Having considered the recommendations of the Sub-Committee on Project Review on incremental operating costs for compressors (UNEP/OzL.Pro/ExCom/22/15, paras. 25-26), the Executive Committee decided that:
(a) In countries that do not have compressor manufacturers, or have undertaken not to seek funding for conversion of any compressor manufacturers, incremental operating costs for loaded non-CFC compressors would continue to be eligible for compensation unless such compressors are being procured from firms that the Fund is paying to convert;
(b) For countries that are seeking funding for conversion of a compressor manufacturer, in order to be eligible for incremental operational costs, they must first submit information on their 1995 production of compressors and downstream user products. If those data show that compressor production was equal to or greater than the production of the downstream equipment producers, no funds shall be provided for incremental operational costs associated with the compressors;
(c) For countries that are seeking funding for conversion of compressor manufacturers that produced less than the number of units produced by the downstream users, the eligible incremental operational costs associated with compressors for downstream users shall be reduced in accordance with the following example: if a country produced 100 refrigerators, but is seeking compensation for the production of 90 compressors, the eligible incremental costs for the downstream users would be 10 per cent of the level otherwise eligible for funding in a distributive manner;
(d) If a country has received compensation for the conversion of some of its compressor manufacturers, but for the remainder of its firms would like instead to receive compensation for its downstream users, such compensation for the downstream users for the cost of loaded compressors would be eligible - however, the level of compensation would have to be adjusted using, at the choice of the country, either the example used above, or in a manner (to be proposed by the Secretariat and the Implementing Agencies for the consideration of the Executive Committee) which would offset funds spent on the earlier conversion projects in a distributive manner;
(e) The above guidelines were adopted with the following understandings:
(i) Incremental operating costs will no longer be considered for compressor manufacturers;
(ii) The guidelines will independently apply to domestic and commercial refrigeration projects;
(iii) Further work may need to be done to accurately define domestic and commercial refrigeration;
(iv) The agencies and the Secretariat need to agree to a specific methodology for determining what incremental cost will be used for defining the eligible costs;
(v) Further work needs to be done in relation to combined compressor and refrigerator manufacturers;
(vi) In considering the availability of domestic compressor production within Article 5 countries, one factor which may be considered by the Secretariat and the Implementing Agencies could be the source of supply used by the downstream users in the baseline;
(vii) Given the apparent ambiguity that existed prior to this meeting regarding the eligibility of incremental operational costs for domestic refrigerator compressors, projects submitted to the Twentieth and Twenty-first Meeting will be approved with operational costs as agreed between the Implementing Agencies and the Secretariat;
(viii) Domestic refrigeration compressor projects first submitted to this Meeting, one Meeting after the issue was originally raised, shall be agreed consistent with the above guidelines;
(ix) Projects submitted to the present Meeting in the commercial refrigeration sector (where this issue was first raised) shall be decided consistent with the manner in which previous projects were approved;
(x) After the present Meeting, all compressor projects shall be considered in accordance with the above guidelines.