Decision 66/54

The Executive Committee decided:

1. To take note of the report of the Production Sector Sub-group contained in document UNEP/OzL.Pro/ExCom/66/53;

Modification of China’s CFC production sector phase-out plan to permit exemptions for the production of CFCs for essential uses approved for other Parties for 2012

2. To modify the CFC production sector Agreement for China to allow the production for export of pharmaceutical-grade CFCs in 2012, with an annual review, for purposes of meeting the 2012 essential use exemption for metered-dose inhalers (MDIs) authorized by the Parties in decision XXIII/2 for the other countries, provided the exporting country had reporting and verification systems in place and that the reporting and verification systems collected and reported on the following information:
   1. Documents from MDI manufacturers ordering pharmaceutical-grade CFCs;
   2. Approvals from importing country governments for purchasing essential use pharmaceutical-grade CFCs;
   3. Approvals received from governments of MDI-producing countries that ordered pharmaceutical-grade CFC and the essential production authorized;
   4. Raw materials consumed for production run;
   5. Amount of pharmaceutical-grade CFC produced;
   6. Amount of non-pharmaceutical-grade CFC produced;
   7. Documentation (transport, storage, disposal) verifying that the amount of non-pharmaceutical CFCs had been destroyed;
   8. Export documentation from producers;
   9. Invoices from MDI manufacturers;
   10. Audit reports verifying all the above;
3. To request the World Bank, as the implementing agency for the CFC production phase‑out plans for China, to provide its services in carrying out the verification/audit and to submit reports to the Executive Committee on behalf of China on the understanding that:
   1. The World Bank verified that the producer had access to destroy the excess CFC produced using a destruction technique approved by the Parties;
   2. The cost of verification would be approved in advance of the audit by the Executive Committee;
4. That:
   1. The Secretariat, on behalf of the Executive Committee, would seek confirmation from the importing country of the actual quantities imported by that country;
   2. The producing country agreed to limit the production of non-pharmaceutical specification grade CFCs to the extent possible and pay for their destruction; and
   3. The Executive Committee would consider application of the penalty clause to any CFC production determined as being excessive by the verification reports;

Draft report of the technical audit of the HCFC production sector in China

5. To note that the Fund Secretariat intended to:
   1. Request the United Nations Office at Nairobi to end the contract with the consultant contracted for the technical audit of the HCFC production sector in China, by mutual agreement, ensuring payment for the work done to date, on the understanding that the consultant would provide to the Secretariat all of the data collected as part of the contract and satisfactorily answer all outstanding questions on the draft final report;
   2. Pursue completion of the technical audit with the next lowest price bidder, enabling the new consultant to submit the final technical audit to the Committee at its 67^th meeting;
6. To note that the delayed submission of the final technical audit report would not prevent the Executive Committee from considering the project proposal for HCFC phase-out plan for the production sector for China;
7. To request the members of the Production Sector Sub-group to submit comments relating to the final report to the Secretariat by 30 April 2012, on the understanding that any further work on the technical audit would, to the extent possible, address issues raised in their written or oral comments, as well as those made by the Secretariat, the peer reviewer and the World Bank, at the level of individual plants;
8. Through the Government of China, to invite the HCFC production plants to provide data that they had not provided to the original consultant, including on:
   1. The book value for the facility relating directly to production of HCFCs for use in assessing residual plant value;
   2. Trading price data for carbon emission reductions;
   3. Incinerator costs; and
9. To request the Secretariat to review, for consideration at the 67^th meeting, the project proposal for HCFC phase-out in the production sector in China, taking into account any available information from the technical audit, as well as any other relevant sources of information;

HCFC production sector guidelines

10. To request the Sub-group to continue its discussions on the HCFC production sector guidelines at the 67^th meeting of the Executive Committee.