With the filing of the Ozone-depleting Substances and Halocarbon Alternatives Amendment Regulations (SOR/2017-216) under the Canadian Environmental Protection Act, 1999, Canada has become one of the first countries in the world to ratify the Kigali Amendment to the Montreal Protocol on Substances that Deplete the Ozone Layer.
The Kigali Amendment was agreed to on October 15, 2016. In it, the parties to the Montreal Protocol agreed to a phase-down of hydrofluorocarbons (HFCs), powerful greenhouse gases that have been used as substitutes for banned ozone-depleting substances.
The amendments, which take effect for the most part on April 16, 2018, will phase-down the consumption of bulk HFCs and introduce product-specific controls. The effect will be to reduce Canada’s consumption of HFCs to 85% below baseline projections by 2036.
The phase-down of consumption of bulk HFCs will be achieved through the distribution of consumption allowances based on each importer’s share of Canada’s total HFC consumption in 2014 and 2015. These allowances will be reduced annually, though the proportion held by each importer will remain constant. Allowance-holders will also have a limited right to transfer allowances with each other.
Product-specific controls will apply to the refrigeration and air conditioning, foam, mobile air-conditioning, and aerosols sectors. Limits and prohibition dates will be applied to different product types within each sector.
According to the government’s cost-benefit analysis, the HFC phase-down is expected to result in cumulative greenhouse gas emission reductions of about 168 Mt of CO2 equivalent. The government values these emission reductions at about $6.2 billion. There will be compliance costs incurred by industry of about $2.2 billion, in addition to related cost savings of almost $48 million. The net benefits of the phase-down are estimated to be about $4 billion.