ACHRNEWS

June 2, 2010: Refrigerant Management Canada Increases Levy on HCFCs

June 2, 2010

MISSISSAUGA, Ontario - Refrigerant Management Canada (RMC) announced an increase to the environmental levy on HCFCs effective June 2010. The levy rate increased from $1.50 to $2.50 per kilogram on HCFCs or HCFC blends sold in Canada. According to RMC, this adjustment is in response to the 30 percent reduction in allowable HCFC import volumes that went into effect on Jan. 1, 2010, and is necessary for the sustainability of the RMC program. The 30 percent reduction in import volumes translates into a 30 percent reduction in RMC revenue.

RMC is an industry-led extended producer responsibility (ERP) program in Canada committed to ensuring that refrigerants are disposed of in an environmentally responsible manner. The program is funded by a voluntary environmental levy remitted by the industry on sales of new and reclaimed HCFCs and HCFC blends. No government funding is provided for the program. The levy has been maintained at $1.50 per kilogram since Jan. 1, 2006. However, RMC said the 30 percent volume reduction of HCFCs will not allow the program to remain financially viable without an increase in the levy.

In 2007, after seven years of operation, RMC had collected and destroyed over one million kilograms of surplus ozone depleting refrigerants. In 2010, it will reach two million kilograms collected and destroyed. This next benchmark in refrigerant destroyed by the program will have been accomplished in under three years and RMC said it calls attention to the significant volume increases the program is handling as revenues decline.

Canada’s federal and provincial regulations require that the refrigeration and air conditioning industry recover and dispose of all surplus refrigerants that are sold in the Canadian marketplace. Without the RMC program, the significant costs associated with the obligations under these regulations would be born individually by each member company that provides refrigeration and air conditioning products and services.

RMC said it recognizes that this levy increase on HCFCs is a short-term measure as the volumes of available HCFCs significantly decline over the next 10 years. In addition to this levy increase, RMC is pursuing two other revenue streams to fund the program into the future. These streams include actively pursuing the carbon credit market to leverage the environmental benefits of the refrigerant destroyed into funding for the program and working with Environment Canada on a proposed federal stewardship regulation for all halocarbons that will effectively provide the opportunity to extend the levy to HFCs.

For more information, visit www.refrigerantmanagement.ca.

Publication date: 05/31/2010