UNITED NATIONS	EP
United Nations Environment Programme	Distr. GENERAL UNEP/OzL.Pro/ExCom/91/18/Add.1 21 October 2022 ORIGINAL: ENGLISH

EXECUTIVE COMMITTEE OF
THE MULTILATERAL FUND FOR THE
IMPLEMENTATION OF THE MONTREAL PROTOCOL
Ninety-first Meeting

Montreal, 5-9 December 2022

Item 7(b) of the provisional agenda

Addendum

Reports on projects with specific reporting requirements

The present addendum includes reports on projects with specific reporting requirements pertaining to China that are due at the 91st meeting.

The document is divided into the following three sections:

Section	Report title	Paragraphs
I	Report on progress in the implementation of activities listed in decision 83/41(e)	3 to 6
II	Study to determine the regulatory, enforcement, policy or market circumstances that might have led to the illegal production and use of CFC-11 and CFC-12 (decision 83/41(d))	7 and 8
III	Updated report on the production of CTC and its feedstock uses in China (decision 84/41(b) and (c))	9 to 34

I.	Report on progress in the implementation of activities listed in decision 83/41(e)

Introduction

At its 83rd meeting, the Executive Committee considered the following two documents:

Review of current monitoring, reporting, verification and enforcement (MRVE) systems in accordance with HCFC consumption and production phase-out management plan Agreements between the Government of China and the Executive Committee, submitted by UNDP on behalf of the Government of China, in line with decisions 82/65 and 82/71(a); and

Desk study on the current system of monitoring consumption of foam-blowing agents at enterprises assisted under stage I of the HCFC phase-out management plan and verification methodology submitted by the World Bank on behalf of the Government of China in line with decision 82/67(c).

In its deliberations, the Committee inter alia welcomed a number of regulatory and enforcement actions to be undertaken by the Government; noted with appreciation that the Government will undertake additional actions in support of its enforcement actions; and further noted with appreciation that the Government will consider a set of suggestions to supplement and augment its regulatory and enforcement actions. The Executive Committee also noted that the Government of China would submit a report at the 84th meeting, and again to the 86th meeting, on its progress in implementing the activities described in subparagraphs (a) to (d) of decision 83/41.

At its 84th meeting, the Executive Committee considered the progress report submitted by the Government of China in line with decision 83/41(e). Subsequent to a discussion, the Executive Committee took note of the information provided by the representative of the Government of China regarding implementation of the activities listed in decision 83/41.

The Government of China had submitted to the 86th meeting a progress report pursuant to decision 83/41. The Executive Committee deferred consideration of the progress report to the 87th, 88th, and 90th meetings in accordance with the agreed procedures for conducting those meetings. At the 90th meeting, the Executive Committee agreed to further defer consideration of the report to the following in-person meeting on account of the online participation of key representatives of one member’s delegation. The progress report is attached in its entirety to the present document without editing or further review.

II.	Study to determine the regulatory, enforcement, policy or market circumstances that might have led to the illegal production and use of CFC-11 and CFC-12 (decision 83/41(d))

Introduction

In the context of its discussions on China’s monitoring, reporting, verification and enforcement systems at its 83rd meeting, the Executive Committee inter alia decided to note that the Government of China will consider engaging a nongovernmental consultant to undertake a study (including quantitative data, where available, and qualitative market information) to determine the regulatory, enforcement, policy or market circumstances that might have led to the illegal production and use of CFC-11 and CFC-12 (decision 83/41(d)).

Pursuant to decision 83/41(d), the Government of China had submitted to the 86th meeting the Study on the Supervision, Law Enforcement, Policy and Market Situation of Ozone Depleting Substances in China that was prepared by a non-governmental consultant. The Executive Committee deferred consideration of the study to the 87th, 88th, and 90th meetings in accordance with the agreed procedures for conducting those meetings. At the 90th meeting, the Executive Committee agreed to further defer consideration of the study to the following in-person meeting, on account of the online participation of key representatives of one member’s delegation. The study is attached in its entirety to the present document without editing or further review.

III.	Updated report on the production of CTC and its feedstock uses in China (decision 84/41(b) and (c))

Introduction

At its 84th meeting, the Executive Committee considered the report on the production of carbon tetrachloride (CTC) and its feedstock uses in China (decision 75/18(b)(iii)) contained in documents UNEP/OzL.Pro/ExCom/84/22/Add.2 and Add.3 and, subsequent to a discussion, decided inter alia to invite the Government of China, through the World Bank, to submit, to the 88th meeting, an updated report on the production of CTC and its feedstock uses in the country, taking into consideration the information contained in documents UNEP/OzL.Pro/ExCom/84/22/Add.2 and Add.3, and including: (i) an update on the progress in monitoring perchloroethylene (PCE) plants that used the alkane chlorination process; (ii) any additional information relevant to the difference in emissions described in the report, and the estimated CTC emissions from China included in section 1.2.3 of the Scientific Assessment of Ozone Depletion: 2018; and to note that the Government of China was considering monitoring the PCE that used the alkane chlorination process, and to invite the Government to include in the updated report any actions taken on that matter (decision 84/41).

The Government of China, through the World Bank, submitted the updated report on the production of CTC and its feedstock uses in China on 20 September 2020. Given the limited time available before the 88th meeting, and in line with decision 84/41, the Secretariat undertook a preliminary review of the updated report, contained in section IV of document UNEP/OzL.Pro/ExCom/88/18/Add.1. The Secretariat undertook a detailed review of the updated report for the 90th meeting, contained in section III of document UNEP/OzL.Pro/ExCom/90/9/Add.1; the Executive Committee agreed to defer consideration of the updated report to the following in-person meeting on account of the online participation of key representatives of one member’s delegation. The present document contains the Secretariat’s review of the updated report as presented to the 90th meeting.

Updated report

Chloromethane (CM) and CTC production

CM and CTC production steadily increased between 2015 and 2019. In 2019, there were 16 CM production enterprises with total production capacity of 2,730,000 tonnes per annum. The production levels of CM and CTC are given in table 1.

Table 1. Production of CM and CTC in China (mt)

Particulars	2015	2016	2017	2018	2019
CM production	2,055,221	2,264,813	2,586,052	2,647,676	2,927,110*
CTC production	97,161	105,675	122,759	140,095	155,669
Percentage of CTC production	4.73%	4.67%	4.75%	5.29%	5.32%

* Production was above the nameplate capacity for 2019.

During the period 2015 to 2019, the stock level for CTC grew from 1,435.9 mt at the beginning of 2015 to 12,588.2 mt by December 2019.

Conversion of CTC to non-ODS chemicals at CM producers

Most (68-71 per cent) of the CTC produced in 2018-2019 was used internally by CM producers for conversion to non-ODS chemicals (PCE, methyl chloride, and chloroform). The remaining CTC was sold to 25 registered feedstock users; minor quantities (less than 0.3 per cent of CTC production) was used for laboratory and analytical uses and as a process agent.

Feedstock use of CTC

CTC is used as a feedstock for the manufacture of 15 non-ODS chemicals, including four chemicals that had not been manufactured in 2017. The number of feedstock users in 2018-2019 grew to 25 from the 21 users that were active in 2017. The quantity of CTC used as a feedstock increased from 29,199 mt in 2015 to 50,337 mt in 2019, principally due to the increased manufacture of HFC-245fa, HCC240fa, and PCE. The manufacture of three of the new chemicals in 2018-2019 accounted for less than 1 per cent of CTC used as feedstock, while the manufacture of the fourth chemical (HCC-240fa) became the largest feedstock use in 2019, accounting for approximately 40 per cent of the CTC used as feedstock in 2019. HCC-240fa is principally used as a feedstock for the manufacture of HFOs and HFC-245fa.

Production of PCE

There are two PCE production processes in China: the acetylene chlorination process and the C1C3 alkane chlorination process. The former, which is the main production pathway of PCE in China due to the low price and the availability of acetylene in China, does not result in the production of CTC byproduct, while CTC by-product is produced in the latter process. The updated report confirmed that there was only one PCE plant that uses the alkane chlorination process. All CTC by-product at that enterprise is recycled directly to the reactor, along with other reactants, after product distillation. CTC is partially separated in the quench tower, and in the purification units; the streams from these two processes containing a mixture of CTC, PCE, and other components are fed to a storage tank, which are not suitable for sale without purification. As there is no CTC purification unit at the enterprise, CTC from the enterprise cannot be sold; the contents of the storage tank, including the by-produced CTC, is recycled to the reactor. Production at the enterprise is supervised by the local ecology and environment bureau (EEB), which undertakes routine environmental supervision and monitoring, and irregular inspections to ensure that no CTC leaves the production line.

Estimated CTC emissions

The updated report provided estimated emissions of CTC for 2018-2019 based on the model described in the report on the 2015-2017 production of carbon tetrachloride and its feedstock uses in China, and the 2018-2019 CTC production and use data. CTC emissions are estimated from three sources: from the CTC production by CM producers, from the conversion of CTC to non-ODS chemicals by CM producers, and from CTC feedstock users.

CTC emissions from CM production was assumed to be very low given advanced process technology and onsite management and controls at CM production facilities; the enterprises have installed cryogenic condensers in tank outlets to reduce volatile emission from the tail gas of CTC tanks; CTC incinerators are operational in most of the enterprises; closed systems with advanced cargo-tank and product-tank connections for avoiding any CTC emissions in the loading/unloading process and onsite management; and process controls and advanced equipment used to minimize emissions of CTC during maintenance. In 2017, emissions of CTC were estimated at 25.6 mt, with an additional 365.6 mt of potential emissions, resulting in maximum CTC emissions of 391.2 mt (0.3 per cent of CTC production); emissions in 2018 and 2019 increased to 29.6 mt and 30.3 mt, with an additional 432.2 mt and 543.7 mt of potential emissions, resulting in maximum CTC emissions from the production of CM of 461.8 mt and 574 mt (0.3 and 0.4 per cent of CTC production), respectively.

CTC emissions from the conversion of CTC to non-ODS chemicals by CM producers was assumed to be very low, in line with the advanced CTC conversion technology and process management for the large scale, continuous and highly automatic production process. All the CM production enterprises converting CTC are designed specifically for converting their CTC by-product; strict measures similar to that used in the CM production process are used to lower CTC emissions. In 2017, emission of CTC from CM producers during the conversion to non-ODS chemicals were 17.9 mt, with additional potential emissions of 84.3 mt, resulting in maximum emissions of 102.2 mt. Emissions in 2018 and 2019 decreased to 13.1 mt and 14.2 mt, with potential emissions of 86.9 mt and 75.0 mt, resulting in maximum emission of 100.0 mt and 89.2 mt, respectively. Emissions decreased notwithstanding the increased quantity of CTC converted to non-ODS chemicals due to change in relative proportion of non-ODS produced and the different emissions associated with each process; in particular, the highest emissions in 2017 were from the production of chloroform, which decreased in 2018 and 2019. In contrast, production of methyl chloride, which does not result in emissions of CTC, increased, as did production of PCE, which has relatively low emissions of CTC.

CTC emissions from feedstock use are assumed to be low given a high utilization rate of CTC that is ensured by adjusting the reaction conditions, recycling CTC in the production process, and advanced production technology and management of CTC. Emissions of CTC from feedstock use in 2017 were 39.4 mt, with additional potential emissions of 138.6 mt, resulting in maximum emissions of 177.9 mt. Emissions in 2018 and 2019 increased to 54.3 mt and 75.2 mt, while additional potential emissions decreased to 74.4 mt and 93.8 mt, resulting in maximum emissions of 128.7 mt and 169.0 mt, respectively.

Table 2 summarizes the estimated CTC emissions for 2017-2019.

Table 2. Estimated 2017-2019 CTC emissions in China (mt)

Year	2017	2018	2019
Item	Actual emission	Potential emission	Maximum emission	Actual emission	Potential emission	Maximum emission	Actual emission	Potential emission	Maximum emission
CM production	25.6	365.6	391.2	29.6	432.2	461.8	30.3	543.7	574.0
Conversion at CM producers	17.9	84.3	102.2	13.1	86.9	100.0	14.2	75.0	89.2
Feedstock uses	39.4	138.6	177.9	54.3	74.4	128.7	75.2	93.8	169.0
Total	82.9	588.4	671.3	97.0	593.5	690.5	119.7	712.5	832.2

Secretariat’s comments

CTC production, stock levels, and controls

The percentage of CTC production as a function of CM production increased to satisfy increased market demand for CTC as a feedstock. In particular, CM producers can adjust their production process and the amount of CTC by-product depending on the demand for CTC for feedstock uses. The national CTC by-production monitoring platform started operation in 2019; the platform allows for the daily monitoring of production at CM producers.

The increase in CTC stock levels in 2019 was principally due to an operational problem with the destruction device at one CM producer that year; subsequently, the CM producer commissioned another CM producer to assist in the disposal of the stock, which was monitored by the local EEB. The World Bank emphasized that the Ministry of Ecology and Environment pay close attention to CM producers’ CTC stockpiles and urges them to complete any required disposal in a timely manner.

At the 84th meeting, the World Bank had indicated that further research was needed on whether technology upgrades at CM producers could further reduce the concentration of CTC in chloroform, a potential source of CTC emissions. The World Bank informed that since then, CM producers had not considered such technology upgrades.

At the 84th meeting, the Secretariat had noted that for all feedstock users included in the 2015-2017 report, material conversion ratios varied for individual enterprises on a year-to-year basis and across enterprises for the same feedstock use; moreover, some reported material conversion ratios appeared to vary by year within the same enterprise, which would make comprehensive monitoring of CTC difficult. The Government considered the existing system adequate.

PCE production through the C1-C3 alkane chlorination process

At the 84th meeting, the Secretariat had requested clarification on monitoring of CTC at PCE producers that use the C1-C3 alkane chlorination process. The updated report indicates that the only PCE producer that uses the alkane chlorination process does not have a CTC purification unit to separate CTC from the process streams that include a mixture of CTC, PCE, and other components. Accordingly, the Government considered the risk of diversion of CTC is low and therefore has not taken any additional actions to monitor the PCE plant. The World Bank confirmed that the PCE producer would need to submit an environmental impact assessment in order to substantially modify its production process, including by installing a CTC purification unit.

CTC emissions

At the 88th meeting, the Secretariat noted that the updated report did not include information or analysis to address the difference in emissions reflected in the 2018 Scientific Assessment of Ozone Depletion and those in documents UNEP/OzL.Pro/ExCom/84/22/Add.2 and Add.3. In particular, the updated report includes estimated emissions of CTC that are orders of magnitude less than those in the 2018 Scientific Assessment Report, as well as in the scientific journal article by Lunt et al. (2018), which was published too late to be considered in the 2018 report.

Lunt et al. (2018) used two methods to estimate emissions of CTC from China of 17 (11-24) or 13 (7-19) Gg/year for the period 2009 to 2016. Those emission estimates are based on long-term, highfrequency observations of CTC at the Gosan measurement station on Jeju Island, Republic of Korea. The authors also assessed emissions from China using data from the Korea-U.S. Air Quality (KORUS-AQ) flight campaign in May-June 2016, and found that emissions from China were 16 (13–21) Gg/year, consistent with the authors’ Gosan-derived estimated emissions for 2016 of 15 (11–20) Gg/year. While the report on the 2015-2017 production of carbon tetrachloride and its feedstock uses in China only provided estimated emissions for 2017, scaling the model based on 2016 CTC production, conversion by CM producers, and feedstock uses would result in CTC emissions that are two orders of magnitude below those estimated by Lunt et al. (2018); the maximum CTC emissions estimated by the model would be one order of magnitude below those estimated by Lunt et al. (2018).

Further to a request for clarification at the 88th meeting regarding the difference in emissions, the Government of China, through the World Bank, noted the relevance of the CTC emission discrepancy and that there have been substantial differences in top-down and bottom-up estimates of CTC emissions data for years. The Government considered that discrepancy to be a global issue that involves not only China but also other countries in other regions. The Government further noted that the Scientific Assessment Panel has examined this issue for over ten years, and while the discrepancy of CTC emission between top-down and bottom-up estimates has been significantly reduced in the 2018 Scientific Assessment Report, differences still exist and remain to be explained. The 2018 Scientific Assessment Report pointed to the need for improved understanding on factors such as the concentration of air samples and meteorological conditions that affect the assessment. The Government of China expressed its interest to follow up relevant research in this regard.

The Government of China further noted that based on the updated report and the regulations on CTC management and monitoring, the estimated CTC emissions in the 2018 Scientific Assessment Report could not be fully explained, no information on additional CTC emission sources was found, and emphasized that:

The CM production lines are a highly automated and closed system with seamless connection among equipment and incineration units, thus CTC emissions are virtually negligible;

Enterprises that use CTC as a feedstock make best efforts to handle CTC in a cost-effective manner to reduce their production costs, so there is no motive for enterprises to deliberately emit CTC; and

The Government had implemented strict inspections and law enforcement for environmental protection in recent years, in particular for those chemical plants. The supervision on VOCs and chemical oxygen demand was greatly strengthened by various level ecology and environmental protection bodies. In this regard, the CTC emissions by these enterprises are unlikely to be those suggested in the 2018 Scientific Assessment Report or the article by Lunt et al. (2018).

The Secretariat notes that subsequent to the article by Lunt et al. (2018), Park et al. (2021) reported a decline in emissions of CFC-11 and related chemicals, including CTC, from eastern China. In particular, Park et al. (2021) found that CTC emissions from eastern China were higher than expected after 2013 and then declined one to two years before 2019 when a reduction in CFC-11 emissions was observed: emissions from eastern China grew from 6.0 ± 1.4 Gg/yr for 2011-2012 to 10.9 ± 2.0 Gg/yr for 2014-2017, and subsequently declined to 6.2 ± 1.4 Gg/yr in 2018-2019. Notwithstanding those decreases, the CTC emissions estimated by Park et al. (2021) for 2018-2019 are two and one order of magnitude higher than the estimated CTC emissions and maximum CTC emissions, respectively, in the updated report. Furthermore, while Park et al. (2021) reported a substantial (by over 40 per cent) decrease in CTC emissions in 2018-2019, the model used to estimate CTC emissions in the reports on the 2015-2019 production of CTC and its feedstock uses in China suggests gradually increasing emissions of CTC in 2015-2019, consistent with increased CTC production, conversion by CM producers, and feedstock use, suggesting that the model may not be capturing some sources of CTC emissions that were controlled in the latter part of 2015-2019.

The Secretariat enquired whether the Government had further views on the difference between the estimated CTC emissions in the updated report and those by Park et al. (2021), noting that those emissions were specific to China and not global emissions. Moreover, as noted by Lunt et al. (2018), in contrast to global emissions estimation, regional inverse modeling studies can help to address the geographical source of the discrepancy in top-down and bottom-up emissions on a global scale because such regional studies are relatively insensitive to uncertainty in the CTC lifetime. The Government was of the view that the model used in the 2015-2019 reports considered all relevant production process that may generate CTC emission, and the CTC emission discrepancy was a global issue that needed further research.

The Secretariat further noted that an analysis of high-quality observations of CTC atmospheric abundances in China could be helpful in understanding the reasons for the differences in emissions reported in the scientific literature and those in the reports on the 2015-2019 production of CTC and its feedstock uses submitted by China. However, while a preliminary analysis of local data suggested emissions of CTC in 2009-2010 that are comparable to those reported by Lunt et al. (2018) and Park et al. (2021) for those years, it appears that an analysis based on more recent data has not yet been undertaken notwithstanding that at least one atmospheric monitoring site in China included observations of atmospheric abundances of CTC.

Regarding the atmospheric monitoring network the Government of China intended to establish in line with decision 83/41(b)(i), the World Bank informed that the Government was conducting the construction of the monitoring stations as planned, and that atmospheric monitoring of controlled substances would begin in 2022.

Recommendation

The Executive Committee may wish to consider the information contained in the updated report on the production of carbon tetrachloride and its feedstock uses in China (decision 84/41(b) and (c)) contained in document UNEP/OzL.Pro/ExCom/91/18/Add.1.

UNEP/OzL.Pro/ExCom/91/1

UNEP/OzL.Pro/ExCom/84/22/Add.1.

Page 1.24 of https://ozone.unep.org/sites/default/files/2019-05/SAP-2018-Assessment-report.pdf.

The updated report contains information considered confidential by the Government of China and is available by request to Executive Committee members on the understanding that the information contained therein is not disclosed to a third party.

CM encompasses methyl chloride (CH3Cl), dimethyl chloride (CH2Cl2), chloroform (CHCl3) and CTC. CM is produced by reaction methyl chloride with Cl2.

In 2019, the CM producers also manufactured a small quantity of hydrochloric acid.

Triphenylmethanol, glufosinate-ammonium, 3-(2,2-dichlorovinyl)-2,2-dimethyl cyclopropanecarbonyl chloride (DVDC), and 1,1,1,3,3-pentachloropropane (HCC-240fa).

Those feedstock users do not include the CM producers that have their own internal conversion of CTC, except for the one CM producer that also buys CTC to augment its internal production.

Paragraphs 8 to 10 of document UNEP/OzL.Pro/ExCom/84/22/Add.2.

Potential emissions were derived based on a technical assessment of possible emissions of CTC from various waste streams and were estimated based on product disposal methods; unlike actual emissions, which were based on direct estimates of CTC in emission streams, potential emissions are based on usage of products or disposal methods for the CTC streams that could have different CTC levels, before discharge to the atmosphere. The report indicated that those potential emissions are unlikely considering the advanced process technology and management level in the CM production enterprises and the restrict supervision of volatile organic compounds (VOCs) and chemical oxygen demand (COD) by ecology and environmental protection bodies in China.

Lunt, M. F., Park, S., Li, S., Henne, S., Manning, A. J., Ganesan, A. L., et al. (2018). Continued emissions of the ozone-depleting substance carbon tetrachloride from eastern Asia. Geophysical Research Letters, 45.

https://doi.org/10.1029/2018GL079500.

Estimated emissions are provided as an average with the 95 per cent confidence level indicated in brackets; 1 Gg = 1,000 mt.

https://agage.mit.edu/stations/gosan-jeju-island

Documents UNEP/OzL.Pro/ExCom/84/22/Add.2 and UNEP/OzL.Pro/ExCom/84/22/Add.3.

Paragraphs 18 and 19 of document UNEP/OzL.Pro/ExCom/88/18/Add.1.

Park, S, Western, L.M, Park, S., Western, L. M., Saito, T., Redington, A. L., et al. (2021). A decline in emissions of CFC-11 and related chemicals from eastern China. Nature. https://doi.org/10.1038/s41586-021-03277-w

The preliminary analysis was not published in the peer-reviewed scientific literature but is available here: https://www.sparcclimate.org/fileadmin/customer/5_Meetings/2015_PDF/13_Bo_Yao_Longterm_observation_of_CCl4_at_CMA_network_in_China.pdf.

The Global Atmospheric Watch (GAW) at Shangdianzi. A figure showing the timeseries of averaged atmospheric abundances of CTC at the station is available here: https://yhpwebsite.osscnbeijing.aliyuncs.com/upload/2019%E
4%B8%AD%E5%9B%BD%E6%B8%A9%E5%AE%A4%E6%B0%94%E4%BD%93%E5%85%AC%E6%8A%A5_1634010133088.pdf.