Australia’s HFC levy one year on – part 2

By Klara Skačanová, Aug 19, 2013, 14:08 4 minute reading

While industry representatives argue that a lack of preparatory work prior to the introduction of the Australian HFC tax undermined its effectiveness, high HFC retail prices and strong demand for energy efficient, low-GWP technologies are anticipated nevertheless. For the HFC levy to perform as intended training, awareness raising and standards are vital, as is Federal legislation defining compliance requirements for all HVAC&R systems nationwide.

Since its introduction in July 2012, the HFC levy has met with strong opposition, which led to the recent announcement by Australia’s prime minister that its level will be reduced. It may even be abolished if the Liberal Party wins the elections in September 2013.
Resistance by both industry and government to implementation of the HFC Levy has undermined its effectiveness quite significantly,” says Tim Edwards, President of the Australian Refrigeration Association (ARA). “Whilst we consider the HFC levy to be a valid policy, clearly it can only be fully effective if it is supported by the required complimentary measures; awareness, training, standards, new technology validation and commercialisation, enforcement”, he adds.

Lack of supporting policy undermining effective implementation

According to the ARA, a great deal of preparatory work should have been done prior to the introduction of the levy to ensure its effective implementation, including:
  • A major communications programme to explain the logic and impact of the levy
  • A major training programme for all stakeholders including contractors and end-users as to the implications of the levy
  • Facilitation of natural refrigerant-based technology commercialisation
  • Resolution of HVAC&R standards and licensing requirements across the full range of applications
  • New licensing provisions for recovery, recycling and/or destruction of refrigerants

High energy and HFC retail prices to further drive introduction of natural refrigerants

Despite shortcomings in the implementation of the HFC levy, industry is adjusting to the realities of the market, resulting in:
  • Significant increase in energy prices (about 100%) in the last three years
  • Increase in HFC retail prices by 300% on average

It is likely that this situation will persist even after changes to the carbon tax legislation, given that 90% of the energy price increase is a result of factors other than the carbon tax and the fact that the fluorocarbon suppliers are likely to maintain premium refrigerant prices. As a result of these market realities there is a strong demand for energy efficient HVAC&R technology and increasing demand for engineers and contractors skilled in the use of natural refrigerant-based technologies.

Federal Laws regulating the use of natural refrigerants need to be put in place

One of the issues emerging in Australia that is posing difficulties for the introduction of natural refrigerants for different applications is the absence of Federal Laws regulating the use of natural refrigerants. “Federal Laws by definition override State Laws. However, when there are no Federal Laws regulating the use of natural refrigerants, State Laws and local urban planning rules apply. Often natural refrigerant practitioners therefore find themselves in a situation of having to ensure compliance with regulations that ordinarily apply to service stations, chemical storage facilities and the like. These compliance requirements are in addition to the design standards applicable to the system design as such”, explains Stefan Jensen from Scantec Refrigeration Technologies.

As an example he points to the failed attempts to commission two HC based 75 kW water chilling packages for air conditioning at the Global Change Institute at the University of Queensland. “This is a result of the requirements of the “Petroleum and Gas (Production and Safety) Regulation 2004” which dictates very stringent approval requirements and HC charge limitations. There are currently no HC training courses on offer in Queensland that entitle the holder to work on air conditioning systems with a charge exceeding 1.5 kg of HC. The units at the University of Queensland hold 2.25 kg”, Mr Jensen adds.

New Work Health and Safety Act in conflict with carbon tax legislation

Recently Australia has introduced stricter rules within the Work Health and Safety Act (WHS Act) in some States and Territories, which include higher penalties and stricter requirements to mitigate and minimise risks to workers and the public by design.

“The new WHS Act in some ways conflicts with the Clean Energy Future (CEF) legislation. The carbon equivalent HFC levy is part of the CEF legislation. The CEF legislation attempts to transition the Nation towards more toxic, more flammable and more high pressure refrigerants. The designer has to reconcile this with the WHS Act, which dictates risk minimisation by design”, explains Mr Jensen. While the WHS Act dictates that a responsible designer has to be “suitably qualified”, there are currently less than 50 “refrigeration engineers” with qualifications at a tertiary level in Australia.
The current future developments are impossible to predict. However, for the HFC Levy to perform as intended, Federal legislation defining compliance requirements for all HVAC&R systems nationwide needs to be introduced. These compliance and risk management requirements can be as stringent as they need to be in the interest of protecting the workers and the public, but they need to override State Laws”, emphasises Mr Jensen. “Unless this is forced through, the transition of the Nation towards natural refrigerants could then in effect be frustrated by the same people who introduced the HFC levy in the first place”, he adds.


By Klara Skačanová

Aug 19, 2013, 14:08

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