Who gains from saving nature
Ledger 1 : 33 — For each dollar financing nature-based solutions in 2023, about $33 financed activities harmful to nature. (UNEP)
Cases / Carbon credits · Russia · 2008–2015

HFC-23 and SF6 Joint Implementation projects at KCKK Polymer and HaloPolymer Perm

Nature's voice · report
A 2015 study estimates that about 28–33 million tonnes of CO2 equivalent of offset claims against my atmosphere, issued from 2008 to 2012, were not matched by reductions.
Did nature suffer? Yes. Harm is on record. Disputed
Recorded
  • The waste rate of HFC-23 at one Perm plant in 2012 was above the IPCC range of 1.5% to 4% and above any known value, according to the study. Stockholm Environment Institute
What the record lacks: 6 none on record · 2 not disclosed · 1 insufficient · 1 not measured · 3 disputed · 1 unclear See the gaps
Accounts of the harm differ
Whether HFC-23 was abated before the Joint Implementation projects
  • Company or project DNV (determination auditor): Confirmed the original design-document information, which stated HFC-23 was partly abated beforehand. Stockholm Environment Institute
  • Company or project Bureau Veritas Certification (verifier): Confirmed the revised information, which states HFC-23 was not abated beforehand. Stockholm Environment Institute
The finding that waste gas generation rose once crediting rewarded it
  • Researchers Schneider and Kollmuss (Stockholm Environment Institute): All Russian HFC-23 and SF6 abatement projects increased waste gas generation to unprecedented levels once more waste gas earned credits; about 28–33 million credits were issued in excess. Stockholm Environment Institute (Schneider, Kollmuss)
  • Company or project HaloPolymer Perm: Did not respond to Nature's requests for comment. Scientific American / Nature
  • Company or project HaloPolymer Kirovo-Chepetsk: Did not respond to Nature's requests for comment. Scientific American / Nature

Three Joint Implementation projects at two Russian fluorochemical sites issued 54 million emission reduction units. A 2015 study in Nature Climate Change found that waste-gas generation rose abruptly once crediting rules no longer capped it, and estimated that about 28–33 million credits were issued in excess.

28–33 million estimateCredits estimated to have been issued in excess
Estimate by the study authors for all four plants together, equal to 66–79% of credits issued in periods without methodological safeguards.

Status Latest source is the August 2015 study and news coverage; no court ruling or regulatory action against the projects is on record.

What?
Three Joint Implementation projects at KCKK Polymer and HaloPolymer Perm issued 54 million ERUs for destroying HFC-23 and SF6. A 2015 study found waste gas generation rose abruptly after crediting safeguards were removed in 2011. Stockholm Environment Institute (Kollmuss, Schneider, Zhezherin)
Where?
KCKK Polymer, Kirovo-Chepetsk (Kirov region), and HaloPolymer Perm (Perm Krai), Russia. Stockholm Environment Institute
When?
Crediting from 2008; monitoring plans revised in 2011 and applied from 1 January 2010; paper published 24 August 2015. Stockholm Environment Institute (Kollmuss, Schneider, Zhezherin)
Who?
Gained
Lost
  • ERU holders — Secondary prices above EUR 10 in mid-2011; credits worth more than EUR 20 in 2008 and less than EUR 1 by 2015 Scientific American / Nature
Harmed
Why?
Revised monitoring plans removed caps on eligible HCFC-22 production and HFC-23 waste rate, so that all waste gas became eligible for credits. Stockholm Environment Institute
How?
Waste generation rates rose abruptly from the second quarter of 2011; some periods report more HFC-23 incinerated than generated, and from 2012 one project stopped reporting generation. Stockholm Environment Institute (Kollmuss, Schneider, Zhezherin)
6 of 6 questions answered from the record

What happened

The record, in order.

Three registered Joint Implementation (JI) projects at two facilities destroy HFC-23, a by-product of HCFC-22 manufacture, and SF6 off-gas: RU1000201 covers HFC-23 and SF6 at KCKK Polymer in Kirovo-Chepetsk, and RU1000202 (HFC-23) and RU1000309 (SF6) cover HaloPolymer Perm. Together they issued 54 million emission reduction units (ERUs), 6% of ERUs issued by April 2014 according to UNEP Risoe data. A smaller Russian HFC-23 project reached determination but was never registered. The study's Supplementary Information states that the registered and proposed projects cover all Russian production: three HCFC-22 facilities with about 44,000 tonnes a year of capacity and two SF6 facilities with about 1,800 tonnes a year. The Stockholm Environment Institute (SEI) gives the global warming potential of HFC-23 as 11,700 and of SF6 as 23,900 in the first commitment period.

RU1000201 and RU1000202 were developed by Camco International and initially applied CDM methodology AM0001 v5.2, which caps eligible HCFC-22 production at the 2002–2004 maximum and the HFC-23 waste rate at the 2002–2004 minimum. Crediting began in 2008. In 2011 both projects adopted revised monitoring plans with a JI-specific approach, applied from 1 January 2010; the revision removed both caps, so that, in the study's words, "all waste gas generated becomes eligible for crediting". It also declared original design-document information inaccurate, including applicable Russian regulations and historical data on HCFC-22 production and on HFC-23 generation and abatement. RU1000309 (SF6, HaloPolymer Perm) was developed and approved in 2011/2012 and claimed credits retroactively from 1 January 2008.

Schneider and Kollmuss (Nature Climate Change, published online 24 August 2015) reported that "all projects abating HFC-23 and SF6 under the Kyoto Protocol's Joint Implementation mechanism in Russia increased waste gas generation to unprecedented levels, once they could generate credits from producing more waste gas". SEI's working paper summarised the increase as abrupt from the second quarter of 2011, when the safeguards were abandoned, and "mostly attributable to an increase in waste generation rate, and not in production levels". The Supplementary Information states that total Russian HCFC-22 production did not increase substantially in 2011 and 2012; that in 2012 the HFC-23 waste generation rate at HaloPolymer Perm exceeded the IPCC range of 1.5% to 4% and any known value, including the 19 CDM plants in developing countries; and that for SF6 at HaloPolymer Perm the estimated 1990–2007 rate ranged from 0.4% to 5.8% (average 3.8%) against 16.9% reported by the plant for 2008–2010. Waste generation peaked in October–November 2012 at HaloPolymer Perm and in the fourth quarter of 2011 for SF6 at KCKK Polymer; the authors offer one possible explanation, the commonly used 1 December delivery date for carbon futures.

The original design documents stated that HFC-23 was already partly abated before the JI projects; the revised documentation states that it was not. The auditor DNV confirmed the original information at determination and Bureau Veritas Certification confirmed the revised information at verification. SEI also noted data inconsistencies: some periods report more HFC-23 incinerated than generated, or negative fugitive emissions, and from 2012 RU1000202 stopped reporting HFC-23 generation at all; the auditor did not identify these issues. Russia's greenhouse gas inventory kept an implied HFC-23 emission factor of about 3% in 2007–2009, and inventory SF6 emissions fell by 24 tonnes (from 53 to 29 tonnes) in 2007–2008 while the projects claimed reductions of 93–199 tonnes of SF6 a year in 2008–2012.

The authors estimated that "for all four plants together, about 28-33 million credits were issued in excess, corresponding to 66-79% of the credits issued for the periods where methodological safeguards to prevent perverse incentives were not applied". Commission Regulation (EU) No 550/2011 banned HFC-23 credits from use in the EU Emissions Trading System from 1 January 2013, with pre-2013 credits usable until 30 April 2013. HaloPolymer Perm and HaloPolymer Kirovo-Chepetsk did not respond to Nature's requests for comment.

  1. 2008Crediting begins at RU1000201 and RU1000202; SF6 project RU1000309 later claims credits retroactively from 1 January 2008
  2. 2011EU Regulation 550/2011 adopted (7 June); revised monitoring plans for RU1000201 and RU1000202 remove the caps, applied retroactively from 1 January 2010; waste generation rises abruptly from the second quarter
  3. 2012RU1000202 stops reporting HFC-23 generation; waste generation at HaloPolymer Perm peaks in October–November
  4. 2013EU ban on HFC-23 credits applies from 1 January; pre-2013 credits usable until 30 April
  5. 2015Nature Climate Change paper published online (24 August)

What was said

Claims, in the words of those who made them.

“all projects abating HFC-23 and SF6 under the Kyoto Protocol's Joint Implementation mechanism in Russia increased waste gas generation to unprecedented levels, once they could generate credits from producing more waste gas”

“for all four plants together, about 28-33 million credits were issued in excess, corresponding to 66-79% of the credits issued for the periods where methodological safeguards to prevent perverse incentives were not applied”

“all waste gas generated becomes eligible for crediting”

“mostly attributable to an increase in waste generation rate, and not in production levels”

“in practice this requirement did not prevent large industrial gas projects from making substantial changes after their registration”

Where accounts differ

Each party's account, side by side, with its source. The record does not settle these points; it shows them.

Whether HFC-23 was abated before the Joint Implementation projects
Company or project
DNV (determination auditor)

Confirmed the original design-document information, which stated HFC-23 was partly abated beforehand.

Stockholm Environment Institute
Company or project
Bureau Veritas Certification (verifier)

Confirmed the revised information, which states HFC-23 was not abated beforehand.

Stockholm Environment Institute
The finding that waste gas generation rose once crediting rewarded it
Researchers
Schneider and Kollmuss (Stockholm Environment Institute)

All Russian HFC-23 and SF6 abatement projects increased waste gas generation to unprecedented levels once more waste gas earned credits; about 28–33 million credits were issued in excess.

Stockholm Environment Institute (Schneider, Kollmuss)
Company or project
HaloPolymer Perm

Did not respond to Nature's requests for comment.

Scientific American / Nature
Company or project
HaloPolymer Kirovo-Chepetsk

Did not respond to Nature's requests for comment.

Scientific American / Nature
Validity of Vitol's 2011 contracts for ERUs from Galogen and the KChKhK polymer plant
Government and regulators
Ministry of Economic Development (Oleg Pluzhnikov)

Earlier contracts transferring ERUs to foreign companies had no legal force because the units are state property.

Kommersant
Company or project
Baker & McKenzie lawyer (Sergei Sitnikov)

Disputed the ministry's view that the earlier contracts lacked legal force.

Kommersant

How it looked

What was shown, beside what was recorded.

Shown

  • The original design documents stated that HFC-23 was already partly abated before the JI projects.
    Project design documents of RU1000201 and RU1000202, confirmed by DNV at determination · Stockholm Environment Institute
  • The revised documentation stated that HFC-23 had not been abated before the projects.
    Revised project documentation, confirmed by Bureau Veritas Certification at verification · Stockholm Environment Institute

Recorded

Who gained

Money that reached nature, beside money that stayed elsewhere.

Reached nature or the ground

Not published
No figure published.

Gained elsewhere

Not totalled
Currency: EUR · Window: 2008–2015. All figures cover the same period. * Estimate built from cited figures.

Responses on record

In court and with insurers

Every proceeding and every insurer decision on record.

Lawsuits and rulings

No court case on record. No court has ruled on this case.

Insurers

No insurer decision on record.

What nature saw

Outcomes measured on the ground, and nature's note.

Nature's report opens this page. Below: further outcomes measured on the ground.

ERUs issued
54 million
Three projects at two facilities, by April 2014 (UNEP Risoe)
Credits issued in excess
28–33 million
Authors' estimate, all four plants together
HFC-23 waste rate, 2012
> 4%
At HaloPolymer Perm, above the IPCC range of 1.5% to 4%
SF6 waste rate
16.9%
Reported by HaloPolymer Perm for 2008–2010; estimated 0.4–5.8% for 1990–2007

What we don't know

Undisclosed, unproven, untried: recorded as data.
No court caseKey earnings undisclosed

Nature

  • Disputed Whether HFC-23 was abated before the Joint Implementation projects
  • Disputed The finding that waste gas generation rose once crediting rewarded it

Court

Accounts

  • Disputed Validity of Vitol's 2011 contracts for ERUs from Galogen and the KChKhK polymer plant
  • None on record HaloPolymer Perm: Did not respond to Nature's requests for comment.
  • None on record HaloPolymer Kirovo-Chepetsk: Did not respond to Nature's requests for comment.

Record

  • None on record None on record: monitoring data showing whether the extra waste gas was destroyed or vented; the authors state that the data needed to determine which pathway occurred is not available. If extra HCFC-22 or SF6 was produced without demand and vented, they state the emissions increase would exceed the credits issued and, for HCFC-22, ozone-layer protection would be undermined.
  • Not disclosed Not disclosed: revenue received by the plant operators, the buyers of these ERUs and the prices paid. Kommersant (2011) names Vitol as contracted buyer for ERUs from Galogen and the KChKhK polymer plant under a contract then in dispute.
  • Insufficient Insufficient: monitoring reports missing from the Russian registry, namely the 1st and 2nd reports (2008–2009) for RU1000201 and the 1st, 2nd and 4th monitoring reports and 4th verification report for RU1000202.
  • Not disclosed Not disclosed: whether SF6 was abated before project RU1000309; its documentation does not say. SF6 production data before 2008 is unavailable for HaloPolymer Perm.
  • Not measured Not measured: after the 2011 revision, HCFC-22 and SF6 production is no longer monitored at three of the plants.
  • Unclear Unclear: which four plants the estimate of 28–33 million excess credits covers; three registered projects at two facilities and one unregistered project are described.
  • None on record None on record: statements from Bureau Veritas Certification, DNV, Camco or the Russian Designated Focal Point on these findings.
  • None on record None on record: a court ruling or a Russian or international regulatory action against these projects.

Did the harm stop?

EU Regulation 550/2011 banned HFC-23 credits from the EU Emissions Trading System from 1 January 2013.

Who paid?

None on record.

Sources

Voices on record: — Company or project✓ Government and regulators— Courts✓ Press and investigations— Communities and civil society✓ Researchers

Government and regulators

  1. Commission Regulation (EU) No 550/2011
    European Union · 2011-06-07

Press and investigations

Researchers

Connected cases

Related matters, and cases linked to this one through the same organisations, with the role each played in both.
Terms used on this page

Carbon and conservation finance

Excess credits
Credits issued beyond the amount that a later review found to be justified.
Offset
Using carbon credits to balance emissions released elsewhere, so that a buyer can claim lower or zero net emissions.
Standard-setter and registry
An organisation that writes the rules for carbon credits, approves projects, and records when credits are issued and retired. Such bodies typically charge fees per credit.
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