[Federal Register: December 14, 2006 (Volume 71, Number 240)] [Rules and Regulations] [Page 75385-75406] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr14de06-14] [[Page 75385]] ----------------------------------------------------------------------- Part III Environmental Protection Agency ----------------------------------------------------------------------- 40 CFR Part 82 Protection of Stratospheric Ozone: The 2007 Critical Use Exemption From the Phaseout of Methyl Bromide; Final Rule [[Page 75386]] ----------------------------------------------------------------------- ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 82 [EPA-HQ-OAR-2005-0538; FRL-8257-2] RIN 2060-AN54 Protection of Stratospheric Ozone: The 2007 Critical Use Exemption From the Phaseout of Methyl Bromide AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: EPA is finalizing an exemption to the phaseout of methyl bromide to meet the needs of 2007 critical uses. Specifically, EPA is authorizing uses that will qualify for the 2007 critical use exemption and the amount of methyl bromide that may be produced, imported, or supplied from inventory for those uses in 2007. EPA is taking action under the authority of the Clean Air Act to reflect recent consensus Decisions taken by the Parties to the Montreal Protocol on Substances that Deplete the Ozone Layer (Protocol) at the 17th Meeting of the Parties (MOP). DATES: This final rule is effective on December 14, 2006. ADDRESSES: EPA has established a docket for this action identified under Docket ID No. EPA-HQ-OAR-2005-0538. All documents in the docket are listed on the http://www.regulations.gov site. Although listed in the index, some information is not publicly available, e.g., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available only through http://www.regulations.gov or in hard copy. To obtain copies of materials in hard copy, please call the EPA Docket Center at (202) 564-1744 between the hours of 8:30am-4:30pm E.S.T., Monday-Friday, excluding legal holidays, to schedule an appointment. The EPA Docket Center's Public Reading Room address is EPA/DC, EPA West, Room 3334, 1301 Constitution Ave. NW., Washington, DC. FOR FURTHER INFORMATION CONTACT: Marta Montoro, Office of Atmospheric Programs, Stratospheric Protection Division, Mail Code 6205J, Environmental Protection Agency, 1200 Pennsylvania Ave, NW., Washington, DC 20460; telephone number (202) 343-9321; fax number (202) 343-2338; e-mail address: montoro.marta@epa.gov. SUPPLEMENTARY INFORMATION: This final rule concerns Clean Air Act (CAA) restrictions on the consumption, production, and use of methyl bromide (a class I, Group VI controlled substance) for critical uses during calendar year 2007. Under the CAA, methyl bromide consumption (consumption is defined under the CAA as production plus imports minus exports) and production was phased out on January 1, 2005 apart from allowable exemptions, namely the critical use exemption and the quarantine and preshipment exemption. With this action, EPA is authorizing the uses that will qualify for the 2007 critical use exemption as well as specific amounts of methyl bromide that may be produced, imported, or made available from stocks for critical uses in 2007. Section 553(d) of the Administrative Procedure Act (APA), 5 U.S.C. Chapter 5, generally provides that rules may not take effect earlier than 30 days after they are published in the Federal Register. EPA is issuing this final rule under section 307(d) of the Clean Air Act, which states: ``The provisions of section 553 through 557 * * * of Title 5 shall not, except as expressly provided in this section, apply to actions to which this subsection applies.'' CAA section 307(d)(1). Thus, section 553(d) of the APA does not apply to this rule. EPA is nevertheless acting consistently with the policies underlying APA section 553(d) in making this rule effective on December 14, 2006. APA section 553(d) provides an exception for any action that grants or recognizes an exemption or relieves a restriction. This final rule grants an exemption from the phaseout of methyl bromide. Table of Contents I. General Information A. Regulated Entities II. What Is the Background to the Phaseout Regulations for Ozone- Depleting Substances? III. What Is Methyl Bromide? IV. What Is the Legal Authority for Exempting the Production and Import of Methyl Bromide for Critical Uses Authorized by the Parties to the Montreal Protocol? V. What Is the Critical Use Exemption Process? A. Background of the Process B. How Does This Final Rulemaking Relate to Previous Critical Use Exemption Rulemakings? C. Critical Uses and Adjustments to Critical Use Amounts D. The Criteria in Decisions IX/6 and Ex. I/4 E. Emissions Minimization F. Critical Use Allowance Allocations G. Critical Stock Allowance Allocations and Inventory of Methyl Bromide VI. Statutory and Executive Order Reviews A. Executive Order No. 12866: Regulatory Planning and Review B. Paperwork Reduction Act C. Regulatory Flexibility Act D. Unfunded Mandates Reform Act E. Executive Order No. 13132: Federalism F. Executive Order No. 13175: Consultation and Coordination With Indian Tribal Governments G. Executive Order No. 13045: Protection of Children From Environmental Health and Safety Risks H. Executive Order No. 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use I. National Technology Transfer and Advancement Act J. Congressional Review Act I. General Information A. Regulated Entities Entities potentially regulated by this action are those associated with the production, import, export, sale, application, and use of methyl bromide covered by an approved critical use exemption. Potentially regulated categories and entities include: ------------------------------------------------------------------------ Category Examples of regulated entities ------------------------------------------------------------------------ Industry..................... Producers, Importers and Exporters of methyl bromide; Applicators, Distributors of methyl bromide; Users of methyl bromide, e.g., farmers of vegetable crops, fruits and seedlings; and owners of stored food commodities and structures such as grain mills and processors, agricultural researchers. ------------------------------------------------------------------------ The above table is not intended to be exhaustive, but rather to provide a guide for readers regarding entities likely to be regulated by this action. This table lists the types of entities that EPA is aware could potentially be regulated by this action. To determine whether your facility, company, business, or organization is regulated by this action, you should carefully examine the regulations promulgated at 40 CFR part 82, subpart A. If you have questions regarding the applicability of this action to a particular entity, consult the person [[Page 75387]] listed in the preceding FOR FURTHER INFORMATION CONTACT section. II. What Is the Background to the Phaseout Regulations for Ozone- Depleting Substances? The current regulatory requirements of the Stratospheric Ozone Protection Program that limit production and consumption of ozone- depleting substances can be found at 40 CFR part 82, subpart A. The regulatory program was originally published in the Federal Register on August 12, 1988 (53 FR 30566), in response to the 1987 signing and subsequent ratification of the Montreal Protocol on Substances that Deplete the Ozone Layer (Protocol). The Protocol is the international agreement aimed at reducing and eliminating the production and consumption of stratospheric ozone depleting substances. The U.S. was one of the original signatories to the 1987 Montreal Protocol and the U.S. ratified the Protocol on April 12, 1988. Congress then enacted, and President George H.W. Bush signed into law, the Clean Air Act Amendments of 1990 (CAAA of 1990) which included Title VI on Stratospheric Ozone Protection, codified as 42 U.S.C. Chapter 85, Subchapter VI, to ensure that the United States could satisfy its obligations under the Protocol. EPA issued new regulations to implement this legislation and has made several amendments to the regulations since that time. III. What Is Methyl Bromide? Methyl bromide is an odorless, colorless, toxic gas which is used as a broad-spectrum pesticide and is controlled under the CAA as a class I ozone-depleting substance (ODS). Methyl bromide is used in the U.S. and throughout the world as a fumigant to control a wide variety of pests such as insects, weeds, rodents, pathogens, and nematodes. Additional characteristics and details about the uses of methyl bromide can be found in the proposed rule on the phaseout schedule for methyl bromide published in the Federal Register on March 18, 1993 (58 FR 15014) and the final rule published in the Federal Register on December 10, 1993 (58 FR 65018). The phaseout schedule for methyl bromide production and consumption was revised in a direct final rulemaking on November 28, 2000 (65 FR 70795), which allowed for the phased reduction in methyl bromide consumption and extended the phaseout to 2005. The revised phaseout schedule was again amended to allow for an exemption for quarantine and preshipment purposes on July 19, 2001 (66 FR 37751) with an interim final rule and with a final rule on January 2, 2003 (68 FR 238). Information on methyl bromide can be found at http://www.epa.gov/ozone/mbr and http://www.unep.org/ozone or by contacting the Stratospheric Ozone Hotline at 1-800-296-1996. Because it is a pesticide, methyl bromide is also regulated by EPA under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and other statutes and regulatory authority, as well as by States under their own statutes and regulatory authority. Under FIFRA, methyl bromide is a restricted use pesticide and therefore subject to certain Federal and State requirements governing its sale, distribution, and use. Nothing in this final rule implementing the Clean Air Act is intended to derogate from provisions in any other Federal, State, or local laws or regulations governing actions including, but not limited to, the sale, distribution, transfer, and use of methyl bromide. All entities that would be affected by provisions of this final rule must continue to comply with FIFRA and other pertinent statutory and regulatory requirements for pesticides (including, but not limited to, requirements pertaining to restricted use pesticides) when importing, exporting, acquiring, selling, distributing, transferring, or using methyl bromide for critical uses. The regulations in this action are intended only to implement the CAA restrictions on the production, consumption and use of methyl bromide for critical uses exempted from the phaseout of methyl bromide. IV. What Is the Legal Authority for Exempting the Production and Import of Methyl Bromide for Critical Uses Authorized by the Parties to the Montreal Protocol? Methyl bromide was added to the Protocol as an ozone-depleting substance in 1992 through the Copenhagen Amendment to the Protocol. The Parties agreed that each industrialized country's level of methyl bromide production and consumption in 1991 should be the baseline for establishing a freeze in the level of methyl bromide production and consumption for industrialized countries. EPA published a final rule in the Federal Register on December 10, 1993 (58 FR 65018), listing methyl bromide as a class I, Group VI controlled substance, freezing U.S. production and consumption at this 1991 level, and, in 40 CFR 82.7, setting forth the percentage of baseline allowances for methyl bromide granted to companies in each control period (each calendar year) until the year 2001, when the complete phaseout would occur. This phaseout date was established in response to a petition filed in 1991 under sections 602(c)(3) and 606(b) of the CAAA of 1990, requesting that EPA list methyl bromide as a class I substance and phase out its production and consumption. This date was consistent with section 602(d) of the CAAA of 1990, which for newly listed class I ozone-depleting substances provides that ``no extension [of the phaseout schedule in section 604] under this subsection may extend the date for termination of production of any class I substance to a date more than 7 years after January 1 of the year after the year in which the substance is added to the list of class I substances.'' EPA based its action on scientific assessments and actions by the Parties to the Montreal Protocol to freeze the level of methyl bromide production and consumption for industrialized countries at the 1992 Meeting of the Parties in Copenhagen. At their 1995 meeting, the Parties made adjustments to the methyl bromide control measures and agreed to reduction steps and a 2010 phaseout date for industrialized countries with exemptions permitted for critical uses. At that time, the U.S. continued to have a 2001 phaseout date in accordance with the CAAA of 1990 language. At their 1997 meeting, the Parties agreed to further adjustments to the phaseout schedule for methyl bromide in industrialized countries, with reduction steps leading to a 2005 phaseout for industrialized countries. The controls on methyl bromide appear in Article 2H of the Protocol. Critical use exemptions are addressed in Article 2H(5), which provides that the 2005 methyl bromide phaseout shall not apply ``to the extent the Parties decide to permit the level of production or consumption that is necessary to satisfy uses agreed by them to be critical uses.'' In October 1998, the U.S. Congress amended the CAA to prohibit the termination of production of methyl bromide prior to January 1, 2005, to require EPA to bring the U.S. phaseout of methyl bromide in line with the schedule specified under the Protocol, and to authorize EPA to provide exemptions for critical uses. These amendments were contained in Section 764 of the 1999 Omnibus Consolidated and Emergency Supplemental Appropriations Act (Pub. L. 105-277, October 21, 1998) and were codified in Section 604 of the CAA, 42 U.S.C. 7671c. The amendment that specifically addresses the critical use exemption appears at Section 604(d)(6), 42 U.S.C. 7671c(d)(6). Section 604(d)(6) provides that ``[t]o the extent consistent with the [[Page 75388]] Montreal Protocol, the Administrator, after notice and the opportunity for public comment, and after consultation with other departments or instrumentalities of the Federal Government having regulatory authority related to methyl bromide, including the Secretary of Agriculture, may exempt the production, importation, and consumption of methyl bromide for critical uses.'' More generally, Section 614(b) provides that Title VI of the CAAA of 1990 ``shall be construed, interpreted, and applied as a supplement to the terms and conditions of the Montreal Protocol.'' On November 28, 2000, EPA issued regulations to amend the phaseout schedule for methyl bromide and extend the complete phaseout of production and consumption to 2005 (65 FR 70795). On December 23, 2004 (69 FR 76982), EPA published a final rule (the ``Framework Rule'') in the Federal Register that established the framework for the critical use exemption; set forth a list of approved critical uses for 2005; and specified the amount of methyl bromide that could be supplied in 2005 from pre-phaseout inventory and new production or import to meet the needs of approved critical uses. EPA then published a second final rule that added additional uses to the exemption program for 2005 and allocated additional critical stock allowances (70 FR 73604). EPA published a final rule on February 6, 2006 to exempt production and import of methyl bromide for 2006 critical uses and to indicate which uses met the criteria for the exemption program for that year (71 FR 5985). A Technical Correction amending the critical use allowances was published on April 28, 2006 (71 FR 25077). With this action, under authority of section 604(d)(6) of the CAA, EPA is listing the uses that will qualify as approved critical uses in 2007 and the amount of methyl bromide required to satisfy those uses. This action reflects Decision XVII/9, taken at the Parties' Seventeenth Meeting in December 2005. In accordance with Article 2H(5), the Parties have issued several Decisions pertaining to the critical use exemption. These include Decisions IX/6 and Ex. I/4, which set forth criteria for review of proposed critical uses. The status of Decisions is addressed in the recent D.C. Circuit opinion, NRDC v. EPA., D.C. Cir. No. 04-1438 (August 29, 2006), 2006 U.S. App. LEXIS 22074, and in EPA's ``Supplemental Brief for the Respondent,'' filed in NRDC v. EPA and available on Docket No. EPA-HQ-OAR-2005-0538. In this final rule, EPA is honoring commitments made by the United States in the Montreal Protocol context. V. What Is the Critical Use Exemption Process? A. Background of the Process Starting in 2002, EPA began notifying applicants of the process for obtaining a critical use exemption to the methyl bromide phaseout. On May 10, 2002, the Agency published its first notice in the Federal Register (67 FR 31798) announcing the availability of the application for a critical use exemption and the deadline for submission of the requisite data. Applicants were informed that they may apply as individuals or as part of a group of users (a ``consortium'') who face the same limiting critical conditions (i.e. specific conditions that establish a critical need for methyl bromide). EPA has repeated this process annually since then. The critical use exemption is designed to permit production and import of methyl bromide for uses that do not have technically and economically feasible alternatives. The criteria for the exemption initially appeared in Decision IX/6 of the Parties to the Protocol. In that Decision, the Parties agreed that ``a use of methyl bromide should qualify as 'critical' only if the nominating Party determines that: (i) The specific use is critical because the lack of availability of methyl bromide for that use would result in a significant market disruption; and (ii) there are no technically and economically feasible alternatives or substitutes available to the user that are acceptable from the standpoint of environment and public health and are suitable to the crops and circumstances of the nomination.'' These criteria are reflected in EPA's definition of ``critical use'' at 40 CFR 82.3. In response to the yearly requests for critical use exemption applications published in the Federal Register, applicants have provided data on the technical and economic feasibility of using alternatives to methyl bromide. Applicants further submit data on their use of methyl bromide, on research programs into the use of alternatives to methyl bromide, and on efforts to minimize use and emissions of methyl bromide. EPA's Office of Pesticide Programs reviews the data submitted by applicants, as well as data from governmental and academic sources, to establish whether there are technically and economically feasible alternatives available for a particular use of methyl bromide and whether there would be significant market disruption if no exemption were available. In addition, EPA reviews other parameters of the exemption applications such as dosage and emissions minimization techniques and applicants' research or transition plans. This assessment process culminates with the development of a document referred to as the ``Critical Use Nomination'' or CUN. The CUN is submitted annually by the U.S. Department of State to the United Nations Environment Programme (UNEP)'s Ozone Secretariat. The CUNs of various countries are subsequently reviewed by the Methyl Bromide Technical Options Committee (MBTOC) and the Technical and Economic Assessment Panel (TEAP), which are independent advisory bodies to Parties to the Montreal Protocol. These bodies make recommendations to the Parties on the nominations. The Parties then take a Decision to authorize a critical use exemption for a particular country. The Decision also identifies how much methyl bromide may be supplied for the exempted critical uses. Finally, for each exemption period, EPA provides an opportunity for comment on the amounts of methyl bromide that the Agency has determined to be necessary for critical uses and the uses that the Agency has determined meet the criteria of the critical use exemption. For more information on the domestic review process and methodology employed by the Office of Pesticide Programs, please refer to a detailed memo titled ``Development of 2003 Nomination for a Critical Use Exemption for Methyl Bromide for the United States of America'' available on the docket for this rulemaking. While the particulars of the data continue to evolve and clerical matters are further streamlined, the technical review itself has remained the same since the inception of the program. On January 31, 2005, the U.S. Government submitted the third U.S. Nomination for a Critical Use Exemption for Methyl Bromide to UNEP's Ozone Secretariat. This nomination contained the request for 2007 critical uses. On March 16 and 18, 2005, and June 10 and 13, 2005, MBTOC sent questions to the U.S. Government concerning technical and economic issues in the nomination. The U.S. Government transmitted responses to these requests for clarification on April 8, 2005 and August 18, 2005. These documents, together with reports by the advisory bodies noted above, can be accessed in the docket for this rulemaking. The determination in this final rule reflects the analysis contained in those documents. [[Page 75389]] EPA received one comment requesting it not exempt any methyl bromide for critical uses. The CAA allows the Agency to create an exemption for critical uses from the production and consumption phaseout of methyl bromide. Although the Act does not require EPA to establish an exemption, EPA believes the lack of suitable alternatives for the uses listed as approved critical uses in this rulemaking warrants the continuation of the exemption process begun in 2005. The history of ozone protection programs has been the transition of industries away from production, import, and use of ozone-depleting substances to alternatives. In some instances a successful transition was possible within the allotted time. In other instances, additional time has been required to allow for the development and market penetration of alternatives. In fact, more than ten years after the phaseout of chlorofluorocarbons (CFCs), the U.S. Government is still exempting the production of CFCs for essential uses in metered dose inhalers. In the instance of critical uses where suitable alternatives are not yet available for all uses, EPA believes it would be inconsistent with the history and the goals of the ozone protection program not to allow for a safety valve in accordance with the provisions of both international and domestic law. B. How Does This Final Rulemaking Relate to Previous Critical Use Exemption Rulemakings? The December 23, 2004 Framework Rule (69 FR 76982) established the bulk of the framework for the critical use exemption in the U.S. including trading provisions and recordkeeping and reporting obligations. In this action, EPA is not changing the framework of the exemption program but rather is establishing a list of approved critical uses for 2007 and is issuing allowances that will determine the amount of methyl bromide available for those uses consistent with the Framework Rule. In the proposed rulemaking, published on July 6, 2006 (71 FR 38325), EPA sought comment on the proposed critical use exemptions for the 2007 calendar year. No major changes to the operational framework were proposed. Some commenters, however, requested that EPA re-examine significant portions of the operational framework identified in the December 23, 2004 Framework Rule. In this action, EPA is only addressing comments within the scope of the proposal, but may consider additional suggestions pertaining to other areas in future critical use exemption rulemakings. With respect to the comments on the operational framework, EPA has already addressed similar points in the Response to Comments document for the Framework Rule, accessible on Docket No. EPA- HQ-OAR-2005-0538. EPA received three comments concerning the term significant market disruption, as described in Decision IX/6. One commenter requested a proper definition of the term, in addition to the terms ``technical feasibility'' and ``economic feasibility.'' Another commenter stated that the proposal lacked a market disruption finding and that EPA did not provide support for its claims of market disruption. The other commenter noted that the critical use exemption application for the Florida Golf Course Superintendents Association was rejected because of a failure to demonstrate that the loss of methyl bromide would result in significant market disruption, and believes the term is undefined by EPA. These comments are addressed in the separate response to comments document, available on the docket for this action. A description of EPA's application of this concept is available in the memo titled ``Development of the 2003 Nomination for a Critical Use Exemption for Methyl Bromide for the United States of America,'' on Docket Nos. EPA- HQ-OAR-2003-0017, EPA-HQ-OAR-2004-0506, EPA-HQ-OAR-2005-0122, and EPA- HQ-OAR-2005-0538. One commenter stated that a ``significant market disruption'' refers to ``a decrease or delay in supply or an increase in price of a commodity produced with methyl bromide.'' EPA views this as one possible type of market disruption. As stated in the memo available on EPA-HQ-OAR-2004-0506, ``markets are partially defined by the interaction between supply and demand, which determines the price and quantity of a good traded in a market. EPA's position is that a disruption to either side of a market, demand or supply, would result in market disruption.'' For example, if the loss of methyl bromide in strawberry production resulted in significant production decreases, followed by an increase in the price of strawberries--and, depending on the price elasticity of strawberries, potential loss of grower income-- EPA could determine that it constituted a significant market disruption. In determining whether a change in supply or demand is significant, EPA considers several dimensions of which two are key: (1) Individual versus aggregate and (2) absolute versus relative. EPA typically evaluates losses at the individual level, e.g., on a per-acre basis. We then extrapolate to the aggregate loss by multiplying this loss by the number of acres affected, using crop budgets and other relevant information. EPA balances the two measures to determine whether impacts are significant. For example, if the loss of methyl bromide in Michigan for vegetable production results in high prices in the upper Midwest, EPA may determine that it constitutes a significant market disruption, even if producers and consumers in the rest of the country are unaffected. The other key dimension is absolute versus relative impacts. The loss of a single processing plant may not seem significant. However, if there are only three such plants, the loss of one could still result in significant market disruption. EPA relies on detailed crop budgets and other sources of information for data on production costs, gross revenues, and other measures. C. Critical Uses and Adjustments to Critical Use Amounts In Decision XVII/9, taken in December 2005, the Parties to the Protocol agreed as follows: ``for the agreed critical-use categories for 2007, set forth in table C to the annex to the present decision for each Party, to permit, subject to the conditions set forth in the present decision and decision Ex.I/4, the levels of production and consumption for 2007 set forth in table D of the annex to the present decision which are necessary to satisfy critical uses * * *'' The following uses are those set forth in table C of the annex to Decision XVII/9: cucurbits; dry commodities/structures cocoa beans; dried fruit and nuts; NPMA dry commodities/structures (processed foods, herbs & spices, dried milk and cheese processing facilities); dry cure pork products (building and product); eggplant (field); forest nursery seedlings; mills and processors; nursery stock-fruit trees, raspberries, roses; orchard replant; ornamentals; peppers (field); strawberry fruit (field); strawberry runners; tomato (field) and turf grass. When added together, the agreed critical-use levels for 2007 total 6,749,060 kilograms, which is equivalent to 26.4% of the U.S. 1991 methyl bromide consumption baseline of 25,528,000 kilograms. However, the maximum amount of allowable new production or import as set forth in table D of Decision XVII/9 is 5,149,060 kilograms, which is equivalent to 20% of the 1991 methyl bromide consumption baseline. The difference between allowable new production or import and the total critical use amount [[Page 75390]] will be made up from pre-phaseout inventory. EPA further discusses the breakout between new production or import and stocks in section V.G. of this preamble. EPA is establishing the following reductions to the amount of newly produced or imported methyl bromide authorized in Decision XVII/9 to satisfy critical uses: (a) Reductions to accommodate uptake of sulfuryl fluoride in 2007; (b) Reductions to account for unused critical use methyl bromide at the end of 2005; (c) Reductions to accommodate increased allocation of critical stock allowances (CSAs). Eleven commenters objected to EPA's proposed reductions and stated that EPA should grant the full amount of new production allowed by the Parties to the Montreal Protocol in Decision XVII/9. However, another commenter stated that new production and import should be decreased further to account for large inventory. The comments on EPA's proposed reductions are addressed in the subsequent section of this preamble, and the comments on inventory are addressed in Section F. In the 2006 CUE Rule (71 FR 5985), EPA allocated less methyl bromide for critical uses than was authorized by the Parties, in order to account for the recent registration of sulfuryl fluoride. The Agency based those reductions on the data contained in the 2008 CUN, which was submitted to the Ozone Secretariat in January 2006. The 2008 CUN is available in the docket for the July 6, 2006 proposed rule. The nomination indicated that sulfuryl fluoride is registered to control the relevant pests in all post-harvest sectors except for cheese and dry cured ham use categories and that between 12 percent and 18 percent of the industry, depending on the use category, could feasibly transition to this alternative each year. This analysis still represents the best available data on the transition to sulfuryl fluoride including factors such as potential obstacles in the export of treated commodities. The report of the Methyl Bromide Technical Options Committee (MBTOC) indicated that the MBTOC did not make any reductions in these use categories for the uptake of sulfuryl fluoride in 2007 because the United States Government indicated that it would do so in its domestic allocation procedures. Therefore, EPA is reducing the total volume of critical use methyl bromide by 53,703 kilograms to reflect the continuing transition to sulfuryl fluoride. The July 6, 2006 proposed rule sought comment on the transition rates for sulfuryl fluoride described in the 2008 CUN. In particular, the Agency sought comment on the ability of certain end users, such as dried fruit and nut processors, to use sulfuryl fluoride given the progress made by importing countries in establishing and approving tolerance levels for the use of sulfuryl fluoride. A copy of the 2008 analysis is available in the rulemaking docket for comment. EPA received 26 comments on the availability of sulfuryl fluoride. Nine commenters stated that EPA's transition estimates of 12%-18% were not justified and were premature, and five commenters contended that the proposed reduction had no factual basis. Four commenters cited the Motion of Stay of Effectiveness of Sulfuryl Fluoride Tolerances, described in the Request For Stay of Tolerances notice published in the Federal Register on July 5, 2006 (71 FR 38125). The commenters also cited concerns with the regulatory status of sulfuryl fluoride. One commenter noted that data collection on the efficacy of sulfuryl fluoride is just beginning this year and will continue over the next three years. This commenter requested that EPA not make any additional reductions in methyl bromide allocations until sulfuryl fluoride and other alternatives have been more thoroughly studied. One commenter stated that sulfuryl fluoride is not meeting expectations as an alternative and another questioned the viability of sulfuryl fluoride as a commercial use. Another commenter provided supporting documents, available on the docket for this action, explaining why sulfuryl fluoride uptake has not kept pace with EPA's transition estimates. Similar comments expressed concerns relating to the safety, efficacy, and/or trade limitations associated with sulfuryl fluoride. In contrast, eight commenters stated that sulfuryl fluoride is a satisfactory alternative to methyl bromide because of its excellent results in application, pest population control, and aeration timing, among other reasons, and supported the use of sulfuryl fluoride in post-harvest applications. Two commenters noted that sulfuryl fluoride could replace all methyl bromide in the post-harvest sector by December 31, 2007. One commenter noted that sulfuryl fluoride provides pest control at all life stages and does not deplete the ozone layer. The commenter provided nineteen supporting documents. Another commenter stated that the market penetration of sulfuryl fluoride is inhibited by the continued availability of methyl bromide through the critical use exemption process. The Agency sought comments on the ability of certain end-users, such as dried fruit and nut processors, to use sulfuryl fluoride given the progress made by importing countries in establishing and approving tolerance levels for the use of sulfuryl fluoride. One commenter responded by noting that Maximum Residue Levels (MRLs) have been established in Japan, Canada, the European Union, and the U.S. The commenter also noted that sulfuryl fluoride is registered in eight nations. Three other commenters noted that there were few or no tolerances for sulfuryl fluoride. One commenter suggested EPA poll industries that have the opportunity to use sulfuryl fluoride to identify those able to transition. On August 23, 2006, EPA issued letters to a sample of fumigation and flour milling operations under Section 114 of the CAA in order to obtain better data on sulfuryl fluoride transition estimates. However, the data received from the Section 114 responses did not result in significantly comparable data points and therefore EPA is making no additional sulfuryl fluoride reductions at this time. However, EPA may use the data obtained from the Section 114 responses in future rulemakings and in conjunction with information that EPA may receive in the future. After considering the comments received, in this final rule, EPA is reducing the amount of newly produced or imported critical use methyl bromide by 53,703 kilograms to reflect the continuing transition to sulfuryl fluoride. The July 6, 2006 proposed rule sought to reduce the amount of newly produced or imported methyl bromide by 68,170 kilograms. However, one post-harvest sub-sector had been double-counted in the original post-harvest calculations. EPA has placed the revised spreadsheet demonstrating the revised calculation on the docket. Responses to specific comments appear in the separate Response To Comment document, available on the docket for this rulemaking. As described in the December 23, 2004 Framework Rule (69 FR 76997), EPA is deducting the amount of unused methyl bromide from the total number of allowances issued for the control period following the control period immediately after the control period when the methyl bromide was unused for critical uses. For example, all unused methyl bromide that was produced or imported under the critical use exemption in 2005 was reported to EPA in 2006 and would be reduced from the total allowable levels of new production/import in 2007. EPA's July [[Page 75391]] 6, 2006 proposed rule proposed to reduce the total level of new production and import for critical uses by 443,000 kilograms to reflect the total level of unused material available at the end of 2005. As described in the Framework Rule, after applying this reduction to the total volumes of allowable new production or import, EPA allocates prorated critical use allowances (CUAs) to each company based on their 1991 baseline market share in the corresponding proposal. EPA received fourteen comments objecting to EPA's proposal to reduce the level of new production and import for critical uses by 443,000 kilograms to reflect the total level of unused material at the end of 2005. The commenters contend that the unused amount described in the proposal was largely attributed to the delay in finalizing the 2005 supplemental rule and that stakeholders should not be penalized. EPA notes that the accumulation of inventory is not allowed under the critical use exemption program, and that the unused amount consists of material that was produced but was never sold to critical users. The 2005 supplemental rule only authorized an additional 610,655 kilograms of pre-phaseout inventory to be made available for critical uses (70 FR 73604) and did not authorize additional new production or import for the 2005 calendar year. Thus, the 2005 supplemental rule did not affect the carryover amount. Therefore, to account for carryover of inventory, EPA is reducing the level of new production and import for critical uses by 443,000 kilograms as proposed. Decision XVII/9, paragraph 7, ``request[s] Parties to endeavor to use stocks, where available, to meet any demand for methyl bromide for the purposes of research and development.'' EPA then proposed to reduce the total supply of new production and import for critical uses by an amount equivalent to the total amount authorized for research purposes, which is 21,702 kilograms. The calculations used by the Agency for the research adjustment are available for public comment in the docket for this action. Further, EPA encouraged methyl bromide suppliers to sell pre-phaseout inventory to researchers and encouraged researchers to purchase stocks of methyl bromide. EPA received three comments stating that research amounts should come from new production amounts because such research is critical to the long-term acceptance of alternatives, and allowing new production for this use will facilitate the transition to non-ozone-depleting substances. EPA's allocation for the 2007 control period is consistent with the above Decision. To account for research amounts, in this final rule EPA is reducing the amount of methyl bromide available for new production and import by 21,702 kilograms but notes that use of methyl bromide for research purposes will facilitate the transition to alternatives. In response to Decision XVII/9, EPA continues to encourage methyl bromide suppliers to sell inventory to researchers and encourages researchers to purchase inventory. Additional discussion can be found in Section V.F of this final rule. Lastly, the Agency proposed to allocate critical stock allowances (CSAs) for 2007 critical uses in an amount equal to either 6.2% or 7.5% of baseline. The Agency is allocating CSAs equal to 7.5% of baseline in this final rule. In section V.G. of this preamble, the Agency describes the reasons for this action. Having chosen the larger CSA amount, the Agency is making a corresponding reduction in the amount of new production and import under the exemption program. On February 6, 2006, EPA amended the label for 1,3-dichloropropene (1,3-D) regarding karst restrictions. Copies of the amended labels are available in the docket for this action. The previous label states ``Do not apply in areas overlying karst geology'' whereas the new label states ``Do not apply this product within 100 feet of karst topographical features.'' The new label language is more instructive on the use of 1,3-D in areas with karst topography, while still protecting the environment, than the previous label language. EPA's assessment of the amount of methyl bromide that may be displaced by the use of 1,3-D over karst areas in the 2007 technical analysis was already based on the revised label language now in place. Therefore, EPA did not propose to make further reductions to the volumes of pre-plant methyl bromide based on the label change. A more detailed explanation of this matter appears in the responses to the MBTOC, available in the docket for this rulemaking. A copy of the label amendment is available in the docket as well. EPA received one comment on the karst label restriction, which is addressed in the Response to Comments document for this action. With this final rule, EPA is amending Columns B and C of Appendix L to 40 CFR Part 82, Subpart A to reflect the agreed critical-use categories identified in Decision XVII/9 for the 2007 control period (calendar year). The Agency is amending the table of critical uses based, in part, on the technical analysis contained in the 2007 U.S. nomination that assesses data submitted by applicants to the critical use exemption program as well as public and proprietary data on the use of methyl bromide and its alternatives. EPA sought comment on the aforementioned analysis and, in particular, any information regarding changes to the registration or use of alternatives that may have transpired after the 2007 U.S. nomination was written. Such information has the potential to alter the technical or economic feasibility of an alternative and could thus cause EPA to modify the analysis that underpins EPA's determination as to which uses and what amounts of methyl bromide qualify for the critical use exemption. EPA did not receive any comments regarding changes to the registration of an alternative, but did receive five comments stating that it is inappropriate for EPA to revisit the technical analysis contained in the 2007 nomination at this time because the Parties have already authorized critical use amounts for the 2007 calendar year. While EPA is not revising the technical analysis at this time due to the lack of new information regarding the registration or use of alternatives, EPA will continue to consider such information in future rulemakings. Based on the information described above, EPA is determining that the uses in Table I: Approved Critical Uses, with the limiting critical conditions specified, qualify to obtain and use critical use methyl bromide in 2007. Table I.--Approved Critical Uses ---------------------------------------------------------------------------------------------------------------- Column A Column B Column C ---------------------------------------------------------------------------------------------------------------- Approved Critical Uses............. Approved Critical User and Limiting Critical Conditions that either Location of Use. exist, or that the approved critical user reasonably expects could arise without methyl bromide fumigation: ---------------------------------------------------------------------------------------------------------------- [[Page 75392]] PRE-PLANT USES ---------------------------------------------------------------------------------------------------------------- Cucurbits.......................... (a) Michigan growers....... Moderate to severe soilborne fungal disease infestation. Moderate to severe disease infestation. A need for methyl bromide for research purposes. (b) Southeastern U.S. Moderate to severe yellow or purple nutsedge limited to growing infestation. locations in Alabama, Moderate to severe fungal disease infestation. Arkansas, Kentucky, Moderate to severe root knot nematodes. Louisiana, North Carolina, A need for methyl bromide for research South Carolina, Tennessee, purposes. and Virginia. (c) Georgia growers........ Moderate to severe yellow or purple nutsedge infestation. Moderate to severe fungal disease infestation. Moderate to severe root knot nematodes. A need for methyl bromide for research purposes. Eggplant........................... (a) Florida growers........ Moderate to severe yellow or purple nutsedge infestation. Moderate to severe nematodes. Moderate to severe disease infestation. Restrictions on alternatives due to karst geology. A need for methyl bromide for research purposes. (b) Georgia growers........ Moderate to severe yellow or purple nutsedge infestation. Moderate to severe nematodes. Moderate to severe pythium root, collar, crown and root rot. Moderate to severe disease infestation. Moderate to severe southern blight infestation. Restrictions on alternatives due to karst geology. A need for methyl bromide for research purposes. (c) Michigan growers....... Moderate to severe soilborne fungal disease infestation. A need for methyl bromide for research purposes. Forest Nursery Seedlings........... (a) Members of the Southern Moderate to severe yellow or purple nutsedge Forest Nursery Management infestation. Cooperative limited to Moderate to severe disease infestation. growing locations in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, and Virginia. (b) International Paper and Moderate to severe yellow or purple nutsedge its subsidiaries limited infestation. to growing locations in Moderate to severe disease infestation. Alabama, Arkansas, Georgia, South Carolina, and Texas. (c) Public (government- Moderate to severe weed infestation including owned) seedling nurseries purple and yellow nutsedge infestation. in Illinois, Indiana, Moderate to severe Canada thistle infestation. Kentucky, Maryland, Moderate to severe nematodes. Missouri, New Jersey, Moderate to severe fungal disease infestation. Ohio, Pennsylvania, West Virginia, and Wisconsin. (d) Weyerhaeuser Company Moderate to severe yellow or purple nutsedge and its subsidiaries infestation. limited to growing Moderate to severe disease infestation. locations in Alabama, Moderate to severe nematodes and worms. Arkansas, North Carolina, and South Carolina. (e) Weyerhaeuser Company Moderate to severe yellow nutsedge and its subsidiaries infestation. limited to growing Moderate to severe fungal disease infestation. locations in Oregon and Washington. (f) Michigan growers....... Moderate to severe disease infestation. Moderate to severe Canada thistle infestation. Moderate to severe nutsedge infestation. Moderate to severe nematodes. (g) Michigan herbaceous Moderate to severe nematodes. perennials growers. Moderate to severe fungal disease infestation. Moderate to severe yellow nutsedge and other weed infestation. Orchard Nursery Seedlings.......... (a) Members of the Western Moderate to severe nematode infestation. Raspberry Nursery Presence of medium to heavy clay soils. Consortium limited to Prohibition on use of 1,3-dichloropropene growing locations in products because local township limits on use California and Washington of this alternative have been reached. (Driscoll's Raspberries A need for methyl bromide for research and their contract growers purposes. in California and Washington). (b) Members of the Moderate to severe nematode infestation. California Association of Presence of medium to heavy clay soils. Nurserymen--Deciduous Prohibition on use of 1,3-dichloropropene Fruit and Nut Tree Growers. products because local township limits on use of this alternative have been reached. A need for methyl bromide for research purposes. [[Page 75393]] (c) California rose Moderate to severe nematode infestation. nurseries. Prohibition on use of 1,3-dichloropropene products because local township limits on use of this alternative have been reached. A need for methyl bromide for research purposes. Strawberry Nurseries............... (a) California growers..... Moderate to severe disease infestation. Moderate to severe yellow or purple nutsedge infestation. Moderate to severe nematodes. A need for methyl bromide for research purposes. (b) Maryland, North Moderate to severe black root rot. Carolina, and Tennessee Moderate to severe root-knot nematodes. growers. Moderate to severe yellow and purple nutsedge infestation. A need for methyl bromide for research purposes. Orchard Replant.................... (a) California stone fruit Moderate to severe nematodes. growers. Moderate to severe fungal disease infestation. Replanted (non-virgin) orchard soils to prevent orchard replant disease. Presence of medium to heavy soils. Prohibition on use of 1,3-dichloropropene products because local township limits on use of this alternative have been reached. A need for methyl bromide for research purposes. (b) California table and Moderate to severe nematodes. raisin grape growers. Moderate to severe fungal disease infestation. Replanted (non-virgin) orchard soils to prevent orchard replant disease. Medium to heavy soils. Prohibition on use of 1,3-dichloropropene products because local township limits for this alternative have been reached. A need for methyl bromide for research purposes. (c) California wine grape Moderate to severe nematodes. growers. Moderate to severe fungal disease infestation. Replanted (non-virgin) orchard soils to prevent orchard replant disease. Medium to heavy soils. Prohibition on use of 1,3-dichloropropene products because local township limits for this alternative have been reached. A need for methyl bromide for research purposes. (d) California walnut Moderate to severe nematodes. growers. Moderate to severe fungal disease infestation. Replanted (non-virgin) orchard soils to prevent orchard replant disease. Medium to heavy soils. Prohibition on use of 1,3-dichloropropene products because local township limits for this alternative have been reached. A need for methyl bromide for research purposes. (e) California almond Moderate to severe nematodes. growers. Moderate to severe fungal disease infestation. Replanted (non-virgin) orchard soils to prevent orchard replant disease. Medium to heavy soils. Prohibition on use of 1,3-dichloropropene products because local township limits for this alternative have been reached. A need for methyl bromide for research purposes. Ornamentals........................ (a) California growers..... Moderate to severe disease infestation. Moderate to severe nematodes. Prohibition on use of 1,3-dichloropropene products because local township limits for this alternative have been reached. A need for methyl bromide for research purposes. (b) Florida growers........ Moderate to severe weed infestation. Moderate to severe disease infestation. Moderate to severe nematodes. Karst topography. A need for methyl bromide for research purposes. Peppers............................ (a) California growers..... Moderate to severe disease infestation. Moderate to severe nematodes. Prohibition on use of 1,3-dichloropropene products because local township limits for this alternative have been reached. A need for methyl bromide for research purposes. (b) Alabama, Arkansas, Moderate to severe yellow or purple nutsedge Kentucky, Louisiana, North infestation. Carolina, South Carolina, Moderate to severe nematodes. Tennessee, and Virginia Moderate to severe pythium root, collar, crown growers. and root rots. Presence of an occupied structure within 100 feet of a grower's field the size of 100 acres or less. A need for methyl bromide for research purposes. [[Page 75394]] (c) Florida growers........ Moderate to severe yellow or purple nutsedge infestation. Moderate to severe disease infestation. Moderate to severe nematodes. Karst topography. A need for methyl bromide for research purposes. (d) Georgia growers........ Moderate to severe yellow or purple nutsedge infestation. Moderate to severe nematodes, or moderate to severe pythium root and collar rots. Moderate to severe southern blight infestation, crown or root rot. A need for methyl bromide for research purposes. (e) Michigan growers....... Moderate to severe fungal disease infestation. A need for methyl bromide for research purposes. Strawberry Fruit................... (a) California growers..... Moderate to severe black root rot or crown rot. Moderate to severe yellow or purple nutsedge infestation. Moderate to severe nematodes. Prohibition on use of 1,3-dichloropropene products because local township limits for this alternative have been reached. Time to transition to an alternative. A need for methyl bromide for research