Champions
Read the stories of some of the people helping to fight the illegal smuggling of HFCs and find out how you can play your part in tackling the issue.
- Citizens
- Contractors
- Distributors
- Enforcment
Neil Everitt
“In my years investigating this topic, I found that the legitimate value chain is already doing what it needs to. It is those working outside of it who are bending the rules. The #SayNoToIllegalHFCs campaign has a lot of potential to pool these efforts and prove to authorities that there is real concern across European industry, that the black market is harming real people and businesses. I hope it urges authorities to crack down on the issue in all affected countries and properly police existing laws.”
After almost 40 years as a journalist covering the global air conditioning, refrigeration and heat pump industry, Neil founded the Cooling Post in 2013 and quickly established it as a leading, independent voice on the refrigeration industry. The Cooling Post is not only an important source of information on the black market for HFCs in Europe – Neil has through his active investigative journalism contributed to shutting down illegal operations across the EU.
Neil took early notice of the increasing illegal trade in refrigerants. Those affected by the black market, such as refrigerant suppliers, started coming to Neil with stories which fed his reporting. At first, it was fishy emails and text messages offering illegally traded refrigerants. Then, the activity moved to online marketplaces. While many such marketplaces have successfully cracked down on this activity, Neil worries that criminals are always a step ahead of the legitimate industry and enforcement authorities.
Recently, Neil uncovered connections between a company based in Latvia that was selling refrigerant products in breach of the F-gas regulation and a well-known Chinese refrigerant manufacturer. This coverage led the Chinese manufacturer to publicly distance themselves from the Latvian company and ask them to stop using their brand in conjunction with the illegal activity.
Neil’s tireless work in investigating the illegal trade flow among end users and seller platforms has been instrumental in drawing attention to and building understanding of the black market. Neil’s reporting proves the vast, detrimental impact of the black market on European people and businesses. He also shows us that any individual can join the good fight and make an impact.
What can citizens do?
- Raise awareness about this issue
- Ask local shops and garages if they are using legal refrigerants
What citizens can do?
- Raise awareness about this issue
- Ask local shops and garages if they are using legal refrigerants
Marco Buoni
“We noticed repeated violations at different levels. We started to see both individuals selling illegal products on the internet, and retailers selling to people who do not own a F-Gas License. This is how we first became aware of the extent of the illegal trade in HFCs.”
llegally traded HFC imports in Italy and Europe are all too familiar to Marco Buoni, Director General of Centro Studi Galileo, Secretary General of ATF and President of AREA (European Association of Refrigeration, Air Conditioning and Heat Pump Contractors). The smuggling of HFCs is unfortunately well known by Centro Studi Galileo, the main training centre for the HVACR sector in Italy. The centre trains more than 10,000 RAC technicians and holds over 100 courses per year, making it one of the largest in Europe.
For this reason, Centro Studi Galileo carefully monitors and reports suspicious online HFCs adverts, and invites refrigeration technicians in Italy to do the same and use all available tools – including the EFCTC Action Line – to tackle the illegal HFCs market.
Marco Buoni acknowledges the complexity of the problem of illegal HFCs imports which makes use of highly differentiated routes and means of entry into Europe. Many shipments depart from large HFCs production centres in Asia and reach the borders of the European Union by sea and over land. The product is smuggled into the EU either by individuals or by criminal organisations who are aiming to make extra money.
These gases are then marketed to professionals who – despite being aware of the illegality of the suppliers and of the safety issues that could occur from using unverified gases – are willing to cut costs and disregard the associated environmental issues.
According to Buoni, it is essential to raise awareness among citizens and the wider value chain so that they know about the risks associated with using illegally imported HFCs. This includes risks related to the safety and warranty of installed systems. Specific training sessions should also be delivered to custom officers to help to catch any illegally traded products.
Claus-Dieter Penno
“The small businesses belonging to ZVKKW do a lot to keep up to date with regulations and protect the environment. At the same time, the businesses are confronted with a flood of illegal refrigerants, which may be tempting to some customers. This dilemma could make some smaller companies go out of business in the near future.”
Claus-Dieter Penno has represented trade, commerce, industry, and educational institutions in the refrigeration, air conditioning and heat pump sectors since 2017. Before his election as President of the ZVKKW, he worked for decades as an engineer in the trade and distribution of refrigerants. “Our association and its companies are fully behind the F-Gas Regulation and its associated goal of environmental protection. Since the introduction of the regulation in 2015, the member companies have been striving to use refrigerants more efficiently in order to avoid a potential supply issues.”
At the same time, working with refrigerants can be extremely difficult for the industry – so difficult that some companies are likely to go out of business in the medium term. In their work they must keep up to date with the latest regulations whilst the black market creates unfair price pressure. According to Penno, this repeatedly leads to difficult conversations with some customers. Small companies in particular will not be able to cope with the pressure to reduce their prices in the medium term.
From a technical point of view, the black market also can damage equipment. According to Penno, many a plant operator has found that the refrigerants he has bought and filled himself do not meet the required specifications and so the refrigeration plant has stopped working. The companies in his association are then called in to extract the impure material and replace them with legitimately sourced refrigerants to avoid any major damage.
On behalf of the ZVKKW, Penno is also in contact with other national associations in Europe. He can confirm that the implementation of the F-Gas Regulation into national law as well as its enforcement differs from country to country. However, the challenges for small companies across Europe are very similar. In addition to harsher penalties for smugglers, Penno would like European policy makers to listen to the industry about the challenges they are facing.
Wimar Wysluch
“Infrequent and ineffective controls massively reduce the risk of being caught using illegally traded refrigerants. Unfortunately, this leaves it up to individual companies to counter the black market. As an expert, I can only recommend that all those involved always act consistently and according to the law – even if it means losing a customer.”
As managing director of a refrigeration, air conditioning and heat pump technology company, Wimar Wysluch has been working with refrigerants for over 35 years. He also serves as a publicly appointed expert and surveyor: Wysluch is President of the German Surveyor’s Council on Refrigeration, Air Conditioning and Heat Pumps.
He estimates almost every other cooling system in building technology is not tested according to the regulations, often filled with refrigerants from dubious sources. He knows of countless cases in which illegal refrigerants have led to system damage, with the compressor impacted in most cases. The damaged parts or the whole system then have to be replaced, even when their life cycle has not been completed. Insurance does not cover the use of illegitimate refrigerants and it ends up costing operators.
Wysluch reports that refrigerant gases bought illegally online are also an issue. He remembers one case where an installer correctly refused to refill a refrigerant gas into a customer’s system – the gas was bought via an online platform and came in an illegal disposable cylinder. The customer tried to force him by calling in a lawyer, but this installer continued to refuse.
Further, since most specialised companies refuse to fill refrigerant gases bought online for liability reasons, the task is often carried out by unqualified contractors. This poses an additional risk for system operators, the environment and the safety of those involved. It also violates the legal obligation of end users to keep records and only allow certified personnel from certified companies to work on their cooling systems.
For many years, Wysluch has campaigned against the issue of refrigerant gases traded illegally outside of the quota system of the F-gas regulation. He has also reported many cases to the authorities. He appeals to everyone to act according to the law, as it is the only way to combat the illegal trade and use of refrigerants. If no one buys refrigerants from illegitimate sources, the black market will lose its footing.
WHAT CAN CONTRACTORS DO?
- Buy only from reliable traders
- Buy disposable cylinders
- Check cylinders for EU specifications
- Check the Safety Data Sheet
Report suspicious activity to the EFCTC Action Line.
What contractors can do?
- I will buy only from reliable traders
- I will not buy disposable cylinders
- I will check cylinders for EU specifications
- I will check the Safety Data Sheet
- I will report suspicious activity to the EFCTC Action Line
Maria
“I am pleased that there is now a movement to combat illegally traded HFCs in Europe. As a longstanding distributor of refrigerant gases, our company has felt the effects of the illegal trade over the past few years. However, this is much more than just a business problem and requires work from law enforcement to hold the criminal organisations accountable for the harm they are causing.”
Maria [1], a Greek distributor of HFCs, currently runs a family business which was established over 60 years ago. In recent years, the company has lost business to smugglers active in the illegal trade in HFCs.
Undercut by the black market, almost all of Maria’s smaller customers now buy from illegitimate suppliers. What’s more, she has heard that larger end use companies are also unwittingly working with technicians who use illegal refrigerants from disposable canisters. Maria estimates that illegally traded HFCs are so widespread in Greece that between 60% and 80% of the entire market is made up of smuggled product.
Undeterred, the company has written to the Greek government as part of a coalition of refrigeration companies in order to improve awareness and enforcement at borders. F-gas smuggling can be difficult to detect because it takes place in a range of creative ways; the coalition has heard reports of buses hiding containers in the luggage area, as well as refrigerated lorries carrying hidden containers. Despite the EU F-gas regulation being in place since 2015, fines are also rarely applied by the Greek enforcement authorities, so smugglers continue their activities when they are released. These criminal networks are not just smuggling HFCs, however the lack of penalties has made the trade particularly attractive. The Greek Ministry of Finance is aware of this issue and is currently working to bring about more severe fines.
Besides undercutting legitimate businesses, buying illegally traded canisters has the added danger that customers do not always receive the gas they intended to order. Maria has heard that many fill cylinders with whatever product they have available, causing damage to the refrigeration units down the line. Higher GWP refrigerants are available for lower prices on the black market, which is hindering shifts towards newer, more environmentally friendly alternatives.
The availability of illegally traded HFCs in Europe is so pervasive that it requires action from all levels of the value chain. Maria’s work is an excellent example of bringing companies together in order to encourage action from government. Her work to increase awareness about this issue is paramount in order to root out the problem.
[1] Names have been changed
Krysztof Grzegorczyk
“I started PROZON as part of my social responsibility. I felt like it was my responsibility to limit the impact of the refrigerant gasses so necessary to the industry, to make sure they would be reused and reclaimed, and that the illegal market would not be not allowed to proliferate.”
More than 25 years ago, Krzysztof was working as a refrigerant distributor in a major international company. While working in this role he identified a problem in the market for refrigerant gas: the gases were not being adequately reclaimed at the time. So he decided to do something about it and founded PROZON, the “Foundation for the Preservation of the Ozone Layer”, together with Marek Wawryniuk. Back then, ozone-depleting CFC gases were still used, and Krzysztof made it his priority to make sure that substances were all reclaimed and disposed of properly.
CFCs are no longer on the market, and so PROZON’s mission has evolved. PROZON is continuing its efforts for the climate as the Foundation for Climate Protection through reclaiming fluorinated greenhouse gases. And they are a key player in the fight against illegally traded HFCs. Through close collaboration with the Ministry of Finance and Polish customs, they have managed to significantly slow down the illegal market for HFCs in Poland.
Ever since this issue first surfaced, Krzysztof and his colleagues have worked to raise awareness among ministries, the general public and the value chain. In total, PROZON has trained more than 200 customs officers in a dozen training sessions – showing them how to find and test illegal cylinders. Over the past years, this collaboration has led to more than a handful of successful seizures.
The impact of the work started by Krzysztof and PROZON has not stopped at the Polish border. At a meeting between the Polish Ministry of Finance and the European Commission Directorate General for Climate (DG CLIMA), PROZON has showed more than 30 representatives from a dozen countries how they work successfully with customs in Poland.
Krzysztof and the PROZON team are determined to continue their work and to show as many people as possible how we can eradicate the black market for HFCs.
What distributors can do?
- Only buy from reliable traders
- Check the Safety Data Sheet
- Report suspicious activity to the EFCTC Action Line
OLAF “Illicit Trade, Health and Environment” Team
“We are very proud to fight against this problem and to protect the climate and legitimate industry. Our work has shown us that raising awareness among EU member states, as well as cooperation with all stakeholders is crucial to help us detect and combat this illegal trade. This is why we are committed to supporting initiatives like the pledge which encourage exchanges of information and best practices.”
OLAF is a European Union body which – amongst other things – detects and investigates illicit goods coming from outside the EU. They work to prevent trade in products which could be harmful for the safety and security of the citizens and for the environment and cooperate with authorities to stop them from coming onto the market. The OLAF “Illicit Trade, Health and Environment” Team is composed with notably two investigators who have the knowledge, experience, skills and competencies needed to conduct effective, specialised investigations in the domain of illicit HFC trade. They dedicate their day-to-day to tracking down smuggled HFC imports alongside other goods and, if appropriate, with the support of other colleagues as well as the analyst and forensic team.
In practice, they work to substantiate intelligence of illegal shipments of HFCs which they gather from their own investigations, or via tipoffs from other sources. They then coordinate with EU member state customs authorities in order to stop shipments and streamline the cooperation between the customs authorities and the F-Gas authorities; the intelligence they supply has led to several large seizures of illegally traded HFCs over the past year.
When they first started working on this problem, the team identified loopholes which were being exploited by criminal organisations. Up to 90% of smuggled product is linked to abuses to the T1 transit procedure, whereby shipments which are meant to travel through the EU are being diverted and sold illegally within the member states. A lot of OLAF’s success has been built on bridging the customs systems in member states with the EU’s F-gas quota portal. This enables them to see if a company importing HFCs is registered as a legitimate quota-holder. In future these two systems will work together automatically, making it easier to detect smuggled products more quickly, through the Single Window System under development by the Commission and the Member States. They also identified shell companies established only for purpose of smuggling non-refillable cylinders which are prohibited in the EU and evading VAT.
Interestingly, it is not just the seizures which deter criminals but publicising their success acts as a preventative too. After a seizure, they have noticed a decrease in activity in that member state for a few weeks. They believe that the smugglers focus on different routes into Europe for a short while before retrying their original tactics.
OLAF’s work is undoubtedly helping to prevent illegally traded HFCs as they work to intercept shipments across Europe. The black market is not slowing down – illegal shipments and OLAF alerts have skyrocketed since the COVID lockdown period earlier this year – but OLAF is constantly improving their methods. Increased awareness and cooperation are enabling them to gather significant amounts of intelligence, with one or two alerts passed onto member states every day in September 2020 alone.