The Economist February 26th 2022 Europe 53ofhisown.ThatleftVoxtobenefitfrom
widespreaddiscontentwithMrSánchez’s
handlingofthepandemicandtheslow-
nessoftheeconomicrecovery.Vox’ssup-
porthasclimbedto21%inthelatestpolls,
whichgivethepp22%.
MrFeijóoisaconciliatorycentrist.He
haswonfourconsecutiveabsolutemajor-
itiesinGalicia,keepingVoxoutofthere-
gionalparliamentthere.Manyexpected
himtostandfortheleadershipin2018,but
heapparentlyconsideredthepartytoodi-
vided.Spanishpoliticalleaderstendto
clingondespitedefeat.TheSocialistswent
throughasimilarbloodlettingin 2016,
withMrSánchezbeingoustedandthen
winningbackhisjob.Buttherewillalmost
certainlybenowaybackforMrCasado.His
partinggifttothepphasbeentouniteit,
againsthimself.HFCSmugglingFree as air
F
orawhileitlookedasifallwasgoing
to plan. In a move cheered by climate
activists, the European Union began in
2015 to restrict the production and import
of gases known as hydrofluorocarbons
(hfcs). hfcs are widely used in refrigera-
tion, air-conditioning and manufacturing,
but they are also potent greenhouse gases.
The first big shortages hit in early 2018.
Prices across Europe multiplied sixfold or
even more. The eu wanted to push hfc us-
ers to adopt pricey, climate-friendlier al-
ternatives. It thought that the engineered
shortage would do the trick.
But officials were soon scratching their
heads. The high prices unexpectedly plum-
meted. And even though the eutightened
caps on hfcs again a year ago, prices are
still not much higher than before the
crunch. The reason: hfcs were being
smuggled into the eu. The trafficking is
still going on. The Environmental Investi-
gation Agency, a watchdog based in Lon-
don that has dispatched researchers to
pose as buyers in Romania, estimates that
a quarter of all hfcs in the eu are contra-
band. A body formed by chemical compa-
nies, the European FluoroCarbons Techni-
cal Committee (efctc), says the propor-
tion may be as high as a third.
Such estimates are rough. But they have
not been plucked from thin air. Much can
be inferred, for example, by examining of-
ficially registered trade flows. Data from
Turkish sources show that in 2020 more
than four times as much hfctonnage leftTurkey bound for the eu than the latter re-
ported as imported. This suggests that
plenty of tanks and canisters holding hfcs
enter on the sly.
The smuggling has hit some firms par-
ticularly hard. To supply greener alterna-
tives to hfcs, Chemours, an American
firm, spent around $500m on r&dand
production facilities. But with illegal im-
ports continuing to hold down hfc prices,
demand for alternatives has been “stagnat-
ing” and even declining, laments Murli
Sukhwani of Chemour’s European hq in
Geneva. Mr Sukhwani, who also leads the
efctc’s investigation into the black mar-
ket, says climate-friendly alternative gases
cost at least twice as much as the com-
pounds they are supposed to replace.
This has miffed America. In a report last
year on barriers to trade, Katherine Tai, the
American trade representative, wrote that
the eu’s “insufficient oversight and en-
forcement” of its hfc caps is hurting
American chemical firms, not to mention
the climate. European officials, for their
part, point to the difficulty of preventing
profitable contraband from crossing the
bloc’s long borders.
Consider the potential earnings, says
Marco Buoni, president of an association
of European refrigeration and air-condi-
tioning contractors called area. When
prices first soared, a car boot could be filled
in Ukraine with canisters of an hfc blend
called R404A that would sell, hours later,
for ten times as much in Poland. Margins
have since shrunk as legions have got in on
the action. But contraband hfcs are still so
valuable that canisters are sometimes giv-
en space on boats trafficking migrants
from north Africa to Europe.
Some trafficking is carried out by
moonlighters who make border runs in
their cars or hide canisters in luggage
stowed on passenger coaches. But the
black market is now dominated by crimesyndicates that move large volumes, says
the European Anti-Fraud Office (olaf).
Most of the contraband seems to come
from China, Russia, Turkey and Ukraine.
One trick is to mislabel with stickers
that are later peeled off. To detect the prac-
tice, which became widespread in 2019, ex-
pensive gas-analysis equipment is needed,
says an olaf investigator. Another ap-
proach is to falsely declare that a shipment
of hfcs will be subsequently exported out
of the eu. These “transiting” goods are not
subject to eu limits on imports, but the
stuff often disappears, the investigator
says, into “a very, very difficult to track”
succession of warehouses across Europe.
Trafficking has been exacerbated by gener-
ally light penalties. Fines of a few thousand
euros have been common.
The efctc is trying to improve enforce-
ment. It has hired Kroll, an American firm,
to gather intelligence on potential smug-
gling and pass it along to authorities. The
team, which is based in London, uses net-
work-analysis software to unearth hidden
relationships between entities in myriad
sources of data. In one success, the soft-
ware drew attention to a lorry driver haul-
ing gas from Turkey into the eu. In a video
posted online, he unwisely mentioned his
“friends at the border”. He was later
nabbed. Recent months have seen “a lot of
arrests and a lot of action”, especially in-
volving Romania and Turkey, says Bene-
dict Hamilton, leader of the Kroll team.
But the outlook nonetheless remains
grim, according to Marius Appenzeller, re-
frigerants manager at Westfalen Group, a
gases distributor based in Münster, Ger-
many. The firm expects trafficking to in-
crease as the eu continues, every three
years until 2030, to shrink hfc quotas. A
report in December from the European En-
vironment Agency acknowledged thathfc
use had begun to grow, even withouttak-
ing into account “alleged” smuggling.Controlling the flow of gases, even in
canisters, turns out to be trickyWho knows where it came from?