HFC quota from the reserve: the declaration under Article 17(3)

Short answer

The reserve is the part of the annual maximum quantity that is left once quota has been allocated to undertakings with reference values. It is shared among those who have submitted a declaration.

• Who. Article 17(3): producers and importers may make a declaration for receiving quota from the reserve referred to in Annex VIII via the F-gas Portal.
• When. The text names 1 June 2024 and 1 April 2027, and at least every 3 years thereafter.
• On what conditions. Article 18: establishment in the Union or an only representative; three consecutive years of experience; a physical address, with only one undertaking registered per address; undertakings sharing the same beneficial owner treated as a single undertaking.
• How much. Annex VIII, point 2: each declarant receives an allocation corresponding to a pro-rata share of the reserve, and the pro-rata share is calculated by dividing 100 by the number of undertakings that have submitted a declaration.

Two routes to quota, with different rules

Article 16(1) says that the placing on the market of hydrofluorocarbons is allowed only to the extent that producers and importers have been allocated quota. Article 17 and Annex VIII describe how that quota is reached.

The two routes are not mutually exclusive: an undertaking with a reference value may also make the declaration under paragraph 3, and that matters for the redistribution of unpaid quota described below.

How big the reserve is: Annex VIII, point 2, first subparagraph, says the total sum of the quota allocated under point 1 is subtracted from the maximum quantity for the given year set out in Annex VII to determine the reserve amount. The maximum quantities are reproduced in the phase-down schedule.

The dates and the channel

Three points that matter:

• These are deadlines, not open windows. The text says "by", meaning the declaration must be in at the latest on that date.
• "At least every 3 years" is a minimum frequency for the opportunities to declare, placed on the system, not an obligation on the undertaking.
• The channel is the Portal and nothing else. The text provides no alternative route on paper or through a national authority.

Registration must exist first. Article 20(4), point (b), expressly requires undertakings to have a valid registration in the F-gas Portal prior to submitting a declaration pursuant to Article 17(3). Point (c) adds the same requirement for receiving a quota allocation under Article 17(4) and for the transfers and authorisations in Article 21. The closing subparagraph of paragraph 4 states that registration is valid only once the Commission validates it and for as long as it is not suspended, revoked or withdrawn.

The registration steps themselves are in F-gas Portal registration, and the difference between registration, quota, authorisation and transfer in the dedicated guide.

Who may declare: the Article 18 conditions

Establishment in the Union. Article 18(1): quota shall be allocated only to producers or importers that have an establishment within the Union, or which have appointed an only representative with an establishment within the Union that assumes the full responsibility for compliance with the Regulation and with the requirements of Title II of Regulation (EC) No 1907/2006. The only representative may be the same as the one appointed pursuant to Article 8 of that Regulation.

The wording repays close reading. The required experience is alternative: either trading in chemicals, or servicing across the four listed categories of equipment. It must cover three consecutive years, and the point of reference in time is the quota allocation period, not the date of the declaration. The text does not list the documents accepted as evidence; it says only that evidence is submitted to the Commission upon request.

The physical address. Article 18(3), first subparagraph: for the purpose of registration in the F-gas Portal, producers and importers shall provide a physical address where the undertaking is located and from where it conducts its business. Only one undertaking shall be registered under the same physical address.

The beneficial owner rule

What follows from the text, without adding anything:

• The rule applies to the three operations listed: the declaration, the allocation and the determination of reference values.
• The criterion is a shared beneficial owner, not the address, not the director and not a tax group. The physical address is dealt with separately, in the first subparagraph.
• The default designation rule is first registration in the Portal. The beneficial owner may indicate otherwise; the text prescribes no particular form for that indication.
• The consequence is single: within that group, one entity only is entitled to a reference value and to an allocation.

Read together with the prohibition on registering more than one undertaking at the same physical address, Article 18(3) closes off, in the text of the Regulation itself, the artificial multiplication of declarants. The consequences of breaching it are not in this article but in the penalty regime of Article 31 and in the Commission powers of suspension, revocation or withdrawal of registration mentioned in the closing subparagraph of Article 20(4). See F-gas penalties.

How the reserve is shared

Annex VIII, point 2, is short and must be read exactly.

Three consequences follow directly from that wording:

• The split is equal between declarants. The text provides no weighting by turnover, by seniority, by placing-on-the-market history or by quantity requested.
• The size of the reserve is an outcome, not a decision. It is the difference between the maximum quantity for the year in Annex VII and the sum of the quota allocated under point 1.
• The number of declarants is the decisive variable. The Regulation neither caps it nor publishes it in advance.

Annex VIII, point 3, adds one sentence: penalties established in accordance with Article 31 are taken into account in the calculations referred to above. And point 1, third subparagraph, provides that where, after allocating the full amount of quota, the maximum quantity is exceeded, all quota will be reduced proportionally.

Article 20(7), third subparagraph, requires the Commission to make publicly available, no later than 3 months after the allocation is completed for a given year, a list of quota holders and a list of the undertakings subject to the reporting requirements set out in Article 26.

Payment, and what follows the allocation

Payment conditions the allocation. Article 17(5), first subparagraph: the quota allocations shall be subject to the payment of the amount due, which equals EUR 3 for each tonne of CO2 equivalent of quota to be allocated. The total amount due and the payment deadline are notified via the Portal. The second subparagraph allows partial payment: in that case the quota corresponding to the payment made by the deadline is allocated.

Transfer. Article 21(1) allows the transfer of the quota allocated on the basis of Article 17(4) by "any producer or importer for whom a reference value has been determined pursuant to Article 17(1)", to another producer or importer in the Union or one represented in the Union by an only representative referred to in Article 18(1). Quota that is transferred shall not be transferred a second time. The condition tied to the reference value is written in the text and should be read as it stands.

Authorisation. Article 21(2) is about something else: authorising an undertaking to use quota for the purpose of importing pre-charged equipment referred to in Article 19, and here the reference to the only representative is to Article 19(5). The respective quantities are deemed to be placed on the market by the authorising producer or importer at the moment of the authorisation. Paragraph 3 allows a delegated authorisation, which shall not be delegated a second time, and paragraph 4 requires acceptance via the Portal for any transfer, authorisation or delegation to be valid.

Reporting. Article 26(1), second subparagraph, requires, by 31 March each year, a nil-report from each producer or importer that has been allocated quota pursuant to Article 17(4), or to whom quota has been transferred pursuant to Article 21(1), but has not placed any quantities on the market during the preceding calendar year. See annual reporting.

Checklist before submitting a declaration

Every point below can be checked against the text of the Regulation, not against any company’s practice.

• Portal registration is validatedArticle 20(4), point (b); registration is valid only once the Commission validates it.
• You are a producer or an importerArticle 17(3) addresses those two categories.
• You are established in the Union or have an only representativeArticle 18(1), with full responsibility for compliance with the Regulation and Title II of Regulation (EC) No 1907/2006.
• You can show three consecutive years of experienceArticle 18(2): trading in chemicals, or servicing refrigeration, air-conditioning, fire protection equipment or heat pumps.
• The physical address declared is real and uniqueArticle 18(3), first subparagraph: only one undertaking per physical address.
• You have checked the beneficial owner structureArticle 18(3), second subparagraph: undertakings with the same beneficial owner count as one.
• You know which deadline appliesArticle 17(3): 1 June 2024, 1 April 2027 and at least every 3 years thereafter.
• You have planned for payment on timeArticle 17(5): EUR 3 per tonne CO2 equivalent; partial payment yields proportionate quota.
• You know what you cannot do with the quota receivedArticle 21(1) ties transfer to a reference value determined under Article 17(1).
• You have prepared the annual reportArticle 26(1), including the nil-report if you place nothing on the market.

Frequently asked questions

Official sources

Articles 16 to 21 and Annexes VII and VIII were read in full in the Official Journal text. This page does not describe the administrative practice of any undertaking.

How current this page is, and the limits of our liability

General information prepared by EgoLog from the official text of the Regulation and European Commission material. It is not legal advice and does not replace checking the conditions in force at the time of filing.

Dates and conditions may be amended by delegated or implementing act. Check the text in force and the announcements published in the Portal before acting.