UNEP/OzL.Pro/ExCom/77/67

UNITEDNATIONS

/ EP
/ United Nations
Environment
Programme / Distr.
GENERAL
UNEP/OzL.Pro/ExCom/77/67
3 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 PROPOSAL: URUGUAY

This document consists of the comments and recommendation of the Secretariat on the following project proposal:

Phase-out

• HCFC phase-out management plan (stage II, first tranche) / UNDP

PROJECT EVALUATION SHEET – MULTI-YEAR PROJECTS

Uruguay

(I) PROJECT TITLE / AGENCY / MEETING APPROVED / CONTROL MEASURE
HCFC phase out plan (stageII) / UNDP (lead) / n/a / n/a
(II) LATEST ARTICLE 7 DATA (Annex C Group l) / Year: 2015 / 15.78 (ODP tonnes)
(III) LATEST COUNTRY PROGRAMME SECTORAL DATA (ODP tonnes) / Year: 2015
Chemical / Aerosol / Foam / Fire fighting / Refrigeration / Solvent / Process agent / Lab use / Total sector consumption
Manufacturing / Servicing
HCFC141b / 0 / 0 / 0 / 0 / 1.63 / 0 / 0 / 0 / 1.63
HCFC142b / 0 / 0 / 0 / 0.06 / 0 / 0 / 0 / 0.06
HCFC22 / 0 / 0 / 1.10 / 12.88 / 0 / 0 / 0 / 13.98
HCFC141b in imported preblended polyol / 0 / 3.93 / 0 / 0 / 0 / 0 / 0 / 3.93
(IV) CONSUMPTION DATA (ODP tonnes)
2009 2010 baseline: / 23.40 / Starting point for sustained aggregate reductions: / 28.66
CONSUMPTION ELIGIBLE FOR FUNDING (ODP tonnes)
Already approved: / 4.18 / Remaining: / 24.48
(V) BUSINESS PLAN / 2016 / 2017 / 2018 / 2019 / 2020 / Total
UNDP / ODS phaseout (ODP tonnes) / 2.0 / 0 / 5.8 / 0 / 3.9 / 11.7
Funding (US$) / 186,297 / 0 / 446,858 / 0 / 316,578 / 949,733
(VI) PROJECT DATA / 2016 / 2017 / 2018 / 2019 / 2020 / Total
Montreal Protocol consumption limits / 21.0 / 21.0 / 21.0 / 21.0 / 15.16 / n/a
Maximum allowable consumption (ODP tonnes) / 21.0 / 21.0 / 21.0 / 21.0 / 15.16 / n/a
Project costs requested in principle (US$) / UNDP / Project costs / 314,000 / 0 / 679,889 / 0 / 111,268 / 1,105,157
Support costs / 21,980 / 0 / 47,592 / 0 / 7,789 / 77,361
Total project costs requested in principle (US$) / 314,000 / 0 / 679,889 / 0 / 111,268 / 1,105,157
Total support costs requested in principle (US$) / 21,980 / 0 / 47,592 / 0 / 7,789 / 77,361
Total funds requested in principle (US$) / 335,980 / 0 / 727,481 / 0 / 119,057 / 1,182,518
(VII) Request for funding for the first tranche (2016)
Agency / Funds requested (US$) / Support costs (US$)
UNDP / 314,000 / 21,980
Total / 314,000 / 21,980
Funding request: / Approval of funding for the first tranche (2016) as indicated above
Secretariat's recommendation: / Individual consideration

PROJECT DESCRIPTION

1.  On behalf of the Government of Uruguay, UNDP, as the designated implementing agency, has submitted to the 77th meeting stage II of the HCFC phase-out management plan (HPMP)[1], at the amount of US $1,124,903, plus agency support costs of US $78,743, as originally submitted. The implementation of stage II of the HPMP will phase out 11.25 ODP tonnes of HCFCs and assist Uruguay in meeting the Montreal Protocol compliance target of 35 per cent reduction by 2020.

2.  The first tranche for stage II of the HPMP being requested at this meeting amounts to US$314,000, plus agency support costs of US $21,980 for UNDP.

Status of implementation of stage I of the HPMP

3.  Stage I of the HPMP for Uruguay was approved at the 65thmeeting to meet the 10 per cent reduction from the baseline by 2015 resulting in the phase-out of 4.18 ODP tonnes of HCFCs (i.e., 2.34ODP tonnes of HCFC-22, 1.08 ODP tonnes of HCFC-141b, 0.04 ODP tonnes of HCFC-123, 0.09ODP tonnes of HCFC-124 and 0.63 ODP tonnes of HCFC-142b), at the amount of US $380,004, plus agency support costs. Stage I of the HPMP included only activities for the servicing sector. The fifth and final tranche of stage I was approved at the 75thmeeting.

ODS policy and regulatory framework

4.  The HCFC import control system was established in 2012, and an electronic platform for the licensing system (Ventanilla Unica de Comercio Exterior, VUCE) was developed in 2013; annual quotas have been issued since 2013, and imports and exports of all ODS are controlled through VUCE. Imports of hydrocarbons and ammonia as refrigerants and hydroflourocarbons (HFCs) are recorded but not regulated. During stage I, 60 customs officers, brokers and importers were trained.

Progress in implementation of stage I

5.  The results achieved include:

(a)  Refrigeration servicing sector: Equipment (i.e., cold chambers, milk coolers, air conditioners and refrigerators) was provided to the technological laboratory (Laboratorio Tecnológico del Uruguay, LATU) for training refrigeration and air-conditioning (RAC) technicians and testing of alternatives; training material was updated; 927 technicians were trained on good practices in refrigeration servicing and safe use of refrigerants including flammables; a workshop on flushing procedures and alternatives was organized, and two closed-cycle flushing tools were purchased;

(b)  Awareness programme: Awareness material on HCFC control measures and on alternatives was developed and distributed, and outreach activities were conducted with universities and colleges.

  1. The National Ozone Unit (NOU)[2] was responsible for the coordination and management of stage I of the HPMP, and acted as the project implementation and monitoring unit (PMU).

Status of disbursements

  1. As of August 2016, of the total funds of US $380,004 approved, US$368,811had been disbursed. The remaining US$11,193 will be disbursed by 31 December 2016, and any balances returned to the Multilateral Fund.

HCFC consumption

  1. The starting point for aggregate reductions in HCFC consumption was established at 28.66 ODP tonnes, including 5.33 ODP tonnes of HCFC-141b contained in imported pre-blended polyols. Since stage I of the HPMP phased out a total of 4.18 ODP tonnes of HCFCs, the remaining consumption eligible for funding is 24.48 ODP tonnes (i.e., 18.74 ODP tonnes of HCFC-22, 0.41 ODP tonnes of bulk HCFC-141b, and 5.33 ODP tonnes of HCFC-141b contained in imported pre-blended polyols).
  1. The Government of Uruguay reported a consumption of 15.78 ODP tonnes of HCFC in 2015 under Article 7 of the Montreal Protocol and 3.93 ODP tonnes of HCFC-141b contained in imported preblended polyols under the country programme (CP) implementation report. The 2011-2015 HCFC consumption is shown in Table 1.

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

HCFC / 2011 / 2012 / 2013 / 2014 / 2015 / Baseline /
Metric tonnes
HCFC-22 / 294.26 / 453.58 / 261.89 / 298.26 / 254.23 / 383.36
HCFC-123 / 0.57 / 2.13 / 0.74 / 1.54 / 1.60 / 1.86
HCFC-124 / 4.03 / 5.95 / 7.14 / 6.22 / 3.36 / 4.14
HCFC-141b / 8.38 / 23.97 / 6.38 / 9.64 / 14.81 / 13.58
HCFC-142b / 6.36 / 4.45 / 3.02 / 2.65 / 0.98 / 9.68
Total (mt) / 313.60 / 490.08 / 279.17 / 318.31 / 274.98 / 412.61
HCFC-141b in imported pre-blended polyols* / 41.95 / 61.91 / 60.88 / 51.62 / 35.69 / 48.4**
ODP tonnes
HCFC-22 / 16.18 / 24.95 / 14.40 / 16.40 / 13.98 / 21.08
HCFC-123 / 0.01 / 0.04 / 0.01 / 0.03 / 0.03 / 0.04
HCFC-124 / 0.09 / 0.13 / 0.16 / 0.14 / 0.07 / 0.09
HCFC-141b / 0.92 / 2.64 / 0.70 / 1.06 / 1.63 / 1.49
HCFC-142b / 0.41 / 0.29 / 0.20 / 0.17 / 0.06 / 0.63
Total (ODP tonnes) / 17.62 / 28.05 / 15.47 / 17.80 / 15.78 / 23.33
HCFC-141b in imported pre-blended polyols* / 4.61 / 0 / 6.70 / 5.68 / 3.93 / 5.33**

*County programme data

**Average consumption between 2007 and 2009

  1. The reductions in HCFC consumption are attributed to the activities in the refrigeration servicing sector conducted during stage I and the introduction of RAC systems based on R-404A, R-410A, R-507 refrigerants. The increase in consumption of HCFC-141b was due to stockpiling and increased inventories to reduce freight costs, and in anticipation of the ban on the imports of HCFC-141b, intended to be in place by 1 January 2018.

Polyurethane (PU) foam manufacturing sector

  1. There is no systems house in Uruguay, therefore all HCFC-141b is imported in pre-blended polyols largely used to produce spray foam for rigid insulation and water heaters, with small amounts used in the manufacture of discontinuous panels, integral skin foam for the furniture industry, thermoware and flotation devices, by 24 small and medium-sized enterprises (SMEs) (Table 2).

Table 2. Estimated 2013-2015 average consumption of HCFC-141b contained in imported preblended polyols

Subsector / Consumption / Percentage (%)
mt / ODP tonnes
Water heaters / 13.07 / 1.44 / 26
Discontinuous panels / 1.04 / 0.11 / 2
Thermoware / 0.12 / 0.01 / 0
Integral skin / 0.28 / 0.03 / 1
Spray / 35.62 / 3.92 / 71
Flotation / 0.10 / 0.01 / 0
Total / 50.23 / 5.53 / 100

HCFC consumption in the refrigeration servicing sector

  1. HCFC-22 is mainly used for servicing equipment in the commercial refrigeration subsector (62per cent), residential and commercial air-conditioning (17 per cent), industrial refrigeration (11percent), some chillers (6 per cent) and transport refrigeration (4 per cent). In addition, HCFC-22 (1.1ODP tonnes) is used for the assembly of cold rooms (considered part of the servicing sector) andHCFC141b (1.63ODP tonnes) for flushing refrigeration circuits.

Stage II of the HPMP

  1. The activities to be implemented during stage II include regulatory and control measures; phaseout of HCFC-141b contained in imported pre-blended polyols; assistance to the RAC servicing sector; awareness campaign to promote HCFC phase-out; and implementation and monitoring.

Regulatory and control measures

  1. The following activities will be implemented:

(a)  Review and strengthen the legal framework to control HCFC consumption through an assessment of the licensing and quota system for HCFC to improve control, monitoring and reporting; develop standards on the safe use of flammable refrigerants; and develop guidelines for the adoption of low-global warming potential (GWP) alternatives in the country (US $35,200); and

(b)  Technical assistance to the Customs Directorate through training of 80 customs officers and 20 brokers; update of customs training manual on HCFC control; and development of online training modules (US $33,000).

Activities in the PU foam sector

  1. Stage II proposes to completely phase-out 5.53 ODP tonnes (i.e. 5.43 ODP tonnes of eligible and 0.10 ODP tonnes of non-eligible) consumption of HCFC-141b contained in imported pre-blended polyols used as a foam-blowing agent through the conversion of 21 eligible out of the 24 identified enterprises to hydro-fluoro-olefins (HFO) technology. Out of the 21, funding for incremental costs is requested for only 19, as two have consumption of less than 100 kg/year and will be assisted through technical assistance and the provision of incremental operating costs (IOC). The remaining consumption eligible for funding of HCFC141b contained in imported pre-blended polyols for Uruguay is only 5.33 ODP tonnes.

16.  Incremental capital costs (ICC) included a cooling system for HFO-based formulated polyols (US$65,000), technical assistance, trials and training (calculated at US $15,000 for each foam enterprise with consumption of HCFC-141b above 10 mt; US $10,000 for enterprises with consumption up to 10 mt; US$3,000 for enterprises with consumption between 0.5 and 10 mt; and US $1,300 for enterprises with consumption below 0.5 tonnes); project management through the NOU (US $1,500 each); and technical assistance (US $10,000) for a total cost of US$251,680. Incremental operating costs (IOC) were estimated at US $482,519 (i.e., US$9.78/kg based on the actual consumption of 49.32 mt (5.43 ODP tonnes) for the 21 eligible enterprises.

  1. The total cost of the PU foam sector has been estimated at US $734,199, with funding requested at the amount of US $540,703 based on a cost-effectiveness of US $10.96/kg in line with decision 74/50(c), summarized in Table 3.

Table 3. Total cost for the conversion of the PU foam sector*

Item / Enterprises consumption (mt) / Number of enterprises / Unitary cost
US $/unit / Cost
(US $)
Cooling system / Above 0.5 / 13 / 5,000 / 65,000
Tests, trials and training / Between 10 and 20 / 1 / 15,000 / 15,000
Between 1 and 10 / 10 / 10,000 / 100,000
Between 0.5 and 1 / 2 / 3,000 / 6,000
Between 0.1 and 0.5 / 6 / 1,300 / 7,800
Contingency (10 %) (applicable to cooling system and trials and testing) / 19,380
Subtotal / 213,180
Technical assistance (including two enterprises with consumption less than 100 kg / n/a / 10,000 / 10,000
Project management / 19* / 1,500 / 28,500
Total (ICC) / 251,680
IOC / 482,519
Total cost / 734,199
Funds requested (based on US$10.96/kg) / 540,703

*Of the 21 eligible enterprises, only 19 are included for funding due to very small consumption (less than 100 kg/year) of two.

Activities in the refrigeration servicing sector

  1. The following activities will be implemented:

(a)  Training of 40 trainers and 800 technicians on good refrigeration servicing practices; update training manual to include emerging technologies (i.e., HFO and CO2) and safe use and handling of flammable refrigerants; and promotion of alternatives to HCFC-141b in flushing (e.g. Acemire, stag-flush and closed-cycle machines) (US $160,600);

(b)  Implementation of a pilot project to assess the impact of applying good refrigeration practices in RAC maintenance through analysis of the experience gained in previously implemented training programmes in order to develop standard procedures for technicians, with a focus on commercial refrigeration; preparation of the assessment report, and dissemination of results for end-users (US $40,700);

(c)  Workshops on low-GWP and energy-efficient RAC technologies for 80 trainers, installer engineers and decision-makers; provision of RAC equipment (practice equipment using alternative technologies) to one training facility; development of a sustainable public procurement programme (SPP), to adopt criteria specifying the use of equipment operating with low-GWP alternatives and require procurement processes to specify these when preparing technical specifications for goods to be procured (US $90,200);

(d)  Pilot project to demonstrate the use of low-GWP, energy-efficient alternatives in cold rooms through assessment of comparative performance and energy efficiency with HCFC-22-based systems, identification of safety and control requirements in installation and maintenance, and cost analysis (US $58,300); and

(e)  Awareness and promotion of good refrigeration practices amongst technicians and endusers through development and distribution of technical information for refrigeration technicians, update of the good refrigeration practices manual, and general awareness activities (US $63,800).