What are the main legal consequences if a party ratifies the Kigali Amendment to the Montreal Protocol?
Advice:
1. Legal obligations contained in the Amendment
The main legal effect of the Kigali Amendment is to introduce a new Article 2J, a new Article 5(8) qua and a new Annex F to the Montreal Protocol. Together these provide a framework for ensuring: (i) further reductions in the consumption of certain HFCs; (ii) reductions in production of certain HFCs; and (ii) that the destruction of certain HFCs is done (to the extent practicable) in accordance with appropriate technology.
Further amendments concerning other matters, such as the control of import and export of controlled substances are also introduced by the Kigali Amendment, and further set out below (under b).
a) Articles 2J and 5(8) qua
Reductions in HFCs that Parties are required to make under the Kigali Amendment vary depending on whether a State is an “Article 5 Party” (developing countries) or a “non-Article 5 Party” (developed countries). The relationship between the two main amendments is, therefore, commonly described as the new Article 2J setting out the obligations for developed States, while the new Article 5(8) qua determines the obligations for developing States.
Article 5 and non-Article 5 Parties are each divided into furthers groups[1] with different baseline years and phase-down schedules, with the former (developing countries) being entitled to delay their compliance with the control measures set out in Article 2J. The relevant percentages, baselines and gases that apply to the reductions can be found in the new Articles 2J, Article 5(8) qua, and the new Annex F. This Annex also identifies the global warming potential (GWP) values for HFCs.
As to the legal obligations contained in the new Article 2J and Article 5(8) qua, these Articles effectively provide that States will: (i) reduce consumption of Annex F Group I HFCs; (ii) reduce production of Annex F Group I HFCs; and (iii) destroy Annex F Group II HFCs in accordance with the percentages, time lines and processes set out in Article 2J and Article 5.
Under the Amendment, Montreal Protocol parties are required to gradually reduce HFC use by 80-85 per cent by the late 2040s. First reductions by most developed countries are expected in 2019. Most developing countries will follow with a freeze of HFCs consumption levels in 2024, and in 2028 for some developing countries.[2]
For most non-Article 5 States, for example, the obligation to reduce the consumption and production of HFCs gases starts (if the Amendment enters into force and a State is a Party) from 2019 first with a 10% reduction, measured against a baseline of the average 2011 – 2013 HFCs production/ consumption plus 15% of the HCFC baseline production/consumption; ending with an 85% reduction in 2036, measured against the same baseline. The majority of Article 5 States are entitled to delay their compliance with the control measures set out in Article 2J until 2024. Thereafter, reductions commence with a 10% reduction in 2029, measured against a baseline of the average 2020 – 2022 HFCs production/consumption plus 65% of the HCFC baseline production/consumption; ending with an 80% reduction in 2045, measured against the same baseline.
For more information on the phase-down schedules, the UN has produced a table that summarizes the changes and is available at: http://ozone.unep.org/sites/ozone/files/pdfs/FAQs_Kigali_Amendment.pdf.
In addition, States are required to destroy Annex F Group II gases to the extent practicable using technologies approved by the Parties in COP decisions, in accordance with Article 2J (6) and (7). Unlike the obligations set out above, they do not distinguish between Article 2 and Article 5 States. Hence, the developed and developing States are under the same obligations to destroy Annex F, Group II gases.
b) Other amendments
In addition, the Kigali Amendment introduces various amendments to the Montreal Protocol that seek to update the Protocol to reflect the new provisions in Article 2J and Article 5(8) qua.
These amendments can broadly be summarized as requiring state Parties to the Kigali Amendment to ensure that they act in accordance with their obligations to reduce emissions as committed in Articles 2J or Article 5(8) qua, as respects prior existing obligations in the Montreal Protocol. For instance, the gases in Annex F are introduced as “controlled substances” (new Article 1(4)), States are permitted to share their quotas for the purposes of regional organizations (new Article 2(8)(a)) and adjustments are permitted to be made to Annex F (new Article 2(9)(a)(ii)).
In keeping with the high-level nature of this note, I do not provide further details of the above amendments at this stage. That said, for current purposes, Articles: 4(1) sept; 4(2) sept; 4(5); 4(6); 4(7); 4B 2bis and 7 require specific mention:
Articles 4(1) sept; 4(2) sept; 4(5); 4(6), 4(7) impose restrictions on State Parties to the Amendment regarding trade with non-State Parties in respect of the controlled substances in Annex F. Such restrictions range from a ban on imports from (and export to) states not Party to the Protocol to an obligation to refrain from providing new subsidies that would facilitate the production of controlled substances. These measures are not staggered for Article 5 Parties and apply from the moment of entry into force of the Amendment, in the same manner as for non-Article 5 Parties.
Article 4B 2bis is also significant because it requires that each Party shall establish and implement a system for licensing the import and export of new, used and reclaimed controlled substances in Annex F by 1 January 2019, or within three months of the entry into force of the paragraph – whichever is later. An Article 5 Party that decides it is not in a position to meet that deadline may delay until 1 January 2021.
Finally, the Amendment requires monitoring and reporting of HFC consumption and production, and HFC-23 emissions where relevant (see new Article 7(2) (3) and (3ter)). When considering whether to ratify, States should be aware that they will be required to report in due course. If they are unable or unwilling to, they should give careful consideration as to whether they can ratify the Amendment, without exploring the precise reporting obligations in further detail.
2. Potential benefits of becoming a party to the Kigali Amendment[3]
By agreeing to phase down consumption and production of HFCs, Parties to the Kigali Amendment create the potential for collectively avoiding up to 0.5% of global warming by the end of the century. The Montreal Protocol has an excellent track record in terms of its prior amendments and adjustments having received universal support. Those States that ratify the Amendment early will lead by example.
In addition, there are a number of incentives for Article 5 Parties to ratify the Kigali Amendment:
a) Access to financial support:
- as part of the financial mechanism established under Article 10 of the Montreal Protocol to support Article 5 Parties’ compliance with the Protocol is a Multilateral Fund (MLF), which meets the agreed incremental costs of Article 5 parties. The 28th Meeting of the Parties in Kigali made a number of key decisions about MLF support for Article 5 Parties.
- The Executive Committee of the MLF has been requested to develop guidelines for financing the phase-down of HFC consumption and production, including guidelines that will make enterprises eligible for funding for second and third conversions (to low GWP or zero-GWP alternatives) to comply with the Amendment where they have already made a first conversion in order to phase out substances in accordance with the Montreal Protocol.
- Extra financial support will be available for Article 5 Parties that make a fast start to phasing down HFCs.
b) Flexibility in implementation: the Amendment allows parties a degree of flexibility in implementing their obligations, giving them opportunities to phase down HFCs in a way that suits their needs and interests. Article 5 Parties “will have flexibility to prioritize HFCs, define sectors, select technologies and alternatives and elaborate and implement their strategies to meet agreed HFC obligations, based on their specific needs and national circumstances, following a country-driven approach”.[4]
c) There will be support for enabling activities for institutional strengthening, import and export licensing and quotas, Article 7 reporting, demonstration projects and the development of national strategies for phasing down HFCs.
d) There will be some exemptions for Article 5 Parties from the HFC phase-down requirement, e.g. where a high-ambient-temperature exception applies. Other exemptions, e.g. for essential uses for production and consumption, will also be considered.
e) Avoidance of trade controls: Article 4 of the Montreal Protocol restricts parties from trading controlled substances with states not party to the Protocol. The Kigali Amendment, when Article 4 enters into force [5], will restrict trade in HFCs between Parties and states that are not parties to the Kigali Amendment. This means that there is an incentive for states to ratify the Amendment before the associated trade restrictions enter into force.
f) The use of innovative technologies when implementing the Amendment may give Parties a competitive advantage in the world market.
g) Participation at minimal extra cost: States will not incur significant international meeting costs when they ratify the Amendment because it is part of the Montreal Protocol and the vast majority of states regularly attend its meetings. Article 5 Parties will participate in meetings with the support of the Trust Fund of the Montreal Protocol.
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[1] Developing countries group 2: Bahrain, India, the Islamic Republic of Iran, Iraq, Kuwait, Oman, Pakistan, Qatar, Saudi Arabia and the United Arab Emirates; and distinct baselines and steps for developed country parties Belarus, Russian Federation, Kazakhstan, Tajikistan, Uzbekistan. [2] UNEP, Frequently asked questions relating to the Kigali Amendment available at: https://ec.europa.eu/clima/sites/clima/files/faq_kigali_amendment_en.pdf [3] This section is largely based on the Briefing Note on Ratification of the Kigali Amendment, February 2017, prepared by the UN Environment Ozone Secretariat and available at http://conf.montreal-protocol.org/meeting/oewg/oewg-39/presession/briefingnotes/ratification_kigali.pdf [4] See paragraph 13 of Decision XXVIII/2 [5] Trade restrictions will enter into force on 1.01.2033 provided at least 70 Protocol parties have ratified the Amendment.