EUROPE: As much as 31MtCO2e of HFC refrigerant could have entered through EU borders illegally in 2019, according to a new investigation by refrigerant producers.
The latest figures from Oxera Consulting on behalf of the EFCTC highlights the extent to which uneven enforcement by EU member states has created an opportunity for criminals to bypass the quota system and import HFCs into the EU illegally.
There is also added concern that this year’s reduction of the quota from 63% to 45% of the 2015 baseline could create new opportunities for smugglers to fill the gap.
“In a worst-case scenario where demand for HFCs were to stay around the same level after the 2021 phase-down and enforcement were not to improve, this large black market could double in size,” says the EFCTC.
The figures are based on data from a range of sources – the official EU Eurostat database, the UN Comtrade trade database, data from the Turkish Statistical Institute and Chinese export data.
With the re-evaluation of the 2018 calculation “due to a data integrity issue” the EFCTC now says that a total of up to 73MtCO2e could have been smuggled into the EU between 2018 and 2019.
Chinese data discrepancy
The investigators had previously identified a discrepancy between the export volumes reported by China and the import volumes reported by the EU. This discrepancy decreased slightly from 2018 to 2019.
“However, exports from China to EU neighbouring countries increased by 17% from 2018 to 2019. Even with market growth taken into account, a potential 23MtCO2eq of excess imports of HFCs could be destined for illegal trafficking to the EU market,” said Dave Smith, business director at Koura Global, an EFCTC member company.
Ville Itälä, director-general of the European Commission’s fraud office, OLAF, said that the black market was “still a huge challenge”, with 2020 seeing the largest seizures of illegal HFCs ever.
“At peak times, we alerted member states of illegal shipments on a daily basis,” said Ville Itälä. “When a shipment is stopped somewhere, we often observe a decrease in illegal activity in that member state, with smugglers using different routes to get into the EU.”