HFC-23 OFFSETS IN THE CONTEXT OF THE EU EMISSIONS TRADING SCHEME

The document examines the environmental and economic flaws of HFC-23 destruction projects within the CDM, noting that the high value of Certified Emission Reductions (CERs) encourages the production of HCFC-22 and its byproduct HFC-23. It highlights a conflict between the CDM and the Montreal Protocol, where CDM subsidies may prolong the life of older, more emissive factories. The briefing concludes that the EU should ban HFC-23 CERs from the EU ETS to redirect investment toward sustainable energy and support the Montreal Protocol's phase-out of HCFCs.

• HFC-23 destruction projects under the CDM are financially lucrative to the point that the credits generated are worth significantly more than the primary product, HCFC-22, creating a perverse incentive to increase production of both potent greenhouse gases.
• The EU is a primary market for HFC-23 CERs; in 2009, European installations surrendered over 46 million such credits with an estimated value of €552 million, representing 59% of the offsets used by European companies that year.
• Global HFC-23 emissions continue to rise because a substantial portion of HCFC-22 production in developing countries is not covered by CDM projects, and domestic legislation to curb these emissions is discouraged by CDM 'additionality' requirements.
• There is a direct conflict between the CDM and the Montreal Protocol, as CDM rules favor older factories that are typically the first targets for closure under the Montreal Protocol's accelerated HCFC phase-out.
• HFC-23 projects have exceptionally low investment costs compared to other CDM projects, with an average of €0.80 per CER per year, whereas solar power projects require over €5,000 per CER per year.
• Analysis of monitoring data from 19 registered projects suggests that plant operators are gaming the system by adjusting HCFC-22 production levels to maximize the generation of offset credits.

APA

Carbon Market Watch (2010). HFC-23 OFFSETS IN THE CONTEXT OF THE EU EMISSIONS TRADING SCHEME. https://carbonmarketwatch.org/wp-content/uploads/2010/07/HFC-23_Policy-Briefing1.pdf

Chicago

Carbon Market Watch. HFC-23 OFFSETS IN THE CONTEXT OF THE EU EMISSIONS TRADING SCHEME. 2010. https://carbonmarketwatch.org/wp-content/uploads/2010/07/HFC-23_Policy-Briefing1.pdf.

Wikipedia

{{cite report |author=Carbon Market Watch |title=HFC-23 OFFSETS IN THE CONTEXT OF THE EU EMISSIONS TRADING SCHEME |date=14 July 2010 |url=https://carbonmarketwatch.org/wp-content/uploads/2010/07/HFC-23_Policy-Briefing1.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{carbonmarketwatch2010hfc23, author = {{Carbon Market Watch}}, title = {{HFC-23 OFFSETS IN THE CONTEXT OF THE EU EMISSIONS TRADING SCHEME}}, institution = {Carbon Market Watch}, year = {2010}, month = jul, url = {https://carbonmarketwatch.org/wp-content/uploads/2010/07/HFC-23_Policy-Briefing1.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }