Fluorinated gases including hydrofluorocarbons (HFCS)

Basic information

1

Outline of the system

Companies must have a prior valid registration in the F-Gas Portal and HFC Licensing System (the registry) to import and export fluorinated gases (f-gases) into and from the European Union above the quantities set out under Article 19 of the F-gas Regulation. A valid registration equals to a licence to import and export these gases, as required under the Montreal Protocol. In addition, for import of bulk hydrofluorocarbons (HFCs) it is a requirement that the quantity of HFCs placed on the market are covered by quota on an annual basis.

Furthermore, importers placing on the market (e.g. import released for free circulation) refrigeration, air conditioning and heat pump equipment charged with HFCs must also be registered and the quantities of HFCs must be accounted for within the quota system at the time of import. This must be documented and a declaration of conformity must be drawn up in this respect.

Also, the placing on the market of certain products and equipment containing f-gases with a certain global warming potential are prohibited and the placing on the market of non-refillable containers of fluorinated gases for certain uses is forbidden. Equipment, products and containers with fluorinated gases must be labelled appropriately.

The replies below focus on the procedures in place for import of bulk HFCs and HFCs imported refrigeration, air conditioning and heat pump equipment pre-charged with HFCs.

2

Product coverage

HFCs are together with perfluorocarbons (PFCs) and sulphur hexafluoride (SF6) a fluorinated greenhouse gas (F-gas). F-gases are powerful greenhouse gases, with a global warming effect up to 23,000 times greater than carbon dioxide (CO2). HFC is the most relevant F-gases from a climate perspective. Reducing emissions from fluorinated greenhouse gases is a part of EU's effort to implement the Paris Agreement under the United Nations Framework Convention on Climate Change.

Articles 17 and 19 of the F-gas Regulation together with Commission Implementing Regulation (EU) No 1191/2014 establish an obligation for actors in the HFCs market to register in the F-gas Portal – an electronic registry for quotas for placing HFCs on the market and for reporting. Only companies with a prior valid registration can import and export HFCs into and from the European Union.

HFC's are listed in Annex I, Secion 1, of the F-gas Regulation.

Please see Products - Fluorinated gases including hydrofluorocarbons (HFCS)

Nature of licensing

Automatic

3

If Automatic, administrative purpose

Non-Automatic

4

If Non-Automatic, description of the notified Non-Automatic Licensing regime

5

Products under restriction as to the quantity or value of imports

Article 15 of the F-gas Regulation establishes the quota requirements regarding bulk HFCs, applicable since 1 January 2015.

The quota requirement do not apply to the placing on the market of quantities of less than 100 tonnes of CO2 equivalent of HFC by a producer or an importer per year. They also do not to the following categories of HFCs:

a) imported into the Union for destruction; b) used by a producer as feedstock; c) supplied directly by a producer or an importer to undertakings, for export out of the Union, where those HFCs are not subsequently made available to any other party within the Union, prior to export; d) supplied directly by a producer or an importer for use in military equipment; e) supplied directly by a producer or an importer to an undertaking using it for the etching of semiconductor material or the cleaning of chemicals vapour deposition chambers within the semiconductor manufacturing sector; f) supplied directly by a producer or an importer to an undertaking producing metered dose inhalers for the delivery of pharmaceutical ingredients (only as from 1 January 2018).

However, registration requirements remain for companies importing for the exempted uses listed above (except for the amounts

The licence registration and the quota system implements the requirements related to HFCs under the Montreal Protocol on the substances that deplete the ozone layer, and in particular its so-called Kigali Amendment that added HFCs to the list of controlled substances and agreed to a global phase down of production and consumption of HFCs and required the implementation of a licensing system for import and export of HFCs.

Pursuant to Article 16 of the F-gas Regulation, the quotas of HFCs are allocated to the undertakings annually by the European Commission based on a system that takes into account amounts historically placed on the market by certain companies and declarations made by any undertaking intending to place HFCs on the market. The phase-down steps are defined in accordance with Annex V of the F-gas Regulation and the mechanism to calculate the size of the quotas is laid down in Annex VI.

Article 14 of the F-gas Regulation establishes the requirements related to the placing on the market of refrigeration, air conditioning and heat pump equipment charged with HFCs, inter alia the link to the quota system and the declaration of conformity to this end. These conditions apply to all placing on the market, including for imported equipment released for free circulation. The purpose of this provision is to safeguard the environmental integrity of the phase-down of bulk HFCs.

6

Questions for products under restriction as to the quantity or value of imports

Guidance on procedures for quota allocation and licences can be found on the European Commission web page: https://ec.europa.eu/clima/policies/f-gas/reporting_en.

Companies intending to import in bulk or import refrigeration, air conditioning and heat pump equipment charged with HFCs can request registration (licence) in the registry. The detailed requirements for registrations are laid down in Commission Implementing Regulation (EU) No. 2019/661 of 25 April 2019 ensuring the smooth functioning of the electronic registry for quotas for placing hydrofluorocarbons on the market (OJ L 112, 26.4.2019, p. 11).

At the beginning of each year the European Commission publishes a notice in the Official Journal of the European Union about the annual quota procedure for the following year. The notice is also posted on the HFC Registry information-board and on the European Commission’s website. The notice informs about the relevant details of the quota application process including the deadlines.

Companies report on quantities imported and exported by 31 March in the year following the activity. The reporting is done directly in a reporting tool. The reporting format is based on Commission Implementing Regulation (EU) No 1191/2014.

Please see Answers 6.1-6.11.

7

The system applies to products originating from which country?

Undertakings can be EU and non-EU companies. Non-EU companies must nominate an only representative established in the EU for the purpose of compliance with the requirements of the F gas Regulation.

Country restrictions: None.

8

Expected duration of licensing procedure

Eligibility of applicants

12

Is there a system of registration of persons or firms permitted to engage in importation?

Registration is compulsory for the following:

(a) producers and importers to which a quota for the placing on the market of hydrofluorocarbons has been allocated in accordance with Article 16(5);

(b) undertakings to which a quota is transferred in accordance with Article 18;

(c) producers and importers declaring their intention to submit a declaration pursuant to Article 16(2);

(d) producers and importers supplying, or undertakings in receipt of hydrofluorocarbons for the purposes listed in points (a) to (f) of the second subparagraph of Article 15(2);

(e) importers of equipment placing pre-charged equipment on the market where the hydrofluorocarbons contained in the equipment have not been placed on the market prior to the charging of that equipment in accordance with Article 14;

(f) any undertaking importing fluorinated gases needs to be registered before undertaking such activities in accordance with Article 19 and Commission Implementing Regulation (EU) No. 2014/1191.

13

What persons or firms are eligible to apply for a licence?

An undertaking that constitutes a natural or legal person can request registration in the registry and may after validation apply for HFC quota pursuant to Article 16(2) or 16(4) of Regulation (EU) No.517/2014 for a given year. In order to be eligible for applying for quota, the deadlines for submitting and for completing an application to register in the registry are specified by the Commission in a notice published in the Official Journal.

14

Is there a registration fee?

This service is free of charge.

15

Is there a published list of authorized importers?

The list of companies having quota reference values is being published in tri-annual Commission Decisions.

Contact point for information on eligibility

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Ministry/Authority

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Address

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Telephone

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Fax

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E-mail address

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Website

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Contact officer

Submission of an application

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Administrative body(ies) for submission of an application

Documentation requirements

24

What information is required in applications?

The general information requirements for a registration licence is laid down in Article 3 of Commission Implementing Regulation (EU) No. 2019/661.

For undertakings established in the Union:

a) name and legal form of the undertaking; b) full address; c) telephone number; d) VAT number; e) Economic Operators Registration and Identification (EORI) number; f) the name and e-mail address of the contact person who is either a beneficial owner or an employee of the company, authorized to perform legally binding activities on behalf of the company; g) a description of the undertaking's business activities; h) written confirmation of the undertaking's intention to register in the registry signed by a beneficial owner or employee of the undertaking; i) bank account details – and validated.

For undertakings established outside the Union (and that have mandated an only representative as referred to in Article 16(5) of the F-gas Regulation):

(a)the information listed in points (a), (b) and (c) above, but with respect to both the undertaking and the only representative, and accompanied, in the case of the information listed in point (a), a relevant official document on which the name and legal form appears in each case, together with a certified translation of that document in English; (b) the information listed in points (d), (e) and (i) above, but with respect to the only representative rather than the undertaking; (c) the full name of one contact person who is either a beneficial owner or an employee of the only representative of the compan authorized to perform legally binding activities on behalf of the only representative and the company; (d) an electronic address for the only representative; (e) a description of the undertaking's business activities; (f) the written confirmation listed in point (h) above but signed additionally by a beneficial owner or employee of the only representative.

25

What documents is the importer required to supply with the application?

Window of submission of an application

26

How far in advance of importation must application for a licence be made?

27

Are there any limitations as to the period of the year during which application for licence can be made? If so, explain

Registration in the F-gas Registry can happen all year long. Applications for quota can only be made during a declaration period to be determined annually by the Commission through a notice published in the Official Journal of the Commission.

Issuing the license

28

Can a licence be granted immediately on request?

29

Can licences be obtained within a shorter time-limit or for goods arriving at the port without a licence

30

Which administrative body is responsible for approving application of licences?

31

Must the applications be passed on to other organs for visa, note or approval?

32

Are there any other conditions attached to the issue of a licence?

Not applicable.

Fees and other administrative charges

33

Is there any licensing fee or administrative charge?

There is no fee.

34

What is the amount of the fee or charge?

35

Is there any deposit or advance payment required associated with the issue of licences?

There is no fee.

36

Amount or rate?

37

Is it refundable?

38

What is the period of retention?

39

What is the purpose of this requirement?

Refusal of an application

40

Under what circumstances may an application for a licence be refused other than failure to meet the ordinary criteria?

Companies that meet the conditions set out in Commission Implementing Regulation (EU) 2019/661 ensuring the smooth functioning of the electronic registry for quotas for placing hydrofluorocarbons on the market are being registered (licenced). The Commission may refuse, suspend or cancel a registration if the conditions are not fulfilled.

41

Are the reasons for any refusal given to applicants?

42

Have applicants a right of appeal in the event of refusal to issue a licence?

43

If so, to what bodies and under what procedures?

Importation

44

Are there any limitations as to the period of year during which importation may be made?

45

What documents are required upon actual importation?

Upon importation of bulk HFCs no additional documents are required under the F-Gas Regulation. Upon importation of refrigeration, air conditioning and heat pump equipment charged with HFCs a declaration of conformity must be available.

46

Are there any other administrative procedures, apart from import licensing and similar administrative procedures, required prior to importation?

Not applicable.

Conditions of licensing

47

What is the period of validity of a licence? Can the validity be extended? How?

Registration licence is valid until cancelled or suspended by the Commission in line with Article 6 of Commission Implementing Regulation N0. 2019/661, or until cancelled upon a request submitted by the company. Bulk quotas are valid only for the year for which they are allocated.

48

Is there any penalty for the non-utilization of a licence or a portion of a licence?

There is no penalty for unused licences or quota. Undertakings that have exceeded their quota are allocated a reduced quota allocation for the allocation period after the excess has been detected. The amount of reduction is calculated as 200 % of the amount by which the quota was exceeded.

49

Are licences transferable between importers? If so, are any limitations or conditions attached to such transfer?

According to Article 18 of the F-gas Regulation bulk quota allocated can be transferred to other bulk importers or producers. Only importers and producers that have received a reference value can be transferred their quota. This is to prevent declarations for quota with the sole purpose of selling the quota. In addition, penalties for exceeding the quota are laid down in the legislation of the EU Member States in accordance with Article 25.

Foreign Exchange

50

Is foreign exchange automatically provided by the banking authorities for goods to be imported?

Not applicable.

51

Is a licence required as a condition to obtaining foreign exchange?

Not applicable.

52

Is foreign exchange always available to cover licences issued?

Not applicable.

53

What formalities must be fulfilled for obtaining the foreign exchange?

Not applicable.

The following questions are only for products under restriction as to the quantity or value of imports (whether applicable globally or to a limited number of countries or whether established bilaterally or unilaterally)

6.1

Where is information on allocation and formalities for licences published? Is the overall amount published? The amount allocated to goods from each country? The maximum amount allocated to each importer? How to request any exceptions or derogations from the licensing requirement?

Reference values for the quota allocation are published in a Commission Decision every three years and the quota is updated annually. The names of the undertakings having a reference value are publicly available, whereas the values are commercially confidential.

6.2

Is the size of the quota determined: on yearly, six-monthly or quarterly basis? Are there cases where the size of quota is determined on a yearly basis but licences are issued for imports on a six-monthly or quarterly basis? In the latter case, is it necessary for importers to apply for a fresh licence on a six-monthly or quarterly basis?

Quota is determined on a yearly basis. It is based on the account amounts historically placed on the market (tri-annual reference values) since 2015 and annual declarations made regarding the intention to place additional HFCs on the market. The quotas are calculated in accordance with the phase-down schedule in Annex V of the F-gas Regulation and by applying an allocation mechanism laid down in Annex VI to the F-gas Regulation.

6.3

Are licences allocated for certain goods partly or only to domestic producers of like goods? What steps are taken to ensure that licences allocated are actually used for imports? Are unused allocations added to quotas for a succeeding period? Are names of importers to whom licences have been allocated made known to governments and export promotion bodies of exporting countries upon request? If not, for what reason? (Indicate products to which replies relate)

Unused quota is valid only for the year it is allocated and can only be used for either import or production.

6.4

From the time of announcing the opening of quotas, as indicated in I above, what is the period of time allowed for the submission of applications for licences?

The validity of the licence is in principle time unlimited. The timeframe for the licence registry can vary depending on information provided by the company, but is usually completed within a few working days if the provided information is accurate and complete. Companies must be registered (have a licence) before they can get a quota.

6.5

What are the minimum and maximum lengths of time for processing applications?

Min and max length of licence registry requests – one day to a few months – depending on completeness and accurateness of information provided.

6.6

How much time remains, at a minimum, between the granting of licences and the date of opening of the period of importation?

Import may only occur when a company is having sufficient quota after having been licenced to import. Hence, it the annual quota allocation cycle that is decisive. Usually the declaration deadline is in June/July in the year preceding the year where the quota is becoming valid.

6.7

Is consideration of licence applications effected by a single administrative organ? Or must the application be passed on to other organs for visa, note or approval? If so, which? Does the importer have to approach more than one administrative organ?

Only the European Commission is involved in the processes. Member States are involved via an implementing Committee as regards the determination of the tri-annual reference values.

6.8

If the demand for licences cannot be fully satisfied, on what basis is the allocation to applicants made? First come, first served? Past performance? Is there a maximum amount to be allocated per applicant and if so, on what basis is it determined? What provision is made for new importers? Are applications examined simultaneously or on receipt?

Quota is allocated based on historic amounts placed on the market (tri-annual reference value) since 2015 and annual declarations on the intention to place on the market. The latter quotas are allocated on a pro rata basis. See Article 16 and Annex VI of the F-gas Regulation.

6.9

In the case of bilateral quotas or export restraint arrangements where export permits are issued by exporting countries, are import licences also required? If so, are licences issued automatically?

Not applicable.

6.10

In cases where imports are allocated on the basis of export permits only, how is the importing country informed of the effect given by the exporting countries to the understanding between the two countries?

Not applicable.

6.11

Are there products for which licences are issued on condition that goods should be exported and not sold in the domestic market?

Not applicable.