China - Montreal Protocol (MP) Projects in China

The World Bank signed an agreement with the Multilateral Fund (MLF) to the Montreal Protocol (MP), which provides support to eligible countries to meet their MP obligations in 1991 and became one of the implementing agencies under the MP in the phaseout activities of ozone depleting substances (ODS). ODS are measured by their Ozone Depleting Potential (ODP), and the use of ODS penetrates into all facets of daily life - refrigerators in homes, domestic or commercial or automobile air conditioning, freezers in supermarkets and transportation, aerosols for hair sprays or paint or shaving cream, fire extinguishers, furniture, construction materials, insulation, automobile parts, etc.

With rapid industrialization and urbanization, China's ODS consumption grew over 12% per annum from 1986 to 1994. When production and consumption of ODS in developed countries being eliminated at the end of 1995, China became the world's largest ODS consumer and producer. By the end of 1996, China's ODS production had reached 85,500 MT and consumption about 91,000 MT. By end of 2006, production of ODS has been fallen down to 43,160 MT and consumption to 16, 840 MT.

China is eligible for financing from the Multilateral Fund for the implementation of the MP, which was created to provide support to eligible developing countries to meet their MP obligations. The Bank has approved four ODS Phaseout Projects in 1993, 1994, 1995 and 1997. The ODS I and II Projects were completed in mid-1997 and phased out a total of 15,800 MT ODP.

The ODS III Project finances individual investment projects for conversion activities. By the end of 2001, 95 subprojects have been approved providing over $95 million to Chinese enterprises. The ODS III project was completed in December 2006. Out of the subprojects approved, 87 subprojects were completed for a phaseout of about 19,000 MT ODP, and eight projects were cancelled.

The ODS Project IV is a sector- and performance-based umbrella project which will cover different ODS sectors whenever appropriate. The sector approach in the ODS IV project was introduced in the Montreal Protocol operations in late 1997. Disbursements at all levels are based on satisfactory achievement of performance indicators, that is, achievements of agreed phaseout targets during the phaseout period. The ODS IV will be completed when the total targeted phaseout is accomplished in 2010.

Ten sector plans have been approved by ExCom, of which nine are under implementation and one has been completed.

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Sector Plans

Eight sector plans have been approved by ExCom, of which seven are under implementation and one has been completed.

The halon sector is the first sector included in ODS IV, with funding approved in November 1997 for US$62 million to phase out all production and consumption of halons inChina. Upon completion in 2010, the project would phaseout more than 40,000 ODP tons of halon production and 35,000 ODP tons of halon consumption. Since the start of implementation in 1998, halon production in China has been reduced from over 40,000 ODP tons to below 1,000 ODP tons by the end of 2006, with a corresponding reduction in consumption from over 35,000 ODP tons to below 1,000 ODP tons by the end of 2006.
The mobile air conditioning (MAC) sector plan was approved in November 1998 for US$7.7 million to phaseout 814 ODP tons by Dec. 31, 2001. The project has been completed as scheduled and all newly manufactured vehicles in China install only HFC134a MAC from January 2002 onwards.
The CFC production sector was approved for US$150 million in March 1999 to phaseout 50,324 ODP tons at completion in 2010. Since the start of the program in 1999, China has reduced its verified CFC production to less than 13,500 ODP tons by the end of 2006.
The foam sector was approved in December 2001 for US$53.8 million to phaseout over 14,000 ODP tons of CFC 11 at completion. 11 industrial consolidation conversion contracts and 78 individual conversion contracts to phaseout 9,580 ODP tons of CFC 11 have been signed by July 2007. 30 technical assistance activities have been planned by 2006. 23 out of 30 have been completed.
The commercial refrigeration sector was approved in March 2002 for US$5.2 million to phaseout 765 ODP tons. Two contracts to phaseout the entire 765 ODP tons were signed in 2003 and ODS phaseout was completed in 2006.
The CTC Production and process agents (PA) sector I was approved by the ExCom in November 2002 for a total of US$65 million. Under this sector plan, (i) total CTC production and imports will be reduced from the baseline of 86,280 ODP tons of CTC in 1998-2000 to the maximum allowable sum of production and imports not exceeding 11,990 by 2010, (ii) total CTC consumption in 25 PA application will be reduced from 3,845 ODP tons in 1998-2000 to not exceeding 220 ODP tons in 2010, and (iii) total maximum allowable CFC-113 consumption in the PA Sector (25 applications) will be reduced from 17 ODP tons to zero in 2010. 18 contracts were signed with CTC producers be end of 2004 to reduce national production to less than the control target of 54,857 ODP tons. Another 18 conversion contracts were signed in 2003 and 2004 with PA enterprises to reduce their consumption of CTC.
The 1,1,1,-trichloroethane(TCA) production sector was approved in July 2004 for US$2.1 million to phaseout 113 ODP tons. Two closure contracts and one production reduction contract were signed in 2004. The sector is expected to completely phaseout by the end of 2009.
The CFC/Halon Accelerated Phasout Plan (APP) was approved in December 2004 for US$ 10 million to accelerate CFC phasout from January 1, 2010 to July 1, 2007. Halon 1301 production will be reduced since 2005 from the present 6000 ODP tons to 2000 ODP tons until stop of halon 1301 production by January 1, 2010. The APP is essentially a wrap up project for all ODS production & consumption phaseout in China. CFC production “zero” phaseout target has been met by July 1, 2007.
The CTC Production and process agents (PA) sector II was approved by the the ExCom in April 2006 for a total of US$46.5million. Under this sector plan, (i) CTC consumption for Phase II will be reduced from the baseline of 5,411 ODP tons of CTC in 2003 to the maximum allowable not exceeding 994 by 2010, (ii) the amount of CTC used in process agent applications listed in the interim table A-bis of Decision XV II/8 and in potential future process agent applications as identified and reported by China in its annual verification reports will be reduced from 14,300 ODP tons of CTC in 2006 to zero[1]by 2010.
The Pharmaceutical Aerosol (non-MDI) sector plan was approved in March 2007 for $6 million to phaseout 485.1 ODP tons by Dec. 31, 2010.

In sector approaches, in addition to conversion and closures at the enterprise level, China has promulgated many policy instruments to ensure national phaseout attainable. There are also numerous technical assistance activities such as substitute development, standard revisions, performance testing, public awareness, training that are critical to support and ensure that phaseout is sustainable.

With the introduction of many ODS policies and regulations either already in place or under consideration, China remains on track to meet its obligations as scheduled. China has reported successful compliance with its first obligation, to freeze production and consumption of ODS in 1999 to the average production and consumption levels of 1995 to 1997.

[1]The amount of CTC used will be reduced to zero, or any insignificant levels of emissioins which might by approved by the Parties, by January 1, 2010.

	Total Funding Committed	Phaseout Target (ODP Tons)	Status
ODS I	7,732,000	15,400	Completed/closed.
ODS II	4,904,000	400	Completed/closed.
ODS III (adjusted for cancellations)	88,513,461	19,062	Completed.
ODS IV	408,396,582	205,480	Ten sector plans have been approved; one has been completed, and nine are at various stages of implementation.
Total	509,546,043	240,342

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Montreal Protocol (MP) Projects in China

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