Saudi Energy Efficiency program

1. Saudi Energy Efficiency program Working session on the implementation of the modified Saudi standard SASO 2663/2012 Energy labeling and minimum energy performance requirements for air-conditioners 14 May 2013

2. Agenda • Modified Saudi standard SASO 2663/2012 and energy efficiency label licensing (for imported and locally manufactured air-conditioners) • Enforcement mechanisms at borders (for imported air-conditioners) • Enforcement mechanisms in-Kingdom (for imported and locally manufactured air-conditioners)

3. Approach In order to revise, modify and enforce the Saudi standard SASO 2663/2012, the technical team of the Saudi Energy Efficiency Program adopted an approach based on: Consensus & Unanimity

4. Approach (continued) Local & international manufacturers, importers & distributors • Workshops with local and international air-conditioner manufacturers and regular individual meetings • Input on technical capacity Ministry of Commerce & Industry Saudi Customs • Working sessions with the Deputy Minister of Commerce & Industry and representatives from the ministry • Input on mandate and governance • Working sessions with DG of Restrictions Dept. and representatives from Customs • Input on current practices, tools and infrastructure Saudi Standards, Metrology and Quality Organization Int. & local labs • Workshop with all local & int. private testing laboratories • Input on capacity building and best practices • Working sessions with the SASO Governor and Deputy Governor, as well as weekly input from SASO representatives • Input on standards, label and governance ASHRAE / AHRI • Workshops with the American Society of Heating, Refrigeration & Air-Conditioning Engineers, and the Air-conditioning, Heating & Refrigeration Institute • Input on best-practices

5. Saudi standard SASO 2663/2012: Energy labeling and minimum energy performance requirements for air-conditioners May 2012 December 2012 7 September 2013 1 January 2015 2007 2009 • The Saudi standard SASO 2663/2007 specified 7.5 as the minimum energy performance standard (MEPS) for the Energy Efficiency Ratio (EER) for air-conditioners without differentiation by type or capacity • SASO proposed to raise the minimum energy performance standard (MEPS) for the Energy Efficiency Ratio (EER) to 8.5 in 2009 The minimum energy performance standard (MEPS) for the Energy Efficiency Ratio (EER) was not raised to 8.5 EER due to delays in enforcement (until mid 2010) The Saudi Energy Efficiency Program, in collaboration with relevant stakeholders, started modifying the Saudi standard SASO 2663 and proposed updating the Minimum Energy Performance Standards SASO Board approved the modified standard SASO 2663 as proposed by the Saudi Energy Efficiency Program and updated standard was issued Phase 1 Details in the next slide Phase 2 Details in the next slide Source: Saudi Standards, Metrology and Quality Organization

6. Saudi standard SASO 2663/2012:Energy labeling and minimum energy performance requirements for air-conditioners Star rating to be applied from 3 stars and above only Source: Saudi Standards, Metrology and Quality Organization

7. New energy efficiency label for air-conditioners New SASO logo Old Label New Label Information about the EER Information about annual electricity consumption Legal mention to mandate presence of energy efficiency label before selling Source: Saudi Standards, Metrology and Quality Organization

8. Phased implementation of the modified Saudi standard SASO 2663/2012 May 2013 June 2013 July 2013 August 2013 7 September 2013 1 January 2014 1 January 2015 2 months before implementation: Stop certificates of conformity that are not compliant with the modified standard Reminder announcements for the implementation of the modified standard Implementation of the modified standard Phase 1: • Imported air-conditioners • Locally manufac-turedair-conditioners Implementation of the modified standard Phase 1: • Air-conditioners available for sale in the market Implementation of the modified standard Phase 2: • Imported air-conditioners • Locally manufactured air-conditioners • Air-conditioners available for sale in the market SASO 2663/2012 will be regularly updated in accordance with the American Society of Heating, Refrigerating and Air-Conditioning Engineers standard, ASHRAE 90.1

9. Energy efficiency label licensing procedure for imported and locally manufactured air-conditioners - SASO Starting from 7/9/2013, SASO will not issue licenses to air-conditioners that do not comply with phase 1 of the modified standard; and starting 1/1/2015 for phase 2 • Application Submission • The application submitted to the Saudi Standards, Metrology and Quality organization by importers and local manufacturers should include: • Completed new registration forms • Energy efficiency tests reports from laboratories accredited by an entity recognized by International Laboratory Accreditation Cooperation(ILAC) or Saudi Accreditation Committee (SAC) • After accepting the application, the Saudi Standards, Metrology and Quality Organization issues a license to use the new energy efficiency label and the corresponding number of stars for a period of one year only • The license will be for the tested model only • Licensing • Certificate of conformity • Certificates of conformity not compliant with the modified standard will not be accepted starting from a two-month period before the date of the implementation in order to ensure that non-compliant products will not be imported after 7 September2013

10. Energy efficiency label licensing procedure for imported and locally manufactured air-conditioners - SASO • License to use the energy efficiency label issued by SASO • The license issued by SASO to use the energy efficiency label gives its holder the “right to use the label” and this does not imply the right to import the product or trade it in the market • The license is complementary to the surveillance work conducted by Saudi Customs and the Ministry of Commerce and Industry • The license design has been updated • During the transition period from today until 7 September 2013: • The license will be issued according to the new design while keeping the validity period of 2 years • Old licenses will be replaced with new ones and the recipients will be notified that their license is still valid for the remaining period without any extra charges • Old labels will be replaced with new ones • Recipients of licenses not compliant with the modified standard will be informed that they will maintain the right to use the label but the modified standard will prohibit them from selling their products in the market after the specified dates for each phase • For the period after 7 September 2013 • The license will be issued according to the new design and the validity will be for one year only

11. Agenda • Modified Saudi standard SASO 2663/2012 and energy efficiency label licensing (for imported and locally manufactured air-conditioners) • Enforcement mechanisms at borders (for imported air-conditioners) • Enforcement mechanisms in-Kingdom (for imported and locally manufactured air-conditioners)

12. Ports of entry of air-conditioners 97% of imports enter through 4 ports Air-conditioners import statistic 2012 # of shipments 3,129 # of imported air-conditioner units 2,668,013 • Samples are taken from shipments and only safety tests are conducted Source: Saudi Customs

13. Enforcement mechanism of the modified standard and sampling plan at border/ports of entry- Saudi Customs Customs will not allow the import or entry of air-conditioners not compliant with the modified standard Phase 1: starting 7/9/2013 Phase 2: starting 1/1/2015 • Shipment Inspection (Customs) • Inspection of the shipment to make sure of: • The presence of correct labels for energy efficiency and safety of the product • The presence of the product in the database of SASO • Sampling of air-conditioners as per the safety sampling plan specified in the Kingdom • Samples are sent to accredited private testing labs • Sampling (Customs) • Accredited private testing labs conduct safety and energy efficiency tests • Energy efficiency tests will be conducted in accordance with the modified SASO standard • The importer will bear the cost of the test as is the case for the safety tests • Tests • (Private labs) • If the test results are positive, the shipment is allowed into the market • If the test results are negative, the shipment is not allowed into the market • Test Results

14. Agenda • Modified Saudi standard SASO 2663/2012 and energy efficiency label licensing (for imported and locally manufactured air-conditioners) • Enforcement mechanisms at borders (for imported air-conditioners) • Enforcement mechanisms in-Kingdom (for imported and locally manufactured air-conditioners)

15. Enforcement mechanism for locally manufactured air-conditioners at production line – MoCI MoCIwill not allow locally manufactured air-conditioners not compliant with the modified standardto be sold in the Saudi market Phase 1: starting 7/9/2013 Phase 2: starting 1/1/2015 • Production line Inspection (MoCI) • Production line inspection to make sure of: • The presence of correct labels for energy efficiency and safety of the product • The presence of the product in the database of SASO • Sampling (MoCI) • Take one sample of each model currently in production • Samples are sent to accredited private testing labs • Tests • (Private labs) • Accredited private testing labs conduct safety and energy efficiency tests • Energy efficiency tests will be conducted in accordance with the modified SASO standard • The local manufacturer will bear the cost of the test as is the case for imported products and as is the process for safety tests • Test Results • If the test results are positive, the product is allowed into the market • If the test results are negative, the product is not allowed into the market

16. Enforcement mechanism for locally manufactured and imported air-conditioners in-Kingdom – MoCI MoCI will not allow the sale of air-conditioners not compliant with the modified standard Phase 1: starting 1/1/2014 Phase 2: starting 1/1/2015 • Retailers & distributors Inspection (MoCI) • Inspection of air-conditioners displayed at retailers and distributors to make sure of: • The existence of correct labels for energy efficiency and safety of the product • The presence of the product in the database of SASO • Sampling of air-conditioners according to the sampling plan specified in the Kingdom • Samples are sent to accredited private testing labs • Sampling (MoCI) • Accredited private testing labs conduct safety and energy efficiency tests • Energy efficiency tests will be conducted in accordance with the modified SASO standard • The manufacturer/importer will bear the cost of the test if the result is negative • The ministry will bear the cost of the test if the result is positive • Tests • (Private labs) • Test Results • If the test results are positive, the product is allowed to be sold in the market • If the test results are negative, the dealer or distributor will be punished and the air-conditioner will be pulled from the market

17. Thank you