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Department of the Environment and Heritage annual report 2004-05

Volume two
Department of the Environment and Heritage, 2005
ISSN 1441 9335

Legislation annual reports 2004-05 (continued)

Operation of the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989

This annual report is prepared in accordance with section 68 of the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 and covers the operation of the Act from 1 July 2004 until 30 June 2005.

Ozone depletion is a major global environmental problem. Left unchecked, deterioration of the ozone layer will allow higher doses of ultra violet band B (UVB) radiation to penetrate the earth’s atmosphere and will greatly increase the incidence of skin cancer and eye cataracts, as well as affecting plant and aquatic life.

The international community’s response to ozone depletion has been cohesive and effective. National Aeronautics and Space Administration (NASA) data indicate that the rate of ozone depletion has slowed and scientists predict a full recovery of the ozone layer by 2050. This predicted recovery is dependent on full compliance with internationally agreed phase-out targets for the use of ozone depleting substances and substituting less harmful alternatives.

Australia meets its international obligations to phase out the use of ozone depleting substances and to control the use of synthetic greenhouse gas replacements through the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989.

Objectives of the Act

The objectives of the Act are to:

Operational aspects of the Act

Key operational aspects of the Act are:

Key operational achievements under the Act in 2004 - 05

Licensing

Background

The Act controls the manufacture, import and export of ozone depleting substances and synthetic greenhouse gases used to replace ozone depleting substances in Australia, specifically CFCs; halon 1211, 1301 and 2402; carbon tetrachloride and methyl chloroform; HBFCs; bromochloromethane, HCFCs; methyl bromide; HFCs; and PFCs.

The import, export and manufacture of these substances, the import and manufacture of certain products containing or designed to contain some of these substances, and the import and manufacture of air conditioning and refrigeration equipment charged with an HCFC or HFC refrigerant, are prohibited in Australia unless the correct licence or exemption is held. There are four types of licence: controlled substance; essential use; used substance; and pre-charged equipment. There is one type of exemption: section 40.

Controlled substance, used substance and pre-charged equipment licences are granted for a two-year period and stay in force until the end of the licensing period in which they are granted. The current licensing period ends on 31 December 2005.

Essential use licences and exemptions are granted for a one-year period and stay in force until the end of the year in which they are granted. Essential use exemptions are granted for a two-year period and remain in force until the end of the period in which they were granted, which for the purpose of this report is 31 December 2005.

On 1 April 2004 the Australian Government extended the import, export and manufacturing licensing system to HFC, PFC and pre-charged equipment. The current licensing period ends on 31 December 2005.

Outcomes

In total, 516 licences and exemptions had been issued by the end of 2003 - 04. A further 138 were issued during 2004 - 05. During the year, 16 of these licences have been either surrendered by the licensee or cancelled. There are currently 638 active licences:

Table 1: Active licences as at 30 June 2005
Type of licence Number
Import and export of HCFC 8
Import and export of methyl bromide 6
Import and export of HFC and PFC 16
Import of refrigeration and air conditioning equipment containing an HCFC or HFC refrigeration charge 592
Export of CFC—essential use licence to facilitate the re-export of bulk CFC no longer required in Australia 2
Import and export of used or recycled CFC, halon, carbon tetrachloride and methyl chloroform—used substance licence 1
Section 40 exemptions 1 13
1  S40 exemptions are issued only to enable the import of certain products and equipment containing or designed to contain certain ozone depleting substances that are essential for medical or other purposes and for which practical alternatives are not available in Australia.

On 3 May 2005 the Ozone Protection and Synthetic Greenhouse Gas Regulations 1995 were amended to permit the use of methyl bromide as a feedstock (a feedstock is an intermediate substance which is used to manufacture other chemicals). Two permits for this have been issued. These permits are issued on a calendar year basis.

Australia’s imports of ozone depleting substances remain below the limits set through the Montreal Protocol. Bulk imports of ozone depleting gases into Australia during 2004 - 05 amounted to an equivalent of 547.85 ozone depleting potential (ODP) tonnes, an increase of 43.45 ODP tonnes over the previous year. This is due to an increase in methyl bromide imports for use in quarantine and pre-shipment fumigations, reflecting new international quarantine requirements and an easing of the drought conditions. The import of ozone depleting refrigerants, solvents and fire extinguishing agents remained in line with the structured quota reduction system. In addition, an estimated 50.1 ODP tonnes of ozone depleting refrigerants was incorporated in pre-charged equipment imported during the year.

Imports of bulk synthetic greenhouse gases into Australia during 2004 - 05 were in the order of seven million tonnes of carbon dioxide equivalent, while synthetic greenhouse gases incorporated in pre-charged equipment were in the order of 3.9 million tonnes of carbon dioxide equivalent.

Revenue

Background

The Act provides for licence application fees to be levied.

Table 2: Licence and exemption fees
Type of licence/exemption Fee
Controlled substances $15 000 per licence period
Essential uses $3 000 per licence period
Used substances $15 000 per licence period
Pre-charged equipment $3 000 per licence period
Section 40 $3 000 per exemption period

Levies on import and manufacturing activity under a controlled substance licence are payable each quarter under the Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Act 1995 and the Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Act 1995 according to the quantity and ozone depleting potential of HCFCs imported or manufactured; or the quantity of methyl bromide, HFC or PFC imported or manufactured (see Table 3). Australia has not manufactured ozone depleting substances since 1996, and has never manufactured HFCs or PFCs.

Table 3: Activity fees
Licensed activity Fee
HCFCs import $3 000 per ODPa tonne
HFCs and PFCs import $165 per metric tonne
Methyl bromide import $135 per metric tonnea
a. Ozone depleting potential (ODP) is a comparative measure using CFC as a base level of 1. For example one metric tonne of methyl bromide equals 0.6 ODP tonne.

Licence fees and levies are set at the level estimated to be the cost to the Australian Government of administering the legislation and undertaking programmes associated with phase-out and emission minimisation. These fees are held in the Ozone Protection and SGG Account. The purpose of the account is to reimburse the Australian Government for the costs associated with:

Outcomes

Funds received during 2004 - 05 from operation of the National Halon Bank and licence fees and levies were

Table 4: Ozone Protection and SGG Account receipts and expenditure 2004 - 05
Activity Amount received ($)
Controlled substance licence fees:
     Methyl bromide licence fees
     HFCs licence fees

15 000
30 000
Pre-charged equipment licence fees 501 000
Section 40 exemption fees 9 000
Levies
     HCFCs
     Methyl bromide
     HFC
     Pre charged equipment

301 326
72 382
349 400
761 440
National Halon Bank
     Commercial revenue

932 510
Total 2 972 058
Account Expenditure
Grants 15 500
Salary and administration 1 612 635
Total 1 627 135
Projects funded from the Ozone Protection and SGG Account 2004 - 05

One project intended to further the phase-out of ozone depleting substances, and to minimise ozone depleting substance and synthetic greenhouse gas emissions, received funding during 2004 - 05. This was a continuing project to develop an environmental rating scheme for air conditioning and refrigeration systems using life-cycle assessment methodology, to raise awareness in industry and government and confirm comparative operating efficiencies. The total project budget is $165 400 and the project received $15 500 in 2004 - 05.

No new projects were approved for funding under the Ozone Protection and SGG Account in 2004 - 05, as programme priorities will need to be reassessed in light of amendments to the Act in 2003 which expanded the scope of the account to include synthetic greenhouse gases.

Implementation of end use Regulations

National end-use regulations have been implemented for the use of ozone depleting and synthetic greenhouse gases in the refrigeration and air conditioning and fire protection industries, and for control of methyl bromide as a feedstock and its use as a fumigant for approved critical uses and quarantine and pre-shipment uses. Development of end-use strategies for the foam sector continues in close consultation with the affected industries.

These Regulations will ensure Australia meets its phase-out responsibilities under the Montreal Protocol and will lead to reduced emissions of ozone depleting substances and synthetic greenhouse gases through the establishment of national knowledge, skill and working standards for the industry.

Industry boards are being established to assist with the administration of licensing in the refrigeration and air conditioning industry and the fire protection industry.

Montreal Protocol related activities

Background

In March 1985, the Vienna Convention for the Protection of the Ozone Layer was agreed. Following agreement that concrete measures were required to curb the increasing use of ozone depleting substances, the Montreal Protocol on Substances that Deplete the Ozone Layer was finalised in September 1987. The Montreal Protocol aims to promote international cooperation in developing and implementing specific measures to control the consumption and production of ozone depleting substances. The Montreal Protocol was amended in 1990, 1992, 1995, 1997 and 1999.

Australia ratified the Montreal Protocol in May 1989. There are now 190 parties to the Vienna Convention and 189 parties to the Montreal Protocol. The original Montreal Protocol set limits on a number of controlled substances but did not require their total elimination by a specific date. Subsequent reviews of the Montreal Protocol established total phase-out dates for these substances and added to the list of controlled substances. Details of the control measures are available at www.deh.gov.au/atmosphere/ozone/legislation/montp.html.

Outcomes

Australia continues to meet its international obligations under the Montreal Protocol. Australia has met, or is well in advance of, all reduction obligations.

During the year Australia commenced action to ratify the Beijing Amendment to the Montreal Protocol. The Beijing Amendment prohibits trade in HCFCs with parties who have not ratified the agreement, prohibits the import of bromochloromethane and places reporting obligations on the import of methyl bromide for quarantine and pre-shipment purposes. Australia already complies with all requirements of the Beijing Amendment. Australia’s formal acceptance of the Beijing Amendment is expected to be in place by November 2005.

Australia provides technical and financial assistance to other countries in the region to enable those countries to phase out the use of ozone depleting substances. During the year Australia continued to assist India to establish a halon banking facility. The facility will enable India to eliminate imports of new halon. Funding for these projects is provided through Australia’s international aid programme.

Freedom of information

No requests were received under the Freedom of Information Act 1982.

Administrative Appeals Tribunal

No applications under section 66 of the Act, for review of a decision made by the minister, were received by the Administrative Appeals Tribunal.