QUALITY LIGHTING FOR A GREENER ASIA

POLICY BRIEF

CFL Quality in Asia: Solving a Regional Market Failure

THE PROBLEM OF QUALITY

ational and local efforts to promote energy efficiency have been gathering strength in Asia. Many of these programs feature the compact fluorescent lamp (CFL), as adoption of CFLs is one of the quickest and easiest means of delivering energy conservation in the residential and commercial sectors. More than forty countries have announced plans to phase out the use of incandescent lamps as part of their efforts to address climate change, with the CFL being promoted as a replacement. The increasing focus on CFLs has significantly accelerated the global demand for the lamps. Worldwide CFL production has increased six-fold in the last decade, from 500 million lamps in 2000 to more than 3 billion lamps in 2008.1 This is expected to accelerate, as the phase-out of incandescent lamps could boost production of CFLs to as many as 10 billion units per year.2 However, countries in Asia face serious challenges when it comes to adoption of CFLs, including sub-standard quality, a lack of common standards for CFLs, and a lack of consumer awareness about CFL quality. Since CFLs are being promoted as a direct replacement for incandescent lamps, CFLs that do not outperform incandescent lamps can result in serious consumer dissatisfaction with the product category as a whole. Thus, the terms low-quality, lower-quality, sub-standard, poor, or shoddy are now being used by experts, program managers, and regulators to describe the poorperforming CFLs that are being produced in large quantities and sold in many markets in the Asia region. Unfortunately, there is no widely used regional or international standard for CFL quality and performance. Therefore, CFLs need to be assessed in relation to national standards and guidelines or to manufacturers advertised claims. Generally speaking, a poorquality CFL is a lamp that burns out faster, or gives off less light, than advertised, or than prescribed by national standards and guidelines.

Phasing in Quality: Harmonization of CFLs to Help Asia Address Climate Change. USAID, March 2009. Global Lighting: Phase Out Incandescent Lamps. Project Identification Form under the GEF Trust Fund for the Global Environment Facility. 15 July 2007.

CFL Quality in Asia: Solving a Regional Market Failure

In 2007, USAID published a landmark report, Confidence in Quality, which demonstrated that as many as half of the CFLs sold in Asia during 2006 were substandard producing less light or burning out faster than advertised or required by national regulations (USAID, 2007). This high rate of poor-quality lamps results from a number of factors: there is no commonly used quality guideline in the region today; manufacturers lack a sufficient incentive to produce high quality CFLs; and consumers, therefore, gravitate toward cheaper, lower-quality products. Currently, there are a total of 48 different national standards and labelling schemes for CFLs in place or under consideration worldwide.3 For manufacturers who export to more than one country, compliance with all of these different CFL programs and schemes can increase product costs and may negate pricing efficiency gains from volume production. The cost of complying with testing and certification requirements (usually a small percentage of production costs) can rise to as high as 4 to 5 percent.4

A REGIONAL APPROACH

ddressing this product quality issue on a piecemeal, country-by-country basis is not practical a regional approach is needed. In November 2007, with support from the Asia-Pacific Partnership on Clean Development and Climate (APP), the U.S. and Australian governments initiated a project to help harmonize standards and improve the quality of CFLs in the region. In June 2008, a coalition of national lighting associations and the worlds largest lighting companies signed an agreement to push for the elimination of substandard CFLs in the Asia market. Under this agreement, known as the Manila Compact, lighting suppliers committed to develop common performance levels to rate the quality of CFLs sold in Asia, introduce a product marking system, and establish an on-line, regional database that identifies those CFLs that meet quality standards. The Manila Compact was the first public response by CFL manufacturers and lighting associations to address a situation with the potential to damage the spectacular growth of CFLs in Asia, which has grown to a $7 billion annual market. The Manila Compact led to the development of a regional system for certifying and labeling CFLs to ensure good quality in the marketplace. In order to implement this certification and marking system, the signatories grouped together to formally establish the Asia Lighting Compact in October 2009.

Phasing in Quality: Harmonization of CFLs to Help Asia Address Climate Change. USAID, March 2009. International CFL Market Review: A Study of Seven Asia-Pacific Economies. Australian Greenhouse Office. 2006.

CFL Quality in Asia: Solving a Regional Market Failure

REGIONAL BENCHMARK TESTING OF CFL QUALITY. In order to address CFL product quality and standards harmonization issues, USAIDs ECO-Asia Clean Development and Climate Program partnered with the Australian Department of Environment, Water, Heritage and the Arts (DEWHA) in 2008 to initiate a substantial benchmark quality testing program for CFLs. The primary objective of this study was to assess and benchmark the overall quality of CFLs currently being sold in the Asian and Australian markets. Sample CFLs were purchased from stores in six countries Australia, India, Indonesia, the Philippines, Thailand, and Vietnam. Overall, more than 2,600 samples were collected representing 160 models (the results below represent results from 137 models). The samples were compared to the three quality tiers of the Asia Lighting Compact: Tier 1, which is equivalent to Chinas minimum performance standards and represents good quality; Tier 2, which is equivalent to the standard of the Efficient Lighting Initiative (ELI) and represents better quality; and Tier 3, which is equivalent to the quality standard for European lamps developed by the United Kingdoms Energy Saving Trust and represents the best quality. Figure 1 shows that only two of three lamps tested (66%) can met the Tier 1 standard, and just 58% of lamps met the Tier 2 standard.
FIGURE 1. PASSING RATE FOR CFLS ALL LAMPS

Figure 1: Share of lamps from Asian countries tested that meet the three performance tiers for all criteria of the Asia Lighting Compact (ALC).

CFL Quality in Asia: Solving a Regional Market Failure

THE THREE QUALITY TIERS OF THE ALC. The ALC does not recreate lighting standards. Instead, the ALC quality tiers are based on the international testing standards developed by the International Electrotechnical Commission (IEC). Based on the IEC test procedures for CFL performance, the ALC has developed a three-tier quality system that is designed to work cooperatively with other lighting quality standard initiatives. Tier 3. The Best tier is currently based on the UK Energy Savings Trust 6 standard and will migrate to Europes EUP CFL standard once this standard is finalized. Tier 2. The Better tier is based on and harmonized with the Efficient Lighting Initiative (ELI) standard for CFLs. Tier 1. The Good tier represents an initial realistic entry-level performance standard for countries in the Asia region that provides quality, efficiency and performance. The three levels are necessary for the region because not all Asian consumers can afford the very highest quality CFLs, but they should be protected against poorquality products.

THE ALC: A MODEL PUBLIC-PRIVATE PARTNERSHIP

he Asia Lighting Compact (ALC) is an independent, non-profit organization, incorporated in Singapore, but with a region-wide mandate. The ALC is dedicated to reducing greenhouse gas emissions by improving the quality of lighting products and encouraging the adoption of energy-efficient lighting in Asia. Formed through a publicprivate initiative, the ALC works to reduce barriers to trade and mitigate climate change by harmonizing quality and energy-efficiency standards for lighting across the region. The ALCs membership includes national lighting associations in Asia, some of the largest lighting manufacturers in the world, and government agencies. The ALC is impartial, and not tied to any particular commercial organization or driven by political or corporate motivations. Membership is open to all stakeholders, including government energy, efficiency, and standards-setting agencies; testing laboratories; research institutions; professional societies, and bulk purchasers of lighting products. The initial activities of the ALC include: administration and promotion of a quality system for compact fluorescent lamps (CFLs); operation and maintenance of the Asia Quality Registry a database for online reporting and tracking of quality, efficient lighting products; and a product marking system aimed at national regulators and bulk purchasers of CFLs (see box on ALCs three quality tiers).

For more information, please go to

www.asialighting.org