Illegal Trade Round-Up February 2021

Date: 22 February 2021

European Commission publishes a report on the functioning of the EU-wide quota system for hydrofluorocarbons (HFCs) with a section on illegal trade; EFCTC press release on cuts in HFC quotas for 2021, meaning enforcement will be critical and supported by the Commission rigorously implementing the Ultimate Beneficial Owner principle; EFCTC welcomes EU Single Window Environment for Customs proposal which will contribute to the fight against illegal trade of HFC gases; Scottish company gets UK funding for illicit refrigerant project; General press articles about illegal trade; Seizures of illegal HFCs in Spain and sale of online dangerous mixtures in USA. Note this round-up covers the period from November.

European Commission publishes a report on the functioning of the EU-wide quota system for hydrofluorocarbons (HFCs). The findings of this report will serve as input to the review of the EU rules on fluorinated greenhouse gases that the Commission launched as part of the European Green Deal and the Climate Law proposal. In the section on illegal trade. “There is clear evidence of illegal imports of HFCs into the EU, a behaviour incentivised by the high EU prices seen in 2017 and early 2018 compared to the world market. Customs have increasingly been seizing illegal shipments as border enforcement is being ramped up.” The report notes that: “Industry has pointed to discrepancies between Chinese export data and EU import data for some years (2018) as well as increasing imports to EU neighbouring countries as reasons for concern. However, given that such discrepancies are not uncommon in international trade statistics and are often related to trade (re-)routing, it does not appear feasible on the basis of this data alone to make a sound quantification of the extent of illegal imports and hence their relevance for the price development and Union gas availability. Nonetheless, the Commission is taking these claims very seriously and is working together with industry and the Member States to put a stop to such activities.” The report, in its conclusion, states that it will be important to closely continue monitoring the market and gas prices going forward, as well as effectively prevent any illegal activities, in particular as another phase-down step (to 45% of the 2015 baseline) is foreseen for 2021. The EU Customs Single Window – Certificate Exchange (EU CSW-CERTEX) project should, from 2021 onwards, greatly support these efforts by introducing automatic checks at customs of requirements under the F-gas Regulation.

EFCTC welcomes EU Single Window Environment for Customs proposal which will contribute to the fight against illegal trade of HFC gases. The EU Single Window Environment for Customs will provide a real-time connection between the EU’s HFC Registry which monitors the quota allocation and the Single Administrative Document which monitors trade with non-EU countries. Read the press release here.