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2016/EWG52/007 Agenda Item: 2b (i)

Concept Note: APEC Latin America Harmonization of Energy Efficiency Standards for Air Conditioners

and Refrigerators

Purpose: Consideration Submitted by: EGEEC

52nd Energy Working Group Meeting Moscow, Russia

17-21 October 2016

APEC Concept Note

Project Title: APEC-Latin America Harmonization of Energy Efficiency Standards for Air Conditioners and Refrigerators

Fund Source (Select one):

D General Project Account (formerly Operational Account)

D TILF Special Account

0 APEC Support Fund I Energy efficiency sub-fund

For ASF: As per Guidebook Ch. 3, list ASF Sub-fund if appropriate for this project:

APEC forum: EWG, Expert Group on Energy Efficiency and Conversation (EGEEC)

Proposing APEC economy: Mexico

Co-sponsoring APEC USA, Chinese Taipei, China economies:

Expected start date: April 2017

Expected completion date: December 2018

Project summary: The project seeks to increase market share of higher efficient air conditioners and refrigerators, thus reducing electricity consumption and

Describe the project related greenhouse gases emission. The project pursues three main in under 150 words. objectives, (i) to evaluate the energy savings potential and related economic

Your summary should include benefits of the harmonization of standards for air conditioners and the project topic, planned refrigerators, (ii) to develop a roadmap with a detailed action plan for the

activities, harmonization of standards and (iii) to build capacity of policy makers for the timing and location: implementation of the roadmap.

The project aims to directly benefit all Latin American economies member of (Summary must be no longer APEC (Mexico, Peru, Chile), who will be directly engaged in the program, than the box provided. Cover but also other non-APEC economies wil l benefit as well. Project will build on

sheet must fit on one page) the experience of APEC funded ASEAN SHINE project.

It is expected that project implementation time will be 20 months.

Total cost of proposal : (APEC Total amount being sought from APEC (USO): 184,750 USD funding +self-funding):

By category: Travel: 63,750USD Labor costs: 115,000 USO USD 350,000 USO Hosting: 6,000 USO Publication & distribution: 0 Other: 0

Project Overseer Information and Declaration:

Name: Sergio A Segura

Title: Director of International Cooperation

Organization: National Commission for the Efficient Use of Energy (Conuee)

Postal address: 1877 Av. Revoluci6n , Loreto, Alvaro Obregon PC 01090 Mexico City MEXICO

Tel: 52-55 3000 1000 E-mail: sergio.segura@conuee.gob.mx

As Project Overseer and on behalf of the above said Organization, I declare that this submission was prepared in accordance with the Guidebook on APEC Projects and any ensuing project will comply with said Guidebook. Failure to do so may result in the BMC denying or

ing funding an or project roval. I understand that any funds approved are granted on the basis of the information in the t's budget ta , in the cas f any inconsistencies within the document.

Date: September 22th, 2016

Project Synopsis

1. Relevance - Benefits to region: Room air conditioners (RACs) and refrigerators consume a significant share of the electricity in the residential and commercial sectors. In tropical economies such as Thailand, Singapore, Philippines, RACs represent about 50% of total households' electricity consumption, or 5% of the economy's total electricity. In 2013, the project EWG 12/2012A "APEC-ASEAN Harmonization of Energy Efficiency Standards for Air Conditioners: Phase 1" resulted in: 1) harmonization of testing methods standards in ASEAN economies (adoption of international standard ISO 5151 :2010); 2) establishment of the ASEAN SHINE (Standards Harmonization Initiative for Energy efficiency) program which led to the adoption of pro-active policies to promote higher efficient ACs. By increasing market share of higher efficient ACs, the ASEAN SHINE program will help ASEAN economies to save about 5TWh of electricity and 2.7 MtC02 per year compared to 2010. One of the objectives of the EWG 12/2012A project was to use ASEAN as pilot to draw lessons for harmonization of standards across APEC. The ASEAN SHINE program is now managed by International Copper Association (ICA) and UNEP. Mexico, with the technical and financial support of ICA and UNEP, is submitting this proposal to prepare for the replication of the SHINE program in Latin America. The proposed project will therefore: 1) conduct a study to estimate the energy and economic saving potential related to harmonization of AC and refrigerators standards and increase of MEPS over time, as a means to convince policy makers; 2) develop a roadmap with a detailed action plan for the harmonization of testing methods standards and adoption of pro-active policies; and 3) build the capacity of policy makers to prepare for the implementation of the roadmap. The long-term objectives include reduction of electricity consumption from the residential sector (and therefore reduction of GHG emissions), as well as removal of non-tariff barriers to trade (harmonization of standards). To ensure its success, it will build on existing economic fora in Latin America, including MERCOSUR, Alliance of the Pacific, the Central American Integration System and Proyecto Mesoamerica, in which Mexico is member. By design, the project aims to directly benefit all Latin American economies member of APEC (Mexico, Peru, Chile), who will be directly engaged in the program. Other non-APEC economies will benefit as well. But indirectly, the program will benefit the whole APEC region with adoption of international standards to remove non-tariff barriers to trade. Relevance - Rank: By preparing for the harmonization of standards and removing non-tariff barriers to trade, the proposed project is directly relevant to Rank 1: Projects that demonstrate a direct link to promoting regional economic integration via free and open trade and investment (esp. Regional Economic Integration initiatives; and Standards, conformity assessment, technical regulations, regulatory cooperation, and regulatory coherence). By promoting the dissemination of higher efficient air conditioners and refrigerators, the proposed project is also in line with Rank 2: Projects that directly support the APEC Strategy for Strengthening Quality Growth (esp. Energy efficiency, energy security and energy resiliency including the development of low carbon technology) . Objectives: The project's long-term objectives are: 1) to increase market share of higher efficient air conditioners and refrigerators and 2) to remove non-tariff barriers to trade in the APEC region. To achieve these long-term objectives, after working with the ASEAN (EWG 12/2012A project), this project will work with economic fora in Latin America. The project has 3 key objectives: 1) To evaluate the energy saving potential and related economic benefits related to the harmonization

of testing methods standards and increase of MEPS for air conditioners and refrigerators. 2) To develop a roadmap with detailed action plan for the harmonization of standards and adoption of

pro-active policies 3) To build capacity of policy makers for the implementation of the roadmap Alignment - APEC: APEC Leaders recognize the importance of energy efficiency improvement for the purpose of energy security enhancement, job creation , and sustainable development. In this regard, APEC Leaders agreed upon the aspirational energy intensity improvement target of 45% by 2035. Meeting this target will require long-term step-by-step approach, through promoting wider diffusion of efficient technologies among member economies in APEC. After ASEAN (with the EWG 12/2012A project) , air-conditioner and refrigerator EE standard harmonization in Latin America can provide an important foundation towards the EE standard harmonization at the APEC level. This will in turn greatly improve the ability of

economies to increase energy efficiency standard level while at the same time reduce non-tariff barriers to trade. This project will establish expert exchanges between APEC Latin American economies and APEC ASEAN economies. It will also pave the way for a possible harmonization of testing methods across APEC, is in line with the APEC Regulatory Cooperation Process Mechanism on Trade-Related Standards and Technical Regulations as this project, focusing on ACs and refrigerators, "targ~t(~) an area where potential technical barriers to trade are identified and a trend in regulation is anticipated". It is also directly relevant to the "APEC Growth Strategy" adopted by APEC Leaders in 2010 to achieve growth that is balanced, inclusive, sustainable, innovative and secure. The goals for sustainable growth, include, "improving access for environmental goods and services" and "promoting private investment in green industries and production processes." The project is also relevant to the APEC Leaders' declaration in 2011 that aspires to achieve 45% energy intensity improvement of APEC economies by 2035. Alignment - Forum: The proposed project is in direct support of the Expert Group on Energy Efficiency and Conservation's mission (EGEEC): The EGEE&C promotes energy conservation and the application of energy­efficiency practices and technologies (higher efficient air conditioners and refrigerators) through advancing the application of demonstrated energy-efficiency practices and technologies, developing and enhancing trade between APEC Economies in products and services and energy-efficiency practices and technologies (removal of non-tariff barriers to trade for higher efficient air conditioners and refrigerators through harmonization of standards), contributing to international efforts to reduce the adverse impacts of energy production and consumption, and improving the analytical, technical, operational and policy capacity for energy efficiency and conservation within APEC Economies. The proposed project is also directly contributing to the EGEEC's objectives, as it will : advance the application of demonstrated energy-efficiency practices and technologies by transferring the experience of successful approaches in ASEAN (as a result of APEC funded project EWG 12/2012A) in promoting higher efficient air conditioners and refrigerators in appropriate regional end-use sectors (residential[. .. f) ; and assist in developing and enhancing trade between APEC member economies in [ .. .]energy-efficiency practices and technologies (higher efficient air conditioners and refrigerators).

2. Methodology: • Workplan: Project timelines, dates of key activities and deliverable outputs.

Output Month Output Month 1. Scopinq study report 1-10 4. 2nd stakeholders' consultation I 14 2. 151 stakeholders' consultation workshop 6 capacity building workshop 3. Draft roadmap 6-12 5. Approval of roadmap I 18

dissemination workshop

• Beneficiaries and linkages: This project is clearly intended to policy makers and standard making bodies in the field of EE&C. Other beneficiaries and stakeholders include test laboratories and AC and refrigerator manufacturers. Policy makers and standard making bodies in the field of EE&C, as well as AC and refrigerator manufacturers will take an active part in consultation and capacity building workshops. Participation of non-APEC economies will be supported by UNEP and private sector partners, in the framework of the United for Efficiency (U4E) initiative. The APEC EGEEC will be regularly updated during EGEEC meetings, as well as through regular communications by email to provide them with drafts of the studies being conducted. Finally, they wi ll be assembled in a workshop that will present the outcomes of the project, as well as share best practices. AS this project has a strong emphasis on standards harmonization, linkages will be ensured with the APEC SCSC through email communications and presentations made during SCSC meetings to study potential synergies.

• Evaluation: Potential indicators developed to measure progress, project outcomes and impacts/successes. Where possible provide indicators which could assess impacts on women.

The major indicators will include: 1) number of participants in workshops and level of satisfaction; 2) official adoption of the roadmap; 3) adoption of action plans for the implementation of the roadmap. Whenever possible, gender-disaggregated data will be provided. The participation of women will be particularly encouraged.