Protection of Stratospheric Ozone: The 2006 Critical Use Exemption From the Phaseout of Methyl Bromide, 5985-6010 [06-1019]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 71, Number 24 (Monday, February 6, 2006)]
[Rules and Regulations]
[Pages 5985-6010]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-1019]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[FRL-8028-2]
RIN 2060-AN18


Protection of Stratospheric Ozone: The 2006 Critical Use 
Exemption From the Phaseout of Methyl Bromide

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is taking final action to exempt methyl bromide production 
and import for 2006 critical uses. Specifically, EPA is authorizing 
uses that will qualify for the 2006 critical use exemption, and the 
amount of methyl bromide that may be produced, imported, or made 
available from inventory for those uses in 2006. EPA's action is taken 
under the authority of the Clean Air Act (CAA) and reflects recent 
consensus Decisions taken by the Parties to the Montreal Protocol on 
Substances that Deplete the Ozone Layer (Protocol) at the 16th and 17th 
Meetings of the Parties (MOPs) and the 2nd Extraordinary Meeting of the 
Parties (ExMOP).

DATES: This final rule is effective on February 1, 2006.

ADDRESSES: EPA has established a docket for this action under Docket ID 
No. EPA-OAR-2005-0122. All documents in the docket are listed on the 
https://www.regulations.gov web 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 either electronically through 
www.regulations.gov 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 Docket telephone number is (202) 
566-1742. The Public Reading Room 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: Marta Montoro, Office of Atmospheric 
Programs, Stratospheric Protection Division, Mail Code 6205 J, 
Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., 
Washington, DC 20460; telephone number: (202) 343-9321; fax number: 
(202) 343-2337; e-mail address: mebr.allocation@epa.gov.

SUPPLEMENTARY INFORMATION: This final rule concerns Clean Air Act 
restrictions on the consumption, production, and use of methyl bromide 
(class I, Group VI controlled substance) for critical uses during 
calendar year 2006. Under the Clean Air Act, methyl bromide consumption 
and production was phased out on January 1, 2005 apart from certain 
exemptions, including the critical use exemption and the quarantine and 
preshipment exemption. With this action, EPA is listing the uses that 
will qualify for the 2006 critical use exemption, as well as 
authorizing specific amounts of methyl bromide that may be produced, 
imported, or made available from inventory for critical uses in 2006.
    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 CAA, which states: 
``The provisions of section 553 through 557 * * * of Title 5 shall not, 
except as expressly provided in this subsection, 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 nevertheless is 
acting consistently with the policies underlying APA section 553(d) in 
making this rule effective on February 1, 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 Rulemakings 
Regarding the Critical Use Exemption?
    C. What Are the Approved Critical Uses?
    D. What Are the Uses That May Obtain Methyl Bromide for 
Research?
    E. What Amount of Methyl Bromide Is Necessary for Critical Uses?
    F. What Are the Sources of Critical Use Methyl Bromide?
    G. What Are the Critical Use Allowance Allocations?
    H. What Are the Critical Stock Allowance Allocations?
    I. Clarifications to the Framework Rule
    J. Supplemental Critical Use Exemptions for 2006
VI. Statutory and Executive Order Reviews
    A. Executive Order No. 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility
    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 & 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:

[[Page 5986]]



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                Category                  Examples of regulated entities
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Industry...............................  Producers, Importers and
                                          Exporters of methyl bromide;
                                          Applicators, Distributors of
                                          methyl bromide; Users of
                                          methyl bromide such as farmers
                                          of vegetable crops, fruits and
                                          seedlings, owners of stored
                                          food commodities and
                                          structures such as grain mills
                                          and processors, and government
                                          and non-government
                                          researchers.
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    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 be potentially 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 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 United States 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 U.S. 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 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 with a final rule (68 FR 238) on January 2, 2003. 
Information on methyl bromide can be found at https://www.epa.gov/ozone/
mbr and https://www.unep.org/ozone or by contacting EPA's 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. Because of this status, a 
restricted use pesticide is 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 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 authorize critical use exemptions through their Decisions.
    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 Section 82.7 of the rule, 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. 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 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. 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. 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 in 
the Federal Register (the ``Framework Rule'') 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 available inventory and new production 
or import to meet approved critical uses. With this action, EPA is 
authorizing the uses that will qualify as approved critical uses in 
2006 and the

[[Page 5987]]

amount of the 2006 critical use exemption.
    This action reflects Decision XVI/2, taken at the Parties' 16th 
Meeting in November 2004; Decision Ex.II/I, taken at the Second 
Extraordinary Meeting of the Parties in July 2005; and Decision XVII/9, 
taken at the Parties' 17th Meeting in December 2005. In accordance with 
Article 2H(5), the Parties have issued several Decisions pertaining to 
the critical use exemption. These include Decision IX/6, which sets 
forth criteria for review of proposed critical uses, as well as the 
Decisions noted above. For a discussion of the relationship between the 
relevant provisions of the CAA and Article 2H of the Protocol, and the 
extent to which EPA takes into account Decisions of the Parties that 
interpret Article 2H, refer to the December 23, 2004 Framework Rule (69 
FR 76984-76985). Briefly, EPA regards certain provisions of Decisions 
IX/6, XVI/2, Ex.II/1, and XVII/9 as subsequent consensus agreements of 
the Parties that address the interpretation and application of the 
critical use provision in Article 2H(5) of the Protocol. In this 
action, EPA is following the relevant terms of these Decisions. This 
will ensure consistency with the Montreal Protocol and satisfy the 
requirements of Section 604(d)(6) and Section 614(b) of the Clean Air 
Act.
    In Decision XVI/2, taken in November 2004, the Parties to the 
Protocol agreed as follows: ``for the agreed critical-use categories 
for 2006, set forth in section IIA to the annex to the present Decision 
for each Party, to permit, subject to the conditions set forth in 
Decision Ex.I/4, to the extent those conditions are applicable, the 
levels of production and consumption for 2006 set forth in section IIB 
to the annex to the present Decision which are necessary to satisfy 
critical uses, with the understanding that additional levels of 
production and consumption and categories of uses may be approved by 
the Meeting of the Parties to the Montreal Protocol in accordance with 
Decision IX/6.'' Section IIA of the Annex to Decision XVI/2 lists the 
following critical use categories for the U.S.: Cucurbits--field; dried 
fruit and nuts; forest nursery seedlings; nursery stock--fruit trees, 
raspberries, roses; strawberry runners; turfgrass; dry commodities/
cocoa beans; dry commodities/structures; eggplant/field; mills and 
processors; peppers/field; strawberry fruit/field; tomato/field; and 
orchard replant with a total agreed critical-use level of 6,897,680 
kilograms, which is equivalent to 27% of the U.S. 1991 methyl bromide 
consumption baseline.
    In Decision Ex.II/1, taken in July 2005, the Parties to the 
Protocol agreed as follows: ``for the agreed critical uses for 2006, 
set forth in table A of the annex to the present Decision, to permit, 
subject to the conditions set forth in the present Decision and in 
Decision Ex. I/4, to the extent those conditions are applicable, the 
supplementary levels of production and consumption for 2006 set forth 
in table B of the annex to the present Decision which are necessary to 
satisfy critical uses, with the understanding that additional levels 
and categories of uses may be approved by the Seventeenth Meeting of 
the Parties in accordance with Decision IX/6.'' Table A of the Annex to 
Decision Ex.II/1 lists the following critical use categories for the 
U.S.: Ornamentals; dry-cured ham; dry commodities/structures (cocoa 
beans); dry commodities/structures (processed foods, herbs and spices, 
dried milk and cheese processing facilities); eggplant--field, for 
research only; mills and processors; peppers--field; strawberry fruit--
field; tomato--field with a total agreed critical-use level of 
1,117,003 kilograms, which is equivalent to 5% of the U.S. 1991 methyl 
bromide consumption baseline. When combined, the agreed critical use 
levels for 2006 from Decision XVI/2 and Decision Ex.II/1 total 
8,074,683 kilograms, which is equivalent to 32% of the U.S. 1991 methyl 
bromide consumption baseline. Decision XVII/9, taken at the 17th 
Meeting of the Parties in December 2005, authorizes an additional 26.4% 
of baseline for 6,749,000 kilograms for 2007, and an additional 
supplemental request of 7,070 kilograms for 2006. This supplemental 
amount is discussed more fully in Section J below. Based, in part, on 
the applications underlying the U.S. 2006 nomination, the extensive 
review of those applications culminating in the preparation of that 
nomination, and the Decisions noted above, EPA is modifying Columns B 
and C of Appendix L to 40 CFR Part 82, Subpart A to reflect agreed 
critical use categories, locations of use, and limiting critical 
conditions applicable to the 2006 control period.
    The question of whether, and to what extent, EPA should adjust the 
total critical use level agreed by the Parties for 2006 is addressed in 
Section E below. The question of what amount of the total should come 
from new production or import, and what amount should come from pre-
phaseout inventories, is addressed in Section F below. For the reasons 
given in those sections, and based, in part, on the applications 
underlying the U.S. 2006 nomination, the extensive review of those 
applications culminating in the preparation of that nomination, and the 
Decisions noted above, EPA is modifying the table in 40 CFR 82.8 to 
reflect the amount of methyl bromide that may be produced or imported, 
and sold from pre-phaseout inventories, for the 2006 control period.

V. What Is the Critical Use Exemption Process?

A. Background of the Process

    Starting in 2002, EPA began notifying applicants as to the 
availability of an application process for a critical use exemption to 
the methyl bromide phaseout. On May 8, 2003, the Agency published a 
notice in the Federal Register (68 FR 24737) announcing the deadline to 
apply for critical uses for the 2006 calendar year, and directing 
applicants to announcements posted on EPA's methyl bromide Web site at 
https://www.epa.gov/ozone/mbr. Applicants were told they could apply as 
individuals or as part of a group of users (a ``consortium'') who face 
the same limiting critical conditions (i.e., specific conditions which 
establish a critical need for methyl bromide). This process has been 
repeated on an annual basis since then. The critical use exemption is 
designed to meet the needs of methyl bromide users who do not have 
technically and economically feasible alternatives available.
    The criteria for the exemption are delineated 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 annual requests for critical use exemption 
applications published in the Federal Register, applicants have 
provided information supporting their position that they have no 
technically and economically feasible alternatives to methyl bromide 
available to them. Applicants for the exemption have submitted 
information on their use of methyl bromide, on research into the use of 
alternatives to methyl bromide, on efforts to minimize

[[Page 5988]]

use of methyl bromide and reduce emissions, and on the specific 
technical and economic research results of testing alternatives to 
methyl bromide.
    EPA's December 23, 2004, Framework Rule describing the operational 
framework for the critical use exemption (69 FR 76982) established the 
majority of critical uses for the 2005 calendar year. Today's action 
authorizes exemptions for 2006 reflecting information that the U.S. 
Government submitted to the Protocol's Ozone Secretariat in its annual 
nomination submission in February 2004, as approved by the Parties in 
November 2004, July 2005, and December 2005. The domestic review 
process is discussed in detail in a memo titled ``Development of 2003 
Nomination for a Critical Use Exemption for Methyl Bromide for the 
United States of America'' on Docket ID OAR-2005-0122. Briefly, the 
U.S. Government reviews applications using the criteria in Decision IX/
6 and creates a package for submission to the Ozone Secretariat of the 
Protocol (the ``critical use nomination'' or CUN). The CUNs of various 
countries are then reviewed by the Methyl Bromide Technical Options 
Committee (MBTOC) and the Technical and Economic Assessment Panel 
(TEAP), which are independent advisory bodies to the Parties. These 
bodies make recommendations to the Parties regarding the nominations.
    On February 7, 2004, the U.S. Government submitted the second U.S. 
Nomination for a Critical Use Exemption for Methyl Bromide to the Ozone 
Secretariat of the United Nations Environment Programme. This second 
nomination contained a supplemental request for critical use methyl 
bromide for 2005 and the initial request for 2006. In June 2004, MBTOC 
sent questions to the U.S. Government concerning technical and economic 
issues in the nomination. The U.S. Government transmitted its response 
on August 12, 2004. The U.S. submitted a revised request in conjunction 
with ``The U.S. Nomination for Critical Uses for Methyl Bromide in 2007 
and Beyond.'' This revised request was for an additional amount of 
622,053 kilograms of methyl bromide for a total of 2,844,985 kilograms 
of methyl bromide for the year 2006. This revised request was included 
in the U.S. rebuttal to MBTOC's recommendation issued in its October 
2004 report. These documents, together with reports by the advisory 
bodies noted above, can be accessed on Docket ID OAR-2005-0122.
    EPA received five comments requesting the Agency not to 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. In Decisions XVI/2, Ex II/1, and XVII/9, 
the Parties decided to authorize an exemption for uses nominated by the 
United States. EPA, in conjunction with other U.S. Government entities, 
spent substantial time reviewing applications for critical use 
exemptions and preparing a nomination due to the lack of technically 
and economically feasible alternatives for the nominated uses. 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 Rulemakings 
Regarding the Critical Use Exemption?

    EPA's December 23, 2004 Framework Rule (69 FR 76982) established 
the framework for the critical use exemption in the U.S., including 
trading provisions and recordkeeping and reporting obligations. The 
Framework Rule defines the terms ``critical use allowances'' (CUAs) and 
``critical stock allowances'' (CSAs) at 40 CFR 82.3. Each allowance 
represents the right to produce or import, or to sell from inventory, 
respectively, one kilogram of methyl bromide for an approved critical 
use. For example, a distributor with 100 CSAs may sell 100 kilograms of 
pre-phaseout methyl bromide from inventory for an approved critical 
use. Today's action authorizes the uses that will qualify as approved 
critical uses for 2006 and allocates CUAs and CSAs for those uses. In 
the future, EPA will continue to undertake rulemakings that address 
both the approved critical uses and the amounts of methyl bromide to be 
allocated for critical uses in specific control periods.
    On August 30, 2005, EPA published a direct final rule and 
concurrent proposal relating to supplemental critical use exemptions 
for 2005 (70 FR 51270). These recent notices in the Federal Register 
addressed three additional uses as well as additional CSAs for 
supplementary amounts of critical use methyl bromide in 2005. EPA 
received adverse comments on the direct final rule and published a 
withdrawal notice in the Federal Register on October 18, 2005 (70 FR 
60443), which stopped the rule from going into effect. EPA addressed 
the comments and published a final rule for supplemental 2005 CSAs and 
uses in the Federal Register on December 13, 2005 (70 FR 73604). In 
this action, the Agency is finalizing: (1) The list of uses that 
qualify for the critical use exemption in 2006; and (2) the amounts of 
methyl bromide that may be produced or imported, or supplied from pre-
phaseout inventories, for those uses in 2006.
    In the proposed rulemaking, published on October 27, 2005 (70 FR 
62030), EPA sought comment on critical use exemptions for the 2006 
calendar year. Only discrete, specific 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 many of 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 ID OAR-2005-0122.
    With respect to the critical use exemption regulatory process 
generally, EPA received eight comments expressing concern about the 
late publication of the proposed rule. EPA understands this concern but 
notes that the Second Extraordinary Meeting of the Parties, where the 
final 2006 amounts for critical uses in the U.S. were authorized by the 
Parties, did not take place until July 1, 2005.
    EPA received one comment asking how the critical use exemption 
process will be affected by the enforcement of ISPM 15 (the 
international standard for

[[Page 5989]]

trade in wood packaging material, including dunnage). EPA notes that 
ISPM 15 is unrelated to the critical use exemption process.
    EPA received two comments concerning the term significant market 
disruption, as described in Decision IX/6. One commenter stated that 
the proposal was flawed because EPA does not define significant market 
disruption. 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 E-Dockets OAR-2003-0017, OAR-2004-0506, and OAR-2005-
0122. The commenter states 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 
E-docket 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 commodity market, demand or supply, 
would result in market disruption.'' That is, a significant market 
disruption could be experienced on the demand side as an increase in 
price, as noted by the commenter, or on the supply side if growers or 
processors experience a loss of production or delays in production. For 
example, if the loss of methyl bromide in strawberry production 
resulted in significant production decreases--and loss of grower 
income--EPA could determine that it constitutes 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 
representative 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 
shortages and 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.
    One commenter, in requesting a clearer definition of significant 
market disruption, provided an example of a situation that it did not 
believe would constitute a significant market disruption. The example 
was a price increase of less than 1 cent per pound of flour as a result 
of the use of a methyl bromide alternative. In analyzing this example, 
however, EPA would look not only at the market price, but also at the 
effects on users, bearing in mind the dimensions explained above.

C. What Are the Approved Critical Uses?

    In Decision XVI/2, taken in November 2004, the Parties to the 
Protocol agreed as follows: ``for the agreed critical-use categories 
for 2006, set forth in section IIA to the annex to the present Decision 
for each Party, to permit, subject to the conditions set forth in 
Decision Ex.I/4, to the extent those conditions are applicable, the 
levels of production and consumption for 2006 set forth in section IIB 
to the annex to the present Decision which are necessary to satisfy 
critical uses, with the understanding that additional levels of 
production and consumption and categories of uses may be approved by 
the Meeting of the Parties to the Montreal Protocol in accordance with 
Decision IX/6.'' Section IIA of the Annex to Decision XVI/2 lists the 
following critical use categories for the U.S.: Cucurbits--field; dried 
fruit and nuts; forest nursery seedlings; nursery stock--fruit trees, 
raspberries, roses; strawberry runners; turfgrass; dry commodities/
cocoa beans; dry commodities/structures; eggplant field; mills and 
processors; peppers field; strawberry fruit field; tomato field; and 
orchard replant. These categories represent a total agreed critical-use 
level for 2006 of 6,897,680 kilograms, which is equivalent to 27% of 
the U.S. 1991 methyl bromide consumption baseline.
    In Decision Ex.II/1, taken in July 2005, the Parties to the 
Protocol agreed as follows: ``for the agreed critical uses for 2006, 
set forth in table A of the annex to the present Decision, to permit, 
subject to the conditions set forth in the present Decision and in 
Decision Ex. I/4, to the extent those conditions are applicable, the 
supplementary levels of production and consumption for 2006 set forth 
in table B of the annex to the present Decision which are necessary to 
satisfy critical uses, with the understanding that additional levels 
and categories of uses may be approved by the Seventeenth Meeting of 
the Parties in accordance with Decision IX/6.'' Table A of the Annex to 
Decision Ex.II/1 lists the following critical use categories for the 
U.S.: Ornamentals; dry-cured ham; dry commodities/structures (cocoa 
beans); dry commodities/structures (processed foods, herbs and spices, 
dried milk and cheese processing facilities); eggplant--field, for 
research only; mills and processors; peppers--field; strawberry fruit--
field; tomato--field. These categories represent an additional agreed 
critical-use level for 2006 of 1,117,003 kilograms, which is equivalent 
to 5% of the U.S. 1991 methyl bromide consumption baseline. When 
combined, the agreed critical-use levels for 2006 from Decision XVI/2 
and from Decision Ex.II/1 total 8,074,683 kilograms, which is 
equivalent to 32% of the U.S. 1991 methyl bromide consumption baseline. 
Based, in part, on the applications underlying the U.S. 2006 
nomination, the extensive review of those applications culminating in 
the preparation of that nomination, and the Decisions noted above, EPA 
is modifying Columns B and C of Appendix L to 40 CFR Part 82, Subpart A 
to reflect agreed critical-use categories.
    Under the December 23, 2004, Framework Rule (69 FR 76982), an 
approved critical user may obtain access to exempted production/import 
and limited inventories of pre-phaseout methyl bromide inventory, the 
combination of which constitute the supply of ``critical use methyl 
bromide'' intended to meet the needs of agreed critical uses.
    As set out in the Framework Rule, an approved critical user is a 
self-identified entity who meets the following requirements:
    (1) For the applicable control period, applied to EPA for a 
critical use exemption or is a member of a consortium that applied to 
EPA for a critical use exemption for a use and location of use that was 
included in the U.S. nomination, authorized by a Decision of the 
Parties to the Montreal Protocol, and then finally determined by EPA in 
a notice-and-comment rulemaking to be an approved critical use, and
    (2) Has an area in the applicable location of use that requires 
methyl bromide fumigation because the user reasonably expects that the 
area will be subject to a limiting critical condition during the 
applicable control period.

[[Page 5990]]

    Using these criteria, an approved critical user could be a tomato 
farmer in Florida whose farm is over karst topography, but would not 
include a tomato farmer in Oklahoma even if he too has a farm over 
karst topography because no exemption application was filed on behalf 
of Oklahoma tomato farmers. Similarly, a Florida tomato farmer who did 
not have a field with karst topography, or one of the other limiting 
critical conditions specified in this rule, would not be an approved 
critical user because the circumstance of the use is not an approved 
critical use.
    A ``limiting critical condition'' is the basis on which the 
critical need for methyl bromide is demonstrated and authorized. It is 
defined as ``the regulatory, technical, and economic circumstances * * 
* that establish conditions of critical use of methyl bromide in a 
fumigation area.'' 40 CFR 82.3. The limiting critical condition placed 
on a use category reflects certain regulatory, technical, or economic 
factors that either prohibit the use of alternatives or represent the 
lack of a technically or economically feasible alternative for that use 
or circumstance. For example, EPA may determine that a critical use 
exemption for tomatoes is only necessary for areas of tomato production 
in karst topography even if the EPA received applications for all of 
U.S. fresh market tomato production. In this example, not all tomato 
growers would be eligible to acquire exempted critical use methyl 
bromide. Only those growers with production in an area with the 
limiting critical condition of karst topography would have access to 
critical use methyl bromide. Another example is as follows: EPA 
received applications for exemptions for all U.S. grain milling 
companies that are members of the North American Milling Association 
(NAMA). The Parties authorized the exemption because grain milling 
companies have a critical need for methyl bromide because the 
alternatives can not be used, in part, due to corrosivity to electronic 
equipment. Thus, one of the limiting critical conditions for this 
critical use category is the presence of sensitive electronic equipment 
subject to corrosion associated with fumigation with the alternative. 
All grain mills that are members of NAMA that have sensitive electronic 
equipment would be eligible to acquire and use critical use methyl 
bromide.
    EPA is authorizing the critical uses and limiting critical 
conditions for the year 2006 based on its assessment of the technical 
and economic feasibility of alternatives and the potential for a 
significant market disruption if methyl bromide were not available for 
the uses authorized for 2006. This authorization is based on the 
information submitted by CUE applicants, as well as public and 
proprietary data sources. The CUE applications (except to the extent 
claimed confidential), the U.S. nomination, the questions and answers 
between the MBTOC and the U.S. Government about the nomination, and 
procedural memos are all available on Docket ID OAR-2005-0122. Data 
submitted by the CUE applicants served as a basis for the nomination. 
EPA and other government experts also sought data from multiple other 
sources, including but not limited to the National Agricultural 
Statistics Service of the U.S. Department of Agriculture, the State of 
California Department of Pesticide Regulation, and proprietary 
agricultural databases available to EPA. All of the CUE applications 
underwent a rigorous review by highly qualified technical experts. A 
detailed explanation of the nomination process, including the criteria 
used by expert reviewers, is available in a memo titled ``Development 
of the 2003 Nomination for a Critical Use Exemption for Methyl Bromide 
from the United States of America'' on Docket ID OAR-2005-0122. The 
memo was originally written to describe the process leading to the 2005 
critical use exemption rules, but it applies generally to the process 
leading to this action.
    The U.S. Government, in developing the nomination, defined the 
limiting critical conditions for which exempted methyl bromide was 
being sought. The U.S. Government used the information referenced above 
to determine: (a) Whether the lack of availability of methyl bromide 
for a particular use would result in significant market disruption, and 
(b) whether there were any technically and economically feasible methyl 
bromide alternatives available to the user. The analysis was described 
in the U.S. critical use nomination. The nomination was then sent to 
the Parties to the Protocol, and the Parties used the information in 
the nomination and the report from the MBTOC (which was based in part 
on the iterative exchange of questions and answers with the U.S. 
Government) as the basis for the Decisions that authorized critical 
uses.
    Based on the information described above, EPA determined that the 
uses in Table I, with the limiting critical conditions specified, 
qualify to obtain and use critical use methyl bromide in 2006, as 
discussed in Section E. However, as discussed in Section E, some of the 
circumstances for some of the critical use categories have changed due 
to recent registrations of an alternative and therefore EPA is 
decreasing the total CUE level for 2006. EPA has determined, based on 
the U.S. nomination and its supporting documents, that users who are in 
a specific geographic location, identified below, or who are members of 
a specific industry consortium, identified below, or companies 
specifically identified below, are approved critical users provided 
that such users are subject to the specified limiting critical 
condition(s).
    EPA notes the endorsement of emission minimization techniques in 
paragraph 6 of Decision Ex.II/1 and urges the users listed in Table I 
to use ``emission minimization techniques such as virtually impermeable 
films, barrier film technologies, deep shank injection and/or other 
techniques that promote environmental protection, whenever technically 
and economically feasible.'' Indeed, many emissions minimization 
techniques are already being applied, some of which are required in 
accordance with methyl bromide label requirements. Users should make 
every effort to decrease overall emissions of methyl bromide by 
implementing such measures, to the extent consistent with state and 
local laws and regulations. EPA notes that research continues to be 
conducted on the potential to reduce application rates and emissions 
using high-barrier films.

                    Table I.--Approved Critical Uses
------------------------------------------------------------------------
                                     Column B
  Column A  Approved critical   Approved critical    Column C  Limiting
             uses               user and location   critical conditions
                                      of use
------------------------------------------------------------------------
Pre-Plant Uses:

[[Page 5991]]

 
    Cucurbits.................  (a) Michigan       with a reasonable
                                 growers.           expectation that one
                                                    or more of the
                                                    following limiting
                                                    critical conditions
                                                    either already exist
                                                    or could occur
                                                    without methyl
                                                    bromide fumigation:
                                                    moderate to severe
                                                    soilborne fungal
                                                    disease infestation,
                                                    or moderate to
                                                    severe disease
                                                    infestation could
                                                    occur without methyl
                                                    bromide fumigation;
                                                    or with a need for
                                                    methyl bromide for
                                                    research purposes.
                                (b) Southeastern   with a reasonable
                                 U.S. except        expectation that one
                                 Georgia limited    or more of the
                                 to growing         following limiting
                                 locations in       critical conditions
                                 Alabama,           either already exist
                                 Arkansas,          or could occur
                                 Kentucky,          without methyl
                                 Louisiana, North   bromide fumigation:
                                 Carolina, South    moderate to severe
                                 Carolina,          yellow or purple
                                 Tennessee, and     nutsedge
                                 Virginia.          infestation, or to a
                                                    lesser extent:
                                                    fungal disease
                                                    infestation and root
                                                    knot nematodes; or
                                                    with a need for
                                                    methyl bromide for
                                                    research purposes.
                                (c) Georgia        with a reasonable
                                 growers.           expectation that one
                                                    or more of the
                                                    following limiting
                                                    critical conditions
                                                    either already exist
                                                    or could occur
                                                    without methyl
                                                    bromide fumigation:
                                                    moderate to severe
                                                    yellow or purple
                                                    nutsedge
                                                    infestation,
                                                    moderate to severe
                                                    fungal disease
                                                    infestation, or to a
                                                    lesser extent: root
                                                    knot nematodes; or
                                                    with a need for
                                                    methyl bromide for
                                                    research purposes.
    Eggplant..................  (a) Florida        with a reasonable
                                 growers.           expectation that one
                                                    or more of the
                                                    following limiting
                                                    critical conditions
                                                    either already exist
                                                    or could occur
                                                    without methyl
                                                    bromide fumigation:
                                                    moderate to severe
                                                    yellow or purple
                                                    nutsedge
                                                    infestation, or
                                                    moderate to severe
                                                    nematodes, or
                                                    moderate to severe
                                                    disease infestation,
                                                    or restrictions on
                                                    alternatives due to
                                                    karst geology; or
                                                    with a need for
                                                    methyl bromide for
                                                    research purposes.
                                (b) Georgia        with a reasonable
                                 growers.           expectation that one
                                                    or more of the
                                                    following limiting
                                                    critical conditions
                                                    either already exist
                                                    or could occur
                                                    without methyl
                                                    bromide fumigation:
                                                    moderate to severe
                                                    yellow or purple
                                                    nutsedge
                                                    infestation, or
                                                    moderate to severe
                                                    nematodes, or
                                                    moderate to severe
                                                    pythium root and
                                                    collar rots, or
                                                    moderate to severe
                                                    southern blight
                                                    infestation, and to
                                                    a lesser extent:
                                                    crown and root rot;
                                                    or with a need for
                                                    methyl bromide for
                                                    research purposes.
                                (c) Michigan       with a reasonable
                                 growers.           expectation that
                                                    moderate to severe
                                                    soilborne fungal
                                                    disease infestation
                                                    could occur without
                                                    methyl bromide
                                                    fumigation; or with
                                                    a need for methyl
                                                    bromide for research
                                                    purposes.
    Forest Nursery Seedlings..  (a) Members of     with a reasonable
                                 the Southern       expectation that one
                                 Forest Nursery     or more of the
                                 Management         following limiting
                                 Cooperative        critical conditions
                                 limited to         already either exist
                                 growing            or could occur
                                 locations in       without methyl
                                 Alabama,           bromide fumigation:
                                 Arkansas,          moderate to severe
                                 Florida,           yellow or purple
                                 Georgia,           nutsedge
                                 Louisiana,         infestation, or
                                 Mississippi,       moderate to severe
                                 North Carolina,    disease infestation.
                                 Oklahoma, South
                                 Carolina,
                                 Tennessee, Texas
                                 and Virginia.
                                (b) International  with a reasonable
                                 Paper and its      expectation that one
                                 subsidiaries       or more of the
                                 limited to         following limiting
                                 growing            critical conditions
                                 locations in       already either exist
                                 Alabama,           or could occur
                                 Arkansas,          without methyl
                                 Georgia, South     bromide fumigation:
                                 Carolina and       moderate to severe
                                 Texas.             yellow or purple
                                                    nutsedge
                                                    infestation, or
                                                    moderate to severe
                                                    disease infestation.
                                (c) Public         with a reasonable
                                 (government-       expectation that one
                                 owned) seeding     or more of the
                                 nurseries in the   following limiting
                                 states of          critical conditions
                                 Illinois,          either already exist
                                 Indiana,           or could occur
                                 Kentucky,          without methyl
                                 Maryland,          bromide fumigation:
                                 Missouri, New      moderate to severe
                                 Jersey, Ohio,      weed infestation
                                 Pennsylvania,      including purple and
                                 West Virginia      yellow nutsedge
                                 and Wisconsin.     infestation, or
                                                    moderate to severe
                                                    Canada thistle
                                                    infestation, or
                                                    moderate to severe
                                                    nematodes, and to a
                                                    lesser extent:
                                                    fungal disease
                                                    infestation.
                                (d) Weyerhaeuser   with a reasonable
                                 Company and its    expectation that one
                                 subsidiaries       or more of the
                                 limited to         following limiting
                                 growing            critical conditions
                                 locations in       already either exist
                                 Alabama,           or could occur
                                 Arkansas, North    without methyl
                                 Carolina and       bromide fumigation:
                                 South Carolina.    moderate to severe
                                                    yellow or purple
                                                    nutsedge
                                                    infestation,
                                                    moderate to severe
                                                    disease infestation,
                                                    and to a lesser
                                                    extent: nematodes
                                                    and worms.
                                (e) Weyerhaeuser   with a reasonable
                                 Company and its    expectation that one
                                 subsidiaries       or more of the
                                 limited to         following limiting
                                 growing            critical conditions
                                 locations in       already either exist
                                 Washington and     or could occur
                                 Oregon.            without methyl
                                                    bromide fumigation:
                                                    moderate to severe
                                                    yellow nutsedge
                                                    infestation, or
                                                    moderate to severe
                                                    fungal disease
                                                    infestation.
                                (f) Michigan       with a reasonable
                                 growers.           expectation that one
                                                    or more of the
                                                    following limiting
                                                    critical conditions
                                                    already either exist
                                                    or could occur
                                                    without methyl
                                                    bromide fumigation:
                                                    moderate to severe
                                                    disease infestation,
                                                    moderate to severe
                                                    Canada thistle
                                                    infestation,
                                                    moderate to severe
                                                    nutsedge
                                                    infestation, and to
                                                    a lesser extent:
                                                    nematodes.

[[Page 5992]]

 
                                (g) Michigan       with a reasonable
                                 herbaceous         expectation that one
                                 perennials         or more of the
                                 growers.           following limiting
                                                    critical conditions
                                                    already exist or
                                                    could occur without
                                                    methyl bromide
                                                    fumigation: moderate
                                                    to severe nematodes,
                                                    moderate to severe
                                                    fungal disease
                                                    infestation, and to
                                                    a lesser extent:
                                                    yellow nutsedge and
                                                    other weeds
                                                    infestation.
    Orchard Nursery Seedlings.  (a) Members of     with a reasonable
                                 the Western        expectation that one
                                 Raspberry          or more of the
                                 Nursery            following limiting
                                 Consortium         critical conditions
                                 limited to         already either
                                 growing            exists or could
                                 locations in       occur without methyl
                                 California and     bromide fumigation:
                                 Washington         moderate to severe
                                 (Driscoll's        nematode
                                 Raspberries and    infestation, medium
                                 their contract     to heavy clay soils,
                                 growers in         or a prohibition on
                                 California and     the use of 1,3-
                                 Washington).       dichloropropene
                                                    products due to
                                                    reaching local
                                                    township limits on
                                                    the use of this
                                                    alternative; or with
                                                    a need for methyl
                                                    bromide for research
                                                    purposes.
                                (b) Members of     with a reasonable
                                 the California     expectation that one
                                 Association of     or more of the
                                 Nurserymen-        following limiting
                                 Deciduous Fruit    critical conditions
                                 and Nut Tree       already either
                                 Growers.           exists or could
                                                    occur without methyl
                                                    bromide fumigation:
                                                    moderate to severe
                                                    nematodes, medium to
                                                    heavy clay soils, or
                                                    a prohibition on the
                                                    use of 1,3-
                                                    dichloropropene
                                                    products due to
                                                    reaching local
                                                    township limits on
                                                    the use of this
                                                    alternative; or with
                                                    a need for methyl
                                                    bromide for research
                                                    purposes.
                                (c) California     with a reasonable
                                 rose nurseries.    expectation that one
                                                    or more of the
                                                    following limiting
                                                    critical conditions
                                                    already either
                                                    exists or could
                                                    occur without methyl
                                                    bromide fumigation: