Amendments to the Ozone-depleting Substances and Halocarbon Alternatives Regulations on HCFC.

The Ozone Depleting Substances and Halocarbon Alternatives Regulation was recently published in the  Canada Gazette Part II August 25, 2020 on the amendments to the regulations on hydrofluorocarbons (HCFCs).

The amendments to the Ozone-depleting Substances and Halocarbon Alternatives Regulations is to amend the consumption baseline value that is used to determine the HFC quantities that can enter Canada under the HFC phase-down process, which started on January 1, 2019, to reflect corrected consumption data reported by companies importing HFCs in bulk. Amending this baseline is expected to reduce Canadian GHG emissions, in order to help limit increases in global average temperatures. It ensures Canada continues to meet its international obligations under the Kigali Amendment to the Montreal Protocol.

The Amendments also aim to ensure the adequate supply of HCFC-123 for use as a fire-extinguishing agent in situations where an alternative may not be available for certain critical aircraft rescue and firefighting applications. In light of the 2018 adjustment to the Montreal Protocol that allows for the consumption of HCFCs for specific applications within the existing phase-out framework, the Amendments will allow the consumption of HCFC-123 to service fire-extinguishing equipment until December 31, 2029. Currently, the Regulations do not allow the consumption of HCFC-123 for this purpose beyond December 31, 2019.

Regulatory coverage

Several industry groups that use HFCs will either be directly or indirectly affected by the Amendments; others are not expected to be affected in a material way.

Importers of bulk HFCs: Importers will be required to comply with the Amendments by reducing the quantity of imported HFCs in CO2e. It is expected that the import of specific alternative substances will be driven by demand from manufacturers and end users, and any costs due to higher substance prices will be passed on to these groups.

Manufacturers of products containing HFCs: Manufacturers will not be directly affected by the Amendments, but will need to manufacture products with HFC alternatives in some cases, due to the

reduced availability of high-GWP HFCs.

Companies servicing equipment with HFC alternatives: These will not be directly regulated but will likely need to obtain alternative substances. In cases where equipment requires regular maintenance, it is expected that any incremental maintenance costs due to higher alternative substance prices will be passed on to end users.

Regulatory compliance

As bulk importers comply with the amended phase-down schedule in the Amendments, the annual supply of high-GWP HFCs for domestic consumption will be reduced. In response to this reduced supply, manufacturers of products containing HFCs are expected to respond by switching to alternatives with lower GWPs. For the purposes of modelling, the phase-down was assumed to affect all subsectors proportionately. In reality, it is likely that some subsectors will have more challenges than others in transitioning to low-GWP alternatives; therefore, the reductions will not be equally distributed.

GHG emission reduction benefits

The Amendments will decrease bulk imports of HFCs, reducing the supply of HFCs and restricting their use by product manufacturers. As the manufacturing of products containing HFCs shifts to HFC alternatives with lower GWP, a reduction in GHG emissions (in CO2 equivalent) from HFCs will be expected.

The amending Regulations now in place can be found published here. Fact sheets and general information on Phase-out of HCFC and HCFC as fire-extinguishing agent is also published on the Government of Canada webpage here.

CBSA D-memorandum D19-7-2 provides guidelines concerning importation and exportation of ozone-depleting substances and HFCs.  

For more information or you have any questions contact:
Chemical Production Division
Department of the Environment
351 Saint-Joseph Boulevard, 19th Floor
Gatineau, Quebec
K1A 0H3

Regulatory Analysis and Valuation Division
Department of the Environment
200 Sacré-Cœur Boulevard
Gatineau, Quebec
K1A 0H3