Fighting Against Black Market HFCs

A panel of policymakers from European Union (EU) institutions and member states, as well as leaders from industry recently came together to discuss how to put an end to the illegal trade of hydrofluorocarbons (HFCs). The event was hosted by MEP and Industry, Research and Energy (ITRE) Committee Chair Cristian-Silviu Busoi and organised by the European FluoroCarbons Technical Committee (EFCTC).

The black market has been thriving in the EU over the past years due to uneven enforcement of the EU F-gas regulation’s quota system for HFCs. The event was an opportunity to exchange experiences and effective measures to stop this black market from harming legitimate business, feeding organised crime, and undermining the EU’s climate policy.

The panellists agreed that there is not one way to combat HFC smuggling and that authorities need to be very agile: “We need to catch up with these fraudsters. They are very clever in finding new opportunities to make profits illegally,” said Ernesto Bianchi, Director for Revenue and International Operations and acting Deputy Director-General at the European Anti-Fraud Office, OLAF.

Bente Tranholm-Schwarz, European Commission Deputy Head of Unit at the Directorate-General for Climate Action, added: “The Commission is aiming to close these holes with the help of the new F-gas regulation which will be proposed next year.”

Recently, some member states have taken effective steps to address the issue. Konstantinos Aravossis, Secretary General for Natural Environment and Water at Greek Ministry of Environment and Energy, spoke about recent steps taken in Greece where a Ministerial Decision is due to be implemented to combat HFC smuggling. Pärtel Niitaru from the Estonian Ministry of the Environment also presented planned measures in Estonia which include increased fines and a ban of the possession and sales of non-refillable containers.

Information sharing between member state authorities was raised as another way to remain one step ahead of HFC smugglers. Panellists suggested pooling intelligence and bringing together data from multiple sources to better understand and combat illegally traded HFCs from entering the EU. Cooperation would also ensure that when enforcement is strengthened at one border, smuggling is not simply displaced to another trade route.

The complicated nature of HFC smuggling means that authorities are looking at multiple ways to tackle the issue. “Higher fines are just one part of the puzzle, but we also need stronger enforcement,” added Pärtel Niitaru. Other measures mentioned include equipping customs authorities with the right tools and information to be able to check refrigerant gas imports.

“The Commission should provide clearer guidance to member states in this area, and we should aim for better enforcement of upcoming legislation to ensure the integrity of the single market,” MEP Cristian-Silviu Busoi commented.

Murli Sukhwani, EFCTC’s Data and Investigations Chair and Senior Director EU Policy at the Chemours Company, said: “Good progress in the fight against illegally imported HFCs is being made, but mor needs to be done to put an end to the black market. It is, however, encouraging to see constructive discussions between government officials today to step up efforts in curbing illegal trade in HFCs. I look forward to seeing more member states following their example to create a level playing field for all actors in the value chain. Illegal traders should have nowhere to hide.”

“There is no silver bullet or single authority that can prevent illegal imports into the EU, so coordination, information sharing, and a clear understanding of the rules are key. It is a high priority for the Commission to prevent illegal imports and we are doing our utmost within the current F-gas and customs rules. The checks will become more automated in the future, and we aim to make them even more effective under the new F-gas rules that the Commission will propose in spring 2022,” Bente Tranholm-Schwarz, DG CLIMA Deputy Head of Unit at the European Commission, mentioned.

Secretary General for Natural Environment and Water at Greek Ministry of Environment and Energy Konstantinos Aravossis outlined: “The HFC registry foreseen in the Greek Ministerial Decision is the key to tackle illegal HFC trading. This fight is only possible if we follow the HFC phase-down schedule set out in the Montreal Protocol and the Kigali Amendment.”

MEP Cristian-Silviu Busoi closed the discussion, calling for MEPs to raise awareness in their home countries by telling colleagues and by encouraging media to report on this issue. “The key issue is to enforce the current legislation,” he concluded.

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