China Receives US$95 Million Grant to End Production of Ozone-Depleting Global-Warming Gases to help Meet its Targets under the Montreal Protocol

May 2, 2013

China, the world's largest producer of hydrochlorofluorocarbons (HCFC), received a US $95 million grant on April 23, 2013 to help reduce its production of HCFCs. These substances, used primarily in refrigeration and air-conditioning and in the manufacture of foam products, deplete the ozone layer and exacerbate climate change. The grant is from the Multilateral Fund for the Implementation of the Montreal Protocol on Substances that Deplete the Ozone Layer, which provides the funds in exchange for verified annual reductions of HCFC production levels. 

Since 2007, Parties to the Montreal Protocol have been working to accelerate the HCFC phase-out schedule for developed and developing countries alike by setting a series of time-bound targets. The first target was for all developing countries to have frozen HCFC consumption and production to the average of their 2009-2010 levels by January 1, 2013.  The next target to be met involves a 10 percent reduction of this baseline by 2015, then 35 percent by 2020, then 67.5 percent by 2025, and a near complete elimination by 2030.

The new grant will enable China to reduce its production of HCFCs by 10 percent, or 47,000 metric tons from 2010 levels by 2015, thereby meeting its initial HCFC reduction targets under the Protocol. This will have additional positive climate benefits in terms of CO2 emissions reductions equivalent to taking 13.5 million cars off the roads.

This is the first stage of China’s HCFC production sector phase-out plan, itself part of a larger strategy to completely eliminate the country’s production capacity of HCFCs by 2030. This plan has been designed with the assistance of the World Bank.

“This work not only supports China’s efforts to meet its Protocol obligations, but also those of other developing countries around the world who consume nearly half of China’s HCFC production output,” said Karin Shepardson, Program Manager, Climate Policy and Finance at the World Bank.

“Decreases in global supply from China’s production sector phase-out will positively support over 130 consumption phase-down programs supported by the Multilateral Fund in other developing countries by allowing them to meet their Montreal Protocol reduction targets more effectively and efficiently,” she added.

The World Bank is one of the four implementing agencies of the Multilateral Fund. Over the past 20 years, the World Bank–China Montreal Protocol partnership has worked to phase-out over 219,000 T of ozone-depleting substances (ODS) from various sectors. This included closing China’s production capacity of chlorofluorocarbons (CFCs) and halons (both potent ODS) nearly three years ahead of schedule.

In addition to the new HCFC production sector challenge, the World Bank - China Montreal Protocol partnership is also working to strategically address the country’s HCFC consumption through a US$73 million project to assist Chinese foam manufacturers in also reaching the Protocol’s first HCFC reduction target by 2015.

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