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Illegal trade in refrigerants

The illegal trade in ozone-depleting substances (ODS) and hydrofluorocarbons (HFC) is a climate crime of significant proportions, which results in additional greenhouse gas emissions, undermining efforts to limit the worst impacts of climate change. EIA is the only NGO committed to combating this climate crime, with almost 30 years of experience investigating and exposing the criminal trade in substances controlled by the Montreal Protocol. Our groundbreaking investigations have helped government enforcement efforts and changed laws to better protect our planet. We monitor and investigate the illegal ODS and HFC trade, exposing smuggling methodologies, advocating strengthened enforcement capacity and coordination, and working for effective regulation.

 

The problem

While the Montreal Protocol is lauded as the most successful environmental treaty, illicit trade in ODS, which emerged in the mid-1990s, remains a challenge.

Low risks and high profits make the illegal trade of these chemicals, which are primarily used as refrigerants, attractive to criminal networks. Yet it is often not a priority for enforcement agencies and penalties are minor compared to the costs that governments and legitimate businesses face in lost revenues. Meanwhile, the trade results in significant emissions of ozone-destroying and planet warming gases.

Although it was not foreseen in 1987, the basic tenets of the Montreal Protocol, which rightly put the onus on industrialised (non-Article 5) countries to control the production and use of ODS ahead of Article 5 or developing countries, created fertile conditions for an illegal trade in ODS to emerge and flourish. While consumption was being rapidly phased out in non-A5 countries, production in developing countries was growing, guaranteeing a cheap and plentiful supply of ODS. The first wave of ODS smuggling began in the mid-1990s as the US and EU prohibited the production and use of CFCs. The illegal trade also spread to developing countries as they began the CFC phase-out and expanded to HCFCs as they were controlled.

Likewise, the illegal trade in HFCs first emerged in the EU, which implemented a phase down of HFCs under the EU F-gas Regulation starting in 2015, four years ahead of mandatory reductions under the Kigali Amendment to the Montreal Protocol. As early as 2016, reports of illegal (non-quota) HFCs in European markets began to emerge. As the phase-down approached a 37 per cent cut in HFC supply in 2018, prices of HFCs skyrocketed, reaching a peak of six to 13 times higher than the original price in 2015 and the illegal trade surged. EIA investigations have since exposed ongoing illegal trade hotspots and methodologies used by smugglers in two reports: “Europe’s Most Chilling Crime” in 2021 and “More Chilling Than Ever” in 2024.

The 2018 discovery by scientists of significant unexpected emissions of CFC-11, which EIA investigations tracked to illegal CFC-11 production and use in China, reminded the Parties of the fragility of the Montreal Protocol’s achievements and has stimulated an examination of the institutions and processes of the Montreal Protocol with a view to strengthening implementation and ensuring the sustained phase-out of ODS and the phase-down of HFCs.

  • (1997) our first undercover investigation report exposed the illegal trade of CFCs, putting the spotlight on Europe and the USA to act
  • (120,000-440,000) The estimated cumulative emissions of CFC-11 in tonnes over 2012-19 due to illegal production and use in China, equivalent to up to 2.4 billion tonnes of CO2-equivalent emissions
  • (20-30) EIA’s estimate of the illegal HFC trade in the EU as a percentage of the legal trade in 2021
  • 1 st

    undercover investigation report

    In 1997 our first undercover investigation report exposed the illegal trade of CFCs, putting the spotlight on Europe and the US to act

  • 440000

    tonnes of CFC-11 emissions

    The upper estimate for cumulative emissions of CFC-11 over 2012-19 due to illegal production and use in China, equivalent to up to 2.4 billion tonnes of CO2 emissions

  • 30 %

    illegal HFC trade

    EIA’s upper estimate of the illegal HFC trade in the EU as a percentage of the legal trade in 2021

Moving forward

EIA investigations and reports have exposed multiple flaws in implementation and enforcement of the EU F-Gas Regulation. In 2024 law makers responded to the problem, introducing a raft of innovative measures aimed at curbing illegal trade. The challenge now lies in their implementation.

As developing countries near the end of the HCFC phase-out and begin to phase down HFCs, the need for effective enforcement of all Montreal Protocol controls has never been greater. EIA will continue to expose illegal trade in HFCs and ODS in Europe and beyond, sharing lessons learned and advocating for improved policies and better enforcement at the global level.

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