President of the Australian Refrigeration Association Tim Edwards has slammed a federal government decision not to pursue product stewardship arrangements for domestic airconditioning and refrigeration equipment, saying the move contravenes Australia’s commitments to the Montreal and Kyoto protocols.

The decision, announced last month by the Department of Environment, was based on a cost-benefit analysis by KPMG that showed “no net benefit” if end-of-life equipment was subject to stronger de-manufacture and recycling protocols.

This is despite KPMG’s introduction to the report noting that “the current treatment of [refrigeration and airconditioning] equipment at end-of-life has, and continues to create, a range of health and environmental impacts and loss of recoverable resources, resulting in a range of externalities whose costs are borne by businesses and society.”

KPMG modelled four scenarios – business as usual, a voluntary product stewardship scheme, a co-regulatory scheme and a mandatory scheme.

The report said that under all scenarios, except BAU, “the costs are largely borne by industry and benefits flow to the community and the environment. Benefits also accrue to industry through the value of materials recovered from RAC equipment including metals and plastics.”

The modelling showed a benefit of between $1.3 million and $9.1 million worth of reduced carbon emissions over 10 years from 2014-2024, assuming a value of $9.50 a tonne of CO2 equivalent for emissions, a figure based on the recommendations of the Expert Panel reviewing the Renewable Energy Target.

KPMG stated that the largest dollar-value source of benefits under each option was the increasing recovery of RAC equipment materials including metals and plastics, noting that “the results of the analysis are highly sensitive to changes in unit value placed on recovery of metals, plastics and refrigerant gas”.

In publishing its decision not to push product stewardship, DoE stated, “A cost benefit analysis did not show a net benefit to society and the department will not pursue further work on end-of-life domestic refrigeration and air conditioning equipment at this time”.

Mr Edwards said the decision was “fundamentally flawed” as it was contrary to Australia’s commitments under both the Montreal and Kyoto protocols.

Currently, there are a small number of voluntary retailer take-back programs and state government run programs, some collection and destruction of refrigerant gases by RAC suppliers and manufacturers, and some collection of ferrous metals and some collection of non-ferrous metals.

The KPMG analysis found that around 20 per cent of the refrigerant gases in domestic airconditioning systems, which include both ozone-depleting gases and gases with high global warming potential, were emitted into the atmosphere at end of life. In the case of fridges and freezers, up to 60 per cent of the refrigerants were emitted at end of-life.

“And we’re not just talking about a few fridges being shredded,” Mr Edwards said.

ARA estimates there are over 53,000,000 refrigeration and airconditioning installations in Australia. The vast majority contain high GWP synthetic refrigerants and blowing agents, and in older units may also include ozone-depleting materials such as the now-banned chlorofluorocarbons. In 2001, Environment Australia estimated that 710,000 of these units were scrapped annually.

KPMG estimated that the majority of end-of-life units were heading straight to landfill, where they were shredded. In some cases, the metals fraction was recovered for recycling, and in almost all cases the plastics [shredder floc] were deposited into landfill, along with the polyurethane foams used for insulation.

During the shredding process, the insulation emits a range of greenhouse gases and ozone depleting substances straight into the atmosphere.

“About 60 per cent of the synthetic gases in end-of-life equipment is the blowing agent used in the insulation of the equipment,” Mr Edwards said.

Calls to rethink the position

ARA is calling on the government to rethink the decision not to pursue similar product stewardship arrangements as are in place for televisions and computers under the National TV and Computer Recycling Scheme.

It also argues that the airconditioning systems in cars and other refrigeration units such as display cabinets must be included if Australia is to address its responsibilities to reduce greenhouse gas emissions and limit the release of ozone depleting substances.

“The decision [not to proceed with product stewardship] flies in the face of international policy, practice and experience. RAC product stewardship is well understood worldwide. Technologies for environmentally responsible ‘demanufacture’ of fridges, freezers, airconditioning systems and cars is available and a legal requirement in Europe and Japan, and employed in these countries as well as the United States and Canada,” Mr Edwards said.

“Australia’s decision to not establish a product stewardship program for RAC makes Australia a free rider in the international community and puts us in breach of our own legislation and international agreements.

“This is all just more evidence that Australia is not capable of shouldering its environmental responsibilities.”

DoE also stated that the KPMG report and the industry consultation around end-of-life RAC would contribute towards the review of the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 and associated legislation. Parts of this act were already repealed as part of the Omnibus Repeal Day in August last year, including a requirement to report remnant ozone-depleting gases that remain in refrigeration equipment after decommissioning.

DoE has said “the Ozone Review aims to identify opportunities to reduce compliance costs for businesses and individuals and to reduce emissions of ozone depleting substances and synthetic greenhouse gases in line with international efforts”.

The KPMG report and other information about RAC product stewardship can be found here.

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  1. Not only should we be decommissioning and recycling materials we should have a mandatory efficiency improvement schedule equivalent to Japan’s Top Runner program for A/C units, fridges and other home and office equipment which uses large amounts of energy. Discussed in the Zero Carbon Australia Buildings Plan

  2. More wilful negligence by an irresponsible government.
    We need a new government that cares for our common future.

    The cost of gas recovery really needs to be built into purchase price of all new appliances which contain refrigerant gases with a global warming potential in excess of about 10.