Decision 80/79

The Executive Committee decided:

1. To note the 2016 verification report of the HCFC production sector in China considered by the Sub-group on the Production Sector;
2. To request the World Bank:
   1. To verify, in the 2017 verification exercise to be conducted in 2018, that the HCFC production lines in Zhejiang Jinhua Yonghe Fluorochemical Co. Ltd. and Shangdong China Fluoro Technology Co. Ltd. for which idle capacity closure contracts had been signed had been dismantled and the key equipment had been destroyed;
   2. To verify, on a one-time basis, that the newly established HCFC-142b production lines in Zhejiang Juhua Fluoro-chemical Co. Ltd. and Shandong Donyue Chemical Co. Ltd were vertically integrated with the production of downstream facilities and all HCFCs produced in the new lines would be for feedstock use;
3. Further to request the World Bank in future verification exercises to include a report on the status of HFC-23 that had been stored in the previous years, including the amounts incinerated, sold and vented;
4. To apply the penalty clause in the Agreement between the Executive Committee and the Government of China on the basis that 887.64 metric tonnes of compensated HCFC production capacity had been redirected towards feedstock by the Changshu 3F Zhonghao New Chemical Material Co. Ltd facility, noting that:
   1. The penalty was calculated at US $0.15 per kg, resulting in an amount of US$133,146 to be returned to the Multilateral Fund through China and the World Bank; and
   2. The Government of China was improving its monitoring system for examining, inter alia, plant records for HCFC production, sales for controlled use and feedstock use and changes in stock levels, and was improving the mechanism to prevent future redirection of production capacity towards feedstock.