India, US stuck in a deadlock on refrigerant gases

India has sought 2030 as the peaking year for use of existing refrigeration tech, while the US has advocated 2020

The sticking points between India and the US on an amendment to the Montreal Protocol, meant to replace refrigerant gases, remained largely unresolved during US Secretary of State John Kerry’s recent visit to India. Meanwhile, the Indian government has moved to find domestic solutions using indigenous technology.

A conglomerate of government and independent institutions, led by the Department of Science and Technology, have been tasked to research cleaner refrigeration alternatives in collaboration with industry. The Montreal Protocol is a global agreement meant to reduce use and production of substances that burn a hole in the ozone layer. But some of the new substitutes also have a huge climate changing potential. Countries have been negotiating to move the refrigeration industry off these substitutes.

India has seen very high growth in air-conditioning purchases and is a manufacturing hub for the products. It has sought a fair deal for its industry and consumers in the face of solutions that are locked in proprietary rights or safety issues.

US President Barack Obama and his administration have advocated a quick agreement on the issue, leaving the markets to deal with concerns of costs later. Some key proprietary rights, product and application patents over the substitutes are held by US-based companies.

Kerry was accompanied by the US’s top climate negotiators, who held closed door meetings with their Indian counterparts on all climate change related issues. The upcoming amendment to the Montreal Protocol — and not the Indian ratification of the Paris Agreement — was on top of their agenda, besides the global agreement on emission reduction from the aviation sector, multiple sources on the Indian side confirmed. India has sought clarity on how much of the cost of transition to better refrigerant gases would be borne by developed countries, considering the existing funding mechanism under the protocol does not cover the license fee of patented technologies and applications. It also wants to be clear if the cost of making the transition twice, from the worst to the second best (and for now the only available option) and then to the best emerging option in the future also be covered. Third, it has sought clarity on the time Indian industry would get for the transition. That will be decided by a cut-off date by which the use of refrigerant gases that cause global warming is permitted to peak in a developing country.

During the talks, sources said, the US suggested that global deployment of the new cleaner options would bring down costs and markets should be permitted to play their role – something India is not in agreement with. The US assured that whatever the costs decided upon, they would be paid for making the transition twice over, if needed. But there was no headway on the peaking year, sources said.

India has sought 2030 as the peaking year, while the US has advocated 2020. “The cost of transition for the industry and Indian consumer will naturally be a function of how much developed countries are willing to bear and how early a transition is expected from us. Both require clarity, but in this round we could not come to a common ground on these,” a senior official involved in the negotiations said.

But, India’s negotiating power has been constrained by the fact that Prime Minister Narendra Modi has already committed to President Obama through a joint statement in June this year that the amendment to the Montreal Protocol would necessarily be done before the end of 2016, well before the latter’s tenure ends. The meeting for this is to be held in Kigali, Rwanda, which starts on October 8.

In this regard, the environment ministry has initiated a research programme with the department of science and technology’s Indian Institute of Chemical Technology. “We also need to find our own solutions. Some industries in India are capable of or already have generated replacement chemicals, but are stuck with the patents existing on these. But, it is essential that we also build our own capacity as a possible alternative during this transition period,” said an official.

China has invited some countries with a deep interest in the Montreal Protocol negotiations, including India and the US, to a meeting next week to broker an agreement on these and other sticky points. It had pitched for a peaking year ranging between 2020 and 2025 for developing countries.