Decision 78/3

Following the comprehensive discussions on information relevant to the development of the cost guidelines for the phase-down of HFCs in Article 5 countries, the Executive Committee decided:

1. To take note of the information relevant to the development of the cost guidelines for the phase‑down of HCFCs in Article 5 countries: draft criteria for funding contained in documents UNEP/OzL.Pro/ExCom/78/5 and UNEP/OzL.Pro/ExCom/78/5/Corr.1;

In relation to flexibility in implementation that enables Parties to select their own strategies and priorities in sectors and technologies

2. To include paragraph 13 of decision XXVIII/2 in the relevant section of the draft template of the cost guidelines for the phase-down of HFCs contained in Annex I to the present report;

In relation to the cut-off date for eligible capacity

3. To include paragraph 17 of decision XXVIII/2 in the relevant section of the draft template of the cost guidelines for the phase-down of HFCs contained in Annex I to the present report;

In relation to second and third conversions

4. To include paragraph 18 of decision XXVIII/2 in the relevant section of the draft template of the cost guidelines for the phase-down of HFCs contained in Annex I to the present report;

In relation to sustained aggregate reductions in HFC consumption and production

5. To continue discussions on:
   1. The methodology for determining the starting point, including whether it would be expressed in CO2 equivalents, metric tonnes, or both;
   2. The inclusion of paragraph 19 of decision XXVIII/2 in the relevant section of the draft template of the cost guidelines for the phase-down of HFCs;

In relation to eligible incremental costs

For the consumption manufacturing sector

6. In accordance with paragraph 15(a) of decision XXVIII/2, to make the following categories of costs eligible and to include them in the cost calculation associated with the phase-down of HFCs in the consumption manufacturing sector contained in Annex I to the present report:
   1. Incremental capital costs (ICCs);
   2. Incremental operating costs (IOCs) for a duration to be determined by the Executive Committee;
   3. Technical assistance activities;
   4. Research and development, when required to adapt and optimize alternatives to HFCs with low- or zero-global warming potential;
   5. Costs of patents and designs, and incremental costs of royalties, when necessary and cost-effective;
   6. Costs of the safe introduction of flammable and toxic alternatives;
7. To consider approving a limited number of HFC-related projects in the manufacturing sector only, without prejudice to different kinds of technology, no later than at the first meeting of 2019, to allow the Committee to gain experience in the ICCs and IOCs that might be associated with phasing down HFCs in Article 5 countries, on the understanding: that any Article 5 country that submitted a project should have ratified the Kigali Amendment or submitted a formal letter indicating the government’s intention to ratify the Amendment; that no further funding would be available until the instrument of ratification had been received by the depositary at the Headquarters of the United Nations in New York; and that any amount of HFC reduced as a result of the project would be deducted from the starting point;
8. To consider costs and savings related to opportunities for further avoiding HFCs in HCFC phase-out activities and how they could be addressed; and

For the other matters discussed in relation to documents UNEP/OzL.Pro/ExCom/78/5 and Corr.1

9. To request the Secretariat to prepare a document containing the elements of decision XXVIII/2 presented by the Chair of the Executive Committee in his written summary of discussions on agenda item 6(a), Information relevant to the development of the cost guidelines for the phase-down of HFCs in Article 5 countries, at the 78^th meeting, for further consideration by the Executive Committee at its 79^th meeting, including a summary of the issues pending, such as eligible incremental costs (consumption manufacturing, production sector, refrigeration servicing sector, and other costs), energy efficiency, capacity building to address safety, disposal and eligibility of Annex F substances subject to high‑ambient‑temperature exemptions.