Having taken note of the comments and recommendation of the Sub-Committee on Project Review (UNEP/OzL.Pro/ExCom/26/16, paras. 58-59), the Executive Committee decided:
(a) To endorse the following principles:
(i) Incremental operating costs will not be considered for compressor manufacturers;
(ii) 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 will continue to be eligible for compensation;
(iii) In countries that have both compressor manufacturers and downstream manufacturers of refrigerators, double-counting of compensation for the capital cost of conversion of compressor manufacture, and the incremental operating costs associated with compressors for downstream manufacturers of refrigerators, is to be avoided;
(iv) In countries which have received or will seek compensation for compressor conversion, any compensation proposed for downstream manufacturers for incremental operating costs associated with compressors will be discounted according to the ratio of the number of compressors in respect of which compensation for conversion of ODS-based production capacity has been paid or will be paid by the Fund, to the total number of refrigeration units produced in the country concerned using hermetic compressors;
(v) In countries in which downstream users have received or will seek compensation for incremental operating costs associated with compressors, any proposed compensation for the capital costs of compressor conversion will be discounted according to the ratio of the number of hermetic compressors for which incremental operating costs have been or will be paid to downstream users through projects approved by the Fund, to the total number of refrigeration units produced in the country concerned using hermetic compressors;
(b) To request relevant countries provide the necessary basic information on their refrigeration sectors, including:
(i) Relevant enterprise-level data relating to the production levels and capacities of the manufacturers of compressors (hermetic compressors only, since non-hermetic compressors are not used in domestic or small commercial refrigerators), including those manufacturers who have received Multilateral Fund grants as applicable;
(ii) Relevant enterprise-level data relating to the production level of downstream refrigerator manufacturers (both domestic and commercial, using hermetic compressors), including those manufacturers who received incremental operating costs associated with compressors, as applicable;
(iii) Relevant enterprise-level data relating to both of the above for enterprises with combined production, including any compensation received for one or the other from the Multilateral Fund;
(iv) A statement from the country concerned regarding its intention on the remaining enterprises for which it wishes to receive funding for incremental operating cost associated with compressors or incremental capital cost for conversion of compressor manufacture;
(c) To agree that the boundary between domestic and commercial refrigeration be delineated by compressor power rating and that refrigerators using hermetic compressors of 250 rated watts and below be classified as belonging to the domestic subsector;
(d) To note that specific arrangements for implementation of the decision will be proposed by relevant implementing agencies and the Fund Secretariat on a country-by-country basis in the context of project proposals;
(e) To decide that the guidelines in subparagraphs (a)–(d) above should be applied for a period of one year after which the issue could be brought again to the attention of the Executive Committee for further guidance, as pertinent.