Introduction

The 81^st meeting of the Executive Committee, which took place in Montreal, Canada from 18 to 22 June 2018, was attended by the representatives of the 14 Executive Committee member Parties and by participants co‑opted from 22 other countries (see attached list). Mr. Mazen Hussein of Lebanon presided as Chair of the Executive Committee in 2018. Representatives of the Ozone Secretariat, implementing agencies (IAs), UNEP as the Treasurer, and the President of the Implementation Committee, were also present. Non‑governmental organizations that attended as observers included representatives of the Alliance for Responsible Atmospheric Policy, the Environmental Investigation Agency, the Institute for Governance and Sustainable Development, the Kigali Cooling Efficiency Program, the Natural Resources Defense Council, and the Refrigerant Gas Manufacturers’ Association of India.

The agenda for the 81^st meeting included the regular items including the status of contributions and disbursements, the return of project balances, the status of additional contributions for HFC‑phase‑down, the report on country programme data and prospects for compliance, status reports and reports on specific projects, and the consolidated project completion report. With regard to business planning, the Committee considered an assessment of financial planning for the 2018-2020 business plans, and the regular item on tranche implementation delays. Evaluation matters included the preliminary report of the second phase of the evaluation of the refrigeration servicing sector, terms of reference for the desk study for the evaluation of HCFC phase-out management plan (HPMP) preparation activities to assist with the implementation of the Kigali Amendment, and a desk study for the evaluation of gender mainstreaming in Montreal Protocol projects and policies.

Policy matters related to the Kigali Amendment were addressed including the development of the cost guidelines for the phase‑down of HFCs, and key aspects related to HFC‑23 by‑product control technologies. The Executive Committee also considered the implications for Multilateral Fund institutions in terms of expected workload in the coming years, including in relation to the Kigali Amendment for the phase-down of HFCs.

In the margins of the meeting, the Sub‑group on the Production Sector discussed matters including stage II of the HCFC production phase-out management plan (HPPMP) for China.

The Committee took a total of 72 decisions, and approved projects and work programme activities for 90 countries[1] with a value of US $84,446,275 including support costs for bilateral and IAs, of which US $17,368,029 was for HFC-related activities, including US $10,515,677 from the additional voluntary contributions from a group of donor countries for fast start implementation of HFC activities.

Financial matters

Status of contributions and disbursements (decision 81/1)

As at 21 June 2018, the balance of the Multilateral Fund stood at US $117,068,345 which was 45.14 per cent of the total amount pledged for 2018. The loss on the fixed‑exchange‑rate mechanism (FERM) stood at approximately US $34.5 million since the inception of the mechanism in 2000. The Executive Committee urge all Parties eligible to use the FERM to advise the Treasurer of their intention to do so before the 82^nd meeting.

The Executive Committee urged all Parties to pay their contributions to the Multilateral Fund in full and as early as possible and requested the Chief Officer and the Treasurer to continue to follow up with countries that had contributions outstanding for one triennium or more and to report back to the 82^nd meeting.

Report on balances and availability of resources (decision 81/2)

Bilateral and IAs returned balances of US $833,327 against completed projects to the Multilateral Fund, and were requested to return balances to the 82^nd meeting including those from projects completed over two years previously, those from “by decision” projects, and also not-committed balances no longer required for future projects. Taking into account the return of balances and the updated information reported by the Treasurer, the total resources available at the present meeting for new commitments amounted to US $118.8 million.

Status of additional contributions to the Multilateral Fund and availability of resources (decision 81/3)

The Executive Committee noted, with appreciation, that 16 non-Article 5 countries^[2] had paid the additional contributions that they had pledged to provide fast-start support for implementation of the HFC phase-down, and requested the Treasurer, at the 82^nd meeting, to continue reporting on the status of the additional contributions received for fast-start support separately from other pledged contributions to the Multilateral Fund.

Country programme data and prospects for compliance[3] (decision 81/4)

Ninety countries had submitted their country programme (CP) implementation reports for the year 2017, out of which 84 countries had used the web‑based system. The Executive Committee requested the Secretariat to send letters to the governments of countries with outstanding 2014, 2015 and 2016 CP data reports, urging them to submit the reports immediately. Relevant IAs were requested to continue assisting two countries to clarify data discrepancies between CP data and Article 7 data and to report back to the 82^nd meeting.

The Secretariat would prepare a draft of a revised CP data report format, incorporating Group F substances, for consideration by the Executive Committee at its 83rd meeting, taking into account the revised forms for reporting data under Article 7 of the Montreal Protocol, which would be considered by the Thirtieth Meeting of the Parties.

Evaluation

Preliminary report of the second phase of the evaluation of the refrigeration servicing sector (decision 81/5)

The Executive Committee noted the preliminary report of the second phase of the evaluation of the refrigeration-servicing sector[4] and requested the Senior Monitoring and Evaluation Officer to submit the final report of the evaluation of the refrigeration servicing sector to the 82nd meeting, in line with decision 80/8.

Terms of reference (TORs) for the desk study for the evaluation of HPMP preparation activities to assist with the implementation of the Kigali Amendment (decision 81/6)

The Executive Committee approved the TORs for the desk study for the evaluation of HCFC phase-out management plan preparation activities to assist with the implementation of the Kigali Amendment.[5]

Desk study for the evaluation of gender mainstreaming in the Montreal Protocol projects and policies (decision 81/7)

The Executive Committee invited bilateral and IA’s to take into account the information in the desk study for the evaluation of gender mainstreaming in Montreal Protocol projects and policies,[6] and to apply their own institutions’ gender policies to the projects and activities approved under the Multilateral Fund, when relevant. UNEP was requested to inform national ozone units (NOUs), through regional network meetings, about the discussions that had taken place on gender mainstreaming in the Montreal Protocol projects and policies and about decision 81/7, and to seek their input with regard to a potential gender policy for the Multilateral Fund.

The Secretariat would prepare a discussion document for the 83rd meeting, outlining possible objectives and elements of a potential gender policy for the Multilateral Fund, taking into account the policies of the bilateral and IAs, input received from the NOUs and other relevant information.

Programme implementation

Status reports and reports on projects with specific reporting requirements[7] (decisions 81/8 ‑ 81/24)

The Executive Committee noted that bilateral and IAs would report to the 82^nd meeting on three projects with implementation delays and on seven projects recommended for additional status reports.

The Executive Committee considered the reports on projects with specific reporting requirements including: progress reports related to stage I of the HPMPs for nine countries[8]; demonstration projects for low global-warming-potential (low-GWP) alternatives to HCFCs and feasibility studies for district cooling; the phase-out of the consumption and production of carbon tetrachloride in India; ODS waste disposal projects for China, Colombia, Nigeria and Turkey; and ongoing chiller projects. The Committee noted the reports on the implementation of the projects and made a number of decisions to follow up on specific issues.

2018 Consolidated project completion report[9] (decision 81/25)

The Executive Committee urged bilateral and IAs to submit to the 82^nd meeting the PCRs for MYAs and individual projects that were due, and if they were not going to submit them, to provide the reasons for not doing so and the schedule for their submission. Lead and cooperating agencies were urged to closely coordinate their work in finalizing their portion of PCRs to allow the lead IAs to submit the completed PCRs according to schedule. The Executive Committee requested bilateral and IAs to enter thorough and thoughtful lessons when submitting their PCR, and invited all those involved in the preparation and implementation of MYAs and individual projects to take into consideration the lessons learned from PCRs, if relevant, when preparing and implementing future projects.

Business planning

Update on the status of implementation of the 2018–2020 consolidated business plan of the Multilateral Fund and financial planning for the triennium 2018-2020[10] (decision 81/26)

The Executive Committee noted that: the 2018‑2020 business plan did not include the US $11,290,807 of the US $21,912,004 in HFC phase-down activities that had been submitted to the 81st meeting; the bilateral agency business plans for 2018–2020 of the Governments of Canada and Germany did not exceed 20 per cent of the each Governments’ bilateral contributions for the triennium; and, the 2018 funding tranche for two sector plans (polyurethane rigid foam and the room air‑conditioning manufacturing) in stage II of the HPMP for China had been moved to the 2019 consolidated business plan.

The Executive Committee adopted resource allocations of US $194.4 million in 2018, US $174.6 million in 2019, and US $171 million in 2020, and urged bilateral and IAs to submit all projects and activities endorsed in the business plan in order to utilize fully the resources available during the 2018‑2020 triennium. The availability of cash flow for the 2020 budget would be considered at the last meeting of 2019 in light of: the collection of interest; the unexpected return of unused balances from projects; the payment of pledges from triennia prior to the previous replenishment; any losses due to non-payment of pledges expected from the previous replenishment; and any losses or gains due to the FERM.

Tranche submission delays[11] (decision 81/27)

Forty-four out of 87 activities related to tranches of HPMPs that were due for submission to the 82^nd meeting were submitted on time.[12] Relevant IAs indicated that the late submission of the tranches due for submission at the first meeting of 2018 would have no impact or was unlikely to have an impact on compliance, and that there had been no indication that any of the countries concerned were in non‑compliance with the Montreal Protocol control measures. The Secretariat would send letters to 32 countries with delayed tranche submissions inviting them to submit their outstanding tranches of HPMPs to the 82^nd or 83^rd meeting.

Project proposals

Issues related to project review

Outstanding PCRs for stage I of an HPMP with stage II ongoing (decision 81/29)

The Executive Committee decided it would not consider funding requests for the second or subsequent tranches of stage II or for subsequent stages of the HPMP submitted if there was an outstanding PCR from the previously completed stage that had not been submitted to the Secretariat at least six weeks in advance of the meeting to which the tranche request was being submitted.

Deadline for submission of projects (decision 81/30)

The deadlines for the submission of project proposals and reports on projects with specific reporting requirements to the Secretariat, in full, were set at the following number of weeks in advance of the meeting at which they would be considered, as indicated in the table below.

Type of project/report	Number of weeks in advance of meeting
New stages of multi-year agreements	At least 16
Stand-alone HFC investment projects	At least 14
Project proposals in which the total cost of the project was more than US $5 million, including agency support costs, irrespective of the level of funding requested from the Multilateral Fund	At least 14
Project proposals in which the total cost of the project was less than US $5 million, including agency support costs	At least 10
Work programmes and amendments, including institutional strengthening renewal requests	At least 8
Reports on projects with implementation delays, projects for which an additional status report was required and projects with outstanding issues were to be submitted	At least 8
All other projects with specific reporting requirements	At least 10

Bilateral and IAs were encouraged to submit projects in advance of the applicable deadlines. The deadlines would be applicable as of the 82^nd meeting, on the understanding that, at the 82^nd meeting only, flexibility would be shown to bilateral and IAs that were unable to submit specific project proposals or projects with specific reporting requirements in accordance with the stipulated deadlines. The submission deadlines would be reviewed at the last meeting of the Executive Committee in 2019.

Funding for HFC-related projects (decision 81/31)

The Executive Committee decided that all the request for enabling activities for Article 5 group 1 countries submitted to the 81^st meeting and listed for blanket approval would be funded from the additional voluntary contributions provided by a group of non-Article 5 countries, and those submitted for Article 5 group 2 countries^[13] would be funded from the regular contributions to the Multilateral Fund. Requests for funding submitted at future meetings for any Article 5 group 1 country that had not yet made such a request would be funded from the additional voluntary contributions to the extent possible, and from the regular contributions to the Multilateral Fund if no more funding was available from the additional voluntary contributions. Requests for funding submitted at future meetings for any Article 5 group 2 country that had not yet made such a request would be funded from the regular contributions to the Multilateral Fund.

The Executive Committee decided that any balances from the additional voluntary contributions provided by the group of non-Article 5 countries remaining after funding enabling activities at the 81^st meeting could be used to fund stand-alone HFC-related investment projects, in accordance with decision 79/45(d), after giving priority to enabling activities.

Project implementation period for enabling activities (decision 81/32)

The Executive Committee decided to maintain the 18-month implementation period for enabling activities projects in line with decision 79/46(d)(iii) and, if needed, to extend that period by no more than 12 months (totalling 30 months from project approval), when an official request for extension by the country through the relevant implementing agency was received by the Secretariat. A final report of the enabling activities completed should be submitted by the bilateral and IAs within six months of the project completion date, and should highlight lessons learned about how the fast-start activities supported early action on implementing the Kigali Amendment in the country concerned.

Project proposals (decisions 81/33–-81/66)

Verification reports of low-volume-consuming (LVC) countries’ compliance with their HPMP Agreements (decision 81/33)

Bilateral and IAs were requested to include in their amendments to their work programmes for submission to the 82^nd meeting, funding for verification reports for stage I of the HPMPs for 16 low‑volume-consuming (LVC) countries.[14]

HFC investment projects

The Executive Committee approved a total of US $16,195,171, plus agency support costs of US $72,858 for HFC‑related activities comprised of US $6,367,435, plus agency support costs of US $484,917 from the regular contributions to the Multilateral Fund, and US $9,827,736 plus agency support costs of US $687,941 from the additional voluntary contributions of a group of non‑Article 5 countries for activities related to fast‑start implementation of HFC phase‑down. Projects approved included:

·        US $7,785,000 plus agency support costs of seven per cent for enabling activities for 61 countries (55 group 1 countries and six group 2 countries) (decisions 81/34);

·        US $30,000, plus agency support costs for project preparation for a conversion in an extruded polystyrene foam manufacturer in China (decisions 81/37); and

·        US $8,380,171 plus agency support costs for six HFC-related investment project in the refrigeration and air-conditioning sector in five countries (Argentina (decision 81/54), Dominican Republic (decision 81/57), Jordan (decision 81/62), Lebanon (decision 81/63), and Mexico (two projects) (decision 81/64 and 81/65)).

Future submission of HFC investment projects (decision 81/53)

The Executive Committee reiterated decision 79/45, confirming that submitted HFC investment projects should have broad replicability within the country, region or sector, and should take into account geographic distribution and invited bilateral and IAs to prepare and present project proposals for conversion to alternatives to HFCs and promotion of new technologies, for submission up to and including the 84th meeting, especially in sectors and regions that were not covered by projects approved up to and including the 81^st meeting. Those projects about which concerns had been expressed at the 81^st meeting could be resubmitted in accordance with decision 81/53(a) only if those specific concerns had been addressed. ^[15]

HCFC phase‑out activities

The Executive Committee approved stage II of the HPMP for Bangladesh and Nigeria with total funding approved in principle of US $14,902,773 including support costs.[16] A total of US $39,130,997, including support costs, was provided for tranches of HPMPs or stage I/stage II of HPMPs for 37 countries including the first tranches of the new stage II of HPMP for Bangladesh and Nigeria and exceptional funding for HCFC production phase-out for China (see decision 81/71). Funds amounting to US $879,140 including support costs were approved for preparation of stage II of an HPMP in 24 countries, including the development of stage II of HPMPs for 12 Pacific Island countries through a regional approach.

The Executive Committee decided to adjust to 7 per cent the agency support costs associated with the second and future tranches of all sector plans of stage II of the HPMP for China for UNDP, UNIDO and the World Bank, and in line this decision approved additional agency support costs for the second tranche of the extruded polystyrene foam sector plan (UNIDO), the industrial and commercial refrigeration sector plan (UNDP), and the solvent sector (UNDP). The Agreement between the Government of China and the Executive Committee for the implementation of stage II of the HPMP would be revised at the 82nd meeting. (decision 81/45)

The Executive Committee requested UNDP, in cooperation with the sector lead implementing agencies for the China HPMP and the China HPPMP, to use the financial reporting format for the project management unit (PMU) expenditures for the HPMP and HPPMP for China^[17] in their annual tranche progress reports, starting in 2019.

Institutional strengthening

 The Committee approved the extension of IS projects for 25 countries[18] at an amount of US $2,780,109 including support costs.

UNEP’s Compliance Assistance Programme (CAP) (decision 81/38)

The Executive Committee noted the final report on the review of the overall structure of the Compliance Assistance Programme (CAP)^[19] and requested UNEP, when submitting the CAP budget and work plan for 2019 at the 82^nd meeting, to describe the operationalization of the proposed changes in the overall CAP structure.

Matters related to the Kigali Amendment to the Montreal Protocol

Development of the cost guidelines for the phase‑down of HFCs in Article 5 countries (decision 81/67)

Energy-efficiency

The Executive Committee requested the Secretariat to provide to the 82nd meeting the summary of the Parties’ deliberations at the 40th meeting of the Open-Ended Working Group of Parties to the Montreal Protocol and the Thirtieth Meeting of the Parties to the Montreal Protocol (MOP) in relation to the report by the Technology and Economic Assessment Panel on issues related to energy efficiency in response to decision XXIX/10 of the MOP.

Capacity building to address safety

At the 82^nd meeting, the Executive Committee would consider the matter of prioritization of technical assistance and capacity building to address safety issues associated with alternatives with low- and zero‑GWP for all sectors, in light of the paper being prepared by the Secretariat in response to decision 80/76^[20] regarding aspects of refrigeration servicing sector that supported HFC phase-down.

ODS disposal

The Executive Committee would consider, issues related to funding the cost-effective management of stockpiles of used or unwanted controlled substances, including through destruction, in light of the paper on ODS disposal being prepared by the Secretariat for that meeting in response to decision 79/18(e).

Sustained aggregate reductions

The Secretariat would prepare for the 82nd meeting a preliminary information document containing key considerations that could assist the Executive Committee in developing a methodology for establishing the starting point for sustained aggregate reductions under the Kigali Amendment for the HFC consumption and production sectors, taking into account the discussions that had taken place at the 81^st meeting.

Draft template of the HFC phase-down guidelines

The Committee would continue to use the draft template of the cost guidelines for the phase-down of HFCs^[21] and the list of outstanding elements for further discussion^[22] as the working documents for discussions at the 82^nd and future meetings on the development of cost guidelines for the phase-down of HFCs in Article 5 countries, noting that additional elements could be added as required.

Key aspects related to HFC‑23 by‑product control technologies (decision 81/68)

The Executive Committee noted the document on key aspects related to HFC-23 by-product control technologies, ^[23] which included inter alia a report produced by a consultant evaluating options for the destruction of HFC-23 from HCFC-22 facilities, and requested the Secretariat to contract an independent consultant to prepare a report for the 82^nd meeting, providing information on options and all costs and savings related to the control of HFC-23 by-product emissions in Argentina, estimates of fugitive emissions and options for monitoring, leak detection and control of HFC-23 by-product at the plant, the costs, technical feasibility, and logistical, legal and transaction issues associated with shipping HFC-23 for off-site destruction by means of a technology such as the Fluor process. The Government of Argentina was requested to provide, on a voluntary basis, relevant information for the report.

The Secretariat was further requested to prepare a document for the 82nd meeting, based on document UNEP/OzL.Pro/ExCom/79/48^[24], on cost‑effective options for controlling HFC-23 by-product emissions, including information relevant to the cost of closure of HCFC‑22 production swing plants, and options for monitoring, in light of the report by the consultant submitted to the 81st meeting and other relevant reports.

Implications for Multilateral Fund institutions in terms of expected workload in the coming years, including in relation to the Kigali Amendment for the phase-down of HFCs[25] (decision 81/69)

The Executive Committee requested the Secretariat to submit to the 84^th meeting an analysis, conducted in consultation with the bilateral and IAs, of the implications of parallel or integrated implementation of HCFC phase-out and HFC phase-down activities, taking into account, inter alia, resource availability and cost-effectiveness and the capacity of Fund institutions and Article 5 countries, especially NOUs and project management units. The analysis would also take into account relevant partnerships and the engagement of Fund institutions with other institutions, particularly in HFC phase-down activities, supported by the Multilateral Fund, in line with the Kigali Amendment.

Report of the Executive Committee to the 30^th MOP[26] (decision 81/70)

The Executive Committee authorized the Secretariat to finalize the report of the Executive Committee to the 30^th MOP in the light of the discussions held and decisions taken at the 81^st meeting and, following clearance by the Chair, to submit it to the Ozone Secretariat.

Report of the Sub-group on the Production sector[27]

The Sub‑group on the Production Sector (Argentina, Canada (facilitator), the Dominican Republic, France, India, Nigeria, Norway and the United States of America) met in the margins of the 81^st meeting to consider the revised stage II of the HPPMP in China, the annual financial reporting format for PMU expenditures in the China production sector^,[28] the draft HCFC production sector guidelines, and the verification of plant closures, and subsequent monitoring to ensure no later emissions of controlled substances.

With respect to the draft HCFC production sector guidelines, the Sub-Group would consider the matter of funding of HCFC-22 swing plants, once the issue of HFC-23 by product had been fully addressed. The Sub-group reported it had not reached an agreement on the matter raised regarding the verification of plant closures, and subsequent monitoring to ensure no later emissions of controlled substances due to time constraints.

Revised stage II of the HPPMP for China (decision 81/71)

On an exceptional basis, and without setting a precedent with regard to the overall level of funding of stage II of the HPPMP and the funding tranches therein, the Executive Committee approved US $23 million, on the understanding that the maximum allowable level of production of HCFCs for 2018 would be 22,742 ODP tonnes, and that a revised proposal would be presented for consideration at the 83^rd meeting pursuant to discussions at the 82^nd meeting on the remaining issues to be addressed. Details of the conditions and provisions governing the funding approved are set out in decision 81/71.

Other matters

Global emissions of CFC-11 (decision 81/72)

The Executive Committee requested the Fund Secretariat to provide information, as necessary, to the Ozone Secretariat, in accordance with the guidelines, procedures, policies and decisions of the Multilateral Fund and the Montreal Protocol, on the unexpected increase in emissions of CFC-11 recently observed in atmospheric monitoring.

Report of the 81^st meeting

A complete record of all decisions made at the 81^st meeting can be found in the “Report of the Eighty‑first Meeting of the Executive Committee of the Multilateral Fund for the Implementation of the Montreal Protocol” (UNEP/OzL.Pro/ExCom/81/58) which is published on the Multilateral Fund’s website (www.multilateralfund.org) and available in Arabic, English, French, and Spanish.

Annex I ‑ Attendance at the 81^st meeting of the Executive Committee

Executive Committee Members	Co‑opted countries
Non‑Article 5
Belgium	Netherlands (the)
Canada (Vice Chair)	Australia
France	Germany, Italy and the United Kingdom of Great Britain and Northern Ireland (the)
Japan
Norway	Finland and Sweden
Slovakia
United States of America (the)
Article 5
Argentina	Brazil, Colombia and Uruguay
Benin	Chad and Comoros
Dominican Republic	Cuba and Mexico
Grenada	Bahamas and Saint Vincent and the Grenadines
India	Cambodia, China and Malaysia
Lebanon (Chair)	Bahrain and Kuwait
Nigeria	Zimbabwe