I thank all noble Lords who took part in what has turned out to be a very interesting and I hope fairly straightforward debate. I have the answers to nearly all of the questions, which is always an added bonus.
I would like to thank the noble Baroness, Lady Miller, for her congratulations on getting the system up and running. We will take congratulations where we can get them. I was very interested by her observations on the wider environment in relation to ozone depleting substances, F-gases. I have a few responses to the questions that she raised. The UK and other parties raised their serious concerns about carbon tetrachloride in China at the Montreal Protocol meeting last year. China has agreed to take enforcement action. We will continue to monitor the situation and make representations in that area.
The noble Baroness also mentioned an F-gas being 23 times more powerful than carbon dioxide. That is true: there is an F-gas—there are many different types of F-gas—that is 23 times more powerful, called SF6. But this one is rarely used and accounts for less than 3% of emissions for the UK. It is the HFC emissions that account for 95% of UK greenhouse gas emissions. As the noble Baroness pointed out, many other gases can now be used in various pieces of equipment to the same effect and industries are certainly moving over to those.
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I turn now to the detail of the regulations. Going back to the noble Baroness’s point about the devolved Administration, a point that was also raised by the noble Lord, Lord Grantchester, the important thing here, as I mentioned in my opening remarks, is that initially we have this agreement with the devolved Administrations. The Environment Agency will allocate quotas for the whole of the UK. There will basically be one bucket of quota. It will be handed out to
individual companies which will then be able to trade their F-gases within a single UK market; it will not be country specific. In the longer term, we need to make sure that that system is very solid, so there will be governance arrangements and joint decision-making. We do not expect there to be divergence in the future, but there may well be. However, the devolved Administrations will not be allowed to diverge without consulting all the other nations in order to make sure that we do not go over the total target, which of course is set for the UK as a whole.
I move on to the certified technicians. This is quite an interesting one, and I certainly had not realised this: there are around 47,000 technicians certified by UK bodies, which is quite a number of individuals. We do not hold figures on how many technicians are working in the UK with EU certificates but, based on the proportion of EU certificates leaving the UK, it could be around 2,000-3,000 people. The point here is that this is clearly a very skilled job, but it also seems to be quite local because it is a practical job in terms of maintaining the pipework, the cylinders and the places where these things are used. At this moment, we cannot guarantee that the EU will accept UK training certificates. We very much hope that we will reach a deal such that it will do so in future. We have made a very open and generous offer to accept the EU training certificates.
I turn to the comments made by my noble friend Lady Neville-Rolfe. There was slight confusion or perhaps misunderstanding about the different types of cost that will be incurred with this process. The 50 to 60 businesses are those that most engage with the system. These are the bigger companies that may need to engage in the UK and may have F-gas quotas. There will be many other companies interested in far less and which might have just a tiny quota for some ODSs. The cost to the business of engaging with the system therefore varies enormously, but in aggregate we expect it to be less than £60,000. However, in the interests of transparency I note that some charges may well go back to the suppliers of these gases on the basis that the polluter rather than the taxpayer should pay. The additional cost of the system that the Environment Agency will face is estimated to be around £500,000 per year. If the agency chooses to recover the cost through charging fees, we estimate that it would be spread among 800-1,000 companies right across the UK, the EU and the rest of the world which might need to use the UK system at some stage. This will all be subject to consultation, which has not yet started. The actual cost to each company will vary depending on the extent to which it uses the system. It is not in place at the moment. For the time being, the costs are being met out of funds received for no-deal preparation work.
I turn to some comments made by the noble Lord, Lord Grantchester, on the 12.4%—I presume he was referring to the ODS quota value. The data for how much ODS is used in the UK is not readily available as the amount is very small and this information has not been aggregated at a UK level—it is available only at an EU level. The use of ODS is very small and is probably not worth the time and effort to try to figure it out. Following the global phase-out, it is utterly disproportionate to try to quantify the amount of
ODS sold and then compare that to the amount sold in the EU. What will we gain as the phase-down has already happened?
I am not as concerned about that side of things, but on F-gas we have to make sure that we are comfortable. Overestimating how much we use is unlikely; it is more the case that we will underestimate because we have asked all these companies how much they supply to the UK market. They have all sent us their numbers, but it could be that a company has not sent its numbers because it has decided that it will not continue in this market. That is what we have to be concerned about. We will watch that to make sure that we get the right amount of F-gas into the country.
We have been talking to the EU while we have been splitting the quotas, but on divergence from the EU with respect to issues relating to the Montreal protocol, we will, as with all of these issues, be speaking to all of the major partners in the world. We take a very serious leadership role in this.
I return to a question asked by the noble Lord about what happens if a company ceases to trade and so that quota no longer comes into the market. We would have a bucket of quota which can be reallocated to people. It is essential that we make sure that we have the correct supply, but it is also essential to make sure that the phase-down happens within the limits that we are expecting over the coming years, so should a company no longer trade, that quota would be able to be allocated to a separate company.
What has been the impact and has this reduced emissions? It has. We know that the regulations took a little time to come into place—I accept that that was when the EU regulations were put into place. Now that they are in place, the amount of gas being placed on the market is already 37% below 2015 levels, so the EU regulations are having a significant effect. What noble Lords are being asked to approve today is for those EU regulations to be copied over and for some small changes to be made to make sure that they continue to work in the UK and that we too can continue to reduce our usage of F-gases and monitor the very small use of ODSs.