Carbon Market Watch

For fair and effective climate protection.

The HFC-23 destruction scandal – The Ulsan Project (Newsletter #10)

18 Sep 2010

Further to serious concerns that were highlighted with regard to the methodology for HFC-23 destruction, the Board will discuss  the first renewal request to renew the crediting period for a HFC-23 destruction project. The HFC-23 Decomposition Project in  Ulsan, South Korea, operated by the Ineos Group (Project 003) generated 1.4m credits over the first crediting period (2003-2010)  and is applying for another 2.2m credits from 2010 to 2017.

However, an analysis of monitoring data shows that the Ulsan project has also artificially increased HCFC-22 production. The figure on the left  illustrates that from 2001 to 2005 the Ulsan project produced HCFC-22 in the range of about 1000 – 4000 kt/year. When submitting the project for CDM registration, the plant operators declared that they would produce about 4111 kt/yr. However, after the registration of the CDM project in 2005, annual HCFC-22 production increased to about 7000 kt/year.

Action to be taken by the Board: In light of the serious concerns that the methodology for HFC-23 destruction incentivises project developers to artificially increase their production, CDM Watch believes that a decision about the renewal of the crediting period can only be taken once the significant concerns about the current methodology have been addressed. The Board must put the request for renewal of the crediting period of this project on hold until the results of the investigation have been presented and a revised methodology adopted.