The Montreal Protocol, hailed as a triumph in environmental governance, faces persistent hurdles due to the illicit trade in ozone-depleting substances (ODS) that emerged in the mid-1990s.
Criminal networks are drawn to the lucrative trade of these chemicals, primarily used as refrigerants, due to low risks and high profits. However, enforcement agencies often prioritize other issues, and penalties for such activities are disproportionately minor compared to the significant economic losses incurred by governments and legitimate businesses. Moreover, the illegal trade contributes to substantial emissions of ozone-depleting and greenhouse gases, exacerbating environmental concerns.
Contrary to expectations in 1987, the fundamental principles of the Montreal Protocol inadvertently facilitated the emergence and proliferation of illegal ODS trade. While industrialized countries were tasked with controlling ODS production and use ahead of developing countries, the rapid phase-out of consumption in non-Article 5 countries coincided with a surge in production in developing nations. This created a plentiful and inexpensive supply of ODS, spurring the initial wave of smuggling in the mid-1990s.
Similarly, the illicit trade in hydrofluorocarbons (HFCs) began in the European Union, which initiated a phase-down of HFCs under its F-gas Regulation in 2015, preceding mandatory reductions outlined in the Kigali Amendment to the Montreal Protocol by four years. Reports of illegal HFCs surfaced in European markets as early as 2016, intensifying as the phase-down led to a 37 percent reduction in HFC supply by 2018, causing prices to surge. Ongoing investigations by the Environmental Investigation Agency (EIA) have highlighted persistent hotspots of illegal trade, as outlined in reports such as “Europe’s Most Chilling Crime” (2021) and “More Chilling Than Ever” (2024).
The alarming discovery in 2018 of significant, unanticipated emissions of CFC-11, traced to illegal production and use in China, underscored the fragility of the Montreal Protocol’s achievements. This revelation prompted a reevaluation of the Protocol’s institutions and processes, aimed at bolstering implementation and ensuring the continued phase-out of ODS and phase-down of HFCs.
Key statistics further illustrate the gravity of the situation: Our inaugural undercover investigation report in 1997 shed light on the illegal trade of CFCs, urging action from Europe and the USA. The estimated cumulative emissions of CFC-11 from illegal production and use in China from 2012 to 2019 range from 120,000 to 440,000 tonnes, equivalent to up to 2.4 billion tonnes of CO2-equivalent emissions. Additionally, the EIA estimates that illegal HFC trade in the EU represented 20 to 30 percent of the legal trade in 2021.
The ongoing challenge of illicit ODS trade underscores the pressing need for enhanced international cooperation and stringent enforcement measures to safeguard the achievements of the Montreal Protocol and mitigate environmental harm.