Montreal Protocol on Substances that Deplete the Ozone Layer, Report of the Technology and Economic Assessment Panel, Volume 2 Decision XXXI/7 - Continued Provision of Information on Energy-Efficient and Low Global Warming Potential Technologies

EXECUTIVE SUMMARY Key Messages • In the context of accelerating climate change, cooling demand is also increasing rapidly. If unmanaged, this will result in a vicious circle, with increasing global warming through greater energy consumption combined with the use of higher GWP refrigerants. • Addressing access to cooling and its adverse impacts has been a low priority historically, although this is rapidly changing. Cooling is included in all five themes at UNFCCC COP-26. The importance of a combined strategy to improve energy efficiency of cooling equipment while phasing down HFC refrigerants under the Kigali Amendment to the Montreal Protocol is increasingly being recognized as one of the biggest climate mitigation opportunities available today. • Reports from TEAP, UNEP, International Energy Agency (IEA), Kigali Cooling Efficiency Program (K-CEP), Clean Air and Climate Coalition (CCAC) and other institutions all emphasise the climate mitigation opportunity. New initiatives such as, the Cool Coalition, Twinning Training for senior energy and environment officials from A5 parties, and government leadership on developing national cooling plans, are all creating more visibility for these issues. • The coordination of energy efficiency with the implementation of HCFC phase out and HFC phasedown enables industry to explore the synergies in redesigning equipment and retooling manufacturing lines, in which the MLF and the implementing agencies have great experience. The EETF has confirmed that it is possible to leapfrog from HCFCs directly to lower GWP options in many sectors in different regions. • The 2019 EETF assessment of availability showed that low efficiency cooling equipment generally used higher GWP refrigerants, while equipment using lower GWP alternatives was generally of higher efficiency. • The further transition to low GWP and higher EE equipment would be expedited by the coordinated adoption of refrigerant policies with the revision of minimum energy performance standards (MEPS) and labels. In contrast, ambitious MEPS alone can undermine the HFC phasedown by encouraging improved EE of AC equipment, but with the use of high GWP refrigerants including R-410A, especially in countries that are primarily technology receivers. • A5 parties developing a large installed base of low EE equipment, will be economically disadvantaged as valuable electricity capacity is lost from other uses, and because of the need to build more generating capacity. The economic disadvantage could last for decades due to the long product lifetimes of cooling equipment. • Since the 2019 EETF Report, the EETF identified additional technical improvements such as sensors, controls and condenser precooling. 2 • Availability1 : Technology and refrigerants are now widely available to replace most high GWP HFCs, with both natural and lower GWP fluorinated refrigerants options covering key sectors. This is supported by the best practice case studies in this report. • Accessibility2 : Whilst there is good availability of high EE / low GWP products in some regions, the accessibility to these technologies is low in many A5 parties and even in some non-A5 parties. Improved accessibility to high EE/lower GWP AC in A5 parties could be achieved sooner by: o early signalling from the Montreal Protocol to the air conditioning and refrigeration industry o supporting policy designed to improve accessibility e.g. tackling market barriers affecting the end consumer; o adopting ambitious and progressive energy performance standards across regions that are appropriately harmonized and coordinated with HFC phasedown strategies (e.g., U4E model regulations); o coordinating multi-agency funding for A5 enterprise conversions for both high EE and low GWP refrigerants. • Progressive legislation, such as the EU F-gas regulation, has enabled a faster implementation of lower GWP refrigerants. • Individual parties could consider adopting a fast mover status, with ambitious integrated regulation for the HCFC phase out and HFC phasedown with progressive EE improvement. • Parties could consider asking TEAP to assess options for simplified and harmonised emissions reductions, including the costs and benefits of the ongoing HCFC phase out and the HFC phasedown of high GWP refrigerants, taking into account the potential benefits from the synchronised improvement in energy efficiency.