I. Technology and Economic Assessment Panel presentation on the replenishment of the Multilateral Fund for the Implementation of the Montreal Protocol

1. Ms. Shiqiu Zhang, co-chair of the Technology and Economic Assessment Panel task force on the funding requirement for the 2015–2017 replenishment of the Multilateral Fund (decision XXV/8), started the presentation on the supplemental report to the task force’s assessment report on the funding requirement for the replenishment. She elaborated on the mandate given, on the timeline that applied before the supplemental report had been submitted to UNEP and on the fact that a small addendum to the report had been published in October 2014 on equal funding distribution. She emphasized that the Panel’s estimated total funding requirement for the triennium 2015–2017 (and for subsequent triennia) had not changed compared to what was reported in the May 2014 task force report. She continued with an explanation of case 1, “commitment based” phase-out, in which funding for stage II HPMPs addressed the difference between the total reduction committed to in stage I agreements (expressed as a percentage) and the 35 per cent reduction level for 2020. Case 2, the “funding-based” phase-out, addressed the difference between the total of the forecast reduction (in each sub-sector) on which stage I HPMP funding was based and the 35 per cent reduction level for 2020. Values would all be expressed in ODP-tonnes. She mentioned that, for many non-low-volume-consuming (LVC) countries, the stage II HPMP consumption to be addressed in case 2 was significantly lower than that to be addressed in case 1, because additional phase-out had occurred in stage I. She also said that, for a few non-LVC countries, no additional funding would be needed for the 2020 reduction target, since they were expected to exceed their 2020 reduction targets in stage I. She presented tables for case 1 and case 2 with specific percentages for certain countries and the related amounts of HCFCs in ODP-tonnes. For case 1, the average weighted reduction to be funded was 20 per cent of the baseline, and for case 2 it was 12 per cent, a substantial difference.

2. Mr. Lambert Kuijpers, co-chair of the task force, noted that, in addition to the three disbursement schedules in the May 2014 report, a fourth (25-25-25-25 per cent over four years) had been considered. He said that the result of less front loading was a reduction of $50 million for the first triennium with the addition of that amount to the next triennium; he also said that slow disbursement schedules were not consistent with project implementation practices, which required procurement in the first one or two years of a project. He continued with an elaboration on the foam (HCFC) percentage in the total amounts addressed. Varying the foam proportion (compared to the task force calculations) to be addressed in stage II of HPMPs would lead to significant differences in funding in the two next triennia. For case 1, a 10 per cent increase in the foam proportion (to 60 per cent) would result in a decrease of about $53 million while a 10 per cent decrease (to 40 per cent) would result in an increase of about $59 million. For case 2, a 10 per cent increase (to 60 per cent) would result in a decrease of about $33 million, and a 10 per cent decrease (to 40 per cent) in an increase of about $38 million. He said that the various foam proportions would also result in different climate impacts. Reducing the foam percentage from 60 to 40 per cent in case 1 would increase avoidance from 105 to 130 metric tonnes CO2-equivalent and, in case 2, in an avoidance increase from 69 to 86 metric tonnes CO2-equivalent. That would occur at a climate cost effectiveness of about $4.8 per tonne CO2-equivalent.

3. He continued with an elaboration of the funding profile. The funding equalization options presented in the supplemental report included a redistribution of existing funding commitments, where options for equalization presented in the October addendum to the May report all assumed that existing funding commitments would not be redistributed. He also noted that there were a number of key scenarios, from a base case with different funding amounts per triennium to a scenario in which HPMP stage II funding and part of the funding for 2025 commitments were combined and averaged over the next two triennia. He showed a number of tables with the various amounts specified per triennium. Many scenarios – both for case 1 and case 2 – resulted in very uneven distributions. A scenario where funding for HPMP II plus part of the 2012–2023 funding was distributed equally over the first and second trienniums gave a fairly stable outcome over two trienniums. Nevertheless, he said, the task force confirmed its recommendation regarding funding in the May 2014 report.

4. He said that an in-depth study had been performed on the impact of funding for existing HPMP stage I agreements on the decrease of consumption in selected future years (funding for non‑LVCs and LVCs), but the task force was not able to give any quantitative results. That was because funding would depend heavily on the consumption levels reported for those years, which were difficult to estimate. Where it concerned servicing, he said that the introduction of more low‑GWP technologies might lead to increased funding requirements to address safety and health issues; the task force, however, had not developed recommendations beyond those called for in decision 60/44 of the Executive Committee of the Multilateral Fund. He also said that extensive consideration had been given to multinational and non-eligible enterprises. Many multinational operations were taking place in countries that had already committed to large reductions; non‑eligible enterprises might need to be considered in the future, but it would depend heavily on the infrastructure of a country when they were to be addressed.

5. He also said that a cost estimate for the conduct of surveys of high-GWP alternatives to ozone-depleting substances and for preparing projects had been provided, based on the levels of funding provided under Executive Committee decision 71/42, on the preparation of stage II HPMPs. Costs would amount to $10.45 million. He said that such a survey could also address the current consumption of low-GWP substances in Article 5 parties. For the conversion away from high-GWP substances, he said that the long-term development in cost effectiveness factors was difficult to forecast and that the “historic” cost effectiveness factors had therefore been important for the determination of the funding for stage II HPMPs. As an example, he said that avoidance of 50 per cent of high GWP-alternatives in room air-conditioning applications would equal about 95 metric tonnes CO2-equivalent in case 1 and about 63 metric tonnes CO2-equivalent in case 2. That would imply a climate cost effectiveness of about $5.9 per tonne CO2, at a cost effectiveness of $10.1/kg.

6. He mentioned that production capacity for HFCs was expected to grow by a factor of two in the next decade, especially in Article 5 parties, due mainly to an increase in demand for new equipment rather than the conversion of existing HCFC-based production lines. Therefore, supporting the maximum possible phase-in of low-GWP alternatives might be the most practicable way forward to limit increases in HFC consumption. He also noted that not-in-kind technologies were unlikely to deliver a substantial saving in the near term; various methods of heating and cooling, however, such as district cooling, might provide additional savings.

7. On swing plants, he said that HCFC production in swing plants other than in China had been about 40,000 tonnes in the year 2012 (down from a 2009 level of 66,000 tonnes). He said that if funding for swing plants were based on capacity of 50,000 tonnes, at a cost of $1–1.5 per kg, it would add a funding requirement of $9.5–14.5 million per triennium. The total funding for production phase‑out given in the May report would then increase to $82–87 million for the first triennium (2015–2017) and to $75–80 million for the second triennium (2017–2020).

8. In concluding, he said that the most significant impact on the replenishment would be the way that case 1 and case 2 were considered for funding for the next two triennia and that any major change in the proportion of foams versus room air-conditioning would have an impact on the relative funding levels for the next two triennia, but not on the overall funding requirement. He also said that there was a need to consider the longer term operation of the Multilateral Fund, as well as how the Fund operated in real terms, including where it concerned the requirements of the implementing agencies with regard to disbursement schedules and other parameters.

II. Methyl Bromide Technical Options Committee presentation on methyl bromide critical-use nominations

9. The Co-Chairs of the Methyl Bromide technical options committee, Mr. Mohammed Besri, Mr. Ian Porter and Ms. Marta Pizano, presented the final recommendations for critical-use nominations and other issues.

10. Mr. Porter introduced the presentation by summarizing methyl bromide consumption in Article 5 parties and non-Article 5 parties. He reported that global consumption of methyl bromide for controlled uses had fallen from 64,420 tonnes in 1991 to 2,388 tonnes in 2013. He noted that in accordance with paragraph 1 (b) (ii) of decision IX/6 Article 5 parties (as well as non-Article 5 parties) would need to report on stocks if applying for future critical-use exemptions.

11. He stressed that the Methyl Bromide Technical Options Committee assessed nominations using the strict criteria of decision IX/6, whereby a use of methyl bromide should qualify as "critical" only if there were no technically and economically feasible alternatives (or substitutes) available to the user or suitable for the crops and circumstances of the nomination. That required parties to provide technical data to justify the lack of effectiveness of key alternatives in a particular sector, which was particularly important as new critical-use nominations from sectors in Article 5 parties generally reported target pathogens that were generally similar to those in sectors in non-Article 5 parties.

12. He then provided an overview of recommendations for critical-use exemptions for three non‑Article 5 parties (Australia, Canada and the United States) and three Article 5 parties that had submitted nominations for 2016 and 2015, respectively. Consensus had been achieved on all nominations.

13. For commodity uses, one nomination of 3.240 tonnes had been received from the United States for dry cure pork and that amount was recommended. Research had identified several promising chemical and non-chemical alternatives (phosphine, insecticides and sulfuryl fluoride with heat), but the party had demonstrated that they were not yet effective on a commercial scale.

14. For pre-plant soil uses, the three non-Article 5 parties had requested amounts totalling 266.561 tonnes and that amount was fully recommended. For the first time, Article 5 parties had requested amounts of 505 tonnes, and a reduced amount of 198.957 tonnes was recommended.

15. The Australian nomination of 29.76 tonnes for strawberry runners was recommended in the amount of 28.765 tonnes. The Committee considered that no technical or economic alternatives were available for bulking stages of runner multiplication in soil. The party had substantiated that substrates were not economically feasible and had also provided an update on its active research programme during the thirty-fourth meeting of the Open-ended Working Group and was to provide an update to the Working Group at its thirty-sixth meeting.

16. The Canadian nomination of 5.261 tonnes for strawberry runners was recommended. The Committee considered that micropropagated plants had been adopted to replace methyl bromide for early multiplication stages and the party had substantiated that substrate technology was not economically feasible for the final stages of multiplication. The Committee was unclear whether important groundwater studies would proceed at Prince Edward Island and reminded the party that an update was required for the thirty-sixth meeting of the Open-ended Working Group in accordance with decision XXV/4.

17. The United States nomination of 231.540 tonnes for strawberry fruit was recommended. The Committee had noted that the Party had indicated that even though restrictions had affected uptake of key alternatives, the nomination would be the last one for the sector.

18. Mr. Besri then presented an overview of Article 5 party nominations for critical-use exemptions after the phase-out date of 2015.

19. Two nominations from Argentina of 145 tonnes for the tomato and pepper sector and 100 tonnes for the strawberry fruit sector were not recommended. He explained that despite new information being provided after the thirty-fourth meeting of the Open-ended Working Group the submission did not provide suitable specific data that supported the ineffectiveness of alternatives registered and available in Argentina. The need for methyl bromide was therefore not supported in accordance with decision IX/6. That was particularly important as the nominated sectors had effective alternatives in many other countries and no other party had submitted critical-use nominations for those sectors.

20. One nomination from China for 90 tonnes for open field ginger production was recommended in full, but a nomination of 30 tonnes for protected ginger was recommended for 24 tonnes. The Committee considered the methyl bromide dosage rate used for outdoor ginger in China, 40 g/m2, which was considered suitable for the control of the target pathogens and weeds. The Committee also considered that China faced unique pathogens and weeds compared to sectors in non-Article 5 parties (e.g., Japan) that had phased out methyl bromide.

21. Two nominations received from Mexico for 70 tonnes for the raspberry nursery sector and 70 tonnes for the strawberry nursery sector were recommended at reduced amounts of 43.539 tonnes and 41.418 tonnes, respectively. After the thirty-fourth meeting of the Open-ended Working Group, the party had provided additional information showing promising results with key alternatives, but no request for reassessment had been made and the party accepted the interim recommendations.

III. Technology and Economic Assessment Panel presentation on alternatives to ozone-depleting substances

22. Mr Paul Ashford, co-chair of the decision XXV/5 task force, introduced the presentation on the final report, noting that it was an update of the interim report presented at the thirty-fourth meeting of the Open-ended Working Group. Although the presentation covered the entire report, it would focus on the changes and updates made between the thirty-fourth meeting of the Open-ended Working Group and the current meeting, partly as a result of informal discussions that had taken place with parties at the thirty-fourth meeting of the Open-ended Working Group.

23. The main changes identified by Mr. Ashford were the revision of the business as usual (BAU) scenarios to exclude the impact of any regulatory action taken after 2010, changes in data presentation to allow for easier comparisons between sector impacts and the easier identification of sectors of particular importance for potential mitigation strategies. Additionally, he mentioned that it had been decided by the task force to gather all of the information relating to alternatives capable of operation in high ambient temperature conditions into a single annex for ease of reference. It was stressed, however, that no new information had become available during the intervening period.

24. Information on the consumption of HCFCs and HFCs for both refrigeration and air-conditioning (RAC) and insulating foams under the BAU scenario was presented. Mr Roberto Peixoto, co-chair of the task force, explained the refrigerant use patterns, placing particular emphasis on the challenges created by high ambient temperature conditions in certain regions. Mr Lambert Kuijpers, co-chair of the task force, then described the comparative consumption curves for RAC and foam applications, which served to indicate the importance of the RAC sector in the projected growth of total HFC consumption under the BAU scenario. RAC consumption was expected to be 1,650 metric tonnes CO2-equivalent in 2020 globally, for both the BAU and the mitigation scenarios. Under BAU consumption was expected to double by 2030, mainly due to growth in Article 5 parties. The numbers could be compared to foam blowing agent consumption by 2020, which was expected to be about 180 metric tonnes CO2-equivalent globally under the BAU scenario.

25. Mr. Kuijpers then described the potential for avoiding consumption in the RAC sector by way of two mitigation scenarios – one of which was more progressive than the other. In RAC, only a very strict MIT-2 scenario would lead to a decrease in RAC consumption in Article 5 parties after an expected peak in around 2025 of about 1,100 metric tonnes CO2-equivalent. Indicative costs for avoidance in both cases were provided for both non-Article 5 and Article 5 parties, and for both types of countries a range of $1.1–$3.3 billion was given. Mr Ashford presented similar information on mitigation scenarios for the foam sector before summarizing the potential cumulative savings from each of the mitigation scenarios (MIT-1 and MIT-2) as 3,800 metric tonnes CO2-equivalent and 12,000 metric tonnes CO2-equivalent, respectively, by 2030.

26. Mr Dan Verdonik reviewed other uses of HFCs, with a particular focus on some of the challenges faced with halon replacement in the aviation sector. Relevant quantitative information was also provided for the metered-dose inhaler (MDI) sector. The MDI sector used HFC-134a and HFC‑227ea with cumulative emissions of 173 metric tonnes CO2-equivalent globally between 2014 and 2025 under a BAU scenario. It was noted that complete avoidance of HFC-based MDIs was not yet possible. By contrast, reliance on HFCs in the sterilants sector was almost non-existent.

27. In summarizing the findings of the report Mr Verdonik said that BAU scenarios had been defined for RAC and for foam blowing agent consumption in which RAC was the dominant sector in terms of BAU consumption. Mitigation scenarios had also been identified that could save 3,800 metric tonnes CO2-equivalent and 12,000 metric tonnes CO2-equivalent, respectively, by 2030. He also noted that, while the assessment had been refined between meetings, the technologies in question continued to mature, with cost data still emerging in many cases.

IV. Presentations by the assessment panels on the 2014 quadrennial assessments

A. Environmental Effects Assessment Panel

28. Measured changes in UV-B radiation since the 1990s have mostly been small, and due less to the effects of ozone depletion than to factors such as cloud, and snow and ice cover. Large short-term increases in UV-B have been measured at some high latitude locations in response to episodic decreases of ozone, including the Arctic ozone depletion in spring 2011. Without the Montreal Protocol, it has been modelled that, by the end of the twenty-first century, UV levels around the globe would have exceeded, often substantially, levels previously experienced even in the most extreme environments. It has been estimated that the increase in UV-B would have led to an increase of up to two million cases of skin cancer a year by 2030 compared with those occurring with the effective implementation of the Montreal Protocol. With the Protocol, changing behaviour with regard to sun exposure by many fair-skinned populations has probably had a more significant effect on human health than any increase in UV-B owing to ozone depletion. As the ozone layer recovers, strategies to avoid overexposure to solar UV radiation remain important for public health, but should aim to balance the harmful and beneficial effects of sun exposure. Based on current understanding, substitutes for the ozone-depleting substances or their breakdown-products do not pose a significant threat to the environment. New understanding highlights the vulnerability of organisms and environmental processes (including food production) to very large increases in UV caused by uncontrolled stratospheric ozone depletion, but the magnitude of such damage has not been quantified. In most parts of the world, changes in UV-B due to factors such as cloud, snow and ice cover, and UV-B penetration into water bodies, have had a more significant effect on ecosystems than UV-B changes due to ozone depletion over the last three decades. Southern hemisphere ecosystems have responded to severe ozone depletion there, partly owing to increased UV-B radiation, partly as a result of climate-mediated effects.

B. Scientific Assessment Panel

29. The Scientific Assessment Panel co-chairs gave a presentation on the 2014 assessment report of the Scientific Assessment Panel. The assessment represented the combined efforts of 282 scientists from 36 countries with the help of numerous individuals and organizations. The assessment comprised a three-page executive summary and an assessment for decision makers, together with the full five chapters of the scientific assessment of ozone depletion, 2014. The executive summary and the assessment for decision makers had been released on 10 September 2014, while the five-chapter assessment was to be released in early January 2015. They described the approach adopted in the development of the assessment for decision makers and the executive summary. It was noted that the five science chapters, currently available only from the web, had been used to develop the assessment for decision makers, synthesizing the findings of the scientific chapters to produce a policy-relevant document for use by the parties to the Montreal Protocol.

30. The executive summary summarized the key findings of the assessment, and the assessment for decision makers discussed the findings in more detail. The assessment for decision makers and its executive summary were based on the five science chapters of the 2014 assessment. Three key issues were highlighted in the presentation: changes in ozone-depleting substances and the ozone layer; the emerging issue of HFCs and their connection to climate change; and a number of options for the parties to consider.

31. On the first issue, it was noted that upper stratospheric ozone had been increasing over the 2000–2013 period. Furthermore, models were able to reproduce both the 1997 depletion due to ozone‑depleting substances and the 2000–2013 increase. Models revealed that the 2000–2013 upper stratospheric ozone increase was due both to a decrease in ozone-depleting substances and an increase in greenhouse gases. In addition, it was noted that global total ozone-depleting substances amounts were decreasing. Global total column ozone was no longer declining, and there were hints that it might be increasing, but that increase was not yet statistically certain. Models were able to simulate the total ozone decline during the 1960–1996 period, and those same models projected a recovery to 1980 levels in the 2025–2040 period. The future model projections showed differing amounts of ozone changes for different greenhouse gas scenarios. Hence, ozone layer recovery was influenced by climate change.

32. On the second issue, it was noted the ozone-depleting substances were also greenhouse gases and that their abatement helped climate change. It was also noted that HFCs had been used as substitutes for CFCs and HCFCs in many applications, that HFCs did not destroy the ozone layer, and that HFCs were increasing very rapidly in the atmosphere. The contributions of HFCs to climate change were noted to be very small (<1 per cent) currently. It was also pointed out that the projections of HFC usage would lead to a very significant climate forcing contribution in the coming decades, perhaps reaching as much as 0.4 watts per square metre by 2050. The role of HFO-1234yf as a replacement for HFC-134a was noted. The possible production of trifluoroacetic acid (TFA) from the degradation of HFO-1234yf was noted to be small in the coming decade but its role beyond that period required reevaluation in the future.

33. On the third issue, it was noted that the options available to advance the return of the ozone layer to 1980 levels were not as extensive as in the past, i.e., the Montreal Protocol had done a great deal and the remaining options were limited. Those options showed that the cumulative effects of the elimination of emissions from all banks and production would advance the return to 1980 ozone levels by 11 years.

C. Technology and Economic Assessment Panel: report on the 2014 assessment

34. Ms. Bella Maranion, Co-Chair of the Technology and Economic Assessment Panel, reported on progress and presented an overview of the Panel’s 2014 assessment report, noting that the report would be based on the 2014 assessment reports of the six technical options committees. She acknowledged the significant efforts of the committee co-chairs and members of the Panel in overseeing the process over the year and confirmed that the Panel, in its report for the following year, would provide additional information on past and projected efforts aimed at achieving geographic and gender balance among the members of the panel and its technical options committees. She also acknowledged the efforts and participation of over 120 experts from over 40 countries in the development of the reports. The 2014 Technical Options Committee assessment reports and the Panel’s 2014 assessment report would be delivered to the parties in early 2015. The Panel co-chairs would then work with the co-chairs of the other assessment panels to produce a synthesis report. Since the Panel and committee reports would not be completed until early 2015, she explained that at the current time she could only present an overview of some of the topics that would be discussed in each technical options committee’s assessment report.

35. She then continued to report on the following topics for the six committees. The report of the Chemicals Technical Options Committee would consider continuing use of ozone-depleting substances as process agents, emissions from feedstock uses and updates on solvent use. The report of the Flexible and Rigid Foams Technical Options Committee would review progress and remaining challenges with the transition, provide a quantitative update on global consumption of foam blowing agents, consider the status of low global-warming-potential alternatives and update bank estimates and management strategies. The Halons Technical Options Committee report would have a particular focus on the civil aviation sector. That sector was the least prepared to deal with diminishing global halon supplies, and it was very likely that a request for an essential use exemption would come from the sector in the future. The Medical Technical Options Committee report would note the near‑complete phase-out of CFCs in metered-dose inhalers and assess alternatives to CFC-based metered-dose inhalers, including HFCs, as well as the status of alternatives to HCFCs for sterilization. The Methyl Bromide Technical Options Committee report would note the significant decline in non‑quarantine and pre-shipment consumption, the remaining challenges in finding alternatives for nursery plant materials and dry cure pork, and the fact that continuing quarantine and pre-shipment uses were offsetting the benefits of the phase-out of controlled methyl bromide uses. The Refrigeration, Air Conditioning and Heat Pumps Technical Options Committee report would consider the status of the transition and alternatives in the various refrigeration and air‑conditioning applications. She concluded by again thanking the many experts that had participated in the process and indicating that the Technology and Economic Assessment Panel looked forward to presenting the completed reports to the parties the following year.