Protection of Stratospheric Ozone: The 2012 Critical Use Exemption From the Phaseout of Methyl Bromide, 65139-65153 [2011-27186]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 76, Number 203 (Thursday, October 20, 2011)]
[Proposed Rules]
[Pages 65139-65153]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-27186]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[EPA-HQ-OAR-2009-0277; FRL-9481-9]
RIN 2060-AQ83


Protection of Stratospheric Ozone: The 2012 Critical Use 
Exemption From the Phaseout of Methyl Bromide

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing uses that qualify for the 2012 critical use 
exemption and the amount of methyl bromide that may be produced, 
imported, or supplied from existing pre-phaseout inventory for those 
uses in 2012. EPA is taking action under the authority of the Clean Air 
Act to reflect a recent consensus decision taken by the Parties to the 
Montreal Protocol on Substances that Deplete the Ozone Layer at the 
Twenty-Second Meeting of the Parties. EPA is seeking comment on the 
list of critical uses and on EPA's determination of the amounts of 
methyl bromide needed to satisfy those uses.

DATES: Comments must be submitted by November 21, 2011. Any party 
requesting a public hearing must notify the contact person listed below 
by 5 p.m. Eastern Standard Time on October 25, 2011. If a hearing is 
requested it will be held on November 4, 2011 and comments will be due 
to the agency December 5, 2011. EPA will post information regarding a 
hearing, if one is requested, on the Ozone Protection Web site https://
www.epa.gov/ozone/strathome.html. Persons interested in attending a 
public hearing should consult with the contact person below regarding 
the location and time of the hearing.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2009-0277, by one of the following methods:
     https://www.regulations.gov: Follow the on-line 
instructions for submitting comments.
     E-mail: a-and-r-Docket@epa.gov.
     Fax: (202) 566-9744.
     Phone: (202) 566-1742.
     U.S. Mail: Docket EPA-HQ-OAR-2009-0277, U.S. Environmental 
Protection Agency, EPA Docket Center, Air and Radiation Docket, Mail 
Code 28221T, 1200 Pennsylvania Avenue, NW., Washington, DC 20460.
     Hand Delivery or Courier: Docket EPA-HQ-OAR-2009-0277, EPA 
Docket Center--Public Reading Room, EPA West Building, Room 3334, 1301 
Constitution Avenue, NW., Washington, DC 20004. 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 Docket ID No. EPA-HQ-OAR-
2009-0277. 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.regulations.gov, 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 https://www.regulations.gov or e-mail. The https://www.regulations.gov Web site 
is an ``anonymous access'' system, 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 https://www.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, any form of encryption, and be free of 
any defects or viruses. For additional information about EPA's public 
docket visit the EPA Docket Center homepage at https://www.epa.gov/epahome/dockets.htm.

FOR FURTHER INFORMATION CONTACT: For further information about this 
proposed rule, contact Jeremy Arling by telephone at (202) 343-9055, or 
by e-mail at arling.jeremy@epa.gov or by mail at U.S. Environmental 
Protection Agency, Stratospheric Protection Division, Stratospheric 
Program Implementation Branch (6205J), 1200 Pennsylvania Avenue, NW., 
Washington, DC 20460. You may also visit the methyl bromide section of 
the Ozone Depletion Web site of EPA's Stratospheric Protection Division 
at https://www.epa.gov/ozone/mbr for further information about the 
methyl bromide critical use exemption, other Stratospheric Ozone 
Protection regulations, the science of ozone layer depletion, and 
related topics.

SUPPLEMENTARY INFORMATION: This proposed rule concerns Clean Air Act 
(CAA) restrictions on the consumption, production, and use of methyl 
bromide (a Class I, Group VI controlled substance) for critical uses 
during calendar year 2012. Under the Clean Air Act, methyl bromide 
consumption (consumption is defined under the CAA as production plus 
imports minus exports) and production were phased out on January 1, 
2005, apart from allowable exemptions, such as the critical use 
exemption and the quarantine and preshipment (QPS) exemption. With this 
action, EPA is proposing and seeking comment on the uses that will 
qualify for the 2012

[[Page 65140]]

critical use exemption as well as specific amounts of methyl bromide 
that may be produced and imported, or sold from pre-phaseout inventory 
(also referred to as ``stocks'' or ``inventory'') for proposed critical 
uses in 2012.

Table of Contents

I. General Information
    A. Regulated Entities
    B. What should I consider when preparing my comments?
II. What is methyl bromide?
III. What is the background to the phaseout regulations for ozone-
depleting substances?
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 proposed rule relate to previous critical use 
exemption rules?
    C. Proposed Critical Uses
    D. Proposed Critical Use Amounts
    1. Approach for Determining Critical Stock Allowances
    2. Approach for Determining New Production and Import Allowances
    3. Summary of Calculations
    E. The Criteria in Decisions IX/6 and Ex. I/4
    F. Emissions Minimization
    G. Critical Use Allowance Allocations
    H. Critical Stock Allowance Allocations
    I. Stocks of Methyl Bromide
VI. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    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 and Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations

I. General Information

A. Regulated Entities

    Entities potentially regulated by this proposed 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 producers, 
importers, and exporters of methyl bromide; applicators and 
distributors of methyl bromide; and users of methyl bromide that 
applied for the 2012 critical use exemption including farmers of 
vegetable crops, fruits and nursery stock and owners of stored food 
commodities and structures such as grain mills and processors. This 
rulemaking does not affect applications for future control periods.
    This list is not intended to be exhaustive, but rather to provide a 
guide for readers regarding entities likely to be regulated by this 
proposed action. To determine whether your facility, company, business, 
or organization could be regulated by this proposed 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 section.

B. What should I consider when preparing my comments?

    1. Confidential Business Information. Do not submit confidential 
business information (CBI) to EPA through https://www.regulations.gov 
or e-mail. Clearly mark the part or all of the information that you 
claim to be CBI. For CBI information in a disk or CD-ROM that you mail 
to EPA, 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 claimed as 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 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.
    2. Tips for Preparing Your Comments. When submitting comments, 
remember to:
     Identify the rulemaking by docket number and other 
identifying information (subject heading, Federal Register date, and 
page number).
     Follow directions--The agency may ask you to respond to 
specific questions or organize comments by referencing a Code of 
Federal Regulations (CFR) part or section number.
     Explain why you agree or disagree; suggest alternatives 
and substitute language for your requested changes.
     Describe any assumptions and provide any technical 
information and/or data that you used.
     If you estimate potential costs or burdens, explain how 
you arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
     Provide specific examples to illustrate your concerns, and 
suggest alternatives.
     Explain your views as clearly as possible, avoiding the 
use of profanity or personal threats.
     Make sure to submit your comments by the comment period 
deadline identified.

II. 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 was once widely 
used as a fumigant to control a variety of pests such as insects, 
weeds, rodents, pathogens, and nematodes. Information on methyl bromide 
can be found at https://www.epa.gov/ozone/mbr.
    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. Restricted use pesticides are subject to Federal and 
State requirements governing their sale, distribution, and use. Nothing 
in this proposed 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. Entities affected by 
this proposal 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 provisions 
in this proposed 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.

III. What is the background to the phaseout regulations for ozone-
depleting substances?

    The regulatory requirements of the stratospheric ozone protection 
program that limit production and consumption of ozone-depleting 
substances are in 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

[[Page 65141]]

that Deplete the Ozone Layer (Montreal Protocol). The Montreal Protocol 
is the international agreement aimed at reducing and eliminating the 
production and consumption of stratospheric ozone-depleting substances. 
The U.S. was one of the original signatories to the 1987 Montreal 
Protocol and the U.S. ratified the Protocol on April 12, 1988. Congress 
then enacted, and President George H.W. Bush signed into law, the Clean 
Air Act Amendments of 1990 (CAAA of 1990) which included Title VI on 
Stratospheric Ozone Protection, codified as 42 U.S.C. Chapter 85, 
Subchapter VI, to ensure that the U.S. could satisfy its obligations 
under the Protocol. EPA issued regulations to implement this 
legislation and has since amended the regulations as needed.
    Methyl bromide was added to the Protocol as an ozone-depleting 
substance in 1992 through the Copenhagen Amendment to the Protocol. The 
Parties to the Montreal Protocol (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 baseline level of 25,528,270 kilograms, and 
setting forth the percentage of baseline allowances for methyl bromide 
granted to companies in each control period (each calendar year) until 
2001, when the complete phaseout would occur. This phaseout date was 
established in response to a petition filed in 1991 under sections 
602(c)(3) and 606(b) of the CAAA of 1990, requesting that EPA list 
methyl bromide as a Class I substance and phase out its production and 
consumption. This date was consistent with section 602(d) of the CAAA 
of 1990, which for newly listed Class I ozone-depleting substances 
provides that ``no extension [of the phaseout schedule in section 604] 
under this subsection may extend the date for termination of production 
of any class I substance to a date more than 7 years after January 1 of 
the year after the year in which the substance is added to the list of 
class I substances.''
    At the Seventh Meeting of the Parties (MOP) in 1995, the Parties 
made adjustments to the methyl bromide control measures and agreed to 
reduction steps and a 2010 phaseout date for industrialized countries 
with exemptions permitted for critical uses. At that time, the U.S. 
continued to have a 2001 phaseout date in accordance with section 
602(d) of the CAAA of 1990. At the Ninth MOP in 1997, the Parties 
agreed to further adjustments to the phaseout schedule for methyl 
bromide in industrialized countries, with reduction steps leading to a 
2005 phaseout. The Parties also established a phaseout date of 2015 for 
Article 5 countries.

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?

    In October 1998, the U.S. Congress amended the Clean Air Act (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 certain exemptions. These amendments were 
contained in Section 764 of the 1999 Omnibus Consolidated and Emergency 
Supplemental Appropriations Act (Pub. L. 105-277, October 21, 1998) and 
were codified in section 604 of the CAA, 42 U.S.C. 7671c. The amendment 
that specifically addresses the critical use exemption appears at 
section 604(d)(6), 42 U.S.C. 7671c(d)(6). EPA revised the phaseout 
schedule for methyl bromide production and consumption in a direct 
final rulemaking on November 28, 2000 (65 FR 70795), which allowed for 
the phased reduction in methyl bromide consumption specified under the 
Protocol and extended the phaseout to 2005 while creating a placeholder 
for critical use exemptions. EPA again amended the regulations to allow 
for an exemption for quarantine and preshipment (QPS) purposes on July 
19, 2001 (66 FR 37751), with an interim final rule and with a final 
rule on January 2, 2003 (68 FR 238).
    On December 23, 2004 (69 FR 76982), EPA published a final rule (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 stocks and new production or import to meet the needs of approved 
critical uses. EPA subsequently published rules applying the critical 
use exemption framework for each of the control periods from 2006 to 
2011. Under authority of section 604(d)(6) of the CAA, this action 
proposes the uses that will qualify as approved critical uses in 2012 
and the amount of methyl bromide that may be produced, imported, or 
supplied from inventory to satisfy those uses.
    This proposed action on critical uses for 2012 reflects Decision 
XXII/6, taken at the Twenty-Second Meeting of the Parties in November 
2010. In accordance with Article 2H(5), the Parties have issued several 
Decisions pertaining to the critical use exemption. These include 
Decisions IX/6 and Ex. I/4, which set forth criteria for review of 
proposed critical uses. The status of Decisions is addressed in NRDC v. 
EPA, (464 F.3d 1, D.C. Cir. 2006) and in EPA's ``Supplemental Brief for 
the Respondent,'' filed in NRDC v. EPA and available in the docket for 
this action. In this proposed rule on critical uses for 2012, EPA is 
honoring commitments made by the United States in the Montreal Protocol 
context.

V. What is the critical use exemption process?

A. Background of the Process

    The critical use exemption is designed to permit the production and 
import of methyl bromide for uses that do not have technically and 
economically feasible alternatives and for which the lack of methyl 
bromide would result in significant market disruption (40 CFR 82.3). 
Article 2H of the Montreal Protocol established the critical use 
exemption provision. At the Ninth Meeting of the Parties (1997) the 
criteria for the exemption appeared in Decision IX/6. 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 EPA's request for critical use exemption 
applications published in the Federal Register on May 20, 2009 (74 FR 
23705), applicants provided data on the technical and economic 
feasibility of using alternatives to methyl bromide. Applicants also 
submitted data on their use of methyl bromide, research programs into 
the use of alternatives to methyl bromide, and efforts to minimize use 
and emissions of methyl bromide.

[[Page 65142]]

    EPA's Office of Pesticide Programs reviews the data submitted by 
applicants, as well as data from governmental and academic sources, to 
establish whether there are technically and economically feasible 
alternatives available for a particular use of methyl bromide, and 
whether there would be a significant market disruption if no exemption 
were available. In addition, EPA reviews other parameters of the 
exemption applications such as dosage and emissions minimization 
techniques and applicants' research or transition plans. This 
assessment process culminates in the development of a document referred 
to as the critical use nomination (CUN). The U.S. Department of State 
has submitted a CUN annually to the United Nations Environment 
Programme (UNEP) Ozone Secretariat. The Methyl Bromide Technical 
Options Committee (MBTOC) and the Technology and Economic Assessment 
Panel (TEAP), which are advisory bodies to Parties to the Montreal 
Protocol, review the CUNs of the Parties and make recommendations to 
the Parties on the nominations. The Parties then take Decisions to 
authorize critical use exemptions for particular Parties, including how 
much methyl bromide may be supplied for the exempted critical uses. As 
required in section 604(d)(6) of the CAA, for each exemption period, 
EPA consults with the United States Department of Agriculture (USDA) 
and other departments and institutions of the Federal government that 
have regulatory authority related to methyl bromide, and provides an 
opportunity for public comment on the amounts of methyl bromide that 
the agency is proposing to exempt for critical uses and the uses that 
the agency is proposing as approved critical uses.
    More on the domestic review process and methodology employed by the 
Office of Pesticide Programs is available in a detailed memorandum 
titled ``Development of 2003 Nomination for a Critical Use Exemption 
for Methyl Bromide for the United States of America,'' contained in the 
docket for this rulemaking. While the particulars of the data continue 
to evolve and administrative matters are further streamlined, the 
technical review itself remains rigorous with careful consideration of 
new technical and economic conditions.
    On January 22, 2010, the U.S. Government (USG) submitted the eighth 
Nomination for a Critical Use Exemption for Methyl Bromide for the 
United States of America to the Ozone Secretariat of the UNEP. This 
nomination contained the request for 2012 critical uses. In February 
2010, MBTOC sent questions to the USG concerning technical and economic 
issues in the 2012 nomination. The USG transmitted responses to MBTOC 
in March, 2010. These documents, together with reports by the advisory 
bodies noted above, are in the public docket for this rulemaking. The 
proposed critical uses and amounts reflect the analysis contained in 
those documents.

B. How does this proposed rule relate to previous critical use 
exemption rules?

    The December 23, 2004, Framework Rule (69 FR 76982) established the 
framework for the critical use exemption program in the U.S., including 
definitions, prohibitions, trading provisions, and recordkeeping and 
reporting obligations. The preamble to the Framework Rule included 
EPA's determinations on key issues for the critical use exemption 
program.
    Since publishing the Framework Rule, EPA has annually promulgated 
regulations to exempt from the phaseout of methyl bromide specific 
quantities of production and import for each control period (each 
calendar year), to determine the amounts that may be supplied from pre-
phaseout inventory, and to indicate which uses meet the criteria for 
the exemption program for that year. See 71 FR 5985 (calendar year 
2006), 71 FR 75386 (calendar year 2007), 72 FR 74118 (calendar year 
2008), 74 FR 19878 (calendar year 2009), 75 FR 23167 (calendar year 
2010), 76 FR 23769 (calendar year 2011 proposal).
    Today's action proposes to utilize the existing regulatory 
framework to determine critical uses for 2012 and the amounts of 
Critical Use Allowances (CUAs) and Critical Stock Allowances (CSAs) to 
be allocated for those uses. A CUA is the privilege granted through 40 
CFR part 82 to produce or import 1 kg of methyl bromide for an approved 
critical use during the specified control period. These allowances 
expire at the end of the control period and, as explained in the 
Framework Rule, are not bankable from one year to the next. A CSA is 
the right granted through 40 CFR part 82 to sell 1 kg of methyl bromide 
from inventory produced or imported prior to the January 1, 2005, 
phaseout date for an approved critical use during the specified control 
period.
    The critical uses that EPA is proposing to approve as 2012 critical 
uses are the uses included in the USG's eighth CUN and authorized by 
the Parties in Decision XXII/6. EPA is utilizing the existing 
regulatory framework for critical uses. This framework is discussed in 
Section V.D.1 of the preamble.

C. Proposed Critical Uses

    In Decision XXII/6, taken in November 2010, the Parties to the 
Protocol agreed ``to permit, for the agreed critical-use categories for 
2012 set forth in table C of the annex to the present decision for each 
party, subject to the conditions set forth in the present decision and 
in decision Ex.I/4 to the extent that those conditions are applicable, 
the levels of production and consumption for 2012 set forth in table D 
of the annex to the present decision which are necessary to satisfy 
critical uses * * *''
    The following uses are those set forth in table C of the annex to 
Decision XXII/6 for the United States:
     Commodities.
     National Pest Management Association food processing 
structures.
     Mills and processors.
     Dried cured pork.
     Cucurbits.
     Eggplant--field.
     Forest nursery seedlings.
     Nursery stock--fruits, nuts, flowers.
     Orchard replants.
     Ornamentals.
     Peppers--field.
     Strawberry--field.
     Strawberry runners.
     Tomatoes--field.
     Sweet potato slips.
    The Decision XXII/6 critical use levels for 2012 total 1,022,826 
kilograms (kg), which is equivalent to 4.0% of the U.S. 1991 methyl 
bromide consumption baseline of 25,528,270 kg. The maximum amount of 
allowable new production and import for U.S. critical uses in Table D 
of Decision XXII/6 is 922,826 kg (3.6% of baseline), minus available 
stocks.
    EPA is proposing a total critical use exemption in 2012 of 
1,022,826 kg (4.0% of baseline) with new production or import of methyl 
bromide for critical uses up to 759,744 kg (3.0% of baseline), and with 
up to 263,082 kg (1.0% of baseline) coming from pre-phaseout inventory 
(i.e., stocks).
    EPA is seeking comment on the technical analysis contained in the 
U.S. nomination (available for public review in the docket to this 
rulemaking), and seeks information regarding any changes to the 
registration (including cancellation or new registrations), use, or 
efficacy of alternatives that have transpired after the 2012 U.S. 
nomination was written. EPA recognizes that as the market for 
alternatives evolves, the thresholds for what constitutes ``significant 
market disruption'' or ``technical and economic

[[Page 65143]]

feasibility'' change. Comments on the technical data contained in the 
nomination or new information could potentially alter the agency's 
analysis on the uses and amounts of methyl bromide qualifying for the 
critical use exemption. The agency may, in response to new information, 
reduce the proposed quantities of critical use methyl bromide, or 
decide not to approve uses authorized by the Parties. However, the 
agency will not increase the quantities or add new uses in the final 
rule beyond those authorized by the Parties.
    EPA is also proposing to modify the table in 40 CFR part 82, 
subpart A, appendix L to reflect the agreed critical use categories 
identified in Decision XXII/6. The agency is amending the table of 
critical uses based in part on the technical analysis contained in the 
2012 U.S. nomination that assesses data submitted by applicants to the 
CUE program. First, EPA is proposing to remove from the list of 
approved critical users those uses that did not submit applications and 
therefore were not included in the U.S. nomination. These uses are 
International Paper and Weyerhaeuser Company in the forest nursery 
seedlings sector and beans in the commodities sector. The Parties have 
not authorized them as critical uses for 2012 and EPA proposes not to 
list these uses as critical for this control period.
    Second, EPA is proposing to remove North Carolina and Tennessee 
strawberry nurseries. Growers in this sector applied for a critical use 
in 2012. The U.S. did not submit a nomination to UNEP for this use 
because EPA's technical review found that there are alternatives to 
methyl bromide for Southeast strawberry nurseries. The Parties have not 
authorized them as critical uses for 2012 and EPA proposes not to list 
these uses as critical for this control period.
    Third, EPA is proposing to reduce the number of allowable uses for 
the National Pest Management Association's (NPMA) post harvest 
fumigations. Past critical uses for NPMA included ``processed food, 
cheese, herbs and spices, and spaces and equipment in associated 
processing and storage facilities.'' MBTOC found that the nomination 
for food processing facilities was inadequately justified and 
recommended only cheese storage facilities for consideration by the 
Parties as a critical use. MBTOC's comments can be found in the May 
2010 TEAP Progress Report in the docket to this rule. EPA is proposing 
to modify the NPMA critical use to include only ``Members of the 
National Pest Management Association treating cheese storage 
facilities.'' EPA seeks comment on these proposed changes to Appendix 
L.
    EPA is not proposing other changes to the table but is repeating 
the following clarifications made in previous years for ease of 
reference. The ``local township limits prohibiting 1,3-
dichloropropene'' are prohibitions on the use of 1,3-dichloropropene 
products in cases where local township limits on use of this 
alternative have been reached. In addition, ``pet food'' under 
subsection B of Food Processing refers to food for domesticated dogs 
and cats. Finally, ``rapid fumigation'' for commodities is when a buyer 
provides short (two working days or fewer) notification for a purchase 
or there is a short period after harvest in which to fumigate and there 
is limited silo availability for using alternatives.

D. Proposed Critical Use Amounts

    Table C of the annex to Decision XXII/6 lists critical uses and 
amounts agreed to by the Parties to the Montreal Protocol. When added 
together, the total authorized critical use for 2012 is 1,022,826 kg, 
which is equivalent to 4.0% of the U.S. 1991 methyl bromide consumption 
baseline. The maximum amount of new production or import authorized by 
the Parties is 922,826 kg (3.6% of baseline) as set forth in Table D of 
the annex to Decision XXII/6. The difference between the total 
authorized amount and the authorized amount of new production is 
100,000 kg (0.4% of baseline). This difference is the minimum that the 
Parties expect the U.S. to use from pre-phaseout inventory on critical 
uses.
    EPA is proposing to allocate 759,744 kg (3.0% of baseline) of new 
production and import of methyl bromide for critical uses for 2012. EPA 
is also proposing to allocate 263,082 kg (1.0% of baseline) in the form 
of Critical Stock Allowances for sale of pre-phaseout inventory for 
critical uses in 2012. EPA is seeking comment on the proposed total 
levels of exempted new production and import for critical uses and the 
amount of material that may be sold from pre-phaseout inventory for 
critical uses. The sub-sections below explain EPA's reasons for 
proposing the above critical use amounts for 2012.
1. Approach for Determining Critical Stock Allowances
    The 2004 Framework Rule established the provisions governing the 
sale of pre-phaseout inventories for critical uses, including the 
concept of Critical Stock Allowances (CSAs) and a prohibition on the 
sale of pre-phaseout inventories for critical uses in excess of the 
amount of CSAs held by the seller. In addition, EPA noted that pre-
phaseout inventories were further taken into account through the 
trading provisions that allow CUAs to be converted into CSAs. EPA is 
not proposing changes to these CSA provisions for calendar year 2012.
    In the Framework Rule (69 FR 52366), EPA issued CSAs in an amount 
equal to the difference between the total authorized CUE amount and the 
amount of new production or import authorized by the Parties. In each 
of the CUE allocation rules from 2006 through 2010, EPA allocated CSAs 
in amounts that represented not only the difference between the total 
authorized CUE amount and the amount of authorized new production and 
import but also an additional amount to reflect available stocks. In 
the 2006 CUE Rule, EPA issued a total of 1,136,008 CSAs, equivalent to 
4.4% of baseline. For 2006, the difference in the Parties' decision 
between the total CUE amount and the amount of new production and 
import was 3.6% of baseline. In the 2007 rule, EPA added to the minimum 
amount (6.3% of baseline) an additional amount (1.2% of baseline) for a 
total of 1,914,600 CSAs (7.5% of baseline). In the 2008 rule, EPA added 
to the minimum amount (3.0% of baseline) an additional amount (3.8% of 
baseline) for a total of 1,729,689 CSAs (6.8% of baseline). In the 2009 
rule, EPA added to the minimum amount (1.2% of baseline) an additional 
amount (6.3% of baseline) for a total of 1,919,193 CSAs (7.5% of 
baseline). In the 2010 rule, EPA added to the minimum amount (1.8% of 
baseline) an additional amount (2.2% of baseline) for a total of 
1,028,108 CSAs (4.0% of baseline). After determining the CSA amount, 
EPA reduced the portion of CUE methyl bromide to come from new 
production and import such that the total amount of methyl bromide 
exempted for critical uses did not exceed the total amount authorized 
by the Parties for that year.
    As established in the earlier rulemakings, EPA views the inclusion 
of these additional amounts in the calculation of the year's overall 
CSA level as an appropriate exercise of discretion. The Agency is not 
required to allocate the full amount of authorized new production and 
consumption. The Parties only agree to ``permit'' a particular level of 
production and consumption; they do not--and cannot--mandate that the 
U.S. authorize this level of production and consumption domestically. 
Nor does the CAA require EPA to allow the full amount permitted by the 
Parties. Section 604(d)(6) of the CAA does not

[[Page 65144]]

require EPA to exempt any amount of production and consumption from the 
phaseout, but instead specifies that the Agency ``may'' create an 
exemption for critical uses, providing EPA with substantial discretion. 
When determining the CSA amount for a year, EPA considers what portion 
of existing stocks is ``available'' for critical uses. As discussed in 
prior CUE rulemakings, the Parties to the Protocol recognized in their 
Decisions that the level of existing stocks may differ from the level 
of available stocks. Decision XXII/6 states that ``production and 
consumption of methyl bromide for critical uses should be permitted 
only if methyl bromide is not available in sufficient quantity and 
quality from existing stocks.'' In addition, earlier decisions refer to 
the use of ``quantities of methyl bromide from stocks that the Party 
has recognized to be available.'' Thus, it is clear that individual 
Parties have the ability to determine their level of available stocks. 
Decision XXII/6 further reinforces this concept by including the phrase 
``minus available stocks'' as a footnote to the United States' 
authorized level of production and consumption in Table D. Section 
604(d)(6) of the CAA does not require EPA to adjust the amount of new 
production and import to reflect the availability of stocks; however, 
as explained in previous rulemakings, making such an adjustment is a 
reasonable exercise of EPA's discretion under this provision.
    EPA employs the concept of ``available stocks'' in determining 
whether to allocate additional CSAs beyond the minimum stock amount 
stipulated by the Parties. In response to stakeholder questions about 
how EPA derived its CSA amounts, the 2008 CUE rule established a 
refined approach for determining the amount of existing methyl bromide 
stocks that is ``available'' for critical uses. The approach uses a 
tool called the Supply Chain Factor (SCF). The SCF is EPA's technical 
estimate of the amount of methyl bromide inventory that would be 
adequate to meet the need for critical use methyl bromide after an 
unforeseen domestic production failure. The SCF recognizes the benefit 
of allowing the private sector to maintain a buffer in case of a major 
supply disruption. However, the SCF is not intended to set aside or 
physically separate stocks as an inventory reserve.
2. Calculation of Available Pre-Phaseout Inventory
    For 2012, EPA proposes to calculate the amount of ``available'' 
stocks as follows, using the formula adopted in the 2008 CUE rule: 
AS2012 = ES2011 - D2011 - 
SCF2012, where AS2012 is the available stocks on 
January 1, 2012; ES2011 is the existing pre-phaseout stocks 
of methyl bromide held in the United States by producers, importers, 
and distributors on January 1, 2011; D2011 is the estimated 
drawdown of existing stocks during calendar year 2011; and 
SCF2012 is the supply chain factor for 2012. Using this 
formula, EPA calculates that there will be 263,082 kg of pre-phaseout 
stocks of methyl bromide ``available'' on January 1, 2012.
    Existing Stocks. In the above formula, ``ES2011'' is 
methyl bromide that was produced before the January 1, 2005, phaseout 
date but is still held by domestic producers, distributors, and third-
party applicators as of January 1, 2011. ES2011 does not 
include critical use methyl bromide that was produced after January 1, 
2005, and carried over into subsequent years. Nor does it include 
methyl bromide produced (1) Under the quarantine and preshipment (QPS) 
exemption, (2) with Article 5 allowances to meet the basic domestic 
needs of Article 5 countries, or (3) for feedstock or transformation 
purposes. EPA considers all pre-phaseout inventory to be suitable for 
both pre-plant and post harvest uses. Similarly, EPA considers 
inventory methyl bromide to be available to all users, including users 
in California and the Southeastern United States. These assumptions are 
discussed in the 2009 CUE rule (74 FR 19887).
    Estimated Drawdown. In past CUE rules, EPA either estimated the 
drawdown of existing stocks using a simple linear fit estimation of 
inventory data from all available years or used actual reported end of 
year data if available. A linear estimate would project that no methyl 
bromide would remain in inventory on January 1, 2012. EPA does not 
believe this estimate to be accurate because it does not consider that 
the use of inventory on critical uses is limited by the allocation of 
CSAs. A better estimate of drawdown would instead add the estimated 
amount of CSAs that will be expended in 2011 plus the estimated amount 
of methyl bromide that will be used in 2011 for non-critical uses.
    The first element of EPA's proposed drawdown estimate is the amount 
of inventory that will be used in 2011 on critical uses. This can be no 
more than the number of CSAs EPA allocates in the final 2011 CUE Rule. 
For purposes of this estimate, we are assuming the number of CSAs 
allocated in the final 2011 CUE Rule will be the same as the number EPA 
has proposed, which is 482,333 kg. As discussed in the Technical 
Support Document, on average only 58% of the CSAs allocated for a 
control period are reported as sold in that control period. Based on 
this historical pattern, EPA believes that not all of the CSAs will 
actually be expended in 2011 either. To estimate the number of expended 
CSAs in 2011, EPA conservatively assumes that 70% of the CSAs allocated 
for 2011 will be sold. This amount is greater than any year's use of 
CSA allocations. Thus, EPA estimates that 337,633 kg of inventory will 
be sold for critical uses in 2011.
    The second element in the drawdown estimate is the amount of methyl 
bromide used on non-critical uses in 2011. Under the recent 
reregistration decision for methyl bromide, seven non-critical uses 
remain on the pre-plant methyl bromide labels. These non-critical uses 
can continue to use methyl bromide but are restricted to pre-phaseout 
inventory. The uses are caneberries, fresh market tomatoes grown in 
California, fresh market peppers grown in California, Vidalia onions 
grown in Georgia, ginger grown in Hawaii, soils on golf courses and 
athletic/recreational fields for resurfacing/replanting of turf, and 
tobacco seedling trays. See 76 FR 7200. Collectively they are referred 
to as ``Group II uses.'' EPA proposes to estimate the amount of 
inventory that will be sold to these Group II uses in 2011 by averaging 
the amounts sold in 2006-2010 for all non-critical uses. There is no 
clear trend in the pattern of usage which is why EPA is proposing to 
simply take an average. EPA is not including 2005 because it does not 
have data for that year. These data are contained in EPA's annual 
Accounting Frameworks submitted to UNEP and are available in the 
docket. The average use of pre-phaseout inventory on all non-critical 
uses over the last five years is 773 MT. EPA believes that this 
estimate is conservative because it includes the use of inventory for 
all non-critical uses, not just for Group II uses. Therefore, EPA 
proposes to adopt this average as its estimate of non-critical use in 
2011.
    Therefore, EPA proposes to estimate the potential drawdown of 
inventory in 2011 as (1) The projected sum of the use of CSAs for 2011 
and (2) the estimate for Group II uses for 2011. Using this method, EPA 
projects that the pre-phaseout methyl bromide inventory will be drawn 
down by 1,110,633 kg (337,633 + 773,000) during 2011. This would result 
in a pre-phaseout inventory declining from 1,802,715 kg on January 1, 
2011, to 692,082 kg on January 1, 2012. EPA welcomes comment on this 
proposed method of calculating inventory drawdown. If EPA receives 
actual end-of-year reported data

[[Page 65145]]

on inventory levels before this rule is finalized, EPA may substitute 
that data for this estimate.
    Supply Chain Factor. The SCF represents EPA's technical estimate of 
the amount of pre-phaseout inventory that would be adequate to meet a 
need for critical use methyl bromide after an unforeseen domestic 
production failure. As described in the 2008 CUE Rule, and the 
Technical Support Document contained in the docket to this rule, EPA 
estimates that it would take 15 weeks for significant imports of methyl 
bromide to reach the U.S. in the event of a major supply disruption. 
Consistent with the regulatory framework used in previous CUE 
allocation rules, the SCF for 2012 conservatively reflects the effect 
of a supply disruption occurring in the peak period of critical use 
methyl bromide production, which is the first quarter of the year. 
While this 15-week disruption is based on shipping capacity and does 
not change year to year, other inputs to EPA's analysis do change each 
year including the total U.S. and global authorizations for methyl 
bromide and the average seasonal production of critical use methyl 
bromide in the U.S. Using updated numbers, EPA estimates that critical 
use production in the first 15 weeks of each year (the peak supply 
period) currently accounts for approximately 42% of annual critical use 
methyl bromide demand. EPA, therefore, estimates that the peak 15-week 
shortfall in 2012 could be 429 MT.
    As EPA stated in previous CUE Rules, the SCF is not a ``reserve'' 
or ``strategic inventory'' of methyl bromide but is merely an 
analytical tool used to provide greater transparency regarding how the 
Agency determines CSA amounts. Its use in the equation above 
demonstrates that 263,082 kg are available to be allocated. Further 
general discussion of the SCF is in the final 2008 CUE rule (72 FR 
74118) and further detail about the analysis used to derive the value 
for the 2012 supply chain factor is provided in the Technical Support 
Document available on the public docket for this rulemaking.
    Using the following formula AS2012 = ES2011-
D2011-SCF2012, EPA estimates that there will be 
263,082 kg of pre-phaseout stocks of methyl bromide ``available'' on 
January 1, 2012. (263,082 = 1,802,715-1,110,633-429,000). Therefore, 
EPA proposes to allocate 263,082 kg as Critical Stock Allowances for 
2012.
2. Approach for Determining New Production and Import Allowances
    For the 2012 control period, EPA is proposing to apply the existing 
framework established in the Framework Rule. Under this approach, the 
amount of new production would equal the total amount authorized by the 
Parties to the Montreal Protocol in Decision XXII/6, minus the CSA 
amount detailed above, minus any reductions for carryover and the 
uptake of alternatives. Applying this established approach, EPA is 
proposing to exempt limited amounts of new production and imports of 
methyl bromide for critical uses in 2012 in the amount of 759,744 kg 
(3.0% of baseline). EPA is taking comment on this approach.
    Carryover Material. The Parties in paragraph 6 of Decision XXII/6 
``urge parties operating under a critical-use exemption to put in place 
an effective system to discourage the accumulation of methyl bromide 
produced under the exemption.'' As discussed in the Framework Rule, EPA 
does not permit the building of stocks of methyl bromide produced or 
imported after January 1, 2005, under the critical use exemption. 
Quantities of methyl bromide produced, imported, exported, or sold to 
end-users under the critical use exemption in a control period must be 
reported to EPA the following year. EPA uses these reports to calculate 
the amount of methyl bromide produced or imported under the critical 
use exemption, but not exported or sold to end-users in that year. EPA 
deducts an amount equivalent to this ``carryover'' from the total level 
of allowable new production and import in the year following the year 
of the data report. Carryover material (which is produced using 
critical use allowances) is not included in EPA's definition of 
existing stocks (which applies to pre-phaseout material) because this 
would lead to a double-counting of carryover amounts, and a double 
reduction of critical use allowances (CUAs).
    Unlike past control periods, all critical use methyl bromide that 
companies reported to be produced or imported in 2010 was sold to end 
users. The information reported to EPA is that 1,954,610 kg of critical 
use methyl bromide was produced or imported. A slightly higher amount 
than the amount produced or imported was actually sold to end-users in 
2010. This additional amount was from distributors selling amounts that 
were carried over from the 2009 control period. Using the existing 
framework, EPA is proposing to apply the carryover deduction of 0 kg to 
the new production amount. EPA's calculation of the amount of carryover 
at the end of 2010 is consistent with the method used in previous CUE 
rules, and with the method agreed to by the Parties in Decision XVI/6 
for calculating column L of the U.S. Accounting Framework. Past U.S. 
Accounting Frameworks, including the one for 2010, are available in the 
public docket for this rulemaking.
    Uptake of Alternatives. EPA also is proposing to continue 
considering new data about alternatives that were not available at the 
time the U.S. Government submitted its CUN to the Parties and adjust 
the allocation for new production accordingly. Two alternatives not 
considered in the 2012 CUN, which was submitted to UNEP in January 
2010, may potentially be used in 2012. In July 2010, EPA registered 
Dimethyl Disulfide (DMDS) to control nematodes, weeds, and pathogens in 
tomatoes, peppers, eggplants, curcurbits, strawberries, ornamentals and 
forest nursery seedlings, and onions. Currently, 12 states have 
registered DMDS for use in that state. Neither California nor Florida 
has yet to register DMDS. EPA anticipates uptake during 2012 to be 
minimal as the primary states with critical uses have not yet 
registered the alternative. In addition, once registered, growers are 
likely to experiment on only a limited number of acres.
    Second, California registered Iodomethane in December of 2010. EPA 
is unable to estimate uptake of Iodomethane in California during 2012 
due to uncertainties created by the California label, specifically 
impacts of larger buffer zones and the lack of efficacy studies at the 
California label's lower use rates. In addition to the state 
registration, County Agricultural Commissioners must permit each 
iodomethane application that occurs within their jurisdiction.
    While EPA is not proposing a specific amount of reduction to 
account for the uptake of these alternatives, EPA will consider new 
data received during the comment period. If the registration status of 
either of these alternatives changes, EPA is proposing to estimate and 
account for that uptake in the final rule. EPA is not proposing to take 
any other reductions for alternatives because the 2012 CUN properly 
applied transition rates for all other alternatives. The TEAP report of 
October 2010 included reductions in its recommendations for critical 
use categories based on the transition rates in the 2012 CUN. The 
TEAP's recommendations were then considered in the Parties' 2012 
authorization amounts, as listed in Decision XXII/6. Therefore, 
transition rates, which account for the uptake of alternatives, have 
already been applied for authorized 2012 critical use amounts. EPA 
continues to gather information about methyl bromide alternatives

[[Page 65146]]

through the CUE application process, and by other means. EPA also 
continues to support research and adoption of methyl bromide 
alternatives, and to request information about the economic and 
technical feasibility of all existing and potential alternatives.
    In addition, EPA is taking comment on an issue raised in the 
proposed 2011 CUE rule. In that rulemaking, EPA proposed a critical-use 
allowance allocation of 1,500,000 kg for 2011, given that regulated 
entities had been acting in good faith on statements made by the Agency 
in No Action Assurance letters that producers and importers could 
assume the allocation would be at least that much. While the total 
allocation was not affected, the amount of new production was 128,382 
kg more than what EPA would have proposed for 2011 had the CSA and CUA 
amounts been based on the ``available stocks'' calculation using end of 
year inventory data. It also means that the critical stock allocation 
was 128,382 kg less than the amount of ``available stocks.'' EPA stated 
in the 2011 proposed rule that the Agency could reduce critical-use 
allowances for new production and import in the 2012 allocation rule to 
account for this difference.
    EPA is taking comment on an alternative approach in which EPA would 
allocate 631,362 kg (2.5% of baseline) of CUAs for 2012. This amount is 
128,382 kg less than the proposed CUA amount. The CSA amount could 
remain either at 263,082 kg or be increased to 391,464 kg to reflect 
the lower CSA allocation in 2011. The total allocation for 2012 would 
be 894,444 kg or 1,022,826 kg depending on how many CSAs are issued 
under this alternative. While EPA is taking comment on this 
alternative, EPA is not proposing it as the lead approach because the 
number of CUAs in the 2011 rule did not exceed the Parties' production 
authorization for 2011 and the total CUE amount for 2011 was 
unaffected. EPA does not believe the 2011 allocation will result in 
carryover; however, if it does, EPA will follow its standard practice, 
discussed in prior CUE notices, of subtracting the carryover amount 
from the CUA amount in a subsequent year. In addition, any effects that 
the 2011 CSA allocation had on the amount of pre-phaseout inventory 
used in 2011 is captured in the ``available stocks'' analysis contained 
in this rule.
3. Summary of Calculations
    The calculations described above for determining the level of new 
production and critical stock allowances are summarized in the table 
below:

------------------------------------------------------------------------
                                                           Kilograms
------------------------------------------------------------------------
Step 1: Calculate supply chain factor:                 .................
    U.S. authorization for 2012 in Decision XXII/6...          1,022,826
    - Reduction for uptake of alternatives...........                  0
    = One year's CUE need............................          1,022,826
    x Percentage of year's production to recover from                42%
     production failure..............................
                                                      ------------------
        = Supply Chain Factor........................            429,000
                                                      ==================
Step 2: Calculate available stocks:                    .................
    Existing pre-phaseout inventory on January 1,              1,802,715
     2011............................................
    - Drawdown of inventory for critical uses........            337,633
    - Drawdown of inventory for non-critical uses....            773,000
    - Supply Chain Factor (Step 1)...................            429,000
                                                      ------------------
        = Available stocks = Critical Stock Allowance            263,082
                                                      ==================
Step 3: Calculate new production:                      .................
    Total U.S. authorization for 2012................          1,022,826
    - Critical Stock Allowance (Step 2)..............            263,082
    - Carryover......................................                  0
    - Uptake of alternatives.........................                  0
                                                      ------------------
        = New production/import = Critical Use                   759,744
         Allowance...................................
------------------------------------------------------------------------

E. The Criteria in Decisions IX/6 and Ex. I/4

    Paragraphs 2 and 5 of Decision XXII/6 request Parties to ensure 
that the conditions or criteria listed in Decisions Ex. I/4 and IX/6, 
paragraph 1, are applied to exempted critical uses for the 2012 control 
period. A discussion of the agency's application of the criteria in 
paragraph 1 of Decision IX/6 appears in sections V.A., V.C., V.D., and 
V.H. of this preamble. In section V.C. the agency solicits comments on 
the technical and economic basis for determining that the uses listed 
in this proposed rule meet the criteria of the critical use exemption. 
The CUNs detail how each proposed critical use meets the criteria 
listed in paragraph 1 of Decision IX/6, apart from the criterion 
located at (b)(ii), as well as the criteria in paragraphs 5 and 6 of 
Decision Ex. I/4.
    The criterion in Decision IX/6(1)(b)(ii), which refers to the use 
of available stocks of methyl bromide, is addressed in sections V.D., 
V.G., and V.H. of this preamble. The agency has previously provided its 
interpretation of the criterion in Decision IX/6(1)(a)(i) regarding the 
presence of significant market disruption in the absence of an 
exemption, and EPA refers readers to the 2006 CUE final rule (71 FR 
5989) as well as to the memo on the docket titled ``Development of 2003 
Nomination for a Critical Use Exemption for Methyl Bromide for the 
United States of America'' for further elaboration.
    The remaining considerations, including the lack of available 
technically and economically feasible alternatives under the 
circumstance of the nomination; efforts to minimize use and emissions 
of methyl bromide where technically and economically feasible; the 
development of research and transition plans; and the requests in 
Decision Ex. I/4(5) and (6) that Parties consider and implement MBTOC 
recommendations, where feasible, on reductions in the critical use of 
methyl bromide and include information on the methodology they use to 
determine economic feasibility, are addressed in the nomination 
documents.

[[Page 65147]]

    Some of these criteria are evaluated in other documents as well. 
For example, the U.S. has further considered matters regarding the 
adoption of alternatives and research into methyl bromide alternatives, 
criterion (1)(b)(iii) in Decision IX/6, in the development of the 
National Management Strategy submitted to the Ozone Secretariat in 
December 2005, updated in October 2009, as well as in ongoing 
consultations with industry. The National Management Strategy addresses 
all of the aims specified in Decision Ex.I/4(3) to the extent feasible 
and is available in the docket for this rulemaking.
    There continues to be a need for methyl bromide for research 
purposes. A common example is an outdoor field experiment that requires 
methyl bromide as a standard control treatment with which to compare 
the trial alternatives' results. As in past CUE rules, EPA is proposing 
to allocate CSAs rather than CUAs for any amounts authorized 
specifically for research purposes. Also as in past years, EPA is 
proposing to retain research on the crops shown in the table in 
Appendix L to subpart A as a critical use of methyl bromide. The USG 
recently submitted a supplemental nomination for 2,576 kg for research 
activities in 2012. Because the supplemental nomination was submitted 
this year, the Parties have not yet taken a decision authorizing an 
amount. The Parties are expected to take a decision at their upcoming 
Meeting of the Parties in November 2011. Therefore, EPA is proposing to 
increase the final CSA allocation by up to 2,576 kg after consideration 
of the action taken by the Parties in November and comments received on 
this proposed rule regarding research needs.
    EPA encourages methyl bromide suppliers to sell inventory to 
researchers and encourages researchers to purchase inventory for 
research purposes. As discussed in the 2010 CUE rule, research is a key 
element of the critical use process. Therefore, researchers may 
continue to use newly produced methyl bromide, as well as pre-phaseout 
inventory purchased through the expenditure of CSAs, for field, post-
harvest, and emission minimization studies requiring the use of methyl 
bromide. EPA is taking comment on this proposal to increase the CSA 
amount as described above for research.

F. Emissions Minimization

    Previous decisions have stated that Parties shall request critical 
users to employ 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. Through the recent 
Reregistration Eligibility Decision (RED) for methyl bromide, the 
agency requires that methyl bromide applications be tarped except for 
California orchard replant where EPA instead requires deep (18 inches 
or greater) shank applications. The RED also encourages the use of 
high-barrier tarps, such as virtually impermeable film (VIF), by 
providing credits that applicators can use to minimize their buffer 
zones. In addition to minimizing emissions, use of high-barrier tarps 
has the benefit of providing pest control at lower application rates. 
The amount of methyl bromide nominated by the USG reflects the lower 
application rates necessary when using high-barrier tarps, where such 
tarps are allowed. Emissions minimization efforts should not be limited 
to pre-plant fumigations. While the RED addresses emissions 
minimization only in the context of pre-plant fumigation, EPA also 
urges users to reduce emissions from structures and port facilities 
through the use of recapture technologies.
    Users of methyl bromide should continue to make every effort to 
minimize overall emissions of methyl bromide to the extent consistent 
with State and local laws and regulations. The agency encourages 
researchers and users who are successfully utilizing such techniques to 
inform EPA of their experiences as part of their comments on this 
proposed rule and to provide such information with their critical use 
applications. In addition, the agency welcomes comments on the 
implementation of emission minimization techniques and whether and how 
emissions could be reduced further.

G. Critical Use Allowance Allocations

    EPA is proposing to allocate 2012 critical use allowances for new 
production or import of methyl bromide up to the amount of 759,744 kg 
(3.0% of baseline) as shown in the proposed changes to the table in 40 
CFR 82.8(c)(1). EPA is seeking comment on the total levels and 
allocations of exempted new production or import for pre-plant and 
post-harvest critical uses in 2012. Each critical use allowance (CUA) 
is equivalent to 1 kg of critical use methyl bromide. These allowances 
expire at the end of the control period and, as explained in the 
Framework Rule, are not bankable from one year to the next. The 
proposed CUA allocation is subject to the trading provisions at 40 CFR 
82.12, which are discussed in section V.G. of the preamble to the 
Framework Rule (69 FR 76982).
    Paragraph 3 of Decision XXII/6 states ``that Parties shall endeavor 
to license, permit, authorize or allocate quantities of critical-use 
methyl bromide as listed in tables A and C of the annex to the present 
decision.'' This is similar to language in prior Decisions authorizing 
critical uses. The language from these Decisions calls on Parties to 
endeavor to allocate critical use methyl bromide on a sector basis. The 
Framework Rule proposed several options for allocating critical use 
allowances, including a sector-by-sector approach. The agency evaluated 
the various options based on their economic, environmental, and 
practical effects. After receiving comments, EPA determined that a 
lump-sum, or universal, allocation, modified to include distinct caps 
for pre-plant and post-harvest uses, was the most efficient and least 
burdensome approach that would achieve the desired environmental 
results, and that a sector-by-sector approach would pose significant 
administrative and practical difficulties. For the reasons discussed in 
the preamble to the 2009 CUE rule (74 FR 19894), the agency believes 
that under the approach adopted in the Framework Rule, the actual 
critical use will closely follow the sector breakout listed in the 
Parties' decisions, but continues to welcome comments on this issue.

H. Critical Stock Allowance Allocations

    A preambular paragraph to Decision XXII/6 states ``that parties 
should reduce their stocks of methyl bromide retained for employment in 
critical-use exemptions to a minimum in as short a time period as 
possible.'' EPA notes that the U.S. Government is not retaining pre-
phaseout inventory for any particular purpose. Pre-phaseout inventory 
is held by private companies who may sell to any use that meets the 
labeling under FIFRA. However, EPA be