State of the Art in the PU sub-sector Technology Options and Trends by Paul Ashford/Miguel Quintero.

1. C ALEB Caleb Management Services Limited
State of the Art in the PU
sub-sector
Workshop on low-GWP
HCFC replacement in the Technology Options and Trends
foam sector
Seoul, South Korea
6th-7th May 2010
Presented by Paul Ashford/Miguel Quintero
Thursday 6th May 2010
Mayfield Hotel & Resort, Seoul, South Korea
C
ALEB
Addressing tomorrow’s issues today

2. C ALEB Caleb Management Services Limited
Agenda for today’s presentation:
• Introduction to the challenges posed by Decision XIX/6
• Recent discussions at ExCom on the basic funding modalities
• Assistance in the form of the Foam Sourcebook
– Purpose
– Structure and Layout
• Latest PU technology developments and industry trends
– Outcome of latest pilot projects with methyl formate
– Progress Report on the development of unsaturated HFCs
– Updated costs for the conversion to hydrocarbons
– Other significant new developments
• Quantification and management of the ODS-containing legacy
Addressing tomorrow’s issues today 1 1

3. C ALEB Caleb Management Services Limited
Introduction to the challenges
Workshop on low-GWP
HCFC replacement in the
posed by Decision XIX/6
foam sector
Seoul, South Korea
6th-7th May 2010
Presented by Paul Ashford
Managing Director, Caleb Management Services Limited
Thursday 6th May 2010
Mayfield Hotel & Resort, Seoul, South Korea
C
ALEB
Addressing tomorrow’s issues today

4. C ALEB Caleb Management Services Limited
Decision XIX/6 – its origins in Montreal, 2007:
• MOP-19 represented the 20th anniversary meeting of the
Montreal Protocol.
• Climate impacts of on-going use of HCFCs had been
identified in the Special Report on Ozone & Climate (2005)
• TEAP and the Montreal Protocol community had built on
these aspects by identifying/assessing ‘practical measures’
• Accelerated HCFC phase-out and ODS bank management
were seen as the two major measures
• To achieve accelerated phase-out on a programmatic or
project basis, the existing infra-structure needed to stay in
place.
Addressing tomorrow’s issues today 3 3

5. C ALEB Caleb Management Services Limited
Decision XIX/6 – Core Elements:
• Freeze in 2013 based on average 2009-10 consumption
• Further steps in 2015, 2020, 2025 & 2030
140%
• Key point is that, because of the
120%
Old rate of growth, a 2013 freeze
Base equates to ~20% reduction
100%
80%
• Projects need to be delivered in
New 2012 to impact 2013, so need to
Base Annual Growth Rate: 5 %
60% be conceived in 2010
40% • Funding modalities unclear until
ExCom 60 (April 2010)
20%
• Difficulties in deciding how to
0% assess and optimise climate
2008
2012
2016
2020
2024
2028
2032
2040
2036
benefits
New A5 HCFC Measures
Old A5 HCFC Measures
Year
Addressing tomorrow’s issues today 4 4

6. C ALEB Caleb Management Services Limited
Decision XIX/6 and the foam sector:
• Climate benefit needs assessing on a lifecycle basis
(energy as well as direct emissions)
• ‘Worst-first’ policy based squarely on the ozone impact
• Places pressure on HCFC-141b phase-out even though the
alternatives are less certain and may not yield significant
climate benefit – if at all (e.g. saturated HFCs?)
• >70% of all foam enterprises in Article 5 countries have
consumption of less than 40 tonnes/yr
• Cost-effectiveness thresholds used for CFCs have little
relevance to HCFCs if based on ozone benefit alone
Addressing tomorrow’s issues today 5 5

7. C ALEB Caleb Management Services Limited
Recent discussions at ExCom
Workshop on low-GWP
HCFC replacement in the
on the funding modalities
foam sector
Seoul, South Korea
6th-7th May 2010
Presented by Miguel Quintero
Foams Consultant
Thursday 6th May 2010
Mayfield Hotel & Resort, Seoul, South Korea
C
ALEB
Addressing tomorrow’s issues today

8. C ALEB Caleb Management Services Limited
Decision XIX/6 – Funding modalities agreed in Montreal (April 2010):
• Cut-off date agreed to be 21st September 2007
• Second stage conversions to 2013:
– Where need is demonstrated to comply with 35% cut by 2020
– And/or are the most cost effective options for compliance
– Funding for others limited to installation, trials and training
• For early action, Starting Points to be established at the
point of HPMP or project submission, whichever earliest
• Can choose between last reported HCFC consumption or
the average of 2009/10 and make necessary adjustments
to aggregate reductions
Addressing tomorrow’s issues today 7 7

9. C ALEB Caleb Management Services Limited
Decision XIX/6 – Funding modalities agreed in Montreal (April 2010):
• In respect of eligible Incremental Costs to achieve 2013 &
2015 targets:
– Shall refer to UNEP/OzL.Pro/ExCom/55/47 as a guide
– Current CFC cost-effectiveness thresholds in metric kg to be
used as a guide
– Flexibility to reallocate up to 20% of total costs between ICCs
and IOCs
– Funding of up to 25% above cost-effectiveness threshold
available for low-GWP alternatives
• For the foam sector:
– IOC of $1.60/per metric kg for HCFC-141b
– IOC of $1.40/per metric kg for HCFC-142b
– Systems houses calculate on total HCFC for downstream uses
– ExCom can award higher IOC for CO2(water) projects
Addressing tomorrow’s issues today 8 8

10. C ALEB Caleb Management Services Limited
Decision XIX/6 – Funding modalities: Implications for the Foam Sector
• Critical that ICs are based on a ‘metric kg’ basis
• 25% IC premium for low-GWP solutions must significantly
impact decision-making process
• Definition of low-GWP will be an important caveat
• Energy efficiency implications are not factored in
• Not clear about how current GWP provisions would
combine with any climate co-funding provisions
• Systems house provision seems appropriate
• Not clear what is available for HCFC-22 phase-out
• Not clear why CO2(water) has been singled out ahead of
hydrocarbon and other low-GWP technologies
Addressing tomorrow’s issues today 9 9

11. C ALEB Caleb Management Services Limited
Assistance available through
Workshop on low-GWP
HCFC replacement in the
the UNEP DTIE
foam sector
Seoul, South Korea
Foam Sourcebook
6th-7th May 2010
Presented by Paul Ashford
Managing Director, Caleb Management Services Limited
Thursday 6th May 2010
Mayfield Hotel & Resort, Seoul, South Korea
C
ALEB
Addressing tomorrow’s issues today

12. C ALEB Caleb Management Services Limited
UNEP DTIE Foam Sourcebook - Purpose:
• Not a catalogue, but a guide on
how to select technologies that
protect ozone and climate
• A review of options including
strengths & weaknesses
• Information on experience with
use-to-date
• Guidance on the quantification of
climate benefit and an update on
potential funding options
Addressing tomorrow’s issues today 1111

13. C
ALEB Caleb Management Services Limited
UNEP DTIE Foam Sourcebook – Structure and Layout(1):
• INTRODUCTION:
– The challenge of Accelerated HCFC phase-out
– Guidance on the use of the Sourcebook
• INTERFACE BETWEEN OZONE DEPLETION AND CLIMATE CHANGE:
– Measuring impacts: ODP, GWP, Carbon intensity of energy
– Decision XIX/6 and the framework for mitigation
– Potential benefits for business and the environment
• METHODS FOR QUANTIFYING CLIMATE IMPACT:
– Lifecycle approaches based on direct emissions only (e.g. GWP)
– Lifecycle approaches also considering energy (e.g. LCCP, TEWI)
– Hybrid approaches (e.g. functional unit and climate indicator)
Addressing tomorrow’s issues today 1212

14. C
ALEB Caleb Management Services Limited
UNEP DTIE Foam Sourcebook – Structure and Layout(2):
• FOAM MANUFACTURE & EXISTING FLUOROCARBON TECHNOLOGIES:
– An introduction to foam types
– Foam manufacture and the role of blowing agents
– Points in the supply chain where consumption occurs
– Reasons for original selection of CFCs and HCFCs
– Reasons why HFCs are potential replacements for HCFCs
– Why (saturated) HFCs can be sub-optimal solutions for climate
• GENERAL REVIEW OF ALTERNATIVE BLOWING AGENTS:
– Hydrocarbons (both directly added and pre-blended)
– Liquid Carbon Dioxide
– In-situ Carbon Dioxide (water blown)
– Oxygenated Hydrocarbons (Methyl Formate, Methylal, DME)
– Chlorinated Hydrocarbons (Methylene Chloride etc.)
– Saturated HFCs
– Unsaturated HFCs (HFOs)
Addressing tomorrow’s issues today 1313

15. C
ALEB Caleb Management Services Limited
UNEP DTIE Foam Sourcebook – Structure and Layout(3):
• DECISION-MAKING PROCESS:
– Establishing Technical Feasibility and Economic Viability
– Evaluating Safety Aspects and Environmental Impact
– Assessing Cost Effectiveness and Practicality
– Summary Decision Tree
• REVIEW OF SPECIFIC FACTORS INFLUENCING THE SELECTION OF
ALTEERNATIVES AT APPLICATION LEVEL:
– PU Rigid Foams
– Domestic Refrigerators & Freezers
– Other Appliances
– Transport and Reefers
– Boardstock
– Continuous Panels
– Discontinuous Panels
– Spray
– Blocks
– Pipe-in-Pipe
– One Component Foam
Addressing tomorrow’s issues today 1414

16. C
ALEB Caleb Management Services Limited
UNEP DTIE Foam Sourcebook – Structure and Layout(4):
• REVIEW OF SPECIFIC FACTORS INFLUENCING THE SELECTION OF
ALTERNATIVES AT APPLICATION LEVEL:
– PU Flexible Foams
– Integral Skin
– Shoe Soles
– Phenolic Foams
– Boardstock
– Blocks
•
– Thermoplastic Foams
– Extruded Polystyrene Board
– Polyolefin Foams
• FUNDING STRATEGIES :
– Funding the Ozone Component
– Climate Co-Funding within the Montreal Protocol Framework
– Climate Co-Funding via Other Agencies
– Climate Co-Funding via Carbon Finance
Addressing tomorrow’s issues today 1515

17. C ALEB Caleb Management Services Limited
Latest Technology
Workshop on low-GWP Developments and Industry
HCFC replacement in the
foam sector Trends in the PU Sector
Seoul, South Korea
6th-7th May 2010
Presented by Miguel Quintero
Foams Consultant
Thursday 6th May 2010
Mayfield Hotel & Resort, Seoul, South Korea
C
ALEB
Addressing tomorrow’s issues today

18. C ALEB Caleb Management Services Limited
Quantification and
Workshop on low-GWP Management of the ODS-
HCFC replacement in the
foam sector containing legacy
Seoul, South Korea
6th-7th May 2010
Presented by Paul Ashford
Managing Director, Caleb Management Services Limited
Thursday 6th May 2010
Mayfield Hotel & Resort, Seoul, South Korea
C
ALEB
Addressing tomorrow’s issues today

19. C ALEB Caleb Management Services Limited
An Outline of the Presentation:
• The banks in size and scope
• Seeking to evaluate what can be reached and at what cost
• Dealing with the issue of timing
• The challenge of financing – ozone, climate or both
• Dealing with matters of practicality:
– Technologies (Collection, recovery and destruction)
– Methodologies for accounting climate benefits
– Carbon Financing mechanisms
• A personal view of the way forward
Addressing tomorrow’s issues today 1818

20. C ALEB Caleb Management Services Limited
Special Report on Ozone and Climate (SROC - 2005):
HFC-based refrigeration emissions dominate
Addressing tomorrow’s issues today 1919

21. C ALEB Caleb Management Services Limited
Foams Emissions: Continue over and extended period
GWP-Weighted Blowing Agent Emissions by Group (1990-2100) - incl. CFCs
300.00
250.00
Emissions of blowing agent (Mt CO2)
200.00
Total CFC
Total HCs
150.00
Total HFCs
Total HCFCs
100.00
50.00
0.00
90
94
98
02
06
10
14
18
22
26
30
34
38
42
46
50
54
58
62
66
70
74
78
82
86
90
94
98
19
19
19
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Year
CFCs dominate –even in 2015 and beyond
Addressing tomorrow’s issues today 2020

22. C ALEB Caleb Management Services Limited
Can only deal with ODS as they arise in the waste stream
Addressing tomorrow’s issues today 2121

23. C ALEB Caleb Management Services Limited
An Outline of the Presentation:
• The banks in size and scope
• Seeking to evaluate what can be reached and at what cost
• Dealing with the issue of timing
• The challenge of financing – ozone, climate or both
• Dealing with matters of practicality:
– Technologies (Collection, recovery and destruction)
– Methodologies for accounting climate benefits
– Carbon Financing mechanisms
• A personal view of the way forward
Addressing tomorrow’s issues today 2222

24. C ALEB Caleb Management Services Limited
A means of assessing the accessibility of ODS Banks
Some
Exceptions
Foams largely
in
‘High Effort’
Addressing tomorrow’s issues today 2323

25. C ALEB Caleb Management Services Limited
Size of Banks by Ease of Accessibility
Addressing tomorrow’s issues today 2424

26. C ALEB Caleb Management Services Limited
Cost of Bank Management by Ease of Accessibility
• I used to think that $70.4-93.4 billion seems like a lot
• Less than 1 year of committed funding under the
Copenhagen Accord
Addressing tomorrow’s issues today 2525

27. C ALEB Caleb Management Services Limited
An Outline of the Presentation:
• The banks in size and scope
• Seeking to evaluate what can be reached and at what cost
• Dealing with the issue of timing
• The challenge of financing – ozone, climate or both
• Dealing with matters of practicality:
– Technologies (Collection, recovery and destruction)
– Methodologies for accounting climate benefits
– Carbon Financing mechanisms
• A personal view of the way forward
Addressing tomorrow’s issues today 2626

28. C ALEB Caleb Management Services Limited
Refrigerants dominate the ODSs reaching the waste stream
Addressing tomorrow’s issues today 2727

29. C ALEB Caleb Management Services Limited
Taking the Example of Commercial Refrigeration – Actual Tonnes
Volume of Available Waste Streams in Developing Countries
Commercial Refrigeration (ODS only)
60000
Volume of Annual Waste Arising (tonnes)
50000
40000
CFC - Densely Populated Areas
HCFC - Densely Populated Areas
30000
CFC - Sparsely Populated Areas
HCFC - Sparsely Populated Areas
20000
10000
0
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Year
Addressing tomorrow’s issues today 2828

30. C ALEB Caleb Management Services Limited
Taking the Example of Commercial Refrigeration – Climate Impact
Climate Impact of Waste Streams in Developing Countries
Commercial Refrigeration (ODS only)
120.00
Climate Impact of Annual Waste Arising
100.00
80.00
(Mtonnes CO2-eq.)
CFC - Densely Populated Areas
HCFC - Densely Populated Areas
60.00
CFC - Sparsely Populated Areas
HCFC - Sparsely Populated Areas
40.00
20.00
0.00
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Year
Addressing tomorrow’s issues today 2929

31. C ALEB Caleb Management Services Limited
An Outline of the Presentation:
• The banks in size and scope
• Seeking to evaluate what can be reached and at what cost
• Dealing with the issue of timing
• The challenge of financing – ozone, climate or both
• Dealing with matters of practicality:
– Technologies (Collection, recovery and destruction)
– Methodologies for accounting climate benefits
– Carbon Financing mechanisms
• A personal view of the way forward
Addressing tomorrow’s issues today 3030

32. C ALEB Caleb Management Services Limited
Commercial refrigeration – Refrigerants $30-90/kg recovered
Change in Cost Effectiveness of Recovery/Destruction - ODS only
45.00
40.00
Cost Effectiveness ($ per tonne CO2 saved)
35.00
30.00
25.00
ODS - Densely Populated Areas
ODS - Sparsely Populated Areas
20.00
15.00
10.00
5.00
0.00
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Year
Addressing tomorrow’s issues today 3131

33. C ALEB Caleb Management Services Limited
Total Expenditure to manage Commercial Refrigeration Refrigerants
Funding Requirements for Waste Streams in Developing Countries
Commercial Refrigeration (ODS only)
4,000
3,500
Funding Requirements ($ million)
3,000
2,500
CFC - Densely Populated Areas
HCFC - Densely Populated Areas
2,000
CFC - Sparsely Populated Areas
HCFC - Sparsely Populated Areas
1,500
1,000
500
0
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Year
Addressing tomorrow’s issues today 3232

34. C ALEB Caleb Management Services Limited
Funding : How can the costs be met in developing countries?
• Multilateral Fund looking to establish Pilot Projects to act as
exemplars for the future
• Climate co-funding can be made available through:
– Bilateral support from donor Governments
– Co-funding from other agencies (e.g. GEF) in market
transformation projects (e.g. chillers, domestic refrigerators)
• Potential from the carbon markets, but some challenges:
– Risk of excessive profits from ‘low hanging fruits’
– Need to re-invest those profits to reach medium-effort banks
– ODS not included in most compliance markets
– Voluntary market may be too small to accommodate flows
– Need stringent minimum standards to retain credibility and
maximise credit value
Addressing tomorrow’s issues today 3333

35. C ALEB Caleb Management Services Limited
Funding : The Challenge of using the Voluntary carbon market alone
Current Estimated Annual Emissions
TOTAL from Developing Country ODS Banks –
Voluntary Market (1) Low and Medium Effort (2)
400 -
Annual Emissions (Mt CO2e)
350 -
300 -
250 -
200 -
150 -
100 -
50 -
2007
2008
2012
2013
2014
2015
2016
2017
2010
2018
2019
2020
2011
Source: UNDP
Addressing tomorrow’s issues today 3434

36. C ALEB Caleb Management Services Limited
An Outline of the Presentation:
• The banks in size and scope
• Seeking to evaluate what can be reached and at what cost
• Dealing with the issue of timing
• The challenge of financing – ozone, climate or both
• Dealing with matters of practicality:
– Technologies (Collection, recovery and destruction)
– Methodologies for accounting climate benefits
– Carbon Financing mechanisms
• A personal view of the way forward
Addressing tomorrow’s issues today 3535

37. C ALEB Caleb Management Services Limited
Technologies : How are these developing and what needs to happen?
• Collection & Recovery:
– Improving separation strategies in the waste stream – with
better segregation of ODS
– Sharing of approaches on collection from sparsely populated
(rural) areas to decide best cost-effectiveness
• Destruction:
– Need to update the TEAP Approved Destruction Technologies
List
– Need to consider inclusion of small-scale equipment (e.g.
plasma arc facilities)
– Need to establish means of approving/validating in-country
destruction to minimise shipping of waste ODS
– Need to ensure that there are no artificial barriers to transport
where necessary
Addressing tomorrow’s issues today 3636

38. C ALEB Caleb Management Services Limited
Methodologies and Carbon Finance : Creating the right environment
• Methodologies:
– Climate Action Reserve (CAR) has published a protocol/
methodology for ODS, but currently requires US destruction
– Voluntary Carbon Standard (VCS) has also published a
framework for ODS methodologies
• Carbon Finance:
– Initial engagement with the voluntary carbon market to ‘learn by
doing’ - possibly in connection with MLF Pilot Projects
– Concern about capacity and control is leading to a number of
ideas around an ODS Climate Facility
– Not sure if this should be managed inside the MLF or at the
Implementing Agency level
– Connection with the wider Copenhagen Accord agenda needs to
be made eventually once modalities in both arenas mature
Addressing tomorrow’s issues today 3737

39. C ALEB Caleb Management Services Limited
An Outline of the Presentation:
• The banks in size and scope
• Seeking to evaluate what can be reached and at what cost
• Dealing with the issue of timing
• The challenge of financing – ozone, climate or both
• Dealing with matters of practicality:
– Technologies (Collection, recovery and destruction)
– Methodologies for accounting climate benefits
– Carbon Financing mechanisms
• A personal view of the way forward
Addressing tomorrow’s issues today 3838

40. C ALEB Caleb Management Services Limited
A personal view of the way forward:
• The objective needs to be to maximise the amount of ODS
bank eventually managed
• Time constraints require the Montreal Protocol community
to act quickly to gain some immediate CFC-related benefits
• Care must be taken to avoid profiteering in these potentially
lucrative early stages
• Government inputs to the process and endorsement of it
are important
• A long-term connection with the wider carbon markets is
required in order to have sustained finance
Addressing tomorrow’s issues today 3939

41. C ALEB Caleb Management Services Limited
Questions?
Workshop on low-GWP Paul Ashford – Managing Director
HCFC replacement in the Caleb Management Services Limited
foam sector Cromhall,
Seoul, South Korea Wotton-under-Edge
6th-7th May 2010 Gloucestershire, GL12 8AA
United Kingdom
Tel. +44(1454) 269330
Fax +44(1454) 269197
E-mail: paul@calebgroup.net
www.calebgroup.net
C
ALEB
Addressing tomorrow’s issues today