Chinese Black Market in Ozone-Killers Thrives

by Dipankar De Sarkar

The London-based Environment Investigation Agency (EIA) says its findings show that without new and additional actions to combat this illegal trade, "the on-going depletion of the ozone layer will persist as a damning legacy of the 20th century." The report cites a growing illegal market in halons, used in fire extinguishers, and chlorofluorocarbons (CFCs), mainly used as refrigerants -- made in China and other developing countries, then sold and shipped to the U.S. and Europe.

The EIA's report was released ahead of the Nov. 23-24 Cairo meeting of signatories to the Montreal Protocol, the international agreement that seeks to phase out the use of all ozone-depleting substances. The report also follows news that this year's ozone hole over Antarctica in now larger than ever, bigger than North America and three times the size of Australia. Ozone depleting chemicals like CFCs and halons are blamed for degrading the ozone layer. Such chemicals, whose use is supposed to be phased out in developing countries, are produced and traded by companies based in Zhejiang province in China, according to the report.

They recorded Chinese dealers as saying supplying the banned chemicals were "no problem."

During one meeting, a Chinese dealer showed the investigators various documents including a bill of lading to confirm shipments of CFCs from Shanghai to Rotterdam, adding that the Italian buyer arranged collection of the chemicals. The EIA alleged that the Chinese trader also informed the investigators that Chinese manufacturers routinely falsify their documents, often describing virgin chemicals as recycled chemicals, whose export is allowed.

"Our investigation proves beyond doubt that China is the largest source of illegally traded CFCs and halons," said Steven Trent of EIA. "It also shows that illegal trade in halons constitutes a much bigger problem than had previously been thought."

EIA said halon 1301, the highest ozone-depleting chemical with an atmospheric lifetime of 110 years, is being exported in large quantities to the United States because of its use in fire fighting. But although much of this is sold as recycled halon, there are doubts as to whether it is actually recycled.

China was by far the largest country of origin of halon 1301 entering the U.S. last year, with applications for imports of 235 tons of recycled halon 1301 cleared by the U.S. government.

However, EIA says there is only one "official" halon 1301 plant in China -- run by the Zhejiang Chemical Industry Research Institute and based in Hangzhou in Zhejiang province. This plant is said to have a single recycling line, consisting of two distillation units for the separation of contaminants.

At the same time, modern recycling plants based in developed countries can only process between 60 and 70 tons a year -- "and this is in countries where a real economic incentive for reclaiming halon 1301 exists," the agency says.

In what the researchers described as a "sophisticated and profitable fraud," Chinese dealers are said to take advantage of U.S. laws, under which the country's Environmental Protection Agency (EPA) has up to 15 days to respond to "petitions" or applications to import goods. "The burden of proof is on the EPA," said EIA investigator Julian Newman. "How are they going to find out these chemicals are recycled or not? So it goes through."

Although the EPA has been refusing requests to import Chinese halons since last autumn, he added, "the damage has been done".

The report notes: "The influx of cheap material has caused a gross distortion of the halon market in North America and legitimate recycling operations have seen their prices massively undercut by the Chinese halons."

There was a similar problem with CFCs, with EIA investigations showing many shipments labeled as recycled Chinese-made CFCs were mixed with "virgin" (fresh) CFCs. In response to the EIA's claims, a spokesman at the Chinese embassy in London pointed out that under the Montreal Protocol, developing countries including China had until 2010 to stop using CFCs. The cut-off date for developed countries was 1996.

"Accordingly, while gradually phasing out CFC use, China is entitled to continue to produce some CFC to meet both domestic and international demand before 2010," said the spokesman, Shao Zheng.

"Under such circumstances, some illegal businessmen in the EU countries made use of the time gap to engage in illegal smuggling of CFC to meet demand for the substance in the EU market, thus making a huge profit."

He also said that since China is yet to ratify a Montreal Protocol Amendment requesting contracting parties to introduce import and export licence control, "at the moment, China exercises no import and export control" over the trade. "China is under no obligation so far to control its import and export of ozone-depleting substances."

EIA chairman Alan Thornton disputed the Chinese position, saying the country is exempt only from domestic use. He said, "Lack of prosecutions in Europe, coupled with the activities of Chinese traders, have 'severely undermined' the Montreal Protocol."

"The Montreal Protocol has gone some way towards addressing the problem of trade in ozone-depleting substances. However, without proper enforcement, illegal trade in these will continue to threaten human health the natural environment," said Trent. "Delegates to the Montreal Protocol must make this issue a priority," he added.

Thornton also said that Western multinationals were returning these dubious favors by dumping obsolete technology, including refrigerators using CFCs, in developing countries.