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This publication is available at https://www.gov.uk/government/publications/fluorinated-gases-and-ozone-depleting-substances-how-to-do-business-if-the-uk-leaves-the-eu-with-no-deal/using-and-trading-fluorinated-gas-and-ozone-depleting-substances-rules-and-processes-if-the-uk-leaves-the-eu-with-no-deal
If the UK leaves the EU with no deal, the UK will regulate fluorinated greenhouse gases (F gas) and ozone-depleting substances (ODS) from 30 March 2019.
F gas and ODS are substances used mainly as refrigerants, but also in other products including:
- medical inhalers
- fire extinguishers
- insulation foams
- feedstocks for the manufacture of other chemicals
This guide is for businesses and individuals who currently need to follow EU regulations:
This affects you if you:
- produce, supply, import, export or use bulk F gas or ODS
- manufacture or import equipment containing F gas or ODS
You can use this guide if you service:
- commercial, industrial and transport refrigeration and air conditioning systems
- other products containing F gas or ODS
UK regulation of F gas and ODS from 30 March 2019
If the UK leaves the EU without a deal, EU F gas and ODS regulations will no longer apply in the UK from 30 March 2019.
New UK regulations will transfer most of the requirements of the EU regulations into UK law.
The UK will continue to:
- restrict ODS
- use the same schedule as the EU to phase down HFCs (hydrofluorocarbons, the most common type of F gas) by 79% by 2030 relative to a 2009 to 2012 baseline
That means UK F gas quotas will follow the same phase down steps as the EU:
- limited to 63% of the baseline in 2019 and 2020
- reducing to 45% of the baseline in 2021
Most of the rules for F gas and ODS will not change. However, the UK will have separate quota systems, and the IT systems UK businesses use to manage quotas and report on use will change.
You’ll still need to comply with EU regulations on products you place on the EU market after exit.
New quota systems for F gas (hydrofluorocarbons - HFCs) and ODS
When the UK leaves the EU, it will manage its own quota systems.
If you produce, import or export HFCs (the main class of F gases) or ODS, or products containing HFCs or ODS, you’ll need to apply for a:
- UK quota to place them on the UK market
- EU quota to place them on the EU market
If you import or export ODS, including to and from the EU, you’ll need to apply for a UK import or export licence.
Scotland, Wales and Northern Ireland have all decided to remain part of a single, UK-wide system if the UK leaves the EU with no deal on 29 March 2019.
The Environment Agency will administer the systems for the whole of the UK.
Costs to use UK IT systems
The Environment Agency could charge regulated businesses to recover costs of running the quota and reporting systems. It will consult before deciding whether to charge. The consultation will include the level of any charges and the activities to which they would apply.
HFC quota system
If the UK leaves the EU without a deal, the UK will leave the EU F gas system from 30 March 2019.
Before 30 March 2019 you should continue to use your EU quota to place HFCs on the UK market.
After 30 March 2019 you’ll need a UK HFC quota if your business places on the UK market HFCs equivalent to 100 tonnes or more of carbon dioxide (CO2 ) per year. This total includes any imports to the UK from the EU.
The Environment Agency will manage a new UK F gas system, including UK HFC quota allocation.
You will need to register on the new UK F gas system to:
- apply for a UK quota
- report on your activities
If the Environment Agency has your company data, it may register your details for you.
The Environment Agency will publish details of how to use the UK F gas systems in early 2019.
Uses of F gas exempt from quota
You’ll still need to register on the F gas IT system, but you will not usually need a quota for HFCs if you:
- import to destroy or re-export
- recycle or reclaim them
- produce or import for subsequent export from the UK, including to the EU
- produce or import for feedstock, military equipment, semiconductor materials or metered dose inhalers
Applying for UK HFC quota as incumbent quota holder
You’re eligible to apply for a UK HFC quota as an incumbent if all of the following apply:
- you put HFCs on the UK market legally in the years 2015, 2016 or 2017
- you provided data to the Environment Agency giving the quantities of HFCs you placed on the UK market in those years
- your business is established within the UK or has appointed an ‘only representative’ which is established in the UK
An independent auditor must verify the data you provided to the Environment Agency.
Defra wrote to all incumbent EU quota holders in January 2018 inviting them to provide this data. Email email@example.com if you did not get a letter asking you to report this data, and both of the following apply:
- you’re an EU incumbent quota holder
- you placed HFCs on the UK market in 2015, 2016 or 2017
If you put HFCs on the market for the first time in 2017, you may still be classified as a new entrant rather than an incumbent quota holder. This means you’re not automatically eligible for a UK quota and must apply as a new entrant.
The Environment Agency will:
- Check your reported verified data.
- Use the data to calculate your UK reference value - this will be the baseline for calculating your UK quota amount.
- Contact you with your reference value in December 2018.
You’ll need to confirm that you want a UK reference value and provide company details.
The Environment Agency will then:
- Register you on the UK F gas system with the details you provide.
- Email you to say they have registered you and provide you with an Organisation ID.
- Contact you again to tell you how much UK quota you’ll receive for the period 30 March to 31 December 2019.
This will be the amount of HFCs that you can place on the UK market in that period.
For 2020 and all following years you’ll get a:
- UK quota automatically based on your UK reference value
- notification each year of your allocation for the following year
As under the EU system, quota reference values will be re-calculated every 3 years based on HFC quantities placed on the UK market.
Applying for UK HFC quota as a new entrant or for additional HFC quota
As with the EU system, a portion of the total quota allocation for the UK will be allocated to those applying for new or additional quota each year.
You can apply for quota from this reserve to use from 30 March 2019 if you:
- did not place HFCs on the UK market in the years 2015, 2016 or 2017 - you’re a new entrant
- are an incumbent quota holder and need additional quota
You’ll need to apply for UK new entrant quota even if you had new entrant quota for 2018 from the European Commission. You can use your EU new entrant quota to place HFCs on the UK market only until 29 March 2019.
The amount of UK new entrant quota you get may not be the same as the EU quota you had for 2018.
You first need to register on the UK F gas system. The Environment Agency will publish guidance in early 2019 on:
- how to use the UK F gas system to apply for quota
- when registration opens
- the deadline for registering
After registering, you’ll use the UK F gas system to apply for a quota. In your application you’ll need to specify the types of HFCs and the quantities you’d like to place on the market.
The Environment Agency will then tell you the amount of UK quota you have been allocated for the period from 30 March to 31 December 2019. You may get less than you applied for if the total amount which applicants request is more than the reserve.
If you want to apply for UK quota again for 2020 and subsequent years, you must do this on the UK F gas system. The Environment Agency will issue a notice each year of the dates when you can apply.
If the Environment Agency approves your application, it will publish the quantity you have been allocated on the UK IT system.
How new entrants become incumbent quota holders
From 2021 and every 3 years after, new entrants will become incumbent quota holders if they:
- placed HFCs on the UK market
- have reported the quantities on the UK reporting system
The Environment Agency will issue new quota holders with a UK reference value which will automatically entitle them to a UK quota in future years.
Transferring and authorising quota
You’ll be able to use the new UK F gas system to:
- transfer some or all of your UK quota to another producer or importer based in the UK, or who has an only representative in the UK
- authorise another company to use some or all of your UK quota for placing pre-charged equipment on the UK market
The type of data you’ll need to enter will be similar to the EU registry requirements.
The Environment Agency will publish guidance on how to use the UK F gas system to transfer or authorise quota in early 2019.
Importing HFCs in pre-charged equipment
If you import each year pre-charged equipment containing one or more metric tonnes of HFCs, or a quantity of HFCs equivalent to 100 tonnes or more of CO2, you must have a UK quota. This includes imports from the EU.
You must hold sufficient quota authorisations. If you do not, you must get one of the following:
- quota authorisation from a UK quota holder
- delegated authorisation from another authorisation holder
You must register on the UK F gas system to receive quota authorisations and delegations.
Importing bulk HFCs to pre-charge equipment for export
If you want to import to the UK bulk HFCs to pre-charge equipment you’ll need:
- a UK quota to import the bulk gas to the UK
- EU quota authorisations to export the pre-charged equipment to the EU
If you import F gas to the UK solely for re-export and not for the UK market, you may be able to use the inward processing procedure. This would mean you do not need UK quota.
If you get bulk gas from an EU-based producer or importer, they could authorise you to use their EU quota to export equipment back to the EU. This is because they will not need to use their EU quota to send the gas to you.
Other aspects of the requirements for placing pre-charged equipment on the market will be similar to the EU regulation. These include documenting and verifying quota compliance, and a declaration of conformity.
Converting EU quota authorisations into UK authorisations
You can apply to exchange your unused EU authorisations, including delegated authorisations, for UK authorisations to place pre-charged equipment on the UK market from 30 March 2019.
You can only exchange EU authorisations held before 30 March 2019.
To do this you’ll need to:
- register with the Environment Agency IT system to get an organisation ID
- email firstname.lastname@example.org with the amount you want to convert
If the Environment Agency approves your application they will register the UK authorisations on the UK F gas system in your name.
You must tell the European Commission the quantity that you have exchanged. You must not use the same authorisations in both the UK and EU markets
By 31 March 2020 you must provide independently verified evidence to the Environment Agency that you:
- held a sufficient quantity of unused EU authorisations
- have notified the European Commission of the quantity exchanged
This evidence must include:
- copies of transactions in 2019
- your annual F gas report for 2018 as submitted in the EU reporting system
- confirmation that you notified the European Commission of the amount of quota you will exchange
If you do not provide this evidence to the Environment Agency by 31 March 2020, your UK authorisations may be cancelled.
Placing HFCs on the EU market
If you hold, or want to apply for, EU quota to place HFCs on the EU market, you should continue to follow the EU F gas regulation.
The European Commission will allocate your quota, adjusted to deduct your UK market share, from the point at which the UK leaves the EU system.
To continue to be eligible for EU quota to place HFCs on the EU market, you’ll need to do one of the following before 30 March 2019:
- set up an office in the EU
- appoint an ‘only representative’ in the EU
Reporting F gas activities
You must report on the UK F gas reporting system if each year you:
- produce, import or export one or more metric tonnes of F gas, or a quantity of F gas equivalent to 100 tonnes or more of CO2
- destroy F gas equivalent to one metric tonne or 1,000 tonnes of CO2or more
The deadline for reporting and the verification you need to submit to the Environment Agency will not change.
You must report:
- 2018 F gas activity on the EU system by 31 March 2019
- EU and UK F gas activity between 1 January and 29 March 2019 on the EU system by 31 March 2020 (as the UK will still be in the EU during that period)
- UK F gas activity between 1 January and 31 December 2019 on the UK reporting system by 31 March 2020
The type of data you’ll need to enter will be similar to the EU registry.
The Environment Agency will publish guidance on how to use the UK reporting system in early 2019.
Holders of EU F gas quotas
If you’re based outside the UK and EU and have an only representative based in the UK, you must appoint an only representative in the EU to continue to be eligible for EU quota after exit. The European Commission can advise.
Email the European Commission helpdesk CLIMA-HFC-REGISTRY@ec.europa.eu to find out how to specify or change an only representative on the EU system. Alternatively, read the European Commission’s guide on quota allocation, authorisation and reporting.
Other F gas requirements
When the UK leaves the EU, many of the rules for F gases will not change, including requirements or restrictions:
- to prevent intentional release of F gases
- to prevent the unintentional release of F gases during production and use
- to minimise and repair leakages
- to check leaks and keep records
- to use leakage detection systems
- to provide evidence that trifluoromethane produced during the production of F gases has been destroyed
- to recover F gases from equipment for recycling, reclamation or destruction
- on placing certain products and equipment on the market
- on sales of F gases to businesses which do not hold the relevant certificates or attestations
- for product and equipment labelling
- on the use of certain F gases for magnesium die-casting, vehicle tyres or servicing certain refrigeration equipment
Requirements in the UK will also not change on:
- the individual qualifications and company certifications you need to install, service, maintain, repair, decommission or check for leaks in certain equipment or the recover F gas
- the content and requirements of training and certification programmes
- the validity of existing certificates and training attestations, including those issued by EU member states both before and after the UK leaves the EU
When the UK leaves the EU, the rules will stay the same for ODS that you:
You’ll have the same responsibilities to:
- maintain equipment
- control leaks
Rules on how you can supply and use ODS will remain the same, including for:
- process agents
- essential laboratory and analytical use
- halons for certain critical uses
ODS quota system
To place ODS on the UK market after 29 March 2019, you’ll need to apply for ODS quota on the new Environment Agency ODS system. You’ll need to:
- Register on the UK ODS system to get an organisation ID.
- Apply for a quota on the UK ODS system - specify how much you need and how you will use it.
If your application is successful the Environment Agency will notify you how much UK quota you have been allocated for 30 March to 31 December 2019.
To get quota for 2020 and subsequent years you must apply on the UK ODS system.
You’ll need to apply by 8 June every year for a quota for the following year. For example, if you want a quota to use in 2021, you must apply on the ODS system by 8 June 2020.
If approved, the Environment Agency will put your allocation on the ODS system.
Instructions on how to use the ODS system will be issued in early 2019.
Importing and exporting ODS
You’ll need to use the new Environment Agency system, instead of European Commission systems, to apply for a licence to import or export ODS, including to and from the EU.
The information that you’ll need to provide to get a licence will not change.
The Environment Agency will publish guidance on how to register and use the new UK ODS system in early 2019.
You still must not trade with countries or territories which are not party to, or do not comply with, the United Nations Montreal Protocol.
Reporting ODS use
You must report your ODS use by 31 March each year. You must report:
- 2018 activity on the European Commission’s systems as normal by 31 March 2019
- activity between 1 January and 29 March 2019 on the EU system by 31 March 2020
- UK activity for the whole of 2019 on the UK’s new reporting system by 31 March 2020
The Environment Agency will publish guidance on how to use the reporting system in early 2019.
The information you need to report will be similar to that reported under the EU regulation.
Using ODS for laboratory and analytical purposes
If you use ODS for laboratory and analytical uses you must register on the UK system and submit a declaration.
The Environment Agency will publish guidance on when you can start registering and the registration deadline, early in 2019.