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China Issues Amended Regulation to Strengthen Its HFC Phasedown

IGSD / 04 January 2024

5 January 2024 — China amended its Regulation on the Administration of Ozone Depleting Substances (ODSs) to strengthen its implementation of the Kigali Amendment to the Montreal Protocol on Substances that Deplete the Ozone Layer. China submitted its ratification document for the Kigali Amendment on 17 June 2021, which went into effect in China on 15 September 2021.

The amended Regulation, issued more than 3 years following release of the public comment draft, applies to all substances included in the List of Controlled ODSs in China. This List was amended in 2021 to include all HFCs subject to phasedown as part of China’s obligations under the Kigali Amendment.

The amended Regulation establishes a comprehensive national regulatory framework for China’s HFC phasedown. The framework includes, for example, provisions on production and consumption allowance (see, e.g., China’s 2024 HFC allowance and allocation plan), import and export licensing for substances included in the List of Controlled ODSs for Import and Export in China, data monitoring and management, leak reduction, and end-of-life recycling, reclamation and destruction. China’s government authorities in charge of ecology and environment and other relevant agencies will be responsible for supervision and inspection of regulated community’s compliance with the amended Regulation.

The amended Regulation includes key adjustments that draw from past experience involving non-compliance and related risks associated with ODS law. For example, in the amended Regulation, ODS/HFC consumption entities that do not need to apply for consumption allowances (per Article 10 of the Regulation)—including entities that use ODSs/HFCs for cooling-equipment servicing and laboratories that use a small amount of ODSs/HFCs for scientific research purposes--must nonetheless undertake filing procedures with the government. Although the government filing procedures are not specified in the amended Regulation, it is noteworthy that under the pre-amendment Regulations, ODS consumption-entity information that was filed with the government included the entity name, location, period of time, and relevant ODSs. This information was made publicly available via the online ODS Information Management System hosted by the Ministry of Ecology and Environment.

Additionally, entities that generate ODSs/HFCs as production byproducts are required under the amended Regulation to undertake harmless disposal of the byproducts prior to discharge. Further, the amended Regulation also requires entities that produce or use large quantities of ODSs/HFCs, and entities that generate large quantities of production-process byproduct ODSs/HFCs, to install automatic monitoring equipment and connect such devices to the government system. The Ministry of Ecology and Environment will subsequently issue detailed rules regarding these requirements. The amended Regulation also includes more stringent legal liabilities and increased financial penalties to deter violations. For instance, the fine for producing ODSs/HFCs without allowances has been raised from 1,000,000 yuan (approximately U.S. $139,753.00) to up to 5,000,000 yuan (approximately U.S. $697,545.00).

The amended Regulation will become effective on March 1, 2024. IGSD’s English reference translation of the amended Regulation on the Administration of Ozone Depleting Substances is available here.

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