020 and 2023.

We would also draw your attention to the sections on 'Accreditation of Auditors' on pages 5 and 8 of the notice. If you engage the services of a UK accredited auditor for the purpose of compliance with the reporting requirements under Articles 19(5) and (6) of Regulation (EU) No 517/2014, we suggest you discuss the implications with them and ensure you have accredited auditors under the terms of the notice and the F-Gas Regulations. This will help to ensure future compliance with the regulations.

Mutual recognition of certificates issued by UK designated certification bodies across the EU will end on 31 December 2020. The readiness notice provides some further clarification here. To address this, the Department of the Environment, Climate and Communications (DECC) initiated a recertification programme in August 2019.

Whilst we have seen a good level of applications for recertification, we would encourage all participants in the industry to engage with the recertification scheme and to encourage colleagues, clients and employees to recertify as soon as possible. Please note that the scheme has now been extended and will run until June 30 2021. This will:

• allow for continued recognition of UK certificates/attestations for six months from the end of the Brexit transition period, provided the UK certificates/attestations have been issued prior to 11pm on 31 December 2020.
• allow for the opportunity to apply to the EPA for a training certificate or attestation in respect of the same activity awarded by a UK certification body, such as City & Guilds, provided the UK certificate/attestation was issued before 11pm on 31 December 2020. Applications to the EPA must be made before the end of April 2021.

You can apply now on the EPA website to have yourself recertified in advance of this deadline.

Producers, importers and exporters of fluorinated greenhouse gases and gases listed in Annex II have to fulfil certain reporting requirements annually, subject to specified thresholds. As of 1 January 2021, the UK will be considered a third country and all movements of F-Gas to and from the UK will thereafter need to be reported to the Commission. We direct you to pages 3 and 4 of the readiness notice both in respect of bulk gas and precharged equipment. Further information on reporting is available from the Commission.

If you require clarification on any of the above please contact the DECC F-Gas team at FGAS@decc.gov.ie