Policy, licensing and quotas

POLICY

Comprehensive and effective national policy frameworks are essential for developing countries to meet and sustain their compliance obligations under the Montreal Protocol. National Ozone Units in developing countries must develop, implement and enforce a range of different measures – institutional, legislative and investment-oriented – to control HCFCs and other ozone depleting substances. The dual gains for the ozone layer and climate system can only be realized if countries choose the right path, which may not be the “business as usual” technology option and which may require additional consideration by those making the policy decisions. An impartial consideration of the relative merits of HCFC replacement technologies and chemicals is essential. The policy and legislation in the country have a great deal to do with shaping the technology course taken by Article 5 countries, and National Ozone Units are the key drivers of such policies. There is a range of short and medium-term policy and legislative options available.

LICENSING AND QUOTA SYSTEMS

The Montreal Protoco l requires each Party to the Protocol to establish a system for licensing the import and export of new, used, recycled and reclaimed controlled substances. Currently, all Parties have ratified the 1997 Montreal Amendment which required the establishment of the licencing systems for ozone-depleting substances (ODS). With the adoption of the Kigali Amendment on HFCs, the establishment of licencing systems for HFCs need to be in place by 2019 (or three months after the Amendment is ratified by 20 countries).

Furthermore, the Executive Committee of the Multilateral Fund for the Implementation of the Montreal Protocol required that from 2013 onwards that for all submissions of new HCFC projects, countries must confirm that they have established an enforceable licensing and a quota system for HCFC imports, and –if relevant – also for HCFC production. It is required that the system is capable of ensuring a country's compliance with the Montreal Protocol HCFC phase-out schedule for the duration of the HCFC Phase-out Management Plan (HPMP) agreed for that country.

An effective and operational licensing system can be considered to be crucial for compliance with commitments under the Protocol. It facilitates control of countries' ODS supply & monitoring and collecting data, it facilitates quota allocation and can be part of a strategy to reduce illegal imports and exports.

The objective of establishing an import/export quota system is to ensure that the country will not import/export more of a substance (or group of substances) than the limit for that country according to its relevant legislation. In the case of ODS, and HCFCs in the future, the limit set for a country by the Montreal Protocol is reflected in the country’s national legislation.

An import/export quota system is usually part of an ODS licensing system which has been established in a country, although some countries may decide to establish it based on a separate administrative order, which may be easier than amending the existing ODS legislation. An import/export quota can be defined as the quantity of individual substance (or group of substances) covered by the quota system which is allocated to an eligible importer/exporter for a given period of time (usually for one calendar year).