Analysis and Implications of the Hydrofluorocarbon Allowance Allocation Systems in the European Union and United States

Although hydrofluorocarbons (HFCs) do not deplete the stratospheric ozone layer, a few of these have high Global Warming Potentials (GWPs) ranging from 12 to 14000. At present, these chemicals are widespread in air conditioners, refrigerators, aerosols, foams, and other products. This study systematically analyzed HFC allowance allocation systems and the practical experiences from the European Union and United States. The focus is on analyzing HFC control concepts, quota allocation mechanisms, and calculation rules in the EU and US, as well as the characteristics of the two systems. It has been observed that both the EU and US have adopted synergistic approaches to protect the ozone layer and address climate change. They jointly promote the implementation of the Kigali Amendment and achievement of climate neutrality goals, and reduce HFCs through economic measures and market mechanisms. Specifically, the EU was the first to adopt paid quotas, thereby strengthening the market constraints. Meanwhile, the US flexibly used market tools, including free quotas with a quota transfer offset system. Additionally, both have established quota-accounting methods based on the GWP values of substances, and the US has developed a toolbox for HFC quota allocation. China implemented the HFCs quota licensing system in 2024. The experiences of the HFC allowance allocation systems in the EU and US can provide references for China's compliance with the Kigali Amendment.