Airah warns of black market

The Australian Institute of Refrigeration Airconditioning and Heating (AIRAH) has released a communique to the federal government warning the refrigerant levy will create a black market.

AIRAH believes the levy will hit small businesses and jeopardise safety.

“The carbon-equivalent levy on refrigerant gases is expected to have a considerable impact on the HVAC&R industry and the many businesses it serves and supports,” AIRAH CEO Phil Wilkinson said.

“Our communiqué to government outlines the issues and proposes urgent actions to avoid unwanted impacts from the legislative package’s introduction.

“Any industry that is forced to absorb an overnight price increase greater than 300 per cent will be severely strained.”

Wilkinson said the rapid inflation in refrigerant gas values, without any immediate change in supply or demand, will create strong incentives for avoiding the levy, and encourage the formation of a refrigerant black market.

He said this will lead to increased compliance costs, reduced collection of the levy, unsafe practices and flouting of the law.

Wilkinson did acknowledge that the price shock caused by the levy could have the environmental benefit of accelerating the migration to alternative technology and to lower global-warming-potential gases.

“Yet without adequate awareness of the issue through education and training, the HVAC&R industry faces workplace heath and safety issues,” he added.

The communiqué calls for government to: form an interdepartmental committee that has representatives from government and industry; to provide funding in support of awareness- raising with industry via forums and other communication tools; and to allocate seed funding to extend the federally regulated refrigerant handling scheme to include all refrigerants.

According to Heatcraft, the new legislation, which provides fixed carbon prices for the first three years of the scheme, could see a tax of $A98.09 being added to a high GWP refrigerant like R404A in 2014.