Protection of Stratospheric Ozone: Adjusting Allowances for Class I Substances for Export to Article 5 Countries, 55480-55489 [05-18832]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 70, Number 182 (Wednesday, September 21, 2005)]
[Proposed Rules]
[Pages 55480-55489]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-18832]



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Part III





Environmental Protection Agency





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40 CFR Part 82



Protection of Stratospheric Ozone: Adjusting Allowances for Class I 
Substances for Export to Article 5 Countries; Proposed Rule

Federal Register / Vol. 70, No. 182 / Wednesday, September 21, 2005 / 
Proposed Rules

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[FRL-7971-6]
RIN 2060-AK45


Protection of Stratospheric Ozone: Adjusting Allowances for Class 
I Substances for Export to Article 5 Countries

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: Today's action proposes adjustments to allocations of Article 
5 allowances that permit production of Class I ozone depleting 
substances (ODSs) solely for export to developing countries to meet 
those countries' basic domestic needs. Today's action proposes 
adjustments to the baseline Article 5 allowances for companies for 
specific Class I controlled substances and establishes a schedule for 
reductions in the Article 5 allowances for these Class I controlled 
substances in accordance with the Montreal Protocol on Substances that 
Deplete the Ozone Layer (Montreal Protocol) and the Clean Air Act 
(CAA). Today's proposal also would extend the allocation of Article 5 
allowances for the manufacture of methyl bromide solely for export to 
developing countries beyond January 1, 2005, in accordance with the 
Montreal Protocol and the CAA.

DATES: Written comments on this proposed rule must be received on or 
before November 21, 2005. If a public hearing takes place, it will be 
scheduled for October 6, 2005. Any party requesting a public hearing 
must notify the contact person listed below by 5pm Eastern Standard 
Time on September 28, 2005. After that time, interested parties may 
call EPA's Stratospheric Ozone Protection Information Hotline at 1-800-
296-1996 for information on whether a hearing will be held, as well as 
the time and place of such a hearing.

ADDRESSES: Submit your comments, identified by Regional Material in 
EDOCKET (RME) ID No. OAR-2005-0151, by one of the following methods:
    1. Federal eRulemaking Portal: https://www.regulations.gov. Follow 
the on-line instructions for submitting comments.
    2. Agency Web site: https://www.epa.gov/edocket. EDOCKET, EPA's 
electronic public docket and comment system, is EPA's preferred method 
for receiving comments. Follow the on-line instructions for submitting 
comments.
    3. E-mail: A-and-R-docket@epa.gov.
    4. Fax: 202-343-2338, Attn: Hodayah Finman.
    5. Mail: ``OAR-2005-0151'', Air Docket, Environmental Protection 
Agency, Mail code 6102T, 1200 Pennsylvania Ave., NW., Washington, DC 
20460.
    6. Hand Delivery or Courier. Deliver your comments to: EPA Air 
Docket, EPA West 1301 Constitution Avenue, NW., Room B108, Mail Code 
6102T, Washington, DC 20460. Such deliveries are only accepted during 
the Docket's normal hours of operation, and special arrangements should 
be made for deliveries of boxed information.
    Instructions: Direct your comments to OAR-2005-0151. EPA's policy 
is that all comments received will be included in the public docket 
without change and may be made available online at https://www.epa.gov/
edocket, including any personal information provided, unless the 
comment includes information claimed to be Confidential Business 
Information (CBI) or other information whose disclosure is restricted 
by statute. Do not submit information that you consider to be CBI or 
otherwise protected through EDOCKET, regulations.gov, or e-mail. The 
EPA EDOCKET and the Federal regulations.gov Web site are ``anonymous 
access'' systems, which means EPA will not know your identity or 
contact information unless you provide it in the body of your comment. 
If you send an e-mail comment directly to EPA without going through 
EDOCKET or regulations.gov, your e-mail address will be automatically 
captured and included as part of the comment that is placed in the 
public docket and made available on the Internet. If you submit an 
electronic comment, EPA recommends that you include your name and other 
contact information in the body of your comment and with any disk or 
CD-ROM you submit. If EPA cannot read your comment due to technical 
difficulties and cannot contact you for clarification, EPA may not be 
able to consider your comment. Electronic files should avoid the use of 
special characters and any form of encryption, and should be free of 
any defects or viruses.
    Docket: All documents in the docket are listed in the EDOCKET index 
at https://www.epa.gov/edocket. Although listed in the index, some 
information is not publicly available, such as 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 either electronically in EDOCKET or in hard 
copy at the Air Docket, EPA/DC, EPA West, Room B102, 1301 Constitution 
Ave., NW., Washington, DC. This Docket Facility is open from 8:30 a.m. 
to 4:30 p.m., Monday through Friday, excluding legal holidays. The 
telephone number for the Public Reading Room is (202) 566-1744, and the 
telephone number for the Air Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: For further information about this 
proposed rule, contact Hodayah Finman by telephone at (202) 343-9246, 
or by e-mail at finman.hodayah@epa.gov, or by mail at Hodayah Finman, 
U.S. Environmental Protection Agency, Stratospheric Protection 
Division, Stratospheric Program Implementation Branch (6205J), 1200 
Pennsylvania Avenue, NW., Washington, DC 20460. Overnight or courier 
deliveries should be sent to 1310 L Street, NW., Washington, DC 20005. 
You may also visit the Ozone Depletion Web site of EPA's Global 
Programs Division at https://www.epa.gov/ozone/ for further 
information about EPA's Stratospheric Ozone Protection regulations, the 
science of ozone layer depletion, and other topics.

SUPPLEMENTARY INFORMATION: Today's action proposes to establish a new 
Article 5 allowance baseline for specified Class I substances, 
establish a schedule for phased reductions in such allowances, and 
extend the time allowed for Article 5 production for methyl bromide.

Table of Contents

I. General Information
    A. Regulated Entities
    B. How Can I Get Copies of This Document and Other Related 
Information?
    C. How and to Whom Do I Submit Comments?
    D. How Should I Submit Confidential Business Information (CBI) 
to the Agency?
II. What Is the Legislative and Regulatory Background of the 
Phaseout Regulations for Ozone-Depleting Substances?
III. How Did the Beijing Amendments to the Montreal Protocol Change 
the Levels and Schedules of ODS Production To Meet the Basic 
Domestic Needs of Developing Countries?
IV. How Do EPA's Regulations Permit Additional Production for Export 
to Article 5 Countries?
V. What Is the New Calculation of Baselines of Article 5 Allowances?
    A. CFCs Subject to Earliest Controls
    B. Other Fully Halogenated CFCs
    C. Methyl Bromide
VI. What Is EPA's Proposed Schedule To Reflect the Beijing Amendment 
for Phased Reductions of Article 5 Allowances?

[[Page 55481]]

    A. CFCs Subject to Earliest Controls
    B. Other Fully Halogenated CFCs
    C. Methyl Bromide
VII. What Is the New Timeline for Article 5 Production of Methyl 
Bromide?
VIII. Other Options
IX. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act (RFA), as Amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 
U.S.C. 601 et seq.
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health & Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    I . The National Technology Transfer and Advancement Act

I. General Information

A. Regulated Entities

    Entities potentially regulated by this action are those associated 
with the production and export of Class I ODSs. Potentially regulated 
categories and entities include:

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                Category                 Examples of regulated  entities
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Industry...............................  Producers and Exporters of
                                          Class I ODSs.
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    The above table is not intended to be exhaustive, but rather 
provides a guide for readers regarding entities likely to be regulated 
by this action. This table lists the types of entities that EPA is now 
aware could potentially be regulated by this action. To determine 
whether your facility, company, business, 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 
listed in the preceding FOR FURTHER INFORMATION CONTACT section.

B. How Can I Get Copies of This Document and Other Related Information?

    1. Docket. EPA has established an official public docket for this 
action under the Office of Air and Radiation Docket & Information 
Center, Electronic Docket ID No. OAR-2005-0151. The official public 
docket consists of the documents specifically referenced in this 
action, any public comments received, and other information related to 
this action. Although a part of the official docket, the public docket 
does not include Confidential Business Information (CBI) or other 
information whose disclosure is restricted by statute. The official 
public docket is the collection of materials that is available for 
public viewing at EPA West, 1301 Constitution Avenue, NW., Room B108, 
Mail Code 6102T, Washington, DC 20460, Phone: (202)-566-1742, Fax: 
(202)-566-1741. The materials may be inspected from 8:30 a.m. until 
4:30 p.m. Monday through Friday, excluding legal holidays. A reasonable 
fee may be charged for copying docket materials.
    2. Electronic Access. You may access this Federal Register document 
electronically through the EPA Internet under the ``Federal Register'' 
listings at https://www.epa.gov/fedrgstr/. An electronic version of the 
public docket is available through EPA's electronic public docket and 
comment system, EPA Dockets. You may use EPA Dockets at https://
www.epa.gov/edocket/ to submit or view public comments, access the 
index listing of the contents of the official public docket, and access 
documents in the public docket that are available electronically. Once 
in the system, select ``search,'' then type in the appropriate docket 
identification number.
    Certain types of information will not be placed in the EPA Dockets. 
Information claimed as CBI and other information whose disclosure is 
restricted by statute, which is not included in the official public 
docket, will not be available for public viewing in EPA's electronic 
public docket. EPA's policy is that copyrighted material will not be 
placed in EPA's electronic public docket but will be available only in 
printed, paper form in the official public docket. Although not all 
docket materials may be available electronically, you may still access 
any of the publicly available docket materials through the docket 
facility.
    For public commenters, it is important to note that EPA's policy is 
that public comments, whether submitted electronically or in paper, 
will be made available for public viewing in EPA's electronic public 
docket as EPA receives them and without change, unless the comment 
contains copyrighted material, CBI, or other information whose 
disclosure is restricted by statute. When EPA identifies a comment 
containing copyrighted material, EPA will provide a reference to that 
material in the version of the comment that is placed in EPA's 
electronic public docket. The entire printed comment, including the 
copyrighted material, will be available in the public docket.
    Public comments submitted on computer disks that are mailed or 
delivered to the docket will be transferred to EPA's electronic public 
docket. Public comments that are mailed or delivered to the docket will 
be scanned and placed in EPA's electronic public docket. Where 
practical, physical objects will be photographed, and the photograph 
will be placed in EPA's electronic public docket along with a brief 
description written by the docket staff.

C. How and to Whom Do I Submit Comments?

    You may submit comments electronically, by mail, or through hand 
delivery/courier. To ensure proper receipt by EPA, identify the 
appropriate docket identification number in the subject line on the 
first page of your comment. Please ensure that your comments are 
submitted within the specified comment period. Comments received after 
the close of the comment period will be marked late. EPA is not 
required to consider these late comments. If you plan to submit late 
comments, please also notify Hodayah Finman, U.S. Environmental 
Protection Agency, Stratospheric Protection Division (mail code 6205J), 
1200 Pennsylvania Avenue, NW., Washington, DC 20460, (202) 343-9246.
    Information designated as CBI under 40 CFR part 2, subpart 2, must 
be sent directly to the contact person for this notice. However, the 
Agency requests that all respondents submit a non-confidential version 
of their comments to the docket as well.
    1. Electronically. If you submit an electronic comment as 
prescribed below, EPA recommends that you include your name, mailing 
address, and an e-mail address or other contact information in the body 
of your comment. Also include this contact information on the outside 
of any disk or CD-ROM you submit, and in any cover letter accompanying 
the disk or CD-ROM. This ensures that you can be identified as the 
submitter of the comment and allows EPA to contact you in case EPA 
cannot read your comment due to technical difficulties or needs further 
information on the substance of your comment. EPA's policy is that EPA 
will not edit your comment, and any identifying or contact information 
provided in the body of a comment will be included as part of the 
comment that is placed in the official public docket, and made 
available in EPA's electronic public docket. If EPA cannot read your 
comment due to technical difficulties

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and cannot contact you for clarification, EPA may not be able to 
consider your comment.
    The electronic public docket is EPA's preferred method for 
receiving comments. Go directly to EPA dockets at https://www.epa.gov/
edocket, and follow the online instructions for submitting comments.
    2. By Mail. Send two copies of your comments to: Air and Radiation 
Docket (6102), Docket No. OAR-2005-0151, U.S. Environmental Protection 
Agency, Mailcode 6205J, 1200 Pennsylvania Avenue, NW., Washington, DC 
20460.
    3. By Hand Delivery or Courier. Deliver your comments to: 1310 L 
Street NW., Washington, DC 20005, Attention: Docket ID No. OAR-2005-
0151. Such deliveries are only accepted during the Docket's normal 
hours of operation as identified under ADDRESSES.
    4. By Facsimile. Fax your comments to: (202) 566-1741, Attention: 
Docket ID No. OAR-2005-0151.

D. How Should I Submit Confidential Business Information (CBI) to the 
Agency?

    Do not submit information that you consider to be CBI 
electronically through EPA's electronic public docket or by e-mail. 
Send or deliver information identified as CBI only to the mail or 
courier addresses listed above, as appropriate, to the attention of 
Docket ID No. OAR-2005-0151. You may claim information that you submit 
to EPA as CBI by marking any part or all of that information as CBI. If 
you submit CBI on disk or CD-ROM, mark the outside of the disk or CD-
ROM as CBI and then identify electronically within the disk or CD-ROM 
the specific information that is CBI. Information so marked will not be 
disclosed except in accordance with procedures set forth in 40 CFR part 
2. In addition to one complete version of the comment that includes any 
information claimed as CBI, a copy of the comment that does not contain 
the information claimed as CBI must be submitted for inclusion in the 
public docket and EPA's electronic public docket. If you submit the 
copy that does not contain CBI on disk or CD-ROM, mark the outside of 
the disk or CD-ROM clearly that it does not contain CBI. Information 
not marked as CBI will be included in the public docket and EPA's 
electronic public docket without prior notice. If you have any 
questions about CBI or the procedures for claiming CBI, please consult 
the person identified in the FOR FURTHER INFORMATION CONTACT section.

II. What Is the Legislative and Regulatory Background of 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 U.S. was one of the original 
signatories to the 1987 Montreal Protocol and the U.S. ratified the 
Protocol on April 21, 1988. Congress then enacted, and President Bush 
signed into law, the Clean Air Act Amendments of 1990 (CAA 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.
    The requirements contained in the final rules published in the 
Federal Register on December 20, 1994 (59 FR 65478) and May 10, 1995 
(60 FR 24970) establish an Allowance Program. The Allowance Program and 
its history are described in the notice of proposed rulemaking 
published in the Federal Register on November 10, 1994 (59 FR 56276). 
The control and the phaseout of the production and consumption of Class 
I ODSs as required under the Protocol and the CAA are accomplished 
through the Allowance Program.
    In developing the Allowance Program, we collected information on 
the amounts of ODSs produced, imported, exported, transformed and 
destroyed within the U.S. for specific baseline years for specific 
chemicals. This information was used to establish the U.S. production 
and consumption ceilings for these chemicals. The data were also used 
to assign company-specific production and import rights to companies 
that were in most cases producing or importing during the specific year 
of data collection. These production or import rights are called 
``allowances.'' Due to the complete phaseout of many ODSs, the 
quantities of allowances granted to companies for those chemicals were 
gradually reduced and eventually eliminated. Production allowances and 
consumption allowances no longer exist for any Class I ODSs. All 
production or consumption of Class I controlled substances is 
prohibited under the Protocol and the CAA, except for a few narrow 
exemptions.
    In the context of the regulatory program, the use of the term 
``consumption'' may be misleading. Consumption does not mean the 
``use'' of a controlled substance, but rather is defined as the 
formula: production + imports - exports, of controlled substances 
(Article 1 of the Protocol and section 601 of the CAA). Class I 
controlled substances that were produced or imported through the 
expenditure of allowances prior to their phaseout date can continue to 
be used by industry and the public after that specific chemical's 
phaseout under these regulations except where the regulations include 
explicit use restrictions. Use of such substances may be subject to 
other regulatory limitations.
    The specific names and chemical formulas for the Class I ODSs are 
in appendix A and appendix F in subpart A of 40 CFR part 82. The 
specific names and chemical formulas for the Class II ODSs are in 
appendix B and appendix F in subpart A.
    Although the regulations phased out the production and consumption 
of Class I controlled substances, a very limited number of exemptions 
exist, consistent with U.S. obligations under the Protocol. The 
regulations allow for the manufacture of phased-out Class I controlled 
substances, provided the substances are either transformed or 
destroyed. They also allow limited manufacture if the substances are 
(1) exported to countries operating under Article 5 of the Protocol or 
(2) produced for essential or critical uses as authorized by the 
Protocol and the regulations. Limited exceptions to the ban on the 
import of phased-out Class I controlled substances also exist if the 
substances are: (1) Previously used, (2) imported for essential or 
critical uses as authorized by the Protocol and the regulations, (3) 
imported for destruction or transformation only, or (4) a transhipment 
or a heel (a small amount of controlled substance remaining in a 
container after discharge) (40 CFR 82.4).

III. How Did the Beijing Amendments to the Montreal Protocol Change the 
Levels and Schedules of ODS Production To Meet the Basic Domestic Needs 
of Developing Countries?

    Under the Montreal Protocol, industrialized countries and 
developing countries have differentiated schedules for phasing out the 
production and import of ODSs. Developing countries operating under 
Article 5, paragraph 1

[[Page 55483]]

of the Protocol in most cases have substantial additional time in which 
to phase out ODSs. The Parties to the Protocol recognized that it would 
be inadvisable for developing countries to spend their scarce resources 
to build new ODS manufacturing facilities to meet their basic domestic 
needs as industrialized countries phase out. The Parties therefore 
decided to permit a small amount of production in industrialized 
countries, above and beyond the amounts permitted under those 
countries' phaseout schedules, to meet the basic domestic needs of 
developing countries.
    The original Montreal Protocol schedule for industrialized country 
production of ODSs to meet the basic domestic needs of developing 
countries was based on a percentage of each producing country's 
baseline. The initial level was set at 10 percent of the baseline and 
this level changed to 15 percent upon phaseout of each specific ODS or 
group of chemicals (see section IV). Current EPA regulations reflect 
this approach.
    The adjustments to the Montreal Protocol adopted by the Parties at 
their 11th meeting in Beijing change the basis for calculating 
production by industrialized countries to meet the basic domestic needs 
of developing countries for specific ODSs or groups of ODSs. Instead of 
being calculated as a percentage of total production of the ODS in a 
given year, the new baselines for basic domestic need production are 
calculated based on the average quantity of the ODS exported to Article 
5 countries over a specified range of years. The new baseline 
calculation agreed to in Beijing reflects the Parties' concern, which 
EPA shares, that global oversupply of certain Class I ODSs is 
interfering with the transition to alternatives. The oversupply of 
these ODSs results in low prices that make it difficult for non-ozone 
depleting alternatives to compete in the marketplace. Businesses and 
individuals thus lack an economic incentive to transition to 
alternatives. The new baseline calculation is designed to overcome this 
problem with respect to Article 5 countries by reducing supply to those 
countries. The price of these ODSs should rise to reflect the decrease 
in supply.
    The adjustments agreed to in Beijing also establish reduction 
schedules for the manufacture of ODSs by industrialized countries to 
meet the basic domestic needs of developing countries. Article 5 
countries are subject to periodic step-downs in the amount of ODSs they 
may consume. If industrialized countries' production for export to 
Article 5 countries were not adjusted to take into account these step-
downs, the problem of oversupply likely would recur. Therefore, the 
Parties agreed at Beijing to reduction schedules that would mirror each 
step-down in Article 5 consumption. The schedules also reflect the 
complete consumption phaseouts in Article 5 countries. Under these 
schedules, industrialized countries must cease production for export to 
developing countries of CFCs by January 1, 2010, and of methyl bromide 
by January 1, 2015.
    To ensure consistency with the Montreal Protocol, EPA is proposing 
to adopt new baselines and reduction schedules at 40 CFR part 82, 
subpart A. Under this proposed rule, the amount of ODSs that could be 
produced to meet the basic domestic needs of developing countries would 
be reduced by a certain percentage of the baseline in accordance with 
the step-down schedule for Article 5 developing countries for those 
chemicals until they are completely phased out.
    The details of the new baselines and reduction schedules agreed to 
in Beijing, as well as updated baselines proposed by EPA, are in the 
sections below. EPA is also removing obsolete provisions from the 
regulations at 682.4(h) to increase the clarity of the regulations.

IV. How Do EPA's Regulations Permit Additional Production for Export to 
Article 5 Countries?

    Section 604(e) of the Clean Air Act allows EPA to authorize, 
through rulemaking, limited production of Class I ODSs for export to 
developing countries, for the purpose of satisfying their basic 
domestic needs. The limits on such production must be no less stringent 
than the Protocol. With respect to the Class I ODSs specifically listed 
in the Act, EPA may not authorize an amount of production greater than 
15 percent of baseline, and the exception must terminate no later than 
January 1, 2010, or, in the case of methyl chloroform, 2012. Production 
of methyl bromide for export to developing countries is addressed 
separately in section 604(e)(3). The CAA does not contain a specific 
cap or termination year for production of methyl bromide for this 
purpose. Consistent with section 604(e) of the CAA, EPA created a 
category of allowances called ``Article 5 Allowances'' in Sec.  82.9 of 
the regulations to permit limited production of Class I ODSs explicitly 
for export to developing countries. Based on the original Protocol 
agreement regarding production to meet the basic domestic needs of 
Article 5 countries, each U.S. producer of an ODS is granted Article 5 
allowances equal to an additional specified percentage of its baseline 
production allowances as listed in Sec.  82.5. This quantity of 
additional production is permitted solely for export to Article 5 
countries.
    Today's proposed action would ensure that EPA's regulations 
concerning Article 5 allowances continue to be no less stringent than 
the Protocol, as required by the CAA. Section 614 of the Clean Air Act 
states that the Act shall ``be construed, interpreted, and applied as a 
supplement to the terms and conditions of the Montreal Protocol, * * * 
and shall not be construed, interpreted, or applied to abrogate the 
responsibilities or obligations of the United States to implement fully 
the provisions of the Montreal Protocol. In the case of conflict 
between any provision of [Title VI of the Act] and any provision of the 
Montreal Protocol, the more stringent provision shall govern.'' In 
accordance with section 614, today's proposed action would ensure full 
implementation of the Montreal Protocol's limitations on production for 
export to Article 5 countries and, in the case of the baseline for 
CFCs, would impose more stringent limitations based on more recent 
information than that available to the Parties in Beijing. Today's 
proposal would also ensure consistency with the termination date for 
Article 5 allowances in section 604(e), by specifying that holders of 
baseline Article 5 allowances for production of CFCs will receive zero 
percent of their baseline beginning January 1, 2010. In addition, as 
discussed below, today's proposed action would ensure that Article 5 
allowances for production of CFCs prior to that date would not exceed 
the maximum level of 15 percent of baseline specified in the Act.

V. What Is the New Calculation of Baselines of Article 5 Allowances?

    Pursuant to the Beijing Amendments of the Montreal Protocol and 
section 604(e) of the CAA, this rule proposes to adjust the calculation 
of the baseline of Article 5 allowances for some of the Class I ODSs. 
The Parties considered but decided not to change the basic domestic 
needs baselines for carbon tetrachloride and methyl chloroform (Group 
IV and Group V controlled substances, respectively) at the meeting in 
Beijing; thus the current regulatory baselines for these substances 
remain consistent with Protocol requirements. EPA believes that there 
is no need, at this time, to propose a change to the baselines for 
carbon tetrachloride and methyl chloroform, since these substances are 
exported primarily for

[[Page 55484]]

use as a feedstock in the manufacture of other substances, and are thus 
transformed. While the Parties did adopt new, more stringent baselines 
for Group II substances (halons), Article 5 allowances for these 
substances ceased to be available in the U.S. as of January 1, 2003. 
Accordingly, this proposed rule does not address those substances.
    Thus EPA is proposing to change the existing regulations only with 
respect to CFCs (Groups I and III) and methyl bromide (Group VI). The 
Protocol contains a formula for calculating the new Article 5 allowance 
baselines for each of these Class I controlled substances. The Protocol 
also contains a range of years to be used for the calculation of each 
baseline as articulated in Articles 2A, 2C, and 2H. At the time of the 
meeting in Beijing (1999), the years chosen for establishing new 
baselines for production to meet Article 5 countries' basic domestic 
needs were the years of most recent and complete historical available 
data to the Parties for the particular group of ODSs.
    For CFCs, EPA is proposing to amend the phaseout regulations to 
make the new baselines for Article 5 allowances reflect more recent 
historical data for exports to Article 5 countries. For methyl bromide, 
EPA is proposing to amend the phaseout regulations to reflect the new 
baselines for Article 5 allowances specified in Article 2H of the 
Protocol. With respect to CFCs, EPA considered granting allowances to 
companies exporting CFCs to Article 5 countries based on an average of 
data from the range of years specified in Articles 2A and 2C of the 
Protocol. The Agency is seeking comment on the use of these time 
periods to calculate the baseline. However, EPA prefers a more 
stringent approach. The presence of only minor price fluctuations for 
CFCs in recent years suggests that there is no shortage of CFCs in 
Article 5 countries (see p. 33 of Technology and Economic Assessment 
Panel (TEAP) Task Force Report on Basic Domestic Needs--October 2004). 
In addition, the October 2004 TEAP report says, ``* * * in 2002 no 
deficit of CFCs were reported in any Article 5(1) country'' (p. 24, 
para. (a)) and ``there has been no sign of any shortage [of CFCs] in 
any Article 5(1) country (even during 2004)'' (p. 24, para. (d)). Thus 
it appears that current supplies are adequate. In addition, the U.S. 
has not historically been a major supplier of CFCs to developing 
countries. EPA's tracking database shows that the U.S. supply of CFCs 
has been significantly lower than the TEAP report indicates. To view 
the aggregate data on CFC supply and production by the U.S., visit 
EDOCKET OAR-2005-0151. Also, the ability to reuse and recycle CFCs 
taken out of refrigeration products provides an additional source of 
supply should demand for CFCs exceed expectations.
    With respect to methyl bromide, the phaseout is in an earlier stage 
and the adequacy of supply is less certain. The U.S. provides a large 
percentage of the supply of methyl bromide to developing countries. As 
a result, decreasing the U.S. baseline could have a substantial effect 
on the amount of supply potentially available to those countries. 
Therefore, EPA is not proposing a more stringent baseline for methyl 
bromide.
    Each substance or group of substances has its own formula for 
calculating the new baseline as described below. The new baselines for 
each company would be specified in Sec.  82.11.

A. CFCs Subject to Earliest Controls

    As discussed above, under the current regulations Article 5 
allowances are currently calculated as a percentage of the original 
production baseline. Section 601(2) of the CAA and EPA's implementing 
regulations at 40 CFR 82.5 establish the year 1986 as the production 
baseline for Class I, Group I substances. Under the current Sec.  82.9, 
every person apportioned baseline production allowances for Group I 
CFCs received Article 5 allowances equal to 10 percent of their 1986 
baseline for each control period ending before January 1, 1996 (the 
phaseout date), and 15 percent of their baseline for each control 
period thereafter.
    As a result of the Beijing Amendment to the Protocol, Article 2A, 
paragraphs 4-7 state that an industrialized Party's allowable 
production of CFCs 11, 12, 113, 114, and 115 to meet the basic domestic 
needs of Article 5 Parties shall be measured against ``the annual 
average of its production of [these substances] for basic domestic 
needs for the period 1995 to 1997 inclusive.'' However, EPA has more 
recent historical data on CFC exports to developing countries over the 
period 2000-2003 that show much lower levels being exported to Article 
5 countries.
    Using the recent data on exports of CFCs from the U.S. to 
developing countries, specifically for the years 2000-2003, EPA is 
proposing a new baseline of Article 5 allowances which would be less 
than one percent (< 1%) of the 1986 production allowance baseline for 
CFCs. The proposed new baseline for Article 5 allowances for Group I 
CFCs therefore meets the requirement in section 604(e)(2)(B) of the CAA 
to limit Article 5 allowances to no more than 15 percent of the 1986 
production baseline. Since the purpose of adjusting the Article 5 
allowance baselines is to avoid oversupply of CFCs in Article 5 
countries, EPA is proposing to establish the new baselines for Article 
5 allowances based on this more recent historical data. These new 
baselines should be a more accurate starting point for the reduction 
schedule specified in the Protocol.

B. Other Fully Halogenated CFCs

    As discussed above, under the current regulations Article 5 
allowances are calculated as a percentage of the original production 
baseline. Section 601(2) of the CAA and EPA's implementing regulations 
at 40 CFR 82.5 establish the year 1989 as the production baseline for 
Class I, Group III substances. Under the current Sec.  82.9, every 
person apportioned baseline production allowances for Group III CFCs 
received Article 5 allowances equal to 10 percent of their 1989 
baseline for each control period ending before January 1, 1996 (the 
phaseout date), and 15 percent of their baseline for each control 
period thereafter.
    As a result of the Beijing Amendment to the Protocol, Article 2C, 
paragraphs 3-4 state that an industrialized Party's allowable 
production of other fully halogenated CFCs to meet the basic domestic 
needs of Article 5 Parties shall be measured against ``the annual 
average of its production of [these substances] for basic domestic 
needs for the period 1998-2000 inclusive.'' However, EPA has more 
recent historical data on exports of CFCs to developing countries over 
the period 2000-2003 that show much lower levels of CFC being exported 
to Article 5 countries.
    Since there was no export of Class I, Group III substances during 
the 2000-2003 period being proposed as the basis for calculating new 
allocations of Article 5 allowances, today's proposal would establish a 
new baseline of zero. Since the purpose of adjusting the Article 5 
allowance baselines is to reduce the amount of CFCs globally, and more 
recent data should provide a more accurate starting point for the 
reduction schedule, EPA is proposing to establish the new baselines for 
Article 5 allowances based on this more recent historical data.

C. Methyl Bromide

    As discussed above, under the current regulations Article 5 
allowances are calculated as a percentage of the original production 
baseline. Section 601(2) of the CAA and EPA's implementing regulations 
at 40 CFR 82.5 establish the year 1991 as the production baseline for 
Class I, Group VI substances (methyl

[[Page 55485]]

bromide). Under the current Sec.  82.9, every person apportioned 
baseline production allowances for Group VI substances received Article 
5 allowances equal to 15 percent of their 1991 baseline for each 
control period ending before January 1, 2005 (the phaseout date). There 
is currently no regulatory framework in place to allow for the 
production of methyl bromide for export to developing countries past 
the phaseout date. Section VII of this proposed rulemaking proposes to 
amend the current regulations to allow for exempted production of 
methyl bromide for export to Article 5 countries past January 1, 2005 
in accordance with section 604(e)(3) of the CAA.
    As a result of the Beijing Amendment to the Protocol, paragraphs 5-
5 bis of Article 2H stipulate that an industrialized Party's allowable 
production of methyl bromide to meet the basic domestic needs of 
Article 5 Parties shall be measured against ``the annual average of its 
production of [methyl bromide] for basic domestic needs for the period 
1995 to 1998 inclusive.'' EPA is therefore proposing to establish the 
average of each company's production exported to Article 5 countries 
for the years 1995-1998 as the new Article 5 allowance baseline for 
methyl bromide.

VI. What Is EPA's Proposed Schedule To Reflect the Beijing Amendment 
for Phased Reductions of Article 5 Allowances?

    Today's proposed action would establish a schedule for phased 
reductions in the manufacture of certain Class I ODSs to meet the basic 
domestic needs of Article 5 countries in accordance with the 
adjustments to the Protocol agreed to in Beijing. For each control 
period specified in the table in Sec.  82.11, EPA proposes to grant 
each U.S. company the specified percentage of the baseline Article 5 
allowances apportioned to it under Sec.  82.11.
    The idea of reduction schedules for the manufacture of ODSs to meet 
basic domestic needs of developing countries is new to the Protocol and 
to U.S. regulations. While the CAA does not require a reduction 
schedule, such a schedule is a reasonable means of assuring that 
production of Class I substances for this purpose will terminate in 
accordance with the deadlines provided in the Act and in the Protocol. 
In addition, the CAA does not allow EPA to authorize Article 5 
allowances in a manner inconsistent with the Protocol. Thus, today's 
action proposes to freeze and gradually phase out the production of 
ODSs in the United States to meet the basic domestic needs of Article 5 
parties in line with the Protocol's phase down schedules for 
consumption in Article 5 countries. So, every time the developing 
countries have a step down in the percentage of their consumption for a 
Class I ODS, the allowable production in the United States to meet 
those countries' basic domestic needs will mirror that step down. For 
instance, in 2005, developing countries operating under Article 5(1) 
must reduce their consumption of CFCs by 50 percent of their baseline; 
therefore, the amount of Article 5 allowances for producing CFCs to 
meet those countries' basic domestic needs is also reduced by 50 
percent.

A. CFCs Subject to Earliest Controls

    In the Montreal Protocol, Article 2A, paragraphs 5-8 set forth the 
reduction schedule for the production of CFCs 11, 12, 113, 114, and 115 
for basic domestic needs of Article 5 countries. EPA is proposing to 
incorporate this reduction schedule into the phaseout regulations. 
Hence, the Article 5 allowance reduction schedule for production of the 
Class I, Group I controlled substances would be as follows: 50% of the 
Article 5 allowance baseline for the 2006 control period; 15% of 
baseline for each of the control periods from January 1, 2007, to 
December 31, 2009; and 0% (complete phaseout) for the control periods 
beginning January 1, 2010, and thereafter.

B. Other Fully Halogenated CFCs

    Paragraphs 3-5 of Article 2C of the Montreal Protocol establish the 
reduction schedule for the production of other fully halogenated CFCs 
(the Class I, Group III controlled substances) to meet the basic 
domestic needs of Article 5 countries. If EPA were to set a baseline 
other than zero for these CFCs, the reduction schedule for their 
production would be: 80% of baseline for the 2006 control period; 15% 
of baseline for each of the control periods from January 1, 2007 to 
December 31, 2009; and 0% (complete phaseout) for the control periods 
beginning January 1, 2010 and thereafter. However, EPA's preferred 
option is to set a zero baseline based on 2000-2003 data, which would 
make a reduction schedule unnecessary.

C. Methyl Bromide

    Article 2H, paragraphs 5 bis. and 5 ter. of the Montreal Protocol 
set forth the reduction schedule for production of methyl bromide to 
meet the basic domestic needs of Article 5 countries. EPA is proposing 
to incorporate this reduction schedule into the phaseout regulations. 
The reduction schedule for the production of methyl bromide (Class I, 
Group VI controlled substances) would be as follows: 80% of the Article 
5 allowance baseline for each of the control periods from January 1, 
2006 to December 31, 2014; 0% (complete phaseout) starting January 1, 
2015 and thereafter.

VII. What Is the New Timeline for Article 5 Production of Methyl 
Bromide?

    The current regulations have no provision that allows for exempted 
production of methyl bromide for export to Article 5 countries past 
January 1, 2005. This rule proposes to create a new basis for exempted 
production of methyl bromide for export to Article 5 countries beyond 
the 2005 phaseout in the U.S. The methyl bromide phaseout date for 
Article 5 countries is 2015 and allowing continuing U.S. production to 
meet such countries' basic domestic needs up to that phaseout date 
obviates the need to install ODS production capacity in those 
countries. The Protocol allows limited production for this purpose up 
until January 1, 2015. The CAA, in Section 604(e)(3), does not specify 
a termination date for this exemption but does require consistency with 
the Protocol. In addition, section 614 requires the regulations to be 
no less stringent than the Protocol. Therefore, EPA is proposing to 
allow limited production of methyl bromide for export to Article 5 
countries up until January 1, 2015.

VIII. Other Options

    In this section EPA describes another option it considered 
regarding the baseline for CFC production and why it is not the 
Agency's preferred approach. EPA looked at granting allowances to 
companies exporting CFCs to Article 5 countries based on an average of 
data from the range of years specified in Article 2A (for Group I) and 
2C (for Group III) of the Protocol (see section V). Although this is 
not EPA's preferred approach, the Agency is seeking comment on the use 
of these time periods to calculate the baseline.
    EPA prefers a more stringent approach than that described in 
Articles 2A and 2C. As described earlier, observed market indicators 
suggest that there is no shortage of CFCs in the marketplace in Article 
5 countries because the price of CFCs has remained stable over the past 
several years. Also, as described earlier, reported data described in 
the October 2004 TEAP Task Force Report on Basic Domestic Needs 
indicates that CFC supplies are stable.
    In addition, historically the U.S. has not been a major supplier of 
CFCs to

[[Page 55486]]

developing countries. EPA's tracking database shows that the U.S. 
supply of CFCs has been significantly lower than the TEAP report 
indicates. (To view the aggregate data on CFC supply and production by 
the U.S., visit EDOCKET OAR-2005-0151.) Also, the ability to reuse and 
recycle CFCs taken out of refrigeration products provides an additional 
source of supply should demand exceed expectations.

IX. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), the 
Agency must determine whether this proposed regulatory action is 
``significant'' and therefore subject to OMB review and the 
requirements of the Executive Order. The Order defines a 
``significant'' regulatory action as one that is likely to result in a 
rule that may: (1) Have an annual effect on the economy of $100 million 
or more, or adversely affect in a material way the economy, a sector of 
the economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities; (2) create a serious inconsistency or otherwise interfere 
with an action taken or planned by another agency; (3) materially alter 
the budgetary impact of entitlements, grants, user fees, or loan 
programs or the rights and obligations of recipients thereof; or (4) 
raise novel legal or policy issues arising out of legal mandates, the 
President's priorities, or the principles set forth in the Executive 
Order.
    It has been determined by OMB and EPA that this proposed action is 
not a ``significant regulatory action'' under the terms of Executive 
Order 12866, and is therefore not subject to OMB review under the 
Executive Order.

B. Paperwork Reduction Act

    This proposed action does not add any information collection 
requirements or increase burden under the provisions of the Paperwork 
Reduction Act, 44 U.S.C. 3501 et seq. The Office of Management and 
Budget (OMB) has previously approved the information collection 
requirements contained in the existing regulations, 40 CFR part 82, 
under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et 
seq. and has assigned OMB control number 2060-0170, EPA ICR number 
1432. A copy of the OMB approved Information Collection Request (ICR) 
may be obtained from Susan Auby, Collection Strategies Division; U.S. 
Environmental Protection Agency (2822T); 1200 Pennsylvania Avenue, NW., 
Washington, DC 20460 or by calling (202) 566-1672.
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information.
    An Agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.

C. Regulatory Flexibility Act (RFA), as Amended by the Small Business 
Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 et 
seq.

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impact of today's proposed rule on 
small entities, small entity is defined as: (1) A small business that 
is identified by the North American Industry Classification System code 
(NAICS) in the table below; (2) a small governmental jurisdiction that 
is a government of a city, county, town, school district or special 
district with a population of less than 50,000; and (3) a small 
organization that is any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.

----------------------------------------------------------------------------------------------------------------
                                                                                                   SIC small
                                                                                                 business size
                                                                                                  standard (in
                        Category                             NAICS code          SIC code          number of
                                                                                                  employees or
                                                                                                  millions of
                                                                                                    dollars)
----------------------------------------------------------------------------------------------------------------
1. Chemical and Allied Products, NEC...................             422690               5169                100
----------------------------------------------------------------------------------------------------------------

    After considering the economic impacts of today's proposed rule on 
small entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. This 
proposed rule will not impose any requirements on small entities, as it 
regulates large corporations that produce, import, or export Class I 
ODSs. There are no small entities in this regulated industry. We 
continue to be interested in the potential impacts of the proposed rule 
on small entities and welcome comments on issues related to such 
impacts.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
one year. Before promulgating an EPA rule for which a written statement 
is needed, section 205 of the UMRA generally requires EPA to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, most cost-effective, or least burdensome alternative 
that achieves the objectives of the rule. The provisions of section 205 
do not apply when they are inconsistent with applicable law.

[[Page 55487]]

Moreover, section 205 allows EPA to adopt an alternative other than the 
least costly, most cost-effective or least burden some alternative if 
the Administrator publishes with the final rule an explanation why that 
alternative was not adopted. Before EPA establishes any regulatory 
requirements that may significantly or uniquely affect small 
governments, including tribal governments, it must have developed under 
section 203 of the UMRA a small government agency plan. The plan must 
provide for notifying potentially affected small governments, enabling 
officials of affected small governments to have meaningful and timely 
input in the development of EPA regulatory proposals with significant 
Federal intergovernmental mandates, and informing, educating, and 
advising small governments on compliance with the regulatory 
requirements.
    EPA has determined that this proposed rule does not contain a 
Federal mandate that may result in expenditures of $100 million or more 
for State, local, and tribal governments, in the aggregate, or the 
private sector in any one year. This proposed rule imposes stricter 
baselines and reduction schedules for Article 5 allowances and extends 
the availability of an exemption from a regulatory prohibition. It does 
not impose mandates on State, local, or tribal governments and does not 
result in substantial expenditures for the private sector. Thus, 
today's rule is not subject to the requirements of sections 202 or 205 
of the UMRA.
    We determined that this proposed rule contains no regulatory 
requirements that might significantly or uniquely affect small 
governments; therefore, we are not required to develop a plan with 
regard to small governments under section 203. Finally, because this 
proposed rule does not contain a significant intergovernmental mandate, 
the Agency is not required to develop a process to obtain input from 
elected state, local, and tribal officials under section 204.

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.'' This 
proposed rule does not have federalism implications. It will not have 
substantial direct effects on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government, as 
specified in Executive Order 13132. This proposed rule relates to an 
exemption used by large corporations that produce, import, or export 
Class I ODSs. It has no effect on State or local governments. Thus 
Executive Order 13132 does not apply to this rule.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 6, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.''
    This proposed rule does not have tribal implications as specified 
in Executive Order 13175. It will not have substantial direct effects 
on tribal governments, on the relationship between the Federal 
government and Indian tribes, or on the distribution of power and 
responsibilities between the Federal government and Indian tribes, as 
specified in Executive Order 13175. This proposed rule relates to an 
exemption used by large multinational corporations that produce, 
import, or export Class I ODSs. It has no effect on tribal governments. 
Thus Executive Order 13175 does not apply to this proposed rule.

G. Executive Order 13045: Protection of Children From Environmental 
Health & Safety Risks

    Executive Order 13045: ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies 
to any rule that: (1) Is determined to be ``economically significant'' 
under Executive Order 12866, and (2) concerns an environmental health 
or safety risk that EPA has reason to believe may have a 
disproportionate effect on children. If the regulatory action meets 
both criteria, the Agency must evaluate the environmental health or 
safety effects of the planned rule on children, and explain why the 
planned regulation is preferable to other potentially effective and 
reasonably feasible alternatives considered by the Agency.
    While this proposed rule is not subject to the Executive Order 
because it is not economically significant as defined in Executive 
Order 12866, we nonetheless have reason to believe that the 
environmental health or safety risk addressed by this action may have a 
disproportionate effect on children. Depletion of stratospheric ozone 
results in greater transmission of the sun's ultraviolet (UV) radiation 
to the earth's surface. The following studies describe the effects on 
children of excessive exposure to UV radiation: (1) Westerdahl J, 
Olsson H, Ingvar C. ``At what age do sunburn episodes play a crucial 
role for the development of malignant melanoma,'' Eur J Cancer 1994; 
30A: 1647-54; (2) Elwood JM, Jopson J. ``Melanoma and sun exposure: an 
overview of published studies,'' Int J Cancer 1997; 73:198-203; (3) 
Armstrong BK. ``Melanoma: childhood or lifelong sun exposure'' In: 
Grobb JJ, Stern RS, Mackie RM, Weinstock WA, eds. ``Epidemiology, 
causes and prevention of skin diseases,'' 1st ed. London, England: 
Blackwell Science, 1997: 63-6; (4) Whiteman D., Green A. ``Melanoma and 
Sunburn,'' Cancer Causes Control, 1994: 5:564-72; (5) Kricker A, 
Armstrong, BK, English, DR, Heenan, PJ. ``Does intermittent sun 
exposure cause basal cell carcinoma? A case control study in Western 
Australia,'' Int J Cancer 1995; 60: 489-94; (6) Gallagher, RP, Hill, 
GB, Bajdik, CD, et. al. ``Sunlight exposure, pigmentary factors, and 
risk of nonmelanocytic skin cancer I, Basal cell carcinoma,'' Arch 
Dermatol 1995; 131: 157-63; (7) Armstrong, BK. ``How sun exposure 
causes skin cancer: an epidemiological perspective,'' Prevention of 
Skin Cancer. 2004. 89-116.
    The methyl bromide phaseout date for Article 5 countries is 2015 
and allowing continuing U.S. production to meet such countries' basic 
domestic needs avoids the need for those countries to install new ODS 
manufacturing facilities. The effect of extending the availability of 
Article 5 allowances for methyl bromide should be that methyl bromide 
that would otherwise be produced at new facilities in developing 
countries will instead be produced in the U.S. for export to those 
countries. The amount of methyl bromide that will be released to the 
atmosphere should remain the same regardless of the manufacturing 
location. In addition, avoiding the installation of new capacity is one 
means of ensuring that production levels continue to decline. Thus, 
this rule is not expected to increase the impacts on children's

[[Page 55488]]

health from stratospheric ozone depletion.
    The public is invited to submit or identify peer-reviewed studies 
and data, of which EPA may not be aware, that assessed results of early 
life sun exposure.

H. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This proposed rule is not a ``significant energy action'' as 
defined in Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355 
(May 22, 2001)) because it is not a significant regulatory action under 
Executive Order 12866.

I. The National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C. 
272 note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. The NTTAA directs EPA 
to provide Congress, through OMB, explanations when the Agency decides 
not to use available and applicable voluntary consensus standards. 
Today's proposed rulemaking does not involve technical standards. 
Therefore, EPA is not considering the use of any voluntary consensus 
standards.

    Dated: September 14, 2005.
Stephen Johnson,
Administrator.
    Title 40, Code of Federal Regulations, part 82, is amended to read 
as follows:

PART 82--PROTECTION OF STRATOSPHERIC OZONE

    1. The authority citation for part 82 continues to read as follows:

    Authority: 42 U.S.C. 7414, 7601, 7671-7671q.

    2. Section 82.3 is amended by revising the entry for ``Article 5 
allowance'' to read as follows:


Sec.  82.3  Definitions for class I and class controlled substances.

* * * * *
    Article 5 allowances means the allowances apportioned under Sec.  
82.9(a), Sec.  82.11(a)(2), and Sec.  82.18(a).
* * * * *
    3. Section 82.4 is amended by revising paragraphs (b)(1) and (h) to 
read as follows:


Sec.  82.4  Prohibitions for class I controlled substances.

* * * * *
    (b)(1) Effective January 1, 1996, for any Class I, Group I, Group 
II, Group III, Group IV, Group V or Group VII controlled substances, 
and effective January 1, 2005 for any Class I, Group VI controlled 
substances, and effective August 18, 2003, for any Class I, Group VIII 
substance, no person may produce, at any time in any control period 
(except that are transformed or destroyed domestically or by a person 
of another Party) in excess of the amount of conferred unexpended 
essential use allowances or exemptions, or in excess of the amount of 
unexpended critical use allowances, or in excess of the amount of 
unexpended Article 5 allowances as allocated under Sec.  82.9 and Sec.  
82.11, as may be modified under Sec.  82.12 (transfer of allowances) 
for that substance held by that person under the authority of this 
subpart at that time for that control period. Every kilogram of excess 
production constitutes a separate violation of this subpart.
* * * * *
    (h) No person may sell in the U.S. any Class I controlled substance 
produced explicitly for export to an Article 5 country.
* * * * *
    4. Section 82.9 is amended by revising paragraph (a)(4) to read as 
follows:


Sec.  82.9  Availability of production allowances in addition to 
baseline production allowances for Class I controlled substances.

    (a) * * *
    (4) 15 percent of their baseline production allowances for Class I, 
Group IV and Group V controlled substances listed under Sec.  82.5 of 
this subpart for each control period beginning January 1, 1996 until 
January 1, 2010;
* * * * *
    5. Section 82.11 is amended by revising paragraph (a) introductory 
text and adding a new paragraph (a)(2) and (a)(3) to read as follows:


Sec.  82.11  Exports of Class I controlled substances to Article 5 
Parties.

    (a) If apportioned Article 5 allowances under Sec.  82.9(a) or 
Sec.  82.11(a)(2), a person may produce Class I controlled substances, 
in accordance with the prohibitions in Sec.  82.4 and the reduction 
schedule in