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World Bank Supports Giving Credits to HFC Projects as UN Boosts Scrutiny
The World Bank expressed support for the United Nations-overseen program that awards tradable credits for reducing hydrofluorocarbon-23 gases, saying it hasn’t inflated production of a chemical called chlorodifluoromethane.
HFC-23 gases, or trifluoromethane, are a byproduct in the making of chlorodifluoromethane, which is known as HCFC-22 and used in the air-conditioning and refrigeration industries. HFC-23 gas’s warming effect in the atmosphere is 11,700 times more powerful than carbon dioxide.
The price of credits from the UN’s Clean Development Mechanism Executive Board surged last week after it requested reviews for five HFC-23-cutting projects, spurring speculation that a clamp down will reduce the supply of credits. HFC-23 offsets make up about half of the total issued in the program since 2005. CDM offsets can be used for compliance in the European Union carbon market, the world’s biggest.
The World Bank said the availability of UN credits is “clearly not” driving demand at chemical plants that make chlorodifluoromethane. “If we look at China alone, where the majority of HFC-23 projects are located, the overall national production of HCFC-22 very significantly exceeds that of the CDM” projects, the World Bank said in the report on its website.
HCFC-22 production has increased by 25 percent a year for uses such as cooling in developing countries, the report said.
An overproduction would mean that more HCFC-22 is produced than consumed, the report said. In China, domestic consumption alone would cover the annual HCFC-22 production capacity of the 11 Chinese HFC-23 destruction CDM projects, it said. That excludes exports.
Volumes of produced HCFC-22 maintained on site were an “extremely low” 3.7% on average for 2008 and 2009, the bank said. “Demand is real and there is little surplus.”
To contact the reporter on this story: Mathew Carr in London at m.carr@bloomberg.net
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