Project Proposals: Jordan

UNEP/OzL.Pro/ExCom/77/51

UNITED
NATIONS / EP
/ United Nations
Environment
Programme / Distr.
GENERAL
UNEP/OzL.Pro/ExCom/77/51
9 November 2016
ORIGINAL: ENGLISH

EXECUTIVE COMMITTEE OF
THE MULTILATERAL FUND FOR THE
IMPLEMENTATION OF THE MONTREAL PROTOCOL
Seventy-seventh Meeting

Montreal, 28 November - 2 December 2016

PROJECT PROPOSALS: JORDAN

This document consists of the comments and recommendations of the Secretariat on the following project proposals:

Phase-out

• HCFC phase-out management plan (stageI) (2015-2016 progress report, 2015 verification report) / UNIDO and World Bank
• HCFC phase-out management plan (stageII, first tranche) / World Bank and UNIDO

PROJECT DESCRIPTION

Background

1.  On behalf of the Government of Jordan, UNIDO as the lead implementing agency, has submitted to the 77thmeeting the annual progress report on the implementation of the work programme associated with the second tranche of the HCFC phase-out management plan (HPMP) and a verification report in line with decision75/60(c).

Report on HCFC consumption

HCFC consumption

2.  The Government of Jordan reported a consumption of 73.99ODP tonnes of HCFC in 2015. The 2011-2015 HCFC consumption is shown in Table 1.

Table 1. HCFC consumption in Jordan (2011-2015 Article 7 data)

HCFC / 2011 / 2012 / 2013 / 2014 / 2015 / Baseline
Metric tonnes (mt)
HCFC-22 / 1,172 / 1,222.0 / 760.0 / 747.6 / 1,005 / 985.3
HCFC-141b / 335 / 524.0 / 160.0 / 169.1 / 170.1 / 261.7
Sub-total (mt) / 1,507 / 1,746.0 / 920.0 / 916.7 / 1,175.1 / 1,247.0
HCFC-141b in imported pre-blended polyols* / 165 / 174.0 / 80.0 / 150.0 / 180 / 102.8**
ODP tonnes
HCFC-22 / 64.46 / 67.21 / 41.80 / 41.12 / 55.28 / 54.19
HCFC-141b / 36.85 / 57.64 / 17.60 / 18.60 / 18.71 / 28.79
Sub-total (ODP tonnes) / 101.31 / 124.85 / 59.40 / 59.72 / 73.99 / 82.98
HCFC-141b in imported pre-blended polyols* / 18.15 / 19.14 / 8.8 / 16.5 / 19.8 / 11.31**

* County programme data.

** Average consumption between 2007 and 2009.

3.  In 2013 and 2014, imports of HCFC-22 and HCFC-141b (in bulk) decreased due to closure of enterprises using HCFC-22 in manufacturing refrigeration equipment and slowdown in economic activity. In 2015, an increase in HCFC consumption was experienced due mainly to the growth in demand for production of and servicing air-conditioning (AC) systems and increase in manufacturing of foam products.

4.  Implementation of regulations banning use of HCFC in the manufacturing of AC equipment and import of HCFC-based AC equipment from 31 December 2016; controls on HCFC-141b consumption both bulk and contained in imported pre-blended polyol; completion of the conversion of HCFC-22 based AC manufacturing enterprises; and the activities in the refrigeration servicing sector being implemented, would result in reduction of HCFC consumption below the allowable levels of consumption in 2016 and 2017.

Verification report

5.  The verification report confirmed that the Government of Jordan continued to implement its licensing and quota system for HCFC imports and exports, and that the total consumption of HCFCs for 2015 of 73.99ODP tonnes was below the national target of 74.70ODP tonnes in its Agreement with the Executive Committee.

Country programme (CP) implementation report

6.  The Government of Jordan reported HCFC sector consumption data under the 2015 CP implementation report which was 2mt higher than the consumption reported under Article 7 of the Montreal Protocol. This difference was due to the use of 2mt HCFC-22 in firefighting from previous years’ stocks.

Progress report on the implementation of the third tranche of the HPMP

Legal framework

7.  The licensing and quota system for HCFC imports was updated in 2013 to ensure effective control over import and export of HCFCs. The ban on manufacture and import of HCFC-based residential AC equipment will be in effect from 31 December 2016, and a mandatory compliance with minimum energy performance standard (MEPS) for AC equipment will be in place by 31 December 2016 (which would require enterprises to convert to inverter technology).

Refrigeration and AC manufacturing sector

8.  The conversion at three eligible enterprises, Abu Haltam Group for Investments (Abu Haltam), National Refrigeration Company (NRC) and Petra Engineering Industries Co. (Petra), to HFC-410A technology has been completed resulting in the phase-out of 9.5ODP tonnes of HCFC-22. In line with decision66/52(c), Petra has also developed a split AC equipment based on HC-290 refrigerant; however, the enterprise has not been able to produce and sell this equipment as customers still resist purchase of the equipment due to flammability concerns. Petra will still try to sell equipment with HC-based refrigerant based on market readiness. Final payments are pending for operating costs and costs for prototypes, design and testing for NRC and Abu Haltam.

Refrigeration and AC servicing sector

9.  The servicing sector activities included training of 20 Customs officers on enforcement and 20officers from the Jordan Institute of Standard and Metrology on regulations and the HCFC phase-out plan in the AC sector; training of 25 trainers on good servicing practices; and development of curricula for good practice in servicing HCFC-22-based AC equipment. Training of 100 technicians and procurement and distribution of recovery and recycling equipment and refrigerant identifiers will be completed by September 2017.

Project Management Unit (PMU)

10.  The PMU has provided support to the AC manufacturers through site visits and technical exchanges and meetings. A project implementation manual completed by the Ministry of Environment in 2013 is used as a guide during implementation of stageI of the HPMP.

Level of fund disbursement

11.  As of September 2016, of the total funds of US$3,366,017[1] approved, US$2,753,205 had been disbursed. The balance of US$ 612,812 will be disbursed in 2017 and 2018 (Table 2).

Table 2. Financial report of stageI of the HPMP for Jordan (US$)

Agency / First tranche / Second tranche /
Approved / Disbursed / Approved / Disbursed /
UNIDO / 70,000 / 69,774 / 22,184 / 11,494
World Bank / 980,300* / 378,404 / 0 / 0
Sub-total / 1,050,300 / 448,179 / 22,184 / 11,494
Demonstration project for the phase-out of HCFC22 and HCFC141b from the manufacture of unitary AC equipment at Petra (60thmeeting) / 2,167,033 / 2,167,033 / 0 / 0
Additional funds approved for the heat exchanger production and testing for Petra (66thmeeting) / 126,500 / 126,500 / 0 / 0
Total / 3,343,833 / 2,741,711 / 22,184 / 11,494

*Excluding US$89,800 returned by the World Bank as per decision75/60.

SECRETARIAT’S COMMENTS AND RECOMMENDATION

COMMENTS

12.  The Secretariat noted the report, including independent verification demonstrating compliance with the HCFC consumption targets for 2015.

13.  The consumption of HCFC-22 in servicing in 2013 and 2014 was higher than that under the CP data report; and the CP data for 2015 was 47mt lower than the estimated service sector consumption for that year. The Secretariat also noted that the survey showed a consumption of HCFC141b (bulk and contained in imported pre-blended polyol) of 357.72mt for 2015 while the CP report indicated a consumption of 350.0mt. In light of the above differences and in accordance with decision34/18(a), the Secretariat requested the World Bank to advise the Ozone Officer to revise the data on consumption in the CP implementation report for the relevant years.

14.  The Secretariat requested a clarification on the status of the conversion at Petra as the verification report indicates that the import of HCFC-22 increased from 36.72mt in 2014 to 170.00mt in 2015, noting that the progress report submitted to the 75thmeeting[2] indicated that this project had been completed. UNIDO clarified that the increase in consumption was due to a high demand for ACs in the country, and confirmed that the three AC enterprises covered under stageI have stopped using HCFC-22 in manufacturing as of July 2016. The Secretariat also notes that the Government would implement a ban on import of HCFC-22 ACs and use of HCFC-22 in ACs manufacturing by 31 December 2016, ensuring the sustainability of the conversion.

15.  Activities continue to be implemented as planned and the overall level of disbursement is 82per cent of the approved funding.

RECOMMENDATION

16.  The Executive Committee may wish to take note of the 2016 progress report on the implementation of second tranche of stageI of the HCFC phase-out management plan for Jordan and the verification report on the 2015 HCFC consumption, submitted by UNIDO.

PROJECT DESCRIPTION

17.  On behalf of the Government of Jordan, the World Bank, as the lead implementing agency, has submitted to the 77thmeeting stageII of the HCFC phase-out management plan (HPMP) at a total cost of US$6,330,174, consisting of US$4,461,907, plus agency support costs of US$312,334 for the World Bank, and US$1,454,143, plus agency support costs of US$101,790 for UNIDO, as originally submitted[3]. The implementation of stageII of the HPMP will phase out 46.94ODPtonnes of HCFCs[4] (consisting of 39.35ODP tonnes of HCFC-141b and 7.59ODP tonnes of HCFC-22) and assist Jordan in reducing HCFC consumption to 65per cent of the baseline by 2020.

18.  The first tranche for stageII of the HPMP requested at this meeting amounts to US$1,851,988 consisting of US$1,149,173, plus agency support costs of US$80,442 for the World Bank and US$581,657, plus agency support costs of US$40,716 for UNIDO, as originally submitted.

Status of implementation of stageI of the HPMP

19.  StageI of the HPMP for Jordan was approved at the 65thmeeting to meet 20per cent reduction from the baseline by 2017 and phase out 17.44ODP tonnes of HCFC-22 at the amount of US$2,433,334, plus agency support costs. The project to phase 6.88ODP tonnes of HCFC-22 and 1.19ODP tonnes of HCFC-141b from the manufacturing of unitary ACs at Petra, at the amount of US$2,167,033, plus agency support costs, was approved at the 60thmeeting and subsequently included in stageI of the HPMP[5].

20.  The Agreement between the Government of Jordan and the Executive Committee was updated at the 75thmeeting to reflect the revision of funding level due to the withdrawal of Middle East Complex for Engineering, Electronics and Heavy Industries PLC (MEC) (with a consumption of 6.33ODP tonnes and an estimated cost of US$1,360,850) from the HPMP, resulting in the return of US$89,800[6], plus agency support costs of US$6,735 by the World Bank, in line with decision75/60.

21.  The details of the progress report of stageI of the HPMP is presented in paragraphs2 to 15 of the present document.

StageII of the HPMP

Remaining consumption eligible for funding

22.  After deducting 25.51ODP tonnes of HCFCs associated with stageI of the HPMP from starting point for aggregate reduction on HCFC consumption for Jordan, the remaining consumption eligible for funding would be 68.78ODP tonnes.

HCFC sector distribution

23.  Table 3 presents the consumption of HCFCs by sector as reported in the CP data for 2015.

Table 3. Distribution of HCFCs use by sector and substance in 2015

HCFC / Sector / HCFC use
mt / mt (%) / ODP tonnes / ODP tonnes (%)
Manufacturing
HCFC-22 / RAC** / 410.0 / 30.2 / 22.55 / 24.0
HCFC-141b / 50.0 / 3.7 / 5.50 / 5.9
HCFC-141b / Foam / 120.1 / 8.8 / 13.21 / 14.1
HCFC-141b (polyols)* / 180.0 / 13.3 / 19.80 / 21.1
Sub-total / 760.1 / 56.0 / 61.06 / 65.0
Servicing
HCFC-22 / RAC / 595.0 / 43.8 / 32.73 / 34.9
Firefighting / 2.0 / 0.1 / 0.11 / 0.1
Sub-total / 597.0 / 44.0 / 32.84 / 35.0
Total / 1,357.1 / 100 / 93.90 / 100

* HCFC-141b contained in imported pre-blended polyols

** Refrigeration and air-conditioning

24.  HCFC-22 is consumed for the production of ACs, commercial refrigeration systems and small uses (i.e., 2.00mt) by the Jordan Telecom Company for servicing in firefighting; HCFC-141b is used as a foam blowing agent, including insulation foam for domestic and commercial refrigerators. Field survey indicated that the consumption of HCFC-22 for servicing was higher than the amount reported under the 2015 CP data report due to closure of enterprises that were manufacturing HCFC-22-based equipment.

Polyurethane (PU) foam manufacturing sector

25.  All foam users buy pre-blended polyols containing HCFC-141b from local systems houses or through importers. Break-up of consumption of HCFC-141b in imported pre-blended polyols or locally blended in systems house at a sub-sector level could not be provided as it is difficult to estimate the distribution.

26.  The PU foam sector is dominated by sandwich panel and spray applications produced by 52enterprises; in addition one enterprise, Abu Haltam, manufactures refrigerators with HCFC-141b used as foam blowing agent for insulation. The distribution of HCFC-141b use in bulk and imported preblended polyols among PU foam enterprises according to the survey undertaken in stageII preparation is presented in Table 4.

Table 4. Distribution of HCFC-141b among PU foam enterprises (2015)

Sub-sector / Number of enterprises / HCFC-141b (2015)*
mt / ODP tonnes
>20 mt / <20 mt / Total
Discontinuous panels / 2 / 13 / 15 / 147.38 / 16.21
Continuous panels / 1 / 0 / 1 / 23.80 / 2.62
Spray / 1** / 5 / 6 / 82.01 / 9.02
Solar heaters / 0 / 23 / 23 / 18.89 / 2.08
Refrigerated transport / 0 / 2 / 2 / 18.33 / 2.02
Shutters / 0 / 5 / 5 / 13.23 / 1.46
Domestic refrigeration / 0 / 1 / 1 / 17.00 / 1.87
Total / 4 / 49 / 53 / 320.64 / 35.27

*The breakdown between HCFC-141b pure vs in imported pre-blended polyol was not provided.

**Only average 2013-2015 consumption was provided for each spray foam enterprise. Using this average, there is one enterprise with consumption over 20mt.

27.  Jordan has one blending house, Fathei Abu Arja and Partners Industrial Co. (FAA), that has shifted to import HCFC-141b-pre-blended polyols, mainly from Saudi Arabia (Huntsman-APC), the United Arab Emirates (Bayer System Pearls) and Kuwait (KPI). This enterprise continues to be the leading foam provider for insulation in the country.

Refrigeration and AC manufacturing sector

28.  Currently, there are three enterprises manufacturing AC equipment. One enterprise, MEC (that was included in stageI of the HPMP and subsequently withdrew) is re-establishing the production lines for manufacturing their products and appliances and has confirmed the conversion of the AC manufacturing line to R-410A technology (with its own resources). The conversion plans of the remaining two enterprises are not known.