Protection of Stratospheric Ozone: Adjustments to the Allowance System for Controlling HCFC Production and Import, 2020-2029; and Other Updates, 41510-41553 [2019-17018]
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Federal Register / Vol. 84, No. 157 / Wednesday, August 14, 2019 / Proposed Rules
40 CFR Part 82
[EPA–HQ–OAR–2016–0271; FRL–9997–57–
OAR]
RIN 2060–AU26
Protection of Stratospheric Ozone:
Adjustments to the Allowance System
for Controlling HCFC Production and
Import, 2020–2029; and Other Updates
Environmental Protection
Agency (EPA).
ACTION: Proposed rule.
AGENCY:
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Submit your comments,
identified by Docket ID No. EPA–HQ–
OAR–2016–0271, to the Federal
eRulemaking Portal: https://
www.regulations.gov. Follow the online
instructions for submitting comments.
Once submitted, comments cannot be
edited or withdrawn. The EPA may
publish any comment received to its
public docket. Do not submit
electronically any information you
consider to be Confidential Business
Information (CBI) or other information
whose disclosure is restricted by statute.
Multimedia submissions (audio, video,
etc.) must be accompanied by a written
comment. The written comment is
considered the official comment and
should include discussion of all points
you wish to make. The EPA will
generally not consider comments or
comment contents located outside of the
primary submission (e.g., on the web,
cloud, or other file sharing system). For
additional submission methods, the full
EPA public comment policy,
information about CBI or multimedia
submissions, and general guidance on
making effective comments, please visit
https://www.epa.gov/dockets/
commenting-epa-dockets.
ADDRESSES:
The EPA is proposing to
allocate production and consumption
allowances for specific
hydrochlorofluorocarbons, a type of
ozone-depleting substance, for the years
2020 through 2029. These
hydrochlorofluorocarbons may be used
to service certain equipment
manufactured before 2020. The EPA is
also proposing to update other
requirements under the program for
controlling production and
consumption of ozone-depleting
substances, as well as proposing edits to
the regulatory text for improved
readability and clarity. These updates
include revising the labeling
requirements for containers of specific
hydrochlorofluorocarbons; prohibiting
the conversion of
hydrochlorofluorocarbon allowances
allocated through this rulemaking into
allowances for
hydrochlorofluorocarbons that have
already been phased out; requiring the
use of an electronic reporting system for
producers, importers, exporters,
transformers, and destroyers of class I
and class II ozone-depleting substances;
revising and removing recordkeeping
and reporting requirements; improving
the process for petitioning to import
used substances for reuse; creating a
certification process for importing used
and virgin substances for destruction;
and restricting the sale of known
illegally imported substances. This
notice further includes proposed
clarifications to the certification
requirements for methyl bromide
quarantine and preshipment uses. The
EPA is also proposing to add
polyurethane foam systems containing
ozone-depleting chlorofluorocarbons to
the list of nonessential products. Lastly,
the agency is proposing to update the
definition of ‘‘destruction’’ as used in
the context of the production and
consumption phaseout and remove
obsolete provisions.
SUMMARY:
Comments on this notice of
proposed rulemaking must be received
on or before September 30, 2019. Any
party requesting a public hearing must
notify the contact listed below under
FOR FURTHER INFORMATION CONTACT by 5
p.m. Eastern Daylight Time on August
19, 2019. If a public hearing is
requested, the hearing will be held on
August 29, 2019. The hearing will be
held in Washington, DC. More details
concerning the hearing, including
whether a hearing has been requested,
will be available at https://
www.epa.gov/ods-phaseout/phaseoutclass-ii-ozone-depleting-substances.
DATES:
ENVIRONMENTAL PROTECTION
AGENCY
FOR FURTHER INFORMATION CONTACT:
Katherine Sleasman, Stratospheric
Protection Division, Office of
Atmospheric Programs, Mail Code
6205T, 1200 Pennsylvania Avenue NW,
Washington, DC 20460; telephone
number (202) 564–7716; email address
sleasman.katherine@epa.gov. You may
also visit the Ozone Protection website
of the EPA’s Stratospheric Protection
Division at https://www.epa.gov/odsphaseout for further information about
reporting and recordkeeping, other
Stratospheric Ozone Protection
regulations, the science of ozone layer
depletion, and related topics.
SUPPLEMENTARY INFORMATION:
Acronyms and Abbreviations. The
following acronyms and abbreviations are
used in this document.
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ACE/ITDS—Automated Commercial
Environment/International Trade Data
System
ARFF—Aircraft Rescue and Fire Fighting
CAA—Clean Air Act
CBP—Customs and Border Protection
CDC—Centers for Disease Control and
Prevention
CDX—Central Data Exchange
CFC—Chlorofluorocarbon
CFR—Code of Federal Regulations
CROMERR—Cross-Media Electronic
Reporting Regulation
DOT—Department of Transportation
EPA—Environmental Protection Agency
FAA—Federal Aviation Administration
FR—Federal Register
GPEA—Government Paperwork Elimination
Act
HCFC—Hydrochlorofluorocarbon
HTSA—Harmonized Tariff Schedule of the
United States Annotated
MMWR—Morbidity and Mortality Weekly
Report
Montreal Protocol—Montreal Protocol on
Substances that Deplete the Ozone Layer
MOP—Meeting of the Parties
MT—Metric Ton
NFPA—National Fire Protection Association
ODP—Ozone Depletion Potential
ODS—Ozone-Depleting Substance
Parties to the Montreal Protocol or Party—
Nations and regional economic integration
organizations that have consented to be
bound by the Montreal Protocol on
Substances that Deplete the Ozone Layer
RACA—Request for Additional Consumption
Allowances
SNAP—Significant New Alternatives Policy
TEAP—Technology and Economic
Assessment Panel
UNEP—United Nations Environment
Programme
Table of Contents
I. General Information
A. Does this Proposed Action apply to me?
B. What action is the Agency proposing?
C. What is the Agency’s authority for this
Proposed Action?
D. What are the incremental costs and
benefits of this Proposed Action?
II. Background
III. Allocation of HCFC Allowances for the
Years 2020 Through 2029
A. Allocation of HCFC–123 Production and
Consumption Allowances
B. De minimis Exemption
C. Addition of Fire Suppression Servicing
Uses to the HCFC Phaseout Schedule
D. Revisions to Labeling Requirements
E. Allocation of HCFC–124 Production and
Consumption Allowances
F. Changes to Transfer of Allowance
Provisions in § 82.23
IV. Updates to Other Provisions of the
Production and Consumption Control
Program
A. Electronic Reporting
B. Changes to Reporting Requirements in
§§ 82.13, 82.23, and 82.24
C. Changes to Methyl Bromide Provisions
in §§ 82.4 and 82.13
D. Changes to Provisions for the Import of
ODS in § 82.3, 82.4, 82.13, 82.15, and
82.24
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E. Prohibiting the Sale of Illegally Imported
Controlled Substances
V. Addition of Polyurethane Foam Systems
Containing CFCs to the Nonessential
Product Ban
VI. Updates to §§ 82.3, 82.104, and 82.270
Related to Destruction
VII. Removing Obsolete Provisions in §§ 82.3,
82.4, 82.9, 82.10, 82.12, 82.13, 82.15,
82.16, and 82.24
VIII. Economic Analysis
IX. 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 (PRA)
C. Regulatory Flexibility Act (RFA)
D. Unfunded Mandates Reform Act
(UMRA)
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 (NTTAA)
J. Executive Order 12898: Federal Actions
To Address Environmental Justice in
Minority Populations and Low-Income
Populations
I. General Information
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A. Does this Proposed Action apply to
me?
You may be potentially affected by
any final action on this proposal if you
manufacture, process, import, or
distribute into commerce certain ozonedepleting substances (ODS) and
mixtures. Potentially affected entities
may include but are not limited to:
• Air-Conditioning and Warm Air Heating
Equipment and Commercial and Industrial
Refrigeration Equipment Manufacturing
entities (NAICS 333415)
• Air-Conditioning Equipment and
Supplies Merchant Wholesalers (NAICS
423620)
• Basic Chemical Manufacturing (NAICS
3251)
• Chlorofluorocarbon Gas Manufacturing
and Import (NAICS 325120)
• Farm Product Warehousing and Storage
(NAICS 493130)
• Farm Supplies and Merchant
Wholesalers (NAICS 424910)
• Flour Milling (NAICS 311211)
• Fire Extinguisher Chemical Preparations
Manufacturing (NAICS 325998)
• Fruit and Nut Tree Farming (NAICS
1113)
• General Warehousing and Storage
(NAICS 493130)
• Greenhouse, Nursery, and Floriculture
Production (NAICS 1114)
• Hazardous Waste Treatment and
Disposal, Cement Manufacturing, Clinker
(NAICS 327310)
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• Hazardous Waste Treatment and
Disposal, Incinerator, Hazardous Waste
(NAICS 562211)
• Industrial Gas Manufacturing (NAICS
325120)
• Materials Recovery Facilities (NAICS
562920)
• Other Aircraft Parts and Auxiliary
Equipment Manufacturing (NAICS 336413)
• Other Chemical and Allied Production
Merchant Wholesalers (NAICS 424690)
• Other Crop Farming (NAICS 1119)
• Pesticide and Other Agricultural
Chemical Manufacturing (NAICS 325320)
• Plumbing, Heating, and AirConditioning Contractors (NAICS 238220)
• Portable Fire Extinguishers
Manufacturing (NAICS 339999)
• Postharvest Crop Activities (except
Cotton Ginning) (NAICS 115114)
• Research and Development in Physical,
Engineering, and Life Sciences (NAICS
541710)
• Rice Milling (NAICS 311212)
• Soil Preparation, Planting, and
Cultivating (NAICS 115112)
• Vegetable and Melon Farming (NAICS
1112)
This list is not intended to be
exhaustive, but rather provides a guide
for readers regarding entities likely to be
affected by this action. Other types of
entities not listed in this section could
also be affected. The North American
Industrial Classification System
(NAICS) codes have been provided to
assist you and others in determining
whether this action might apply to
certain entities. If you have any
questions regarding the applicability of
this action to a particular entity, consult
the person listed under FOR FURTHER
INFORMATION CONTACT.
B. What action is the Agency proposing?
The EPA is proposing a number of
revisions to the production and
consumption control program for ODS 1
in 40 CFR part 82, subpart A, which are
divided into ‘‘class I’’ and ‘‘class II’’
substances. Section 602 of the Clean Air
Act (CAA) contains initial lists of class
I and class II substances and addresses
additions to those lists. The current lists
appear in appendices A and B in
subpart A. The list of class I substances
includes chlorofluorocarbons (CFCs),
halons, carbon tetrachloride, methyl
chloroform, and methyl bromide. The
list of class II substances consists
entirely of hydrochlorofluorocarbons
(HCFCs). This action proposes specific
revisions to the production and
1 Generally speaking, when the EPA refers to ODS
in this preamble, it is referring to class I and/or
class II controlled substances. The terms
‘‘controlled substance’’ and ‘‘ODS’’ are used
interchangeably, as are the terms ‘‘HCFC’’ and
‘‘class II substance.’’
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consumption control program
including:
• The allocation of production and
consumption allowances for HCFC–123
and HCFC–124 to service certain
equipment manufactured before January
1, 2020;
• Requiring the use of an electronic
reporting system for producers,
importers, exporters, transformers, and
destroyers of ODS;
• Revisions and removal of certain
recordkeeping and reporting
requirements;
• Clarifications to the certification
requirements for methyl bromide
quarantine and preshipment uses;
• Improvements to the process for
petitioning to import used substances
for reuse;
• Creation of a certification process
for importing used and virgin
substances for destruction; and
• Restrictions on the sale of known
illegally imported ODS.
In addition, this action proposes
changes to other subparts supporting the
ODS phaseout, specifically:
• Changes to the subpart E
requirements for labeling of products
containing HCFC–123 to clarify
permitted uses;
• Adding to the subpart C ban on sale
and distribution or offer for sale and
distribution in interstate commerce of
certain products that contain class I
ODS; and
• Changes to subpart H for reducing
halon emissions.
As summarized below, the proposed
changes outlined are grouped by
relevance and thus may not be grouped
by subparts as described above. The
EPA is proposing to allocate annual
production and consumption
allowances for HCFC–123 and HCFC–
124 for the years 2020 through 2029 to
be used for servicing certain equipment
manufactured before January 1, 2020.
Section 605 of the CAA addresses the
production, consumption, use, and
introduction into interstate commerce of
class II substances (listed HCFCs) within
the United States. Sections 605 and 606
taken together constitute the primary
source of authority for the domestic
implementation of United States’
obligations to phase out HCFCs under
the Montreal Protocol on Substances
that Deplete the Ozone Layer (Montreal
Protocol). The EPA regulations issued
under sections 605 and 606 appear at 40
CFR part 82, subpart A. Those
regulations reflect the agreed Montreal
Protocol HCFC phaseout schedule. An
element of that schedule is to phase out
HCFC production and consumption by
January 1, 2020, other than production
and consumption for certain narrowly
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defined uses in an amount up to 0.5%
of baseline annually. Under a previous
adjustment to the Montreal Protocol in
1995, production and consumption
during the years 2020 through 2029 was
restricted to the servicing of
refrigeration and air-conditioning
equipment existing on January 1, 2020.2
In November 2018, the Parties to the
Montreal Protocol adopted another
adjustment that, among other things,
added ‘‘the servicing of fire suppression
and fire protection equipment’’ existing
on January 1, 2020 as a permissible
use.3 Consistent with this adjustment
and a continuing servicing demand in
fire suppression equipment using
HCFCs in the United States, the EPA is
proposing to revise subpart A to add
servicing of existing ‘‘fire suppression
equipment’’ to the authorized uses of
newly produced or imported quantities
of HCFC–123 and HCFC–124 during the
years 2020 through 2029. To facilitate
compliance, the EPA is proposing to
revise labeling requirements for
containers of fire suppression agent
containing HCFC–123 that is imported
during the years 2020 through 2029 in
subpart E. To align with existing
regulations that prohibit the production
and import of phased out HCFCs, in
particular HCFC–22, the agency is
proposing to modify the inter-pollutant
allowance transfer provisions
authorized by CAA section 607 to
prohibit transfers into ODS that are
already phased out.
In addition, the EPA is proposing to
update the requirements under other
provisions of 40 CFR part 82, subpart A.
To increase the accuracy of reported
data and to reduce burden associated
with reporting ODS data, the EPA is
proposing to require that certain reports,
import petitions, and certifications of
intent to import for destruction be
submitted electronically through the
agency’s Central Data Exchange (CDX).
Each entity must establish an account in
CDX in order to prepare, transmit,
certify, and submit reports and
submissions. The EPA is also proposing
to amend the recordkeeping and
reporting requirements by harmonizing
requirements for class I and class II
substances and removing reporting
elements that would be made
unnecessary by moving to electronic
reporting. Required electronic reporting
2 Section 605(a)(3) of the CAA refers to equipment
‘‘manufactured’’ prior to January 1, 2020. The EPA
interprets this to mean that an appliance ‘‘existing
on’’ January 1, 2020 is one that is ‘‘manufactured’’
by that date. The definition of ‘‘manufactured’’ can
be found at 40 CFR 82.3. See also 74 FR 66439.
3 Decision XXX/2 and Annex I of the
‘‘Compilation of decisions adopted by the parties,’’
adjust Article 2F of the Montreal Protocol.
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and reducing the number of reporting
elements reduce the reporting burden.
The EPA is proposing two changes to
provisions related to the sale of
quarantine and preshipment (QPS)
methyl bromide, a fumigant used to
control pests in agriculture and
shipping, in response to the
misapplication of this ODS in Puerto
Rico and the U.S. Virgin Islands. First,
the EPA is proposing to extend to all
distributors of QPS methyl bromide a
certification requirement that currently
applies only to certain distributors and
end users. This proposed change would
help ensure that all distributors and
applicators are aware of the restrictions
on the use and sale of QPS methyl
bromide. Second, the EPA is proposing
to explicitly prohibit the use of methyl
bromide produced under the QPS
exemption for any use other than a
quarantine use or a preshipment use.
Additionally, the EPA is proposing
revisions in §§ 82.4, 82.8, and 82.13 for
readability, including changes to the
naming convention for methyl bromide.
The EPA is also proposing to revise
provisions related to the import of ODS.
The agency is proposing to modify the
import petition process by clarifying
that failure to provide additional
information requested by the EPA
during the process is grounds for
objection, and by allowing for
information from the government of the
exporting country to be submitted in
lieu of certain currently required
information for petitions to import
recovered class I ODS held in ODS
banks. The agency would modify the
petition process to import used class I
substances for reuse and provide a new
certification process for the import of
ODS (used and virgin) for destruction in
the United States. Additionally, the EPA
is proposing to exempt halon 1211, a
potent ODS used as a fire suppression
streaming agent, in extinguishers used
onboard aircraft from the import
petition process to make it easier for
companies to service fire suppression
equipment, promoting proper
maintenance of these bottles and
preventing the emission of halon 1211.
The EPA is also proposing two
changes to reduce the likelihood that
phased out ODS will be sold and
distributed in the United States, and
thus reduce the potential for emissions
of those substances in this country.
First, the agency is proposing to prohibit
the sale or offer for sale or distribution
of any ODS that the seller knows, or has
reason to know, has been imported into
the United States without consumption
allowances or is otherwise not subject to
an exemption. Second, the EPA is
proposing to add polyurethane foam
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systems containing CFCs to the list of
class I nonessential products under 40
CFR part 82, subpart C to prohibit them
from being sold or distributed in the
United States.
The agency is proposing to revise the
definition of ‘‘destruction’’ to include
additional technologies such as
chemical conversion processes, all of
which have been approved in decisions
of the Parties to the Montreal Protocol
which is found or otherwise discussed
in subparts A, E, and H. Lastly, the EPA
proposes to remove outdated provisions
related to the allocation and transfer of
class I ODS credits and allowances that
are no longer in use in subpart A.
C. What is the Agency’s authority for
this Proposed Action?
Several sections of the CAA 4 provide
authority for the actions proposed by
the EPA in this notice of proposed
rulemaking. Section 603 provides
authority to establish monitoring and
reporting requirements for ODS.
Sections 604 and 605 provide authority
to phase out production and
consumption of class I and class II
substances, respectively, and to restrict
the use of class II ODS. Section 606
provides the EPA authority to establish
a more stringent phaseout schedule 5
than that set out in sections 604 and 605
based on: (1) Current scientific
information that a more stringent
schedule may be necessary to protect
human health and the environment, (2)
the availability of substitutes, or (3) to
conform to any acceleration under the
Montreal Protocol. Section 607 provides
the EPA with authority to issue
production and consumption
allowances and to authorize allowance
transfers, including inter-pollutant and
inter-company transfers. Section 610, in
relevant part, directs the EPA to issue
regulations that identify nonessential
products that release class I substances
into the environment (including any
release during manufacture, use,
storage, or disposal) and prohibit any
person from selling or distributing any
such product, or offering any such
products for sale or distribution, in
interstate commerce. Section 611
requires the EPA to establish and
implement labeling requirements for
containers of, and products containing
or manufactured with, class I or class II
ODS.
4 The Clean Air Act provisions addressing
stratospheric ozone protection are codified at 42
U.S.C. 7671–7671q.
5 The following documents are available in the
docket: ‘‘EPA. 1999. The Benefits and Costs of the
Clean Air Act: 1990 to 2010,’’ and ‘‘EPA. 2018.
Overview of CFC and HCFC Phaseout.’’
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The EPA’s authority for this
rulemaking is supplemented by section
114, which authorizes the EPA
Administrator to require recordkeeping
and reporting in carrying out any
provision of the CAA (with certain
exceptions that do not apply here).
Section 301 further provides authority
for the EPA to ‘‘prescribe such
regulations as are necessary to carry out
[the EPA Administrator’s] functions’’
under the CAA. Additional authority for
electronic reporting comes from the
Government Paperwork Elimination Act
(GPEA) (44 U.S.C. 3504), which
provides ‘‘(1) for the option of the
electronic maintenance, submission, or
disclosure of information, when
practicable as a substitute for paper; and
(2) for the use and acceptance of
electronic signatures, when
practicable.’’
Additional information on the EPA’s
authority to establish and manage an
allocation system for the phaseout of
class I and class II substances can be
found at 58 FR 65018 (December 10,
1993) and 68 FR 2820 (January 21, 2003)
respectively.
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D. What are the incremental costs and
benefits of this Proposed Action?
The EPA considered the incremental
costs and benefits associated with this
rulemaking which stem from proposed
changes to reporting and recordkeeping
requirements. The revisions proposed
here would require electronic
submissions through CDX, create a
streamlined Certification of Intent to
Import ODS for Destruction, exempt
halon 1211 in aircraft bottles from the
import petitions process, and add
recordkeeping certification requirement
for methyl bromide QPS. The agency
has analyzed the impact on the
regulated community associated with
the proposed regulatory changes, and
the EPA estimates changes to reporting
and recordkeeping would result in a
cost of approximately $5,000 per year.
However, the EPA estimates the annual
costs savings to reporters as a result of
reductions in reporting elements,
streamlining forms, and added
efficiencies to be approximately $13,000
per year. The one-time redesign labeling
costs for containers of fire suppression
agents are estimated to cost between
$1,000 to $3,000. In addition, the EPA
analyzed the impact on small businesses
and found there would be no additional
costs imposed on small business, see the
docket for the screening analysis on
small businesses. A description of the
results of the analysis and the methods
used can be found in Section VIII of this
notice.
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II. Background
The United States was one of the
original signatories to the 1987 Montreal
Protocol and ratified it on April 12,
1988. After ratification, Congress
enacted, and President George H.W.
Bush signed into law, the CAA
Amendments of 1990, which included
Title VI on Stratospheric Ozone
Protection, codified as 42 U.S.C.
Chapter 85, Subchapter VI, to ensure
that the United States could satisfy its
obligations under the Montreal Protocol,
in addition to establishing
complementary measures such as the
national recycling and emission
reduction programs under section 608
and the labeling requirements under
section 611.
The 1992 Copenhagen Amendment 6
to the Montreal Protocol created the
stepwise reduction schedule,
subsequently revised, and the eventual
phaseout of HCFC consumption.7 The
next milestone is a commitment to
reduce HCFC consumption by 99.5%
below the baseline by January 1, 2020,
with consumption for the years 2020
through 2029 restricted to the servicing
of refrigeration, air-conditioning, and
fire suppression equipment existing on
January 1, 2020.8 This is referred to as
the ‘‘servicing tail.’’ In November 2018,
the Parties to the Montreal Protocol
agreed to add fire suppression
equipment existing on January 1, 2020
to the list of permissible servicing tail
uses.
The United States has chosen to
implement the Montreal Protocol
phaseout schedule of HCFCs on a
chemical-by-chemical basis that
employs a ‘‘worst-first’’ approach
focusing on the phaseout of certain
chemicals with higher ozone depletion
potential (ODP) earlier than others. In
1993, the EPA established a phaseout
schedule to eliminate HCFC–141b first,
to greatly restrict HCFC–142b and
HCFC–22 next, and to subsequently
place restrictions on all other HCFCs
ultimately leading to a complete
phaseout of all HCFCs by 2030 (58 FR
6 Further information on the Copenhagen
Amendment is available at https://ozone.unep.org/
en/handbook-montreal-protocol-substancesdeplete-ozone-layer/2199.
7 Consumption is defined in § 82.3 as production
plus imports minus exports of a controlled
substance (other than transshipments or used
controlled substances). Production is defined in
§ 82.3 as the manufacture of a controlled substance
from any raw material or feedstock chemical, but
does not include: (1) The manufacture of a
controlled substance that is subsequently
transformed; (2) the reuse or recycling of a
controlled substance; (3) amounts that are destroyed
by the approved technologies; or (4) amounts that
are spilled or vented unintentionally.
8 See Montreal Protocol Article 2F, paragraph 6.
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15014, March 18, 1993; 58 FR 65018,
December 10, 1993).
The EPA designed the allowance
program to implement the production
and consumption controls of the CAA
and to facilitate an orderly phaseout. To
control production, the EPA allocated
baseline production allowances to
producers of specific ODS. To control
consumption,9 the EPA allocated
baseline consumption allowances to
producers and importers of specific
ODS. In the allowance program, the EPA
allocates ‘‘calendar-year’’ or ‘‘annual’’
allowances to companies who expend
them when they produce or import
ODS. The allowances can be traded
among companies both domestically
and internationally (between countries
that are Parties to the Protocol), with
certain restrictions. Allocation of
production and consumption
allowances for most class I substances
(CFCs, methyl chloroform, carbon
tetrachloride, and halons) ended in
1996, and in 2005 for methyl bromide.
Production and consumption
allowances for class II substances
(HCFCs) will be reduced to zero in
2030.10
Since the EPA is implementing the
HCFC phaseout on a chemical-bychemical basis, it allocates and tracks
production and consumption
allowances on an absolute kilogram
basis for each chemical. An allowance is
the unit of measure that controls
production and consumption of ODS.
The EPA allocates allowances for
specific years; they are valid between
January 1 and December 31 of a given
control period (i.e., calendar year). In
previous rulemakings, the EPA has
allocated calendar-year allowances
equal to a percentage of the baseline for
specified control periods. A calendaryear allowance represents the privilege
granted to a company to produce or
import one kilogram (not ODPweighted) of the specific substance. The
EPA allocates two types of calendar-year
allowances—production allowances and
consumption allowances. To produce an
HCFC, an allowance holder must
expend both production and
consumption allowances. To import an
HCFC, an allowance holder must
expend only consumption allowances.
An allowance holder exporting HCFCs
for which it has expended consumption
allowances may obtain a refund of those
consumption allowances upon
submittal of proper documentation to
the EPA. Production and import of
9 See CAA section 601(6), 42 U.S.C. 7671(6); 40
CFR 82.3.
10 See CAA section 605 (b)(2), 42 U.S.C. 7671(d)
and Montreal Protocol Article 2F, paragraph 6.
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virgin HCFCs without allowances are
prohibited except for transformation,
destruction, transshipments, or heels
(§ 82.15(a) and (b)).
Under the chemical-by-chemical
phaseout schedule for HCFCs, the EPA
stopped allocating production and
consumption allowances for HCFC–
141b as of 2003; there will be no more
production and consumption
allowances for HCFC–22 and HCFC–
142b as of 2020; and beginning in 2020
the use of newly produced or imported
quantities of the remaining HCFCs will
be limited to servicing refrigeration, airconditioning, and fire suppression
equipment existing at that date.
The EPA notes that absent specific
use restrictions, HCFCs can continue to
be used after their production and
import has ceased, for example, to
service existing equipment such as
refrigeration and air-conditioning
systems. The EPA’s intent has always
been to facilitate a smooth transition to
alternatives, which means avoiding
stranding equipment that has not yet
reached the end of its useful life. For
example, used HCFC–22 that is
recovered and reclaimed, or virgin
material produced before the 2020
phaseout may continue to be used for as
long as it is available to service existing
HCFC–22 systems.
The allowance system for production
and import that reduces the number of
allowances over time is a central
component of the ODS phaseout in the
United States. The EPA limits how
much ODS enters the market to meet the
CAA and Montreal Protocol phaseout
milestones. To smooth the phaseout
steps, the EPA also takes
complementary actions that reduce the
demand for ODS, encourage recovery
and recycling or reclamation of used
ODS, allow for continued servicing to
avoid stranding existing equipment, and
encourage transition to alternatives that
‘‘reduce overall risks to human health
and the environment.’’ 11
The EPA’s most recent action related
to the phaseout of HCFCs was a 2014
rule that allocated production and
consumption allowances for HCFC–22,
HCFC–142b, HCFC–123, and HCFC–124
for 2015–2019 (79 FR 64254, October
28, 2014). In that action, the EPA also
implemented the provisions in CAA
section 605(a) that limit production and
consumption to servicing refrigeration
and air-conditioning appliances and for
use in fire suppression applications.
That notice provides additional
discussion of the history of the phaseout
of HCFCs.
11 CAA
section 612, 42 U.S.C. 7671(k).
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III. Allocation of HCFC Allowances for
the Years 2020 Through 2029
This section presents the EPA’s
proposed approach for issuing HCFC
allowances for the next regulatory
period that extends from 2020 through
2029, as well as complementary changes
to implement a recent adjustment to the
Montreal Protocol. The EPA is
proposing to issue consumption
allowances for HCFC–123 and
consumption and production
allowances for HCFC–124 consistent
with the CAA, EPA regulations, and
obligations of the United States under
the Montreal Protocol. These are the two
HCFCs not already slated for phaseout
in the United States by 2020 under
existing regulations. These HCFCs are
currently used in the refrigeration, airconditioning, and fire suppression
sectors. The EPA is also proposing to
add servicing of fire suppression
equipment to the authorized uses of
newly produced or imported quantities
of these HCFCs during the years 2020
through 2029. In addition, the EPA is
proposing changes to the current
labeling requirements for containers of
fire suppression agent using HCFC–123.
In this proposed action, the EPA is
relying on its authority under CAA
section 605(c) to promulgate regulations
phasing out the production and
restricting the use of class II substances
in accordance with section 605, subject
to previous accelerations under section
606 (See 58 FR 65018, December 19,
1993 and 74 FR 66411, December 15,
2009). The EPA is proposing limited
changes to the existing regulations on
production, consumption, and use of
class II ODS to provide flexibility for the
years 2020 through 2029 consistent with
the requirements of section 605 and
obligations of the United States under
the Montreal Protocol.
In developing the proposed
allocations for HCFC–123 and HCFC–
124 for the years 2020 through 2029, the
EPA considered a number of factors,
including existing company-specific
consumption baselines listed in § 82.19;
the uses of HCFCs that are permissible
for the years 2020 through 2029 under
CAA section 605(a) and the availability
of alternatives for those uses; the types
of HCFCs that may be produced and
consumed consistent with existing
obligations and regulations; the quantity
needed to meet the estimated demand
for each permissible use; the estimated
quantity of HCFCs that will be available
from recycling and reclamation, as well
as from the potential stockpiling of
virgin HCFCs in advance of the 2020
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phaseout step; 12 and the transition that
must occur by 2030 when HCFC
production and consumption will be
phased out completely. For each HCFC
that will be allocated, the EPA identifies
a total number of allowances to be
allocated and then sets calendar-year
allowances equal to a percentage of each
company’s baseline.13 The following
discussion describes how the EPA
considered each of these factors broadly
in developing the proposed allocations.
The first factor the EPA considered
when developing this proposal was the
existing limitation on permissible uses
of HCFCs and the availability of
alternatives for those uses. Section
605(a) of the CAA limited the use of
newly-produced (i.e., virgin) HCFCs
beginning January 1, 2015. The statute
provides that starting on that date, it
shall be unlawful for any person to
introduce into interstate commerce or
use any class II substance unless such
substance: (1) Has been used, recovered,
and recycled; (2) is used and entirely
consumed (except for trace quantities)
in the production of other chemicals; (3)
is used as a refrigerant in appliances
manufactured before January 1, 2020; or
(4) is listed as acceptable under the
Significant New Alternatives Policy
(SNAP) program for use as a fire
suppression agent for nonresidential
applications. As detailed in the draft
report in the docket titled The U.S.
Phaseout of HCFCs: Projected Servicing
Demands in the U.S. Air Conditioning,
Refrigeration, and Fire Suppression
Sector (2020–2030), hereafter referred to
as the Draft Servicing Tail Report, the
EPA considered the availability of
alternatives for the latter two uses, with
the understanding that it is typically
best to service equipment with the same
refrigerant or fire suppression agent it
was designed to use. The SNAP program
continues to review and list alternatives
for applications that use HCFCs,
including refrigeration and air
conditioning and fire suppression
applications that use HCFC–123.
Substitutes are listed under that
regulatory program as acceptable,
unacceptable, or acceptable subject to
use restrictions for specific uses. Any
future use of substitutes listed as
acceptable subject to use restrictions
12 EPA. 2019. The U.S. Phaseout of HCFCs:
Projected Servicing Demands in the U.S. Air
Conditioning, Refrigeration, and Fire Suppression
Sector (2020–2030).
13 The percentage of baseline allowances to be
allocated for each HCFC is determined as follows:
First, all the company-specific consumption
baselines (listed in the table at § 82.19) are added
to determine the aggregate amount of consumption
baseline. The total number of allowances to be
allocated in a given year are then divided by the
aggregate amount of baseline allowances.
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must comport with any conditions of
the SNAP program, if applicable.
Currently, the SNAP program lists a
number of acceptable substitutes for
HCFCs for use as a fire suppression
agent for nonresidential applications,
making a variety of allocation options
practicable for the years 2020 through
2029.
In addition to the statutory provisions
in CAA section 605, the EPA established
a ‘‘worst-first approach’’ in 1993 which
addressed which HCFCs may be
produced and consumed and prioritized
the phaseout of HCFCs based on their
ODPs (58 FR 15014 and 58 FR 65018).
These regulations can be found in
§ 82.16. HCFC–141b was phased out in
2003, except for certain exempted uses.
HCFC–22 and HCFC–142b will be fully
phased out of production and
consumption starting in 2020, with
exceptions for destruction and
transformation. Consistent with that
approach, the EPA is proposing to issue
allowances for production and
consumption of only HCFC–123 and
HCFC–124, as these are the remaining
HCFCs that have not been phased out
domestically.
Under the Montreal Protocol, the
United States has committed to phase
out HCFC production and consumption
by January 1, 2020, other than
production and consumption for certain
narrowly defined uses in an amount up
to 0.5% of baseline annually. Under a
previous Montreal Protocol adjustment
in 1995, production and consumption
during the years 2020 through 2029
were restricted to the servicing of
refrigeration and air-conditioning
equipment existing on January 1, 2020.
In the spring of 2018, the United States
proposed adjusting the Montreal
Protocol to allow for new production
and import of HCFCs within the 0.5%
cap for servicing fire suppression
equipment existing on January 1, 2020.
This proposal was based on extensive
stakeholder consultation on HCFC
needs during the years 2020 through
2029 and the EPA’s analysis of available
information, including the 2018 Draft
Servicing Tail Report. In November
2018, the Parties to the Montreal
Protocol decided to adopt an adjustment
that, among other things,14 added to
Article 2F ‘‘the servicing of fire
suppression and fire protection
equipment’’ existing on January 1, 2020
14 The adjustment adopted at the Meeting of the
Parties in November 2018 included an essential use
provision as well as the addition of two niche
applications under the 0.5% cap. In this proposed
rule, the EPA is only proposing to address the
addition of fire suppression. We are not proposing
to take any action with regard to other elements of
the adjustment at this time.
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as a permissible use for newly produced
or imported HCFCs.15 While the term
‘‘fire protection’’ can be understood in
some contexts to refer broadly to all
measures taken to protect persons or
property from harm, the terms ‘‘fire
protection’’ and ‘‘fire suppression’’ have
been used interchangeably in the
Montreal Protocol context to refer to
suppressing or putting out fires through
the use of chemical substances. Section
605(a) of the Clean Air Act uses the term
‘‘fire suppression.’’ In addition, the EPA
views this term as the more precise term
in the context of regulating ozonedepleting substances. Therefore, the
EPA is proposing to add servicing of
‘‘fire suppression equipment’’ to the
authorized uses of newly produced or
imported quantities of these HCFCs
during the years 2020 through 2029. The
adjustment adopted in November 2018
will enter into force on June 21, 2019.
The final meeting report from the 30th
Meeting of the Parties and Decision
XXX/2 adopting the adjustment are
included in the docket for this
rulemaking.
In developing the proposed
allocations, the EPA considered the
quantities needed to satisfy estimated
demand for HCFC–123 and HCFC–124
to service certain equipment
manufactured before 2020. These
estimates are discussed in more detail in
an updated 2019 Draft Servicing Tail
Report, which is available in the docket.
This report and the proposed allocation
are based on demand projections
contained in the EPA’s Vintaging
Model,16 recent market research,
discussions with industry on current
HCFC uses and trends, and the expected
availability of recovered, recycled/
reclaimed, and reused material. The
agency made the April 2018 draft report
available on its website and in the
docket along with a Notice of Data
Availability published in the Federal
Register on May 4, 2018 (83 FR 19757)
and requested comment on the data and
assumptions in the report. The EPA did
not receive any substantive comments
on the report but continues to welcome
15 Decision XXX/2 and Annex I of the
‘‘Compilation of decisions adopted by the parties,’’
adjust Article 2F of the Montreal Protocol.
16 The EPA’s Vintaging Model estimates the
annual chemical emissions from industry sectors
that historically used ODS, including Ref/AC and
fire suppression. The model uses information on
the market size and growth for each end-use, as
well as a history and projections of the market
transition from ODS to alternatives. The model
tracks emissions of annual ‘‘vintages’’ of new
equipment that enter into operation by
incorporating information on estimates of the
quantity of equipment or products sold, serviced,
and retired or converted each year, and the quantity
of the compound required to manufacture, charge,
and/or maintain the equipment.
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further input on all aspects of the
revised report, including but not limited
to the underlying assumptions and
sensitivity analyses. As a result of the
adjustment to Article 2F of the Montreal
Protocol, the EPA has since revised the
2018 Draft Servicing Tail Report to
reflect the demand for servicing fire
suppression equipment manufactured
before January 1, 2020. The EPA seeks
comment on the 2019 Draft Servicing
Tail Report specifically related to the
fire suppression sector. Since the EPA
will use the report to support the final
rule, the agency requests any relevant
data and market information that would
improve the accuracy of the agency’s
projections. These data may be used in
determining the final allocation.
The last overarching factor the EPA
considered is the 2030 phaseout date for
HCFC production and import, with
limited exceptions, under CAA section
605(b)(2) and (c). As for prior HCFC
phaseout steps, the agency’s intent is to
accomplish the 2030 phaseout step in a
manner that achieves a smooth
transition to alternatives without
stranding equipment. The goal is to
allow equipment owners to continue
servicing their HCFC–123 and HCFC–
124 equipment that is still within its
expected lifetime. Experience with prior
HCFC–22 phaseout steps indicates that
gradually decreasing allocation levels is
better than an abrupt increase or
decrease to foster recovery, recycling,
and reclamation of HCFCs and an
orderly transition to approved
alternatives.
A. Allocation of HCFC–123 Production
and Consumption Allowances
This section presents the EPA’s
proposed approach for determining the
amount of HCFC–123 production and
consumption allowances to be issued
and takes comment on two alternatives.
The agency is proposing to not
provide any HCFC–123 production
allowances for the years 2020 through
2029. In 2009, the EPA issued zero
production baseline allowances for
HCFC–123 because no companies
produced HCFC–123 production in the
baseline years of 2005 through 2007. As
such, the EPA has not issued production
allowances for HCFC–123 in subsequent
years (74 FR 66431). Under section
605(b)(1) of the CAA, it is unlawful for
any person to produce any class II
substance in an annual quantity greater
than the quantity of such substance
produced by such person during the
baseline year. The EPA does not
propose to issue any production
allowances for HCFC–123 for the years
2020 through 2029.
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In 2020, the consumption baseline of
the United States for all HCFCs will be
0.5% which equates to 76.2 ODPweighted metric tons that could be
available for servicing.17 Under section
605(c) of the CAA, the consumption of
HCFCs by any person is also to be
limited to the quantity consumed by
that person during the baseline year.
The EPA has implemented this
requirement by limiting the number of
annual allowances allocated for each
chemical in § 82.16. Consumption of
HCFC–123 during the baseline year
equates to 2,014 MT (40 ODP-weighted
MT).
Table 1 shows the number of HCFC–
123 consumption allowances that would
be allocated each year from 2020 to
2030 under the EPA’s proposed
approach and under the two alternatives
on which the EPA is also taking
comment. The proposed and alternative
approaches are discussed in greater
detail below.
TABLE 1—COMPARISON OF HCFC–123 CONSUMPTION ALLOWANCE ALLOCATION APPROACHES BETWEEN 2020–2030
(MT)
2020
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Proposal ............
Alternative 1 ......
Alternative 2 ......
2021
650
520
2,014
2022
650
480
2,014
2023
650
450
2,014
570
420
2,014
2024
490
380
2,014
2025
410
350
2,014
2026
2027
330
310
2,014
250
280
2,014
2028
170
250
2,014
2029
90
210
2,014
2030
Total
0
0
0
4,260
3,650
20,140
(1) Proposal
The agency proposes to issue
consumption allowances equal to the
2020 estimated HCFC–123 demand for
servicing existing refrigeration and airconditioning and fire suppression
equipment for years 2020 through 2022
and to then decrease the number of
allowances issued in each subsequent
year by an equal amount each year such
that there are zero allowances issued in
2030. In effect, this proposal would
meet the estimated, full servicing
demand in 2020 with newly imported
HCFC–123 and the estimated, full
servicing demand in 2030 with
reclaimed HCFC–123. Under this
proposal, the EPA would allocate 650
MT 18 for the years 2020 through 2022
to ensure adequate supply for servicing
both existing air-conditioning and fire
suppression equipment. Currently the
reclamation market primarily services
the refrigeration and air conditioning
sector. The EPA believes that initially
providing three years of flat allocations
would allow time for the reclamation
market to enter the fire suppression
sector. This is the maximum estimated
HCFC–123 demand for servicing
refrigeration, air-conditioning, and fire
suppression equipment in 2020 as
discussed in the 2019 Draft Servicing
Tail Report.
The EPA could use an equal yearly
decrease approach beginning in 2023
but start at a higher or lower allocation.
Specifically, the EPA could use a
starting allocation in the years 2020
through 2022 of up to 1,200 MT (24
ODP-weighted MT), which is the
current average annual consumption of
HCFC–123 in 2012 through 2017 (83 FR
19757). The agency could also use a
lower starting allocation for years 2020
through 2022 of between 650 MT (the
proposed starting allocation) and 520
MT (the starting allocation in the first
alternative discussed below). The
agency requests comment on the full
range of possible starting allocations for
this option.
The EPA proposes to reduce the
allocation annually beginning in 2023
by an equal amount each year to bring
allocations down to zero by 2030. This
approach balances the various near and
longer term needs by fostering a stable
supply of HCFCs to be used for
servicing throughout the allocation
period and past the phaseout date.
Gradually reducing HCFC allowances
fosters transition and recycling/
reclamation and is consistent with the
EPA’s approach in previous HCFC
allocation rules (see 74 FR 66412,
December 15, 2009; 76 FR 47451,
August 5, 2011; 78 FR 20004, April 3,
2013; and 79 FR 64254, October 28,
2014). During previous ODS phaseouts,
decreasing the allocation has provided
equipment owners with the proper
market signal to foster transition to
alternatives and to increase the
incentive for recovery and reclamation.
Consistent with our obligations as a
party to the Montreal Protocol, and the
use limitation in CAA section 605(a)
regarding refrigeration and airconditioning equipment, the EPA is not
proposing to issue HCFC–123
allowances for use in fire suppression or
refrigeration and air-conditioning
equipment manufactured on or after
January 1, 2020. The EPA notes that
new fire suppression and refrigeration
and air-conditioning equipment may be
manufactured with recovered and
recycled/reclaimed HCFCs in 2020 and
beyond. Section 605(a) of the CAA does
not restrict the use of recycled/
reclaimed HCFC–123. For instance, as
explained in the 2019 Draft Servicing
Tail Report available in the docket, the
fire suppression sector has a long
history of using recovered and recycled/
reclaimed ODS for both servicing and
new equipment. For example, there has
been continuing demand for halons in
newly-manufactured fire suppression
equipment since the 1994 halon
phaseout in the United States. This
demand for halons has been satisfied
with recycled/reclaimed halons. Any
demand for HCFC–123 for charging and
servicing fire suppression equipment
manufactured on or after January 1,
2020 must also be met by recycled/
reclaimed HCFC–123 or HCFC–123 that
was stockpiled prior to 2020.
Following the November 2018
Montreal Protocol adjustment, the EPA
revised the 2018 Draft Servicing Tail
Report to disaggregate estimated
demand for fire suppression to show
estimated demand for servicing
compared to demand for new
equipment. The EPA consulted with
industry on the estimate of future
market demand for HCFC–123 fire
suppression applications. Over the past
several years, total demand (the
manufacture of new equipment and the
servicing of existing equipment) has
varied, but the average has been
approximately 260 MT per year. The
EPA expects the servicing demand for
fire suppression servicing to be between
35 to 90 MT based on projections 19
from the Vintaging Model and feedback
from industry.
Starting the allocation levels below
the estimated demand for servicing both
fire suppression and refrigeration and
air-conditioning equipment, even
though the amount reclaimed is
expected to be significant, could lead to
insufficient quantities of recycled/
17 76.2 ODP-weighted metric tons is the
equivalent of 3,810 MT of HCFC–123.
18 13 ODP-weighted MT.
19 EPA. 2019. The U.S. Phaseout of HCFCs:
Projected Servicing Demands in the U.S. Air
Conditioning, Refrigeration, and Fire Suppression
Sector (2020–2030), Table 5.
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reclaimed HCFC–123 to meet fire
suppression demand, as indicated in the
2019 Draft Servicing Tail Report. As
such, the EPA does not think it would
be prudent to reduce the allocation
further to account for the complete
amount of expected reclamation in the
early years. Conversely, if the EPA
allocated a higher amount than demand,
more virgin HCFC–123 may be
imported, reducing the need for
recovered and reclaimed HCFC–123. As
a point of comparison, the EPA
allocated 100% of the HCFC–123
baseline (2,014 MT, Alternative 2 in
Table 1) for the years 2015 through
2019. In those years HCFC–123 could be
used to manufacture new equipment as
well as service existing equipment.
Allowance holders did not use their full
allocation for HCFC–123 during those
years and often used the inter-pollutant
transfer mechanism to convert their
HCFC–123 allowances into HCFC–22
allowances. After January 1, 2020, there
is no other market for transfers.
The EPA seeks comment on all
aspects of this proposed allocation
including the proposed number of
allowances to be issued for 2020. The
agency requests comment on the
rationale explained above for its
proposal to allocate 650 MT HCFC–123
consumption allowances for 2020
through 2022; whether the starting
allocation in 2020 should be higher or
lower; the proposal to decrease this
allocation by a constant amount each
year after 2022; and whether this
proposal would meet demand for
HCFC–123 during the years 2020
through 2029. The EPA also requests
comment on the expected servicing
demand for fire suppression equipment,
which is based on projections from the
Vintaging Model and feedback from
industry. The EPA is taking comment on
whether the proposed allocation would
strand any equipment in 2020 through
2029, and what the potential cost
impacts may be for any stranded
equipment. The agency also requests
comment on whether there is a
significant cost difference to users
between reclaimed and virgin HCFC–
123. Commenters should provide as
much detail, with as much quantitative
reasoning (e.g., benefits, market effects,
etc.), as possible. When developing a
final rule, the EPA will consider any
comments received on the starting
allocation number and the proposal to
decrease the allocation by a constant
amount each year.
(2) Alternatives
The EPA is also seeking comment on
two alternative approaches the EPA
considered for determining how many
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HCFC–123 consumption allowances to
issue. The first alternative approach
would be to issue allowances equal to
the total modeled demand each year
from 2020 through 2029 (which
includes servicing of existing equipment
and the manufacture of new equipment
using reclaimed HCFC–123) minus the
low end of the projection for
reclamation each year from 2020
through 2029. This contrasts with the
proposed approach which, as explained
above, would neither consider demand
for the manufacture of new equipment
using reclaimed HCFC–123 nor directly
decrease allocations based on
projections for reclamation. The EPA’s
low-end estimate for reclamation is 300
MT in 2020, rising by 10 MT per year
to 390 MT in 2029. See Table 8 of the
2019 Draft Servicing Tail Report for
more discussion of estimated reclaim. In
Table 1, above, the first alternative
presents the allocations that would
result from applying this approach.
Setting the initial allocation at total
estimated demand in 2020 minus the
low-end projections for reclamation
would reflect current total HCFC–123
market conditions and allow companies
to continue consuming HCFC–123 at a
rate consistent with demand to ensure
adequate supply. Decreasing the
allocations gradually over time would
potentially guard against consumption
levels that are significantly higher than
demand. This approach would also
account for continued manufacture of
fire suppression equipment using
HCFC-based fire suppression agent to
the extent recycled/reclaimed HCFC–
123 is available. While this approach
would start at a lower allocation in 2020
than the proposed approach and would
allocate less HCFC–123 overall in 2020
through 2029, it would give more time
for industry to transition given the
slower decrease in the allocation level
over time, it would also result in a larger
drop between 2029 and 2030 compared
to the proposed approach. This could
result in a situation where HCFC–123
equipment owners wait until the end of
the regulatory period to transition or are
unprepared for the 2030 phaseout.
While the EPA estimates that the level
of reclaimed HCFC–123, at 300 MT per
year, will be higher than the estimated
demand for new fire suppression
equipment, the agency expects that
much of this reclaimed material will be
sold into the refrigeration and airconditioning market given current
business relationships. Based on
industry feedback, the EPA has
tentatively concluded that reclaimed
HCFC–123 is currently sold exclusively
into the refrigeration and airconditioning market. Thus, it might not
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be immediately available for fire
suppression. More availability of virgin
HCFC–123 would allow time for the
market for recycled/reclaimed HCFC–
123 to shift towards new fire
suppression equipment, as consumption
of HCFC–123 under the Montreal
Protocol is only for servicing
equipment.
The EPA seeks comment on this first
alternate approach. The EPA requests
comment on accounting for the
anticipated continued manufacture of
fire suppression equipment using
reclaimed HCFC–123. The EPA also
requests comment on using the low end
or the high end of the estimate for
reclamation, or a point in between.
Using the current high end of the
expected reclamation estimate would
equate to an allocation of approximately
470 MT in 2020, 220 MT in 2025, and
20 MT in 2029. The EPA also seeks
comment on whether it should start at
a higher amount in 2020 (up to 1,200
MT) consistent with current average
consumption of HCFC–123, or a lower
amount consistent with the high end of
the expected reclamation estimate
provided in Table 9 of the 2019 Draft
Servicing Tail Report. Commenters
should provide as much detail, with as
much quantitative reasoning (e.g.,
benefits, market effects, etc.), as
possible.
Lastly, the EPA is seeking comment
on a second alternative approach under
which, as shown in Table 1 above, the
EPA would issue 2,014 MT of HCFC–
123 consumption allowances for each
year for the years 2020 through 2029.
This is equal to 100 percent of the
aggregate consumption baseline
allowances for HCFC–123 and is the
maximum allocation allowed under
section 605(c) of the CAA. This
approach would allocate approximately
half of the annual consumption cap
allowed under the Montreal Protocol.
Specifically, this allocation would equal
40.3 ODP-weighted MT compared to
76.2 ODP-weighted MT allowed during
each year between 2020 through 2029.
This approach could be warranted given
the relatively low ODP of HCFC–123
(0.02) and the long lifetime of
equipment using HCFC–123.
The agency believes this approach
would provide significantly more
allowances than are needed to meet
demand for HCFC–123. The existing
regulatory prohibition on producing or
importing HCFC–123 for most uses,
including in the manufacture of
refrigeration and air-conditioning and
fire suppression equipment as of
January 1, 2020 will significantly reduce
the demand for HCFC–123. However,
this approach would be consistent with
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the EPA’s past approach of issuing the
maximum allocation for HCFC–123
during the 2015–2019 control periods.
This option does not account for
recycling or reclamation and might lead
to higher consumption than demand for
HCFC–123. This situation risks
decreased incentive to reclaim
refrigerant at the end of life and during
servicing, potentially resulting in higher
emissions. It also would not incorporate
specific reductions to foster reclamation
and recycling or the transition to
alternatives. The EPA anticipates it may
also significantly curtail the existing
market in the refrigeration and airconditioning sector, since the only
remaining market for reclaimed HCFC–
123 would be for the manufacture of
new fire suppression equipment. This
approach would also result in an abrupt
decrease in allowances in 2030 when
the allocation would decrease from
2,014 MT to zero, which is inconsistent
with past practice of fostering a smooth
transition to alternatives. The EPA
welcomes comment on this alternative
approach of issuing 2,014 MT in each
year. Commenters should provide as
much detail, with as much quantitative
reasoning (e.g., benefits, market effects,
etc.), as possible.
B. De Minimis Exemption
The EPA is proposing to create a de
minimis exemption from the use
prohibition in CAA section 605(a) to
allow virgin HCFC–123 to be used for
the manufacture of chillers that meet
specific criteria through December 31,
2020. This proposal aims to address a
unique situation that has arisen because
certain construction projects that
ordered HCFC–123 chillers for
installation in 2019 are behind schedule
and the chillers may not be installed by
the end of 2019. The EPA understands
that many of the chillers and the virgin
HCFC–123 to charge them are already
on site at these construction projects
and that companies purchased virgin
HCFC–123 for charging these chillers
given the expectation that they would
be installed in 2019. However, due to
construction delays, the final steps in
the manufacture of these chillers
(including charging with refrigerant)
may not occur until after January 1,
2020. CAA section 605(a) prohibits the
introduction into interstate commerce or
use of any class II substance as a
refrigerant unless such substance is
used as a refrigerant in appliances
manufactured before January 1, 2020. To
address this unique circumstance, the
EPA is proposing to create a de minimis
exemption to allow virgin HCFC–123 to
be used for the manufacture of chillers
that meet specific criteria through
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December 31, 2020. This exemption
would only apply if the HCFC–123
chiller unit and other components were
ready for shipment to a construction
location and the components were
specified for installation under a
building permit or contract dated on or
before the date of signature of the
proposed rule, the HCFC–123 was
imported prior to 2020 and is in the
possession of the entity that will
complete the manufacture of the
appliance, and all refrigerant added to
that appliance after December 31, 2020
is used, recovered, or recycled/
reclaimed. This proposal is based on the
information currently available to the
agency. We will consider all comments
on the merits of this proposal and its
potential impacts before deciding
whether to take final action to create
such a de minimis exemption.
(1) Background
As described in Section III of this
notice, the CAA restricts introduction
into interstate commerce and use of
HCFCs over time with limited
exceptions. The CAA prohibits the use
of HCFCs to manufacture new
appliances effective January 1, 2020,
unless the HCFCs are used, recovered,
and recycled. The CAA also phases out
production and consumption of HCFCs,
with an interim milestone in 2015 and
the full phaseout in 2030. Additionally,
the Montreal Protocol phases out the
production and consumption of HCFCs
as of January 1, 2020, while allowing a
limited amount of new production and
consumption for servicing existing
refrigeration and air-conditioning
appliances, as well as other uses
described in Section III. The EPA
codified the CAA use and interstate
commerce restrictions related to
refrigeration and air-conditioning
appliances at 40 CFR part 82, subpart A
in prior rulemakings.
As defined in the regulations, the
term manufactured 20 ‘‘for an appliance,
means the date upon which the
appliance’s refrigerant circuit is
complete, the appliance can function,
the appliance holds a full refrigerant
charge, and the appliance is ready for
use for its intended purposes; . . .’’
Appliances used in commercial
refrigeration, such as large chillers, and
industrial process refrigeration typically
involve more complex installation
processes, which may require custombuilt parts, and typically are
manufactured on-site. Appliances, such
as these, that are field charged or have
the refrigerant circuit completed on-site,
20 The definition of ‘‘manufactured’’ can be found
at § 82.3. See also 74 FR 66439.
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regardless of whether additional
refrigerant is added or not, are
manufactured at the point when
installation of all the components and
other parts are completed, and the
appliance is fully charged with
refrigerant and able to operate.
Recently, the EPA learned that a
limited number of HCFC–123 chillers
specified for installation in 2019 may
not be fully manufactured prior to
January 1, 2020. The key uncharged
components, in particular the chiller
units themselves, were ready for
shipment to the construction location in
the first half of 2019. The agency
understands that chiller manufacturers
ceased factory operations for making
new HCFC–123 chiller units at the end
of April 2019. However, for some
delayed projects, even though the units
and refrigerant may already be on-site,
the final steps to manufacture the
appliance, in particular charging the
chiller with refrigerant, may not occur
until 2020. Thus, if no regulatory relief
is provided, the virgin HCFC–123 could
not be used to charge these chillers even
if it has already been purchased and is
on site.
(2) Proposed De Minimis Exemption
To provide flexibility to complete the
manufacture of HCFC–123 chillers from
components that are ready for shipment
to a construction location, the EPA is
proposing to create a de minimis
exemption to the use prohibition in
605(a). This exemption would allow
HCFC–123 to be used for the initial
charging of certain chillers
manufactured between January 1, 2020
and December 31, 2020 provided they
meet specific conditions. The proposed
exemption would only apply if the
HCFC–123 chiller unit and components
are ready for shipment to a construction
location and the components were
specified for installation under a
building permit or contract dated on or
before the date of signature of the
proposed rule, the HCFC–123 was
imported prior to 2020 and is in the
possession of an entity involved in the
manufacture of the appliance, and all
refrigerant added to that appliance after
December 31, 2020 is used, recovered,
or recycled/reclaimed.
The EPA has implied authority to
propose a de minimis exemption from
the section 605(a) use restriction. The
United States Court of Appeals for the
District of Columbia Circuit has
recognized that ‘‘[u]nless Congress has
been extraordinarily rigid, there is likely
a basis for an implication of de minimis
authority to provide exemption when
the burdens of regulation yield a gain of
trivial or no value.’’ Alabama Power Co.
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v. Costle, 636 F.2d 323, 360–61 (D.C.
Cir. 1980).
In Alabama Power, the Court held
that ‘‘[c]ategorical exemptions from
statutory commands may . . . be
permissible as an exercise of agency
power, inherent in most statutory
schemes, to overlook circumstances that
in context may fairly be considered de
minimis. It is commonplace, of course,
that the law does not concern itself with
trifling matters, and this principle has
often found application in the
administrative context. Courts should be
reluctant to apply the literal terms of a
statute to mandate pointless
expenditures of effort.’’ Id. (internal
citations omitted). In an earlier case
cited by the court in Alabama Power,
the court described the doctrine as
follows: ‘‘The ‘de minimis’ doctrine that
was developed to prevent trivial items
from draining the time of the courts has
room for sound application to
administration by the Government of its
regulatory programs . . . The ability,
which we describe here, to exempt de
minimis situations from a statutory
command is not an ability to depart
from the statute, but rather a tool to be
used in implementing the legislative
design.’’ District of Columbia v. Orleans,
406 F.2d 957, 959 (1968).
In this respect, the Alabama Power
opinion observed in a footnote that the
de minimis principle ‘‘is a cousin of the
doctrine that, notwithstanding the ‘plain
meaning’ of a statute, a court must look
beyond the words to the purpose of the
act where its literal terms lead to
‘absurd or futile’ results.’’ Alabama
Power at 360 n. 89 (citations omitted).
To apply an exclusion based on the de
minimis doctrine, ‘‘the agency will bear
the burden of making the required
showing’’ that a matter is truly de
minimis which naturally will turn on
the assessment of particular
circumstances. Id. The Alabama Power
opinion concluded that ‘‘most
regulatory statutes, including the CAA,
permit such agency showings in
appropriate cases.’’ Id.
A notable limitation on the de
minimis doctrine is that it does not
authorize the agency to exclude
something based on a cost-benefit
analysis. As the court explained, this
‘‘implied authority is not available for a
situation where the regulatory function
does provide benefits, in the sense of
furthering the regulatory objectives, but
the agency concludes that the
acknowledged benefits are exceeded by
the costs.’’ Id. The court held that any
‘‘implied authority to make cost-benefit
decisions must be based not on a
general doctrine but on a fair reading of
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the specific statute, its aims and
legislative history.’’ Id.
Courts have continued to recognize
that authority to create de minimis
exemptions may be implied where ‘‘the
burdens of regulation yield a gain of
trivial or no value.’’ Envtl. Def. Fund
Inc. v. EPA, 82 F.3d 451, 455 (D.C. Cir.
1996) (internal quotation marks omitted)
see also e.g., Ass’n of Admin Law Judges
v. FLRA, 397 F.3d 957, 961–62 (D.C. Cir.
2005).
The EPA believes it has authority to
provide flexibility by creating a de
minimis exemption to the 605(a) use
prohibition. Section 605(a) is not
extraordinarily rigid and is ambiguous
as it does not speak directly to the
circumstance presented here. In
addition, providing flexibility is
consistent with the statutory intent.
The EPA does not view section 605(a)
as ‘‘extraordinarily rigid.’’ Title VI of the
CAA can generally be summarized into
three principal areas: The phaseout of
the production and import of ODS
(section 602–607); the reduction of
emissions of ODS via various means
such as required servicing practices,
restrictions on sale and distribution of
products, and consumer education
(section 608–611); and the transition to
alternatives that reduce overall risk to
human health and the environment
(section 612). Section 605 specifically
addresses the phase-out of production
and consumption of class II substances.
For class II substances, section 605
established specific restrictions
beginning in 2015 on use, introduction
into interstate commerce and
production, while establishing a
complete phaseout of HCFCs in 2030.
Congress’ overall approach to the class
II phaseout was generally less rigid than
its approach to the class I phaseout,
given the longer timeframes and the
presence of only one intermediate
reduction step (see section 605(b)).
Given this context, the EPA does not
view section 605(a) as ‘‘extraordinarily
rigid.’’
The EPA finds that section 605(a) is
ambiguous as it does not speak directly
to the circumstance presented here.
Section 605(a) does not explicitly
address whether virgin HCFC–123 may
be used in a chiller where all the chiller
components were ready for shipment to
a construction site before January 1,
2020 but where the initial charge is not
completed until after January 1, 2020.
Because the statute does not specify
when manufacture is complete, it does
not unambiguously prohibit the use of
virgin HCFC–123 for the initial charge
of chillers where all the chiller
components were ready for shipment
before January 1. 2020. Thus, the EPA
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has authority to resolve the ambiguity
through regulation and determine
whether the use prohibition should
apply in this circumstance.
The EPA views the proposed de
minimis exemption as consistent with
statutory intent. The proposed
flexibility would ensure the orderly
phaseout of ODS and be consistent with
the past practice of preventing the
stranding of existing appliances without
being counter to the three principle
areas of Title VI described previously.
First, it would not contribute to
additional production and consumption
of HCFCs and thus would not inhibit
the United States from reaching the
CAA phaseout date of 2030 or
complying with the Montreal Protocol.
Second, these chillers would continue
to be subject to the servicing practices
and labeling requirements applicable to
all ODS appliances. Third, it would not
slow the transition to alternatives. As
discussed below, the components to
assemble these chillers have already
been made ready for shipment and they
have been purchased for installation.
While these chillers may one day be
retrofitted to an alternative, such as R–
514A, Title VI does not require the
retrofitting of existing equipment.
In addition, rigid application of CAA
section 605(a) in the unique
circumstances presented here would
‘‘yield a gain of trivial or no value.’’
Envtl. Def. Fund Inc. v. EPA, 82 F.3d
451, 455 (D.C. Cir. 1996) (internal
quotation marks omitted). The EPA
believes that there would be no
environmental benefit associated with
rigidly applying 605(a). First, because
the HCFC–123 used to initially charge
these chillers must have been imported
prior to 2020, existing allowances
would have to have been expended.
There would therefore not be any
increase in U.S. consumption compared
to the current allowed level of
consumption for 2019. Second, this
exemption would not encourage the
manufacture of additional HCFC–123
chiller units because factory operations
for making them have already ceased
and the exemption would not permit
such operations for additional units.
The number of chillers is also
anticipated to be small. Based on
consultations with industry, the EPA
understands that the manufacture of up
to five percent of the chillers expected
to be installed in 2019 could be delayed
beyond January 1, 2020. The EPA
expects the number of HCFC–123
chillers to be affected is 33. As detailed
in the 2019 Draft Servicing Tail Report,
the EPA assumes an average charge size
for an HCFC–123 commercial chiller is
approximately 445 kg. Thus, the EPA
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estimates about 15 MT of HCFC–123
could be needed to complete the
manufacture of chillers in 2020 if the
proposed exemption is finalized. This
would equate to about 0.4 percent of all
HCFCs allocated in 2019.
Because the EPA has implemented the
HCFC phaseout under the CAA using a
‘‘worst first’’ approach, this final step in
the phaseout means that the HCFCs that
remain, like HCFC–123, have the lowest
ozone-depleting potential of all HCFCs.
Specifically, the ODP of HCFC–123 is
0.02. Thus, the 15 MT of HCFC–123
anticipated to be used to initially charge
these chillers equates to only 0.3 ODPweighted metric tons. Comparing again
to the consumption allowances
allocated for 2019, this time on an ODPweighted basis, this use would be only
0.02 percent of what was allocated in
2019.
Beyond the HCFC–123 needed for the
initial charge, the EPA has also analyzed
whether this proposed exemption could
increase the servicing demand for
HCFC–123 in the years 2020 through
2029 compared to not providing this
proposed flexibility. As an initial
matter, the modeled servicing demand
described in the 2019 Draft Servicing
Tail Report includes the demand from
the appliances affected by this
exemption. The report assumes that
chillers expected to be manufactured in
2019 are manufactured in that year.
Because the chillers that would be
affected by this proposed exemption
were anticipated to be manufactured in
2019, they would not increase expected
demand. This exemption would not
alter the requirement that used,
recovered, or recycled/reclaimed HCFC–
123 be used for all subsequent servicing
events on these chillers. Further, HCFC–
123 chillers have very low leak rates,
and thus the amount of replacement
refrigerant would be low. Therefore, the
EPA does not anticipate that future
servicing demand will affect the market
for reclaimed HCFC–123 in a manner
that the EPA has not already considered
when proposing allowance allocation
amounts for 2020–2029.
The proposed exemption also
contains numerous constraints that limit
its potential impact. The proposed
exemption from the 605(a) prohibition
on use in appliances manufactured
before January 1, 2020 would apply only
for one year and only in a limited set of
circumstances. It would apply only if
the refrigerant used to manufacture the
appliance was in the possession of an
entity involved in the manufacture of
the appliance and imported prior to
January 1, 2020. In addition, any
servicing of the equipment after
December 31, 2020 would need to be
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done with HCFC–123 that is used,
recovered, or recycled/reclaimed.
Further, the exemption would not allow
for the manufacture of additional
chillers beyond those for which the
components had already been made
ready for shipment to a construction
location and the components were
specified for installation under a
building permit or contract dated on or
before the date of signature of the
proposed rule.
The proposed de minimis exemption
is also consistent with past EPA practice
in this program. The EPA, on past
occasions, has provided limited
flexibility around use restrictions and
phaseout dates. Existing regulations
have typically prevented the stranding
of appliances and past investments
while phasing out controlled
substances. For example, a concern
similar to the one at issue here came to
the EPA’s attention in 2009 when
commenters requested a limited waiver
from a regulatory prohibition on
manufacturing HCFC–22 appliances that
was to begin in 2010 (74 FR 66412,
66440–41, December 15, 2009).
Commenters identified scenarios in
which HCFC–22 appliances had been
scheduled for use in projects, such as
construction projects, prior to January 1,
2010 but for a variety of reasons their
manufacture could not be completed
prior to January 1, 2010. The EPA
agreed to grant flexibility by providing
an exemption from the regulatory
deadline to allow HCFC–22 to be used
as refrigerant in appliances
manufactured between January 1, 2010
and December 31, 2011 if their
components were manufactured prior to
January 1, 2010 and were specified in a
building permit or contract dated before
January 1, 2010 for use on a project. The
EPA explained that providing flexibility
would not result in additional
consumption of HCFCs, because
companies had previously produced or
imported the HCFCs for use in the
manufacture of appliances, and it did
not affect long-term projections on
servicing needs because this equipment
was already planned to be installed in
the previous year (74 FR 66441).
The EPA also previously created a de
minimis exemption from the statutory
prohibition on the use of previouslyimported virgin HCFCs. In a 2014 rule,
the EPA created an exemption from the
605(a) use prohibition to provide
limited flexibility regarding the use of
HCFCs for sectors other than
refrigeration and air-conditioning and
fire suppression. For example, the EPA
allowed continued use of a small
amount of material that was previously
produced and/or imported using the
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appropriate allowances and in inventory
prior to the CAA’s 2015 use restriction
for solvents. The EPA determined that
the continued use of previously
produced/imported material was
consistent with past practices, that
production and consumption would not
be higher than that already allowed for
and that the environmental effect would
be limited. (79 FR 64254, October 28,
2014).
The EPA also recognizes that in the
circumstances presented here, there
could be negative impacts if the agency
did not provide flexibility. Without the
proposed flexibility, chiller
manufacturers would not be able to use
virgin HCFC–123 to initially charge and
install new equipment even though that
virgin HCFC–123 may already be onsite. Granting flexibility would allow
the installation to continue using the
HCFC–123 available and prevent further
delay of the installation.
For the reasons described above, the
EPA is proposing to create a de minimis
exemption to the 605(a) use restriction
and to revise 40 CFR 82.15(g)(5)(iii) to
allow virgin HCFC–123 to be used for
the initial charging of certain chillers
manufactured between January 1, 2020
and December 31, 2020 provided they
meet specific conditions. The proposed
exemption would only apply if the
HCFC–123 chiller unit was ready for
shipment to a construction location and
the components were specified for
installation under a building permit or
contract dated on or before the date of
signature of the proposed rule, the
HCFC–123 was imported prior to 2020
and is in the possession of an entity that
will complete the manufacture of the
appliance, and any service on the
appliance after December 31, 2020 is
done using refrigerant that is used,
recovered, or recycled/reclaimed. In
sum, the proposed exemption would
apply only in limited instances where
projects have begun but due to delays
have not yet been completed prior to
January 1, 2020. The EPA believes this
would address concerns that were
expressed by stakeholders, would not
result in an environmental effect, and is
consistent with statutory intent.
The EPA is taking comment on this
proposal to establish an exemption to
allow limited flexibility for the
manufacture of chillers with HCFCs past
January 1, 2020. Specifically, the EPA is
requesting comment on several aspects
of the proposal, including:
• Whether there is enough
availability of reclaimed material for the
initial charge of chillers whose
manufacture is delayed until 2020 and
whether rushed installations would
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result in unintended emissions of
HCFCs;
• Whether the EPA has appropriately
assessed the environmental effects of
providing or not providing flexibility,
such as whether up to five percent of
chiller installations may be delayed;
• Whether factory operations for
making uncharged HCFC–123 chiller
equipment have ceased in the United
States as of May 1, 2019;
• Whether HCFC–123 chillers will in
fact be stranded in the absence of this
proposed exemption;
• Whether any additional conditions
would be appropriate to further narrow
the scope of the exemption; and
• Whether the agency has authority to
establish a de minimis exemption in this
situation.
C. Addition of Fire Suppression
Servicing Uses to the HCFC Phaseout
Schedule
The EPA is proposing to modify the
regulations in 40 CFR part 82 consistent
with CAA section 605 and the
November 2018 adjustment to Article 2F
of the Montreal Protocol that allows for
the continued production and
consumption of HCFCs for servicing fire
suppression equipment manufactured
before January 1, 2020. Specifically, the
EPA is proposing to modify §§ 82.16(e)
and 82.15(g) to allow for HCFC–123 to
be produced and imported, as well as
introduced into interstate commerce
and used, during the years 2020 through
2029, to service fire suppression
equipment existing on January 1,
2020,21 so long as it is being used as a
streaming agent listed as acceptable for
use or acceptable subject to narrowed
use limits for nonresidential
applications in accordance with the
SNAP regulations.
The EPA is proposing to modify
§ 82.16(e)(2) to permit the production
and import of HCFC–123 for servicing
fire suppression equipment
manufactured before January 1, 2020.
While the agency is proposing to
include the term ‘‘production’’ in this
regulatory change, as stated above, this
action does not propose to allocate
production allowances for HCFC–123
given the lack of production in the
United States. Section 82.16(e)
establishes limits on the production and
import of HCFC–123 starting on January
1, 2020. It provides that HCFC–123 may
not be produced or imported for any
purposes other than the listed
21 This proposal would expand the permitted uses
under §§ 82.15 and 82.16 which also allow for use
and introduction into interstate commerce, as well
as production and consumption, of HCFCs for use
as a refrigerant in equipment manufactured before
January 1, 2020.
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permissible uses. The proposed revision
would add to the list of permissible uses
the following: Use as a fire suppression
streaming agent listed under the SNAP
program as acceptable for use or
acceptable subject to narrowed use
limits for nonresidential applications.
This revision would allow for this
additional use in the years 2020 through
2029.
The EPA is also proposing to add a
new paragraph after § 82.15(g)(4) to
ensure consistency with the proposed
change to § 82.16(e)(2). Section 82.15(g)
establishes limits on the introduction
into interstate commerce and use of
certain HCFCs at certain dates in
accordance with the worst-first
approach discussed previously. Section
82.15(g)(4)(i) establishes limits that
apply to many HCFCs including HCFC–
123 and HCFC–124, effective January 1,
2015.22 The EPA is proposing a new
paragraph after § 82.15(g)(4) that repeats
the limits in § 82.15(g)(4)(i) but may be
helpful in clarifying the permissible
uses of HCFC–123 and HCFC–124
produced or imported after January 1,
2020. Consistent with the restrictions on
production and import in the Montreal
Protocol (as modified through the
adjustment adopted in 2018) and
§ 82.16, with regard to fire suppression,
HCFC–123 produced or imported after
January 1, 2020, may only be used for
servicing fire suppression equipment
manufactured before January 1, 2020.
Existing inventories of HCFC–123
produced or imported prior to January
1, 2020, may continue to be used to
manufacture and service new fire
suppression equipment after January 1,
2020. This change would ensure that the
regulations are clear and consistent
between §§ 82.15 and 82.16, and, as a
practical matter, would add no
additional limitations to those in
§ 82.16.
These proposed revisions, if finalized,
would provide flexibility consistent
with the November 2018 adjustment to
the phaseout schedule for HCFCs in the
Montreal Protocol. The United States
was a proponent of adjusting the
phaseout schedule to allow for the
continued production and consumption
of HCFCs to service existing fire
suppression equipment for years 2020
through 2029. The EPA’s analysis
indicates that in theory, the United
States could meet its own domestic fire
suppression needs with alternatives and
recycled/reclaimed HCFC–123, absent
competing demands from other sectors.
Past phase-outs, such as the halon
phaseout, demonstrated that the
22 Section 82.15(g)(4)(i) applies to all HCFCs not
governed by paragraphs § 82.15(g)(1) through (g)(3).
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availability of recycled/reclaimed and
stockpiled material provides flexibility
for users of ODS long after the phaseout
date. However, recycled/reclaimed
HCFC–123, which is currently being
sold predominately into the
refrigeration and air-conditioning
market,23 may not be immediately
available to the fire suppression sector.
The EPA is concerned that reclaimers
and distributors would need to adjust
current distribution and sales practices
to ensure that reclaimed material is
available for fire suppression. At least in
the near term this could affect the
availability and price of HCFC–123.
Given that a lack of HCFC–123 based
fire suppression agents could present a
safety issue, especially for applications
where there is not an approved
alternative clean agent, such as for
Aircraft Rescue and Fire Fighting
(ARFF) vehicles, allowing continued
consumption of HCFC–123 for the years
2020 through 2029 for servicing existing
fire suppression equipment is prudent.
This is also consistent with the EPA’s
long-standing policy of working to avoid
the premature retirement of existing
ODS-based equipment while fostering
the transition to alternatives.
The EPA notes that the November
2018 adjustment adopted by the Parties
to the Montreal Protocol also contains
an essential use provision and adds
other uses under the Article 2F cap,
namely solvent applications in rocket
engine manufacturing and topical
medical aerosol applications for the
specialized treatment of burns. The EPA
is only proposing regulatory changes
that would allow production and
consumption for the servicing of fire
suppression equipment manufactured
before 2020. The EPA does not currently
have any information indicating a need
in the United States for the additional
flexibilities added to Article 2F; for that
reason, the EPA has not assessed their
practicality or its authority to
implement them under the CAA, and
we are not proposing any action on
them at this time.
D. Revisions to Labeling Requirements
This section presents the EPA’s
proposal to adjust the current labeling
requirements to reflect the proposed
change to 40 CFR part 82, subpart A,
which would allow the use of newlyimported HCFC–123 for servicing fire
suppression equipment manufactured
before January 1, 2020. The proposed
changes to §§ 82.15 and 82.16 in subpart
A are discussed in Section III.B of this
notice. Revising the existing labeling
requirements in 40 CFR part 82, subpart
23 Based
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E to reflect the limited ability to use
HCFC–123 for fire suppression servicing
would increase awareness of
individuals servicing fire suppression
equipment about the restriction on
HCFC–123 use and support compliance
with the proposed revisions to subpart
A. In proposing to revise the current
labeling requirements, the EPA is
relying on authority under section
605(c) to issue regulations phasing out
the production and consumption and
restricting the use of class II substances
that may be needed for compliance. To
further support awareness of these new
requirements, the EPA intends to
conduct outreach initiatives for
technicians, distributors, and service
providers.
If the proposed change to subpart A
is finalized, HCFC–123 imported on or
after January 1, 2020 could be used to
make Halotron® I, a fire suppression
agent produced with HCFC–123, and
could be used to service fire
suppression equipment manufactured
before January 1, 2020. It could not,
however, be used in the manufacture of
new equipment on or after January 1,
2020 or to service equipment
manufactured after January 1, 2020.
Only Halotron® I produced with HCFC–
123 that is reclaimed or was imported
prior to 2020 may be used for those
purposes. Labeling of products
manufactured with or containing HCFCs
has been required under CAA Section
611 since 2015, and the EPA has not
seen a movement away from these fire
suppression agents due to current
labeling requirements. Similarly, the
EPA does not expect a proposed
addition to the existing labeling
requirement would cause a movement
away from Halotron® I. The EPA
identified this addition as the lowest
cost option to ensure the United States
meets its international obligation that
newly-produced HCFC–123 only be
used to service existing equipment,
since this would only modify the text of
the existing label to provide more
information to technicians. Thus, in
addition to adding a labeling
requirement, users will need to be able
to know the date of manufacture of fire
suppression equipment. They will also
need to be able to distinguish fire
suppression agents that may be used
only for servicing equipment
manufactured before January 1, 2020
from fire suppression agents that may be
used for manufacturing new equipment
or servicing equipment regardless of the
date of manufacture.
The EPA believes that users will be
able to identify the date of equipment
manufacture using existing methods as
is the case with refrigeration and air-
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conditioning equipment. However,
without additional labeling of
containers of fire suppression agents
that contain HCFC–123, namely
Halotron® I, it may not be possible for
users to distinguish containers that may
only be used to service fire suppression
equipment manufactured before January
1, 2020 from other containers.
Therefore, the EPA is proposing to
modify the current labeling
requirements codified at 40 CFR part 82
subpart E for such containers. The EPA
is proposing to conclude that such
modified labeling is necessary to ensure
that users will have enough information
to determine which containers of fire
suppression agent may be used in which
equipment, in order to comply with the
proposed revisions to the HCFC
phaseout regulations. The existing CAA
section 611 label is on reclaimed and
virgin product. This proposal would
modify only labels of product
containing virgin HCFC. The EPA is also
taking comment on whether to modify
the current labeling requirements for
containers of fire suppression agents
that contain HCFC–123 that is either
reclaimed or was imported before 2020,
and if there are any other low-cost ways
to distinguish containers for servicing
fire suppression equipment.
To the EPA’s knowledge, the only
HCFC used in a fire suppression agent
is HCFC–123, and it is only used in an
agent sold under the name Halotron® I.
Clean agents like Halotron® I do not
leave a residue, and are commonly used
in applications such as data centers,
clean rooms, and aircraft where highvalue or life-saving equipment will not
be damaged by its use, thereby
minimizing economic damages from a
fire (e.g., shorter equipment downtime
or lower costs to repair). There are three
main fire suppression streaming end
uses where clean agents are used in the
United States: (1) Hand-held portables;
(2) 150-pound wheeled units; and (3)
ARFF vehicles.
As per the National Fire Protection
Association (NFPA) and DOT
regulations at 49 CFR 180.250, all
portable fire extinguishers must be
maintained in a fully charged operable
condition and undergo hydrostatic
testing. NFPA is a codes and standards
organization accredited by the American
National Standards Institute established
to minimize the risk and effects of fire
by establishing criteria for building,
processing, design, service, and
installation around the world. Fire
extinguishers, which include portable
hand-held devices and wheeled units,
are recommended to undergo
maintenance to ensure that an
extinguisher will operate effectively and
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safely in the event of fire.24 Equipment
should be recharged after being used to
extinguish a fire for it to be usable again.
Technicians who conduct hydrostatic
testing, perform inspections, or recharge
fire suppression equipment after a
discharge may need additional
information to aid in distinguishing
between the permissible uses of specific
containers of Halotron® I.
The EPA is proposing to modify the
existing label required by section 611 of
the CAA for certain containers of fire
suppression agent. Section 611 requires
containers of ODS to have a label and
demonstrates that Congress recognized
that labeling requirements may be
needed to effectively implement the
phaseout. In 1993, the EPA established
the labeling requirements for both class
I and class II substances in 40 CFR part
82, subpart E (58 FR 8136, February 1,
1993). Containers in which ODS are
stored or transported must bear a clearly
legible and conspicuous warning label
that can be read by consumers before
they can be introduced into interstate
commerce. Section 611 provides
specific language for the label:
‘‘Warning: Contains [insert name of
substance], a substance that harms
public health and environment by
destroying ozone in the upper
atmosphere.’’ This is reflected in the
implementing regulations at § 82.106.
According to CAA section 611, the label
must be ‘‘clearly legible and
conspicuous.’’ Labels generally should
be within the principal display panel,
the warning statement should be in
sharp contrast to any background upon
which it appears, and if there is any
outer package for the container (e.g.,
cylinder, isotank, or other container),
labels should be on the outside
packaging. Specific requirements on the
size, text, and location of the label are
provided in §§ 82.106–82.110.
The EPA is proposing to modify the
required labeling of all containers of fire
suppression agent made with HCFCs
imported on or after January 1, 2020.
The EPA believes that Halotron® I is the
only fire suppression agent that uses
HCFCs that would be manufactured
after 2020. Containers of Halotron® I
must currently be labeled per
§ 82.102(a) because they contain a class
II substance. The EPA is proposing to
modify the current required label for all
containers of Halotron® I made with
HCFC–123, imported on or after January
1, 2020, by adding the following
sentence: ‘‘Do not use to service
24 National Fire Protection Association. (2018)
‘‘Standards for Portable Fire Extinguishers’’
available at: https://www.nfpa.org/codes-andstandards/all-codes-and-standards/list-of-codesand-standards/detail?code=10.
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equipment manufactured on or after
January 1, 2020.’’ The EPA believes that
this information may be necessary for
technicians to determine which
containers of Halotron® I may or may
not be used to service new fire
suppression equipment after 2020,
thereby aiding compliance with
applicable regulations. Technicians
would still need to locate the
manufacture date on all fire
extinguishers or ARFF vehicles to
determine which container of Halotron®
I may be used to service the equipment.
The EPA is requesting comment on this
proposal.
The EPA is also requesting comment
on whether it should also require a
modified label for containers of
Halotron® I made with recycled/
reclaimed HCFC–123 or HCFC–123
imported before 2020. While there
would be limited additional cost, this
could help technicians distinguish
between specific containers of
Halotron® I. A second sentence could
therefore be added to the existing label
for containers of Halotron® I made with
recycled/reclaimed HCFC–123 or
HCFC–123 imported before 2020 that
reads ‘‘Not restricted to use in servicing
pre-2020 equipment.’’ Additionally, the
EPA is requesting comment on whether
there is another low-cost way to
distinguish containers for servicing fire
suppression equipment, such as having
all containers labeled ‘‘Virgin material
may not be used to service equipment
manufactured on or after January 1,
2020,’’ and then include additional
labeling on containers that distinguish
‘‘virgin’’ vs. ‘‘reclaimed’’ material. This
may result in a cost of about $3,000 to
the industry.
The agency intends to develop
outreach materials in concert with the
final rule and distribute them to
appropriate stakeholders to ensure
industry awareness of the servicing
requirements. The EPA believes that
there are existing methods to determine
the date of manufacture of fire
suppression equipment, as follows.
DOT fire extinguisher regulations at
49 CFR 173.309 require that each fire
extinguisher be tested before initial
shipment and marked to indicate the
year of the test. Technicians could use
this date as a guide for determining
servicing with Halotron® I. The agency
recommends that technicians inspect
the date on hand-held and wheeled fire
extinguishers to determine if they were
manufactured before or after January 1,
2020.
For servicing ARFF vehicles, the EPA
recommends that technicians inspect
the manufactured date on the vehicle.
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For class I–III all-wheel drive
commercial vehicles, vehicle
identification numbers (VINs) are
required by DOT per 49 CFR 565. VINs
are located on the lower right-hand
corner of the windshield. For smaller
class IV and V vehicles, a Vehicle
Information Data Plate must be in the
cab of the vehicle and contain all the
information in the ‘‘Aircraft Rescue and
Fire-Fighting Vehicle Tilt Table
Certification’’ per NFPA 414, including
the make and model year.25 Locating the
year the vehicle was manufactured
would aid the technician in determining
whether a container of Halotron® I can
be used for servicing.
The EPA requests comment on
whether individuals servicing fire
suppression equipment can readily
identify the date the equipment was
manufactured and whether the EPA’s
understanding of the location of this
information is accurate. The EPA also
takes comment on ways technicians can
identify the manufacture date of fire
suppression equipment and whether
manufacturers and service technicians
typically reuse Halotron® I cylinders to
hold recovered fire suppression agent or
imported HCFC–123. The EPA is taking
comment on whether the manufacture
of Halotron® I can designate cylinders
for use in servicing existing equipment.
E. Allocation of HCFC–124 Production
and Consumption Allowances
This section presents the EPA’s
proposed approach for determining the
amount of HCFC–124 production and
consumption allowances to be issued
for the years 2020 through 2029. HCFC–
124 is minimally used as a refrigerant.
It is a component in refrigerant blends
such as R–401A, which is used in
industrial process and transport
refrigeration equipment. It is also used
as a stand-alone refrigerant in some
niche applications that reach high
condensing temperatures. It is not
currently used for fire suppression.
As previously noted, under section
605(b)(1) and (c) of the CAA, it is
unlawful for any person to produce or
consume any class II substance in an
annual quantity greater than the
quantity of such substance produced or
consumed by such person during the
baseline year. This would equate to a
maximum production amount of 4,029
MT (89 ODP-weighted MT) and a
maximum consumption amount of
2,396 MT (53 ODP-weighted MT). Over
25 National Fire Protection Association. (2018)
‘‘Standards for Aircraft Rescue and Fire-fighting
Services at Airports’’ available at: https://arcohvac.ir/wp-content/uploads/2018/04/NFPA-403Std-Aircrft-Rscu-Fire-Ftg-Srvs-at-Airprts-2018.pdf.
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41523
the past five years, consumption has
been approximately 250 MT per year
and reclamation has been minimal.
Based on recent sales data from the
California Air Resources Board, the EPA
estimates that annual demand for
HCFC–124 is between 100 to 200 MT for
servicing refrigeration and airconditioning equipment nationally.
More information on anticipated
demand for HCFC–124 is in the 2018
Draft Servicing Tail Report.
Given the small projected need for
HCFC–124 beyond 2019 and the
continued use of certain refrigerant
blends containing HCFC–124, the
agency is proposing to issue HCFC–124
production and consumption
allowances in the years 2020 through
2029 consistent with the level of
demand in the 2018 Draft Servicing Tail
Report. Based on Vintaging Model
estimates, along with industry feedback
on anticipated demand, uses of HCFC–
124, and the use of HCFC–124
allowances in recent years, the EPA is
proposing to allocate 200 MT for the
first three years and then gradually
decrease over the next seven years by an
equal amount each year, as shown in
Table 2. The EPA’s goal is to ensure that
servicing needs can be met, while also
encouraging recovery and reuse and
transition to alternatives. The EPA
believes providing consistent
allocations for the first three years
would assist in establishing an
inventory of HCFC–124 to be used for
servicing throughout the allocation
period and past the phaseout date for
the expected lifetimes of all existing
equipment. The EPA does not want to
strand existing equipment because of an
inadequate supply of HCFC–124. This
proposed allocation supports this goal
because it accounts for allowed end uses
of HCFC–124 that may not be captured
by the Vintaging Model (e.g., use of
niche refrigerant blends containing
HCFC–124 to service equipment
manufactured before 2020). The EPA is
taking comment on this approach.
The EPA is also taking comment on
whether, to ensure adequate supply, the
agency should issue 200 MT annually
beginning in 2020 without any decrease
(Alternative in Table 2). Without
significant reclamation of HCFC–124, it
may be preferable to err toward a higher
allocation. This is a small quantity in
the broader context and would not have
significant environmental effects given
the low ODP (0.022) of HCFC–124.
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TABLE 2—COMPARISON OF HCFC–124 PRODUCTION AND CONSUMPTION ALLOWANCE ALLOCATION OPTIONS BETWEEN
2020–2030
[MT]
Proposal ............................................................................................
Alternative: No Annual Decrease ......................................................
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The EPA is requesting comment on all
aspects of this proposal, as well as
whether to issue 200 MT or some other
number of allowances per year without
any decline or waiting until 2023 before
starting to decrease allowances.
Commenters should provide as much
detail, with as much quantitative
reasoning (e.g., benefits, market effects,
etc.), as possible.
F. Changes To Transfer of Allowance
Provisions in Section 82.23
This section presents the EPA’s
proposal to prohibit the transfer of
allowances for phased out HCFCs to
allowances for HCFC–123 and HCFC–
124. The proposal would prohibit
calendar-year inter-pollutant transfers
into ODS that are already phased out of
production and consumption. This
proposal responds to stakeholder
inquiries about inter-pollutant transfers
to phased out HCFCs. HCFC–123 and
HCFC–124 are the only remaining
HCFCs that can be produced or
imported in the years 2020 through
2029, with limited exceptions. As such,
the EPA is proposing to issue
allowances for only these two
substances. Production and import of
HCFC–141b, HCFC–225ca, and HCFC–
225cb have already been phased out and
production and import of HCFC–22 and
HCFC–142b are phased out starting in
2020. Demand for some of these HCFCs,
particularly HCFC–22, will continue
beyond 2020. This could create an
incentive for HCFC–123 and HCFC–124
allowance holders to attempt to convert
their allowances into allowances for
phased out HCFCs, such as HCFC–22.
Under CAA section 607, the EPA has
issued regulations at § 82.23 which
provide for both inter-pollutant and
inter-company transfers of allowances
for class II ODS under certain
conditions. In an inter-pollutant
transfer, an allowance holder converts
allowances for one class II ODS into
allowances for another class II ODS
(§ 82.23(b)). The EPA is concerned about
the potential for allowance holders to
attempt inter-pollutant transfers that
would be inconsistent with the
established chemical-by-chemical
phaseout.
The EPA views § 82.16 as effectively
prohibiting this practice by prohibiting
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2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
200
200
200
200
200
200
175
200
150
200
125
200
100
200
75
200
50
200
25
200
0
0
production and import of HCFCs that
have already been phased out. Section
82.16(b)–(e) prohibits individuals from
producing or importing certain HCFCs
that have been phased out, with limited
exceptions. For example, production
and import of HCFC–22 and HCFC–
142b are prohibited in 2020, with
limited exceptions that are not
considered to be United States
consumption under the CAA or
Montreal Protocol. These provisions do
not explicitly prohibit the transfer of
HCFC–123 or HCFC–124 allowances
into allowances for a phased out ODS
even though the entity would be
violating § 82.16(e)(1) if it produced or
imported that phased out ODS for any
purpose other than the few listed
exceptions, such as for use in a process
resulting in its transformation.
Given the EPA has already received
several inquiries about whether interpollutant transfers from HCFC–123 or
HCFC–124 to HCFC–22 will be allowed
after the phaseout of HCFC–22, the EPA
is proposing to explicitly prohibit
calendar-year inter-pollutant transfers of
HCFC–123 and HCFC–124 to phased out
HCFCs in § 82.23(b) to ensure clarity for
the regulated community. Section
82.23(d) already prohibits permanent
inter-pollutant transfers of baseline
allowances, so there is no additional
change needed in that paragraph. The
proposed change to § 82.23(b) would not
have a practical effect on the ability of
allowance holders to legally produce or
import phased out ODS given the
prohibition in § 82.16. However, the
proposed change would minimize
confusion and reduce the likelihood
that an allowance holder attempts to
request an inter-pollutant transfer of
HCFC–123 or HCFC–124 allowances to
phased out HCFCs. Inter-pollutant
transfers between HCFC–123 and
HCFC–124 may continue so long as the
newly produced or imported HCFC–123
and HCFC–124 are for an allowed use,
such as for servicing refrigeration and
air-conditioning appliances
manufactured before January 1, 2020.
The EPA is soliciting comments on
the proposed prohibition on calendaryear inter-pollutant transfers into ODS
that are already phased out of
production and consumption to
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Cumulative
1,300
2,000
improve the clarity of the regulations at
§ 82.23.
IV. Updates to Other Provisions of the
Production and Consumption Control
Program
This section presents the EPA’s
proposal to update several other
provisions in 40 CFR part 82, subpart
A—Production and Consumption
Controls. To decrease the burden of
ODS reporting and increase the
accuracy of reports, the EPA is
proposing to require that certain reports,
import petitions, and certifications of
intent to import ODS for destruction be
submitted electronically through CDX.
To reduce the reporting burden, the EPA
is proposing to update the reporting
regulations, consolidate reporting
elements, and harmonize reporting
requirements for class I and class II
substances. The EPA is also proposing
changes to the recordkeeping provisions
for QPS uses of methyl bromide to
increase awareness of the existing use
restrictions and to amend the regulatory
text for readability. In addition, to better
monitor imports into the United States
and to facilitate imports of ODS for
destruction, the EPA is proposing
changes to provisions related to imports
of ODS.
A. Electronic Reporting
The EPA began allowing electronic
reporting as an option for most types of
reported information under this
program in 2008 (73 FR 15520). The
EPA provided electronic reporting forms
and instructions to assist entities in
fulfilling reporting requirements in
§§ 82.13, 82.20, and 82.24 but did not
require their use and allowed the
submission of hard-copy forms. Upon
receipt of the reports, the EPA either
enters the data manually or imports it
electronically via CDX into the ODS
Tracking System. Manual entry of data
provided in hard copy is time
consuming for the agency as well as a
potential source of error. On July 1,
2018 the EPA launched a new electronic
platform for the ODS Tracking System
along with revised and streamlined
electronic forms. The EPA is proposing
to require the use of the agency’s CDX
to submit reports electronically and is
proposing a compliance date for this
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requirement that is 30 days after the
effective date of the final rule, to ensure
that stakeholders have adequate time to
register in CDX. To achieve this, the
EPA would update the definition of
‘‘Administrator’’ in § 82.3, define
‘‘Central Data Exchange’’ in § 82.3, add
a new section at § 82.14 with
instructions on the process for
electronic reporting, and revise
provisions at §§ 82.13(c) and 82.24(a)(1)
to indicate that reporters must comply
with the requirement to report
electronically through CDX 30 days after
the effective date of the final rule.
Currently, the definition of
‘‘Administrator’’ instructs submitters to
mail all reports and petitions to import
ODS. The EPA is proposing to amend
the definition of ‘‘Administrator’’ to
require electronic reporting for the
reports and petitions that are available
in CDX, which includes the majority of
reports under subpart A, as well as the
import petitions and the Certification of
Intent to Import ODS for Destruction, a
new process which the EPA is
proposing to create, as discussed further
in Section IV.D of this notice. The EPA
is also proposing to revise §§ 82.13,
82.23, and 82.24 to clarify that where a
form is electronically available in CDX
it must be submitted electronically
through that tool. The EPA is also
proposing to add the definition of
‘‘Central Data Exchange’’ and provide
instructions on how to register in CDX
and submit information electronically in
a new section at § 82.14. Each entity
must establish an account in CDX in
order to prepare, transmit, certify, and
submit reports and submissions.
CDX is the EPA’s electronic system
for environmental data exchange and
serves as the EPA’s main mechanism for
receiving and exchanging electronic
information reported via the internet.
CDX provides the capability for
submitters to access their data using
web services. CDX enables the EPA to
work with stakeholders to enable
streamlined electronic submission of
data via the internet. All information
sent via CDX is transmitted securely to
protect CBI. A reporting entity may
register for a CDX account or gain access
to an existing CDX account at https://
cdx.epa.gov, as discussed further below.
The ODS Tracking System is a secure
database that serves as the primary
vehicle for tracking the production and
consumption of ODS in the United
States. The ODS Tracking System allows
producers, importers, and exporters of
class I (excluding methyl bromide) and
class II substances to submit quarterly
and annual reports electronically. The
ODS Tracking System maintains the
data submitted to the EPA and helps the
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agency to: (1) Maintain oversight over
total production and consumption of
ODS in the United States; (2) monitor
compliance of individual companies
with domestic limits and restrictions on
production, imports, and transfers and
with specific exemptions from the
phaseout; (3) enforce against entities
illegally importing without allowances;
and (4) assess and report on compliance
with the United States production and
consumption caps established under the
Montreal Protocol, as implemented
through the CAA.
Providing a system to facilitate
electronic reporting is consistent with
the EPA’s E-Enterprise initiative to
reduce transaction costs and burdens for
the regulated community by leveraging
technologies. Eliminating paper-based
submissions in favor of electronic
reporting, including use of the revised
Microsoft Excel reporting forms, and
CDX, is part of broader government
efforts to move to modern electronic
methods of information gathering. One
of the objectives of E-Enterprise is to
reduce paperwork burden for the
regulated community by offering
electronic reporting, optimized
operations, and advanced real-time
monitoring tools. For more information
on the EPA’s E-Enterprise efforts please
visit: https://www.epa.gov/e-enterprise.
Section 603 of the CAA grants the
EPA the authority to issue certain
regulations on the monitoring and
reporting of ODS. The EPA may also use
the information gathering authority
under CAA section 114(a) to carry out
the provisions of Title VI, including the
production and consumption controls,
and may require anyone who is subject
to Title VI, or who may have
information necessary to carry out Title
VI, to make such reports as may
reasonably be required. It is reasonable
to require electronic reporting for the
reasons set forth in this notice. Using
electronic reporting enables more
efficient data transmittal and reduces
errors through built-in validation
procedures. It reduces the reporting
burden for submitters by reducing the
cost and time required to review, edit,
and transmit data to the agency. It also
promotes efficiency in communications
and cost savings in submissions and
correspondence. Additional support for
electronic reporting comes from the
Government Paperwork Elimination Act
(GPEA) (44 U.S.C. 3504), which states
that Executive agencies are to provide
‘‘(1) for the option of the electronic
maintenance, submission, or disclosure
of information, when practicable as a
substitute for paper; and (2) for the use
and acceptance of electronic signatures,
when practicable.’’ The EPA’s Cross-
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Media Electronic Reporting Regulation
(CROMERR) (40 CFR part 3), published
in the Federal Register on October 13,
2005 (70 FR 59848), provides that any
requirement in title 40 of the CFR to
submit a report directly to the EPA can
be satisfied with an electronic
submission that meets certain
conditions once the agency has
published a notice in the Federal
Register announcing that the EPA is
prepared to receive certain documents
in electronic form. See 40 CFR 3.2(a).
For more information about CROMERR,
go to https://www.epa.gov/cromerr.
The EPA designed the electronic
reporting forms with input from
stakeholders to reduce effort and allow
submitters to paste transaction-level
data into the form from other
spreadsheets. They contain built-in
validations, drop-down lists, and autopopulated cells to reduce errors from
data entry. Once the form is complete,
users generate a comma separated value
(CSV) file and submit the Microsoft
Excel report, CSV file, and any required
supporting attachments via CDX. Refer
to the EPA’s website for additional
information on electronic form
submission: https://www.epa.gov/odsphaseout/ods-recordkeeping-andreporting. The web-based tool, as
appropriate, also allows the user to
choose ‘‘Print,’’ ‘‘Save,’’ or ‘‘Transmit
through CDX.’’ The reporting tool
encrypts the file and electronically
submits it through CDX. The user can
also check the status of their
submissions at any time via CDX. Upon
successful receipt of the submission by
the EPA, the status of the submissions
will be flagged as completed. The CDX
inbox is currently used to notify the
users of any correspondence related to
user registration.
Under this proposal, entities generally
would be required to submit the first
quarter reports for the 2020 reporting
year, due April 1, 2020, through CDX.
Other reports that are available for
submission through CDX, including
import petitions and certifications of
intent to import ODS for destruction,
also would be required to be submitted
electronically through CDX starting
April 1, 2020. The EPA believes this
would give the regulated community
enough time to register in CDX and
familiarize themselves with the revised
electronic reporting forms and format. If
this rule is finalized as proposed,
reporting entities would be required to
register and electronically submit most
reports and petitions through CDX.
Specifically, for production, import,
export, destruction, transformation,
transfers, and trades of ODS entities
must use specified forms to allow for
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submission through CDX. Some reports
are not required to be submitted through
CDX and would continue to be
submitted to the EPA in hardcopy.
These are low-volume reports for which
the EPA has not released an electronic
form, and include the laboratory use
certifications and applications for
critical use exemptions for methyl
bromide. The OMB control number for
this information collection request (ICR)
and these forms is 2060–0170. The
following electronic forms were released
on July 1, 2018 and are available at
https://www.epa.gov/ods-phaseout/odsrecordkeeping-and-reporting and
through CDX:
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—Class I Producer Quarterly Report (EPA
Form 5900–151);
—Class I Importer Quarterly Report (EPA
Form 5900–150);
—Class I Exporter Annual Report (EPA Form
5900–149);
—Class I Laboratory Supplier Quarterly
Report (EPA Form 5900–153);
—Second-Party Transformation Annual
Report (EPA Form 5900–147);
—Second-Party Destruction Annual Report
(EPA Form 5900–148);
—Class II Producer Quarterly Report (EPA
Form 5900–202);
—Class II Importer Quarterly Report (EPA
Form 5900–200);
—Class II Exporter Quarterly Report (EPA
Form 5900–199);
—Class II Trades (EPA Form 5900–205);
—Class II Request for Additional
Consumption Allowances (EPA Form
5900–201).
—Methyl Bromide Producer Quarterly Report
(EPA Form 5900–141);
—Methyl Bromide Importer Quarterly Report
(EPA Form 5900–144);
—Methyl Bromide Exporter Quarterly Report
(EPA 5900–140);
—Distributor of QPS Methyl Bromide
Quarterly Report (EPA Form 5900–155);
and
—Methyl Bromide Pre-2005 Stocks Annual
Report (EPA Form 5900–142).
Petitioners currently have the option
of using CDX to submit petitions. The
current CDX process guides users
through a series of drop downs, fillable
fields, and uploads of PDF attachments
using an electronic webform. The EPA
is proposing to require reporting entities
importing ODS for reuse or destruction
to submit their reports through CDX
because it would enable more efficient
data transmittal and would reduce
errors, as it has built-in validation
procedures. For instance, missing
information in a required field would
prevent the petitioner from submitting
the petition until all fields are
completed. Thus, the EPA and entities
would expect to benefit from electronic
reporting by receiving complete
submissions in a system that allows for
secure electronic communication.
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The EPA estimates that entities
submitting ODS reports who have not
yet registered in CDX would incur a
one-time burden associated with
registration. Most entities have already
registered with CDX to voluntarily
submit electronic ODS Tracking System
forms or for other agency regulatory
programs. The EPA estimates 20
respondents would need to incur the
one-time CDX registration burden.
Based on the EPA’s CROMERR (ICR
number 2002.07; OMB Control No.
2025–0003), the EPA assumes that
entities would spend fifteen minutes per
employee to register with CDX and
complete LexisNexis identity proofing.
Furthermore, the EPA assumes that an
average of two technical staff members
would need to register for each
company, resulting in 20 minutes of
burden per entity.
The EPA estimates that only those
entities who have not yet registered in
CDX would incur a one-time burden for
this change. Based on the number of
entities that are already reporting
through CDX, the EPA expects more
than 90% of reporting entities were
reporting electronically at the start of
2019. Thus, the EPA estimates initial
CDX registration and electronic
signature costs incurred in the first year
would be $2,000 because most entities
have previously registered in CDX and
are reporting electronically. The EPA
estimates the annual costs savings to
reporters to be $4,000 per year for
electronic reporting.
As discussed in the supporting
statement for the accompanying ICR
available in the docket to this rule, the
EPA also expects to reduce its own
burden as the result of receiving
electronic submissions and
communicating electronically with
entities. The agency resources and time
requirements to review and process data
would decrease, and document storage
and retrieval would require fewer
resources. The electronic submission of
data through CDX would allow for the
direct import of data into the ODS
Tracking System. This would reduce the
time the agency spends manually
entering data into the ODS Tracking
System from paper forms as well as
reduce the potential for human error
that exists when data are entered by
hand. Agency personnel would also be
able to communicate more efficiently
with entities electronically. The
conversion to an electronic reporting
system as well as the adoption of CDX
to facilitate form submission and
processing are expected to create longterm burden reductions and increased
efficiencies for the EPA. Annual costs to
the EPA would be associated with the
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operation and maintenance of CDX for
the data flow.
The EPA seeks comment on its
proposal to require electronic reporting
for ODS data under 40 CFR part 82,
subpart A, with exceptions for a few
low-volume forms. In addition, the EPA
seeks input on experience to date with
electronic reporting of ODS data and
whether entities that have already
transitioned to electronic reporting have
been able to lower their reporting costs,
and if so, by how much. The EPA also
requests comment on the proposal that
the requirement for electronic reporting
would begin 30 days after the effective
date of any final rule and on whether
additional time would be needed to
comply with the electronic reporting
requirements.
B. Changes to Reporting Requirements
in §§ 82.13, 82.23, and 82.24
This section presents the EPA’s
proposal to consolidate and harmonize
ODS reporting elements. The agency has
provided the option of electronic
reporting for most submissions since
2008 to assist stakeholders in the
reporting process. The proposed
regulatory changes would reflect current
practices by entities that can be
designed into electronic forms. The EPA
monitors company compliance, in part,
through the recordkeeping and reporting
regulations at §§ 82.13 and 82.24. The
EPA is proposing these updates under
CAA sections 603 and 114. Many of
these proposed regulatory changes
would ease the reporting burden. For
example, the EPA is proposing to
remove reporting elements in
§§ 82.23(a), 82.24(b), and 82.24(c) that
require the reporter to calculate values
from data already provided. Requiring
this of the entity is unnecessary because
if finalized as proposed, the requirement
to report electronically through CDX
means these values can automatically be
calculated and populated. This would
save reporting entities time in reporting
and reduce errors in submissions. The
EPA is also proposing to change
§§ 82.13(h) and 82.24(d) so that the
quantity (rather than the percentage) of
used, recycled, or reclaimed class I and
class II substances, respectively, would
be a required reporting element. This
change would improve consistency with
the importer reporting requirements and
correspond with the way companies
report their annual data. It would also
streamline the exporter reporting forms
by eliminating the need for an entity to
calculate a percentage. The EPA is also
proposing to remove references to
expended and unexpended production
and consumption allowances at
§ 82.13(f)(3)(iv) and (g)(4)(viii), which
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likewise can be calculated automatically
with the use of electronic reporting
forms.
Other proposed regulatory changes
would harmonize the requirements for
class I and class II substances. For
example, the EPA is proposing that the
timeframe submitters have to make
revisions to forms for class I and class
II substances be the same. Currently
under § 82.24 class II reporters have 180
days from the end of the applicable
reporting period to make revisions
while the class I provisions in § 82.13
are silent on the issue. The EPA is
proposing to address this omission in
the class I regulations by adding a
provision that revisions to reports for
class I substances under § 82.13 be made
within 180 days of the end of the
applicable reporting period. This would
conform to the current practices
followed by entities that make revisions
to class I reports and is consistent with
the EPA’s current practice of allowing
such revisions to the reports for class I
substances. These changes would also
be consistent with the current
regulations in § 82.24 for revisions to
reports for class II substances.
The EPA is further proposing to
amend § 82.24(d)(1) to clarify that
exporters who submit a Request for
Additional Consumption Allowances
(RACA) must still include that export on
their quarterly exporter report. Under
§ 82.20, companies may submit a
request for additional consumption
allowances if they export class II
substances that were previously
produced in or imported into the United
States using consumption allowances.
Currently, the regulatory text at
§ 82.24(d)(1) excludes from quarterly
reporting those RACAs even though
exporters do typically include those
exports in their quarterly reporting. For
ease of review by the EPA and for
consistency of reporting by exporters,
the agency is proposing that all exports
be included in the quarterly export
report, even if the EPA had issued
additional consumption allowances to
the exporter for that export. This
proposed change matches current
practice, so the agency does not
anticipate an increase in burden for the
exporter.
The EPA is also proposing to amend
the reporting requirements at § 82.13(v)
to add the contact information for the
source company from which the
material was purchased and the
laboratories to whom the material is
sold. This proposal would allow the
EPA to better track the sale of ODS for
laboratory purposes through the Class I
Laboratory Supplier Report.
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Lastly, the EPA is proposing to correct
class I reporting requirements for
exporters by replacing the term
‘‘Employee Identification Number’’ with
the correct term ‘‘Employer
Identification Number’’ in § 82.13(h).
The EPA seeks comment on its
proposed regulatory changes to the
reporting requirements under 40 CFR
part 82, subpart A. The EPA welcomes
comment on any other changes that
would ease burden on reporters.
C. Changes to Methyl Bromide
Provisions in §§ 82.4 and 82.13
The EPA is proposing to amend the
existing regulatory provisions related to
the QPS exemption for methyl bromide
under CAA section 604(d)(5) and ensure
that QPS methyl bromide is not used in
a manner inconsistent with the
exemption. The EPA’s regulations
implementing CAA section 604(h) set
January 1, 2005 as the production and
import phaseout date (§ 82.4(b), (d)).
Certain exceptions apply, including an
exemption for methyl bromide
produced or imported for quarantine
and preshipment applications.
Quarantine applications and
preshipment applications are both
defined at § 82.3. Briefly, quarantine
applications are treatments to prevent
the introduction, establishment, and/or
spread of quarantine pests (including
diseases), or to ensure their official
control. These can include commodities
entering or leaving the United States or
any State (or political subdivision
thereof). Preshipment applications are
those non-quarantine applications
applied within 21 days before export to
meet the official requirements of the
importing country or existing official
requirements of the exporting country.
The current recordkeeping and
reporting regulations relating to QPS
methyl bromide appear at § 82.13 and
establish specific requirements for
producers, importers, distributors, and
applicators, including in some instances
requirements for written certifications
that the methyl bromide will be used
only for QPS applications in accordance
with the definitions in § 82.3.
This section discusses three types of
proposed changes to the QPS
regulations. As a brief overview, first,
the EPA is proposing to clarify that it is
a violation to sell or use methyl bromide
produced under the QPS exemption for
any uses other than QPS applications.
Second, the EPA is proposing to extend
the existing certification requirements to
all purchasers of QPS methyl bromide.
Third, the EPA is proposing to make
non-substantive changes to §§ 82.4 and
82.13 to improve readability, including
changes to the naming convention for
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methyl bromide where appropriate and
removal of unnecessary references to
‘‘used’’ material.
These proposed changes are, in part,
in response to the misuse of QPS methyl
bromide by applicators and distributors
in the U.S. Virgin Islands and Puerto
Rico. As described in the Centers for
Disease Control’s (CDC) Morbidity and
Mortality Weekly Report (MMWR), on
March 18, 2015,26 a U.S. Virgin Islands
pest control company, Terminix
International USVI LLC, fumigated a
condominium complex in St. John with
a product containing methyl bromide
for the purpose of exterminating
household pests. As a result, a family of
four suffered acute methyl bromide
poisoning resulting in three family
members having life-altering illnesses.
On March 25, 2015, the U.S. Virgin
Islands Department of Planning and
Natural Resources issued a stop-use
order for methyl bromide to the
company that performed the fumigation.
A subsequent investigation by the
Department of Planning and Natural
Resources and the EPA revealed that a
previous fumigation with methyl
bromide had occurred on October 20,
2014, at the same condominium resort.
In total, 37 persons may have been
exposed to methyl bromide as a result
of the October 2014 and March 2015
fumigations (Kulkarni et al., 2015).
Terminix, LP and Terminix, USVI were
sentenced to pay a total of $10 million
in criminal fines and restitution for
violating the Federal Insecticide,
Fungicide, and Rodenticide Act
(FIFRA).27 The companies were also
ordered to perform community service
following an investigation and guilty
pleas to their use and application of
illegal fumigants in multiple residential
locations in the U.S. Virgin Islands.
As a result of the exposures in the
U.S. Virgin Islands, as well as
documented misuse of QPS methyl
bromide in Puerto Rico, and the high
health risk potential from mishandling
or misuse of QPS methyl bromide, the
EPA is proposing to add a regulatory
provision at § 82.4(r) to expressly
prohibit the sale or use of QPS methyl
26 1. Kulkarni, P.A., Duncan, M.A, Watters, M.T.,
Graziano, L.T., Vaouli, E., Cseh, L.F., Risher, J.F.,
Orr, M.F., Hunte-Ceasar, T.C., Ellis, E.M. (2015)
Severe Illness from Methyl Bromide Exposure at a
Condominium Resort-U.S. Virgin Islands, March
2015 Morbidity Monthly and Weekly Report
(MMWR) Center for Disease Control, 64(28); pg.
763–766. Available at: https://www.cdc.gov/mmwr/
preview/mmwrhtml/mm6428a4.htm.
27 EPA. (2017). ‘‘Press Release: Terminix
Companies Sentenced for Applying Restricted-Use
Pesticide to Residences in the U.S. Virgin Islands.’’
Available at: https://www.epa.gov/newsreleases/
terminix-companies-sentenced-applying-restricteduse-pesticide-residences-us-virgin.
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bromide for any uses other than QPS
applications. The proposed provision
would also explicitly state that it is a
violation of subpart A to sell or use
methyl bromide produced or imported
under the QPS exemption for any uses
other than QPS applications.
The existing regulations at
§ 82.13(y)(1) and (z)(2) require
certification statements from
distributors, applicators, commodity
owners, shippers or their agent that
methyl bromide ‘‘will be used only for
quarantine and preshipment
applications.’’ Similarly,
§ 82.13(f)(2)(xviii) and (xix) describe the
exempted quantities of methyl bromide
as ‘‘produced solely for quarantine and
preshipment applications.’’ The EPA
interprets this existing text as already
prohibiting the use of methyl bromide
produced or imported under the QPS
exemption for any uses other than QPS
applications. Although the EPA is
proposing to add an express statement
of the prohibition at § 82.4(r) to add
clarity and enforceability to this
prohibition, the EPA does not view this
as changing the existing requirements.
The proposed prohibition that would
appear at § 82.4(r) for the QPS
exemption is modelled on the language
at § 82.4(n), which contains an express
prohibition on using controlled
substances produced under the essential
use exemption.
Second, to help avoid future
exposures stemming from misuse of
QPS methyl bromide, the EPA is
proposing to extend the existing
certification requirements to all
purchasers of QPS methyl bromide,
including purchasers who purchase for
further distribution. Under the existing
recordkeeping and reporting
requirements at § 82.13(f)(2)(xviii),
producers of methyl bromide must
maintain certifications that methyl
bromide produced for QPS applications
has been purchased by distributors or
applicators to be used only for QPS
applications. Under § 82.13(y),
distributors of QPS methyl bromide
must certify when they purchase or
receive QPS material from producers
and importers that the controlled
substances will be used only for QPS
applications. Applicators of QPS methyl
bromide must also certify to distributors
that the controlled substance will only
be used only for QPS applications under
the existing regulation at § 82.13(z).
The EPA has identified a gap in this
certification chain when the material is
sold through multiple distributors
before reaching the applicator. When
one distributor sells to a second
distributor, neither distributor is
required to certify or maintain a
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certification that the material will be
used only for a QPS application. The
EPA is proposing to revise § 82.13(y) to
extend the certification requirement to
purchasers who purchase or receive
material for further distribution to
address this gap.
The proposed extension of the
certification requirement would help to
ensure that distributors are
knowledgeable of the requirements for
the sale of QPS methyl bromide. The
sales and misapplications of QPS
methyl bromide in Puerto Rico and the
U.S. Virgin Islands demonstrate that
distributors may not have been aware of,
or may have ignored, the limitations on
the use of this material. The purpose of
the requirement when established was
to ensure that anyone selling or
purchasing QPS methyl bromide signed
a certification verifying that they would
comply with requirements under Title
VI of the CAA (66 FR 37760).
Distributors are more likely to make
themselves aware of those requirements
and be mindful of the fact that QPS
methyl bromide can only be used for
QPS applications if they are required to
sign a certification addressing these
requirements and provide it before each
purchase. This proposal would fill the
gap in the distribution chain and ensure
the original intent of the regulation is
implemented.
The EPA is therefore proposing to
extend the existing requirement that
every distributor of QPS methyl
bromide certify to the producer or
importer from whom they purchased or
received the material that quantities
purchased or received would be sold
only for quarantine applications or
preshipment applications to also require
such a certification when the material is
purchased or received from a
distributor. Likewise, the existing
requirement that such distributors
receive from any applicator, to whom
they sold or delivered the methyl
bromide a certification, prior to delivery
of the quantity, stating that the quantity
would be used or sold solely for QPS
applications in accordance with
definitions in subpart A would be
extended to sales and deliveries to any
exporter or distributor under the
proposed changes. For exporters, the
invoice or sales agreement currently
required in § 82.13(h)(2)(viii) is enough
for this purpose. The EPA is proposing
to make these changes to § 82.13(y).
The EPA is also proposing that the
distributor certify that they are selling
the material for a QPS application rather
than certify that it will be used for a
QPS application, as is required in the
existing regulations. This would better
align the rule text with the distributor’s
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role. The proper sale of the material is
within the distributor’s control whereas
the use may not be, given that the
material may be resold by another
distributor and applied by an end user
or third-party applicator.
The EPA seeks comment on its
proposed addition of § 82.4(r) relating to
the prohibition against using QPS
methyl bromide for anything other than
QPS uses and its proposed changes to
the certification requirements for QPS
methyl bromide.
The EPA is also proposing edits to
§ 82.13(h)(2), which contains the
recordkeeping requirements for
exporters of certain ‘‘types’’ of methyl
bromide by companies that did not
produce the material. The EPA is
proposing edits to clarify what is meant
by ‘‘type’’ of methyl bromide.
Specifically, the EPA is proposing to
more clearly state that the provision
requires reporting of the quantity of
methyl bromide exported for
transformation, destruction, critical use,
and QPS uses. These are the only
exempted uses of methyl bromide, and
this would match the information
requested in the existing reporting
forms. The EPA is also proposing to
remove the requirement in the existing
provision that exporters state how much
of the exports are of ‘‘used, recycled or
reclaimed material.’’ Unlike other ODS,
methyl bromide is a product that is
registered and controlled under FIFRA
and thus is not sold ‘‘used’’ or
‘‘recycled’’ or ‘‘reclaimed.’’ Therefore,
these adjectives are not applicable to
methyl bromide and this phrase is not
needed.
Lastly, the EPA is proposing to
replace references to ‘‘class I, Group VI
controlled substances’’ with ‘‘methyl
bromide’’ where appropriate for
readability throughout §§ 82.4 and
82.13. ‘‘Class I, Group VI controlled
substances’’ is how methyl bromide is
classified under the EPA’s regulations in
appendix A to subpart A, but methyl
bromide is the only compound within
this category. Using the common name
would improve the readability of the
QPS regulations.
The EPA seeks comment on these
proposed changes to §§ 82.4 and 82.13
for readability and clarity of the
regulations, as well as on the proposed
changes to the recordkeeping
requirements at § 82.13(h)(2) for exports
of certain types of methyl bromide.
D. Changes to Provisions for the Import
of Ozone-Depleting Substances in
§§ 82.3, 82.4, 82.13, 82.15, and 82.24
Under CAA sections 604, 605, and
606, the EPA restricts the import of ODS
consistent with both the CAA and the
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Montreal Protocol. As discussed
previously in Section II of this notice,
importing virgin ODS requires the
importer to expend consumption
allowances. Controlling the number of
allowances and knowing who holds
those allowances allows the EPA to
ensure that the phaseout obligations
under the Montreal Protocol as
implemented through the CAA are met.
Used ODS 28 can be imported without
consumption allowances, and generally
without use restrictions, if certain
conditions are satisfied. Imports of used
ODS are currently regulated under
§ 82.13(g)(2)–(3) (for imports of used
class I substances) and § 82.24(c)(3)–(4)
(for imports of used class II substances).
The EPA has reviewed the import
petition process and is proposing
amendments to improve data collection.
Such changes would require collection
of additional information when
additional verification is needed to
determine whether the material has
been previously used and remove data
elements that are currently collected but
that are no longer needed. The EPA is
also proposing to create a procedure for
imports of both used and virgin ODS
when they are imported for destruction.
This proposal may lead to more used
ODS being imported for reuse or
destruction because of the less
burdensome reporting requirements,
which is beneficial for fostering a
smooth transition to alternatives and
reducing emissions of ODS to the
atmosphere. In a recent example, the
EPA granted a petition for the import of
virgin ODS for destruction. The agency
anticipates additional petitions for
imports of virgin material may be
received by the agency as the global
phaseout of HCFCs continues and
because the United States has a greater
capacity for destruction. Additionally,
these proposals would reduce the
chance that virgin ODS are imported
under the false pretense that it is
‘‘used.’’
Anyone wanting to import used ODS
must currently submit a petition to the
agency and receive a ‘‘non-objection
notice’’ approving the import. The
petition to import a used ODS must
contain certain information, which the
EPA considers in determining whether
the ODS is in fact used. Required
information includes: A description of
the previous use of the substance; the
identity of source facilities from which
the material was recovered; a contact
28 Used ODS have been recovered from their
intended use systems (e.g., refrigeration and AC
equipment) and may include controlled substances
that have been, or may be subsequently, recycled
or reclaimed. See 40 CFR 82.3
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person at each source facility; the name,
make, and model number of the
equipment from which the material was
recovered at each source facility; a best
estimate of when the material was
removed; and an export license from the
appropriate government agency from the
country of export. See §§ 82.13(g)(2) and
82.24(c)(3). After review, the EPA
responds to the petition by issuing
either a ‘‘non-objection notice,’’ which
allows the import to proceed, or an
‘‘objection notice,’’ which has the effect
of prohibiting the import because a nonobjection notice is required for the
lawful import of such material.
The EPA established the petition
process to import used class I ODS
(under CAA sections 603 and 604) in
1998 (63 FR 41626) and in 2003 (68 FR
2819) for class II ODS (under CAA
sections 603 and 605) out of concern
that some importers were circumventing
the production and import controls by
importing virgin class I and class II
substances that had been intentionally
mislabeled as used. The petition process
has been effective in addressing this
potential problem because the
information requirements and the
review undertaken by the EPA make it
difficult for importers to falsify
documents. Sections 604, 605, and 606
of the CAA provide statutory authority
for controlling the import of ODS,
including the petition process and the
proposed changes to that process.
Section 603 of the CAA requires
reporting of the amount of ODS
imported on a quarterly basis or on a
basis determined by the Administrator.
To the extent that these proposed
changes involve recordkeeping and
reporting of information, the EPA also
relies upon its authority under CAA
section 114, which authorizes the EPA
to require recordkeeping and reporting
in carrying out any provision of the
CAA (with certain exceptions that do
not apply here). Specifically, the EPA is
proposing changes to the recordkeeping
and reporting requirements to carry out
the import provisions of sections 604,
605, and 606.
Despite the effectiveness of the
petition process at providing
information that allows the EPA to
verify that ODS are used before they are
imported, the EPA has identified
potential improvements to the process.
For example, the current requirements
are difficult to satisfy if the imported
material comes from a halon bank or
other ODS banks. The current
regulations exempt only halon 1301
aircraft bottles from the petition process
for hydrostatic testing, yet aircraft
bottles containing halon 1211 are also
imported for such testing. The current
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petition process also does not
distinguish imports of used ODS that
are intended to be destroyed from
imports of all other used material that
are intended to be reclaimed for
continued use, though the agency
recognizes that the verification
requirements do not need to be as
rigorous when the ODS are to be
destroyed. The existing regulations also
do not provide a mechanism to preapprove the import of virgin material for
destruction, resulting in delays at the
port of entry while the shipment is
verified by the EPA.
i. Changes to the Petition Process To
Import Used ODS for Reuse in §§ 82.13
and 82.24
The EPA is proposing changes to the
petition process that would generally
ease the burden on importers, while still
allowing the agency to verify that the
material being imported is used.
Specifically, the agency is proposing to:
Allow, under certain circumstances,
submission of an official letter from the
appropriate government agency in that
country where the material is stored
attesting that a class I substance is
‘‘used’’ in lieu of detailed equipmentlevel source information; 29 allow
submission of an application for an
export license in lieu of the license
itself; require that petitions include
email addresses in contact information
(while removing the requirement to
provide fax numbers) and commodity
codes for the material; and specifically
authorize the agency to request
additional information when additional
verification is needed before issuing a
non-objection notice. In general, the
EPA anticipates these changes would
increase the availability of used class I
substances in the United States and thus
help to provide a greater supply of used
material for servicing existing
equipment, which might otherwise have
to be retired before the end of its useful
life.
First, the EPA is proposing to amend
§ 82.13(g)(2) in recognition that banks 30
of halon and other class I ODS overseas
are a potential source of used ODS.
Since halons were phased out in the
United States and other non-Article 5
countries in 1994, many countries and
organizations established halon banks
where they aggregate and store
29 The EPA is not proposing similar changes for
class II ODS given the production phaseout for
these substances is still underway.
30 The EPA uses the term ‘‘bank’’ here to refer to
a company-run or nationally government-run
facility that collects and stores previously-recovered
ODS (e.g., a halon bank) for reuse at a later date,
not the ‘‘bank’’ of ODS installed in existing
equipment and products.
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previously used and recovered halon for
reuse in fire suppression applications.31
In most cases the managers of such
banks do not have the complete
information required by the EPA’s
petition process especially since the
material may have been recovered more
than two decades ago. As detailed
above, the import petition must
currently contain information about the
used ODS including the source facility
and name, make, and model number of
the equipment and from which the
material was recovered. Petitioners
sourcing class I substances from banks,
therefore, rarely have enough records to
provide all the information required in
the petition process, and as a result the
petitions are subject to denial.
The EPA is proposing to waive the
requirement for specific source
information for halon and other class I
substances stored in either a national
government ODS bank or a privatelyoperated bank authorized by a national
government to collect and manage ODS
if the petitioners include an official
letter from the appropriate national
government agency of the exporting
country attesting that the class I
substance(s) proposed for export to the
United States is used. The EPA would
consider this official letter along with
all the other evidence provided in
determine whether the material is used.
However, providing an official letter
does not mean that the EPA would
automatically approve the petition. The
EPA is proposing to define ‘‘bank’’ for
clarity in the regulatory text.
Stakeholders have indicated to the
agency that this type of change to the
petition process would allow U.S.
companies to potentially access large
reserves of halon held overseas for
which source information cannot be
obtained. Halons are used for fire
protection applications, such as in civil
aviation, military, and oil and gas
drilling and the continued availability
of used halons remains important to
many U.S. operations. Industry in the
United States has successfully managed
the recovery and use of halons since the
domestic phaseout of production in
1994 and the EPA anticipates that they
will continue to do so. However, as we
get further from the phaseout, the
available supply of halons decreases.
The Montreal Protocol’s Technology
and Economic Assessment Panel (TEAP)
has provided information on the
availability and expected need for
halons in the future. The TEAP issued
a report in September 2018, noting
continued demand for halons, in
31 Halons were phased out in Article 5 countries
in 2010.
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particular for servicing fire suppression
equipment for civilian aviation.32 Civil
aircraft will continue to need halon to
meet fire protection requirements for
lavatory bottles, handheld
extinguishers, engine nacelles, auxiliary
power units, and cargo compartments 33
until there is a transition to alternatives
for all applications on new aircraft as
well as to service the civil aircraft fleet.
This proposal would allow halon to be
more easily sourced from overseas
banks and thus should make more halon
available to service aircraft in the
United States. In addition, the military
and oil and gas drillers continue to need
halons for fire suppression applications.
Second, the EPA is proposing to
amend the criteria for when the EPA
may issue an objection notice to a
petition to import a used ODS. When
enough information is not provided
with the initial petition for a
determination, the EPA requests
additional information from the
petitioner in order to verify that the
material was used. The EPA is therefore
proposing to clarify that not providing
this requested information could be
grounds for issuing an objection notice
to the petition. As one example of
information that may be requested, the
EPA may request results of purity
sampling of class I or class II substances.
The EPA understands that if a halon is
used, the purity will typically be much
lower (on the order of 90 to 95 percent
pure) than if the material is virgin. The
EPA may request the results of purity
tests in situations where having those
results would give the EPA and the
company receiving the used ODS
information that could confirm, before
the material is imported, that the ODS
is in fact used. Under this proposal, if
petitioners fail to respond to requests
from the agency for addition
information, the EPA could issue an
objection notice.
Other examples of information that
the EPA has requested in reviewing
petitions to verify the substances is used
before issuing a non-objection notice
include: A photo of each unit that
contained the used ODS, with serial
numbers visible; photos of a
representative sample of the cylinders,
32 UNEP. (2018) Montreal Protocol on Substances
on Substances that Deplete the Ozone Layer. Report
of the Technology and Economic Assessment Panel.
September 2018 Volume 2 Decision XXIX/8 on the
Future Availability of Halons and their
Alternatives; pg. 1–32. Available at: https://
ozone.unep.org/index.php.
33 FAA (2004). ‘‘FAA Halon ARC Final Report
Findings & Recommendations’’ Halon Replacement
Aviation Rulemaking Committee; pg. 1–49.
Available at: https://www.faa.gov/regulations_
policies/rulemaking/committees/documents/
index.cfm/committee/browse/committeeID/397.
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with serial numbers visible; a
description of the facility from which
the used ODS originates, which
includes what is produced at the
facility, the location of the facility, and
how long the facility has been in the
location; a description of each unit from
which the used ODS originates; links to
websites showing brochures,
photographs, and/or descriptions of
each different unit from which the used
ODS originates; copies of the original,
signed work orders authorizing
collecting of the used ODS; copies of the
paperwork showing that the company
completed the work; copies of payment
to the company that collected the used
ODS for their services, with redactions
for confidential or sensitive information
such as bank account numbers; copies
of business licenses from the
government authorizing collection
companies to do this type of work; and
information on how transport will occur
within the exporting country and to the
United States. For used ODS from
Europe, the EPA has requested a
screenshot of the European Commission
export license; the name and contact
information for the European
Commission official who signed the
Export License; and copies of all
paperwork required for movement
within the European Union, such as the
‘‘Notification document for
transboundary movement/shipments of
waste.’’ The EPA is not proposing to
collect all such information for each
petition and thus is not proposing to
revise the regulatory text to require that
it be provided in every petition.
However, the agency does wish to
provide notice to petitioners that it may
request additional information to
confirm that the ODS is in fact used and
is proposing to amend the regulations to
make clear that failure to provide such
information when requested would be a
ground to issue an objection notice. The
EPA specifically requests comment on
this proposal for an additional ground
for denying a petition to import used
ODS and on whether the EPA should
specifically list the types of information
in the regulations that the agency may,
on a case by case basis, request from the
petitioner after reviewing the initial
submission to confirm that the material
is used. If the agency were to add a list
of specific types of information that it
might request on a case-by-case basis,
that list could include some or all the
information described in the prior
paragraphs of this notice that the EPA
has requested in reviewing petitions in
the past.
Third, the EPA is proposing multiple
minor amendments to the petition
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process to ensure accuracy, faster
review, and facilitate the import of used
ODS. In particular, the EPA is proposing
to update the requested contact
information by requiring email
addresses and removing fax numbers.
The EPA is also proposing to require
that the petition for import include the
amount of material authorized under the
export license or export license
application to ensure the petitioned
amount is equal to or less than the
amount that arrives at the United States
port of entry. The EPA is also proposing
to require that petitioners provide the
commodity code associated with the
ODS to be imported. The commodity
codes are classifications for goods and
services traded among countries. This
proposal would match the agency’s
other import and export requirements in
§§ 82.13(g) and (h) and 82.24(c) and (d)
and help to ensure that the data are
correctly entered in Customs and Border
Protection’s Automated Commercial
Environment and International Trade
Data System (ACE/ITDS).
The EPA is also proposing to update
the commodity codes for HCFC–123 and
HCFC–124 in Appendix K. The U.S.
International Trade Commission is
responsible for publishing the
Harmonized Tariff Schedule of the
United States Annotated (HTSA). The
HTSA provides the applicable tariff
rates and statistical categories for all
merchandise imported into the United
States. It is based on the international
Harmonized System, the global system
of nomenclature that is used to describe
most world trade in goods. This action
updates the commodity codes for
HCFC–123 and HCFC–124 in the
appendix so that they coincide with
those currently in effect and in use by
the U.S. International Trade
Commission.
In addition, the EPA is proposing to
amend §§ 82.13(g)(2) and 82.24(c)(3) to
allow importers of class I and class II
substances, respectively, to provide an
application for an export license in lieu
of an actual export license, as is
currently required. For example,
Canada, the largest exporter of used
ODS to the United States, requires the
EPA to approve the export before they
issue an export license. As such,
petitioners are only able to provide the
submitted application for an export
license with their petition. Considering
this, the agency has worked with
Canada to accept the submitted
application in lieu of the export license.
However, there may be other countries
that also require approval prior to
export, and the EPA wants to ensure all
countries receive equal treatment and
that all petitioners are aware of this
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option. As such, the agency desires to
formalize the option in the regulations.
The EPA is also proposing to require an
English translation of the export license
application or export license to facilitate
the agency’s review.
The existing regulations for petitions
for imports of used material also require
that if the imported substance is
intended to be sold as a refrigerant, the
petition must include contact
information for the U.S. reclaimer who
will bring the material to the standard
required under CAA section 608 and
§ 82.152(g), if it is not already reclaimed
to those specifications. The EPA is
proposing to add ‘‘EPA-certified’’ to the
description of reclamation facilities in
the provisions containing this
requirement, §§ 82.13(g)(2)(xiii) and
82.24(c)(3)(xiii). This proposal would
highlight the existing expectation for
petitions to import used material to be
sold as a refrigerant that the reclamation
facility that will receive the material in
the United States must be EPA-certified.
The EPA’s reclamation program is
described at https://www.epa.gov/
section608/stationary-refrigerationrefrigerant-reclamation-requirements.
Finally, the agency is proposing to
allow flexibility for the timing of the
import when the non-objection notices
was issued towards the end of the year.
The EPA currently requires the import
to occur in the same control period (i.e.,
calendar year) that the non-objection
notice was issued. However, this can
result in petitioners postponing their
requests until the start of the next year.
To avoid that unnecessary delay, the
EPA is proposing that importers have
one year from the date stamped on the
non-objection notice to import that
shipment.
The EPA is soliciting comments on
these proposed changes to the petition
process for importing used ODS. The
agency is particularly interested in
whether streamlining the petition
process, including to facilitate imports
of material from banks for class I ODS,
would affect compliance with the
prohibition on import of virgin ODS.
The EPA welcomes suggestions from the
regulated community on how the
petition process may be further
streamlined while ensuring compliance.
b. Exemption for Imports of Halon 1211
Aircraft Bottles in § 82.3
To facilitate the import and testing of
more types of aircraft halon bottles for
hydrostatic testing, the EPA is
proposing to extend the definition of
‘‘aircraft halon bottles’’ in § 82.3 to also
include vessels containing halon 1211.
The current regulations in § 82.13(g)(2)
exempt aircraft halon bottles that are
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41531
imported for hydrostatic testing from
the import petition process. The EPA
has defined ‘‘aircraft halon bottle’’ in
§ 82.3 as a vessel used as a component
of an aircraft fire suppression system
containing halon 1301.
FAA regulations at 14 CFR
25.851(a)(6) require the presence of
halon bottles, or the equivalent, aboard
transport category aircraft, and they
must be tested under United States
Department of Transportation (DOT)
regulations in 49 CFR 180.205 and per
National Fire Protection Association
standards if damaged or discharged
(NFPA, 2018a). In particular, such
bottles undergo hydrostatic testing,
which detects leakage and determines
whether the bottles are functioning
properly. This testing is important both
for safety as well as for detecting and
averting emissions of halon, a highly
potent ODS.
In 2009, the EPA exempted aircraft
fire extinguishing spherical pressure
vessels containing halon 1301 (‘‘aircraft
halon bottles’’) being imported for
hydrostatic testing from the import
petition requirements (74 FR 10182).
The EPA sought comment in that rule
on whether to include halon 1211 in the
exemption for aircraft halon bottles, and
the agency did not receive comment
indicating these imports occur.
Therefore, the EPA limited the
exemption only to aircraft halon bottles
containing halon 1301. The 2009 rule
reduced the administrative burden on
entities when they import aircraft halon
bottles for the purpose of maintaining
these bottles to commercial safety
specifications and standards. More
information on the history and the goals
of the import petition process and an
explanation of why an exemption was
warranted for aircraft halon bottles
containing halon 1301 can be found in
the 2009 rule.
Since that time, the EPA has
determined based on import petitions
received for halon 1211 and discussions
with stakeholders that aircraft halon
bottles containing halon 1211 are
imported for hydrostatic testing. Thus,
the EPA is proposing to extend the
exemption created for aircraft bottles
containing halon 1301 to those
containing halon 1211. This proposed
change would be accomplished by
adding aircraft bottles containing halon
1211 to the definition of ‘‘aircraft halon
bottles’’ in § 82.3. The reasons for
exempting bottles containing halon
1211 are the same as for bottles
containing halon 1301, discussed at 74
FR 10182. For example, this proposed
exemption would facilitate proper
maintenance of bottles containing halon
1211 and allow transit and testing to
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occur more quickly for such bottles.
Promoting proper maintenance of these
additional fire suppression devices
would help ensure the bottles operate
correctly to extinguish fires on aircraft.
Proper maintenance of the storage
vessels also prevents the accidental
emission of this high-ODP compound.
Lastly, reducing the import petition
requirements could also allow
hydrostatically tested bottles to be
available more readily for aircraft.
The proposed exemption of imports of
aircraft bottles containing halon 1211
for hydrostatic testing would only
exempt them from the petition process.
Recordkeeping and reporting are
currently required, and would still be
required, for the import and export of
aircraft halon bottles. In particular, if
the proposed exemption were finalized,
importers of such bottles would still
need to maintain import records, as set
forth in § 82.13(g)(1), submit quarterly
reports within 30 days of the end of the
applicable quarter in accordance with
§ 82.13(g)(4), and submit an annual
export report 30 days after the end of
the calendar year, in accordance with
§ 82.13(h).
The EPA seeks comment on this
proposal and is particularly interested
in whether this would affect the ability
of technicians, aircraft owners, and fire
suppression equipment manufacturers
to continue maintaining existing
equipment.
c. Changes to Requirements for Imports
of ODS for Destruction in §§ 82.3, 82.4,
82.13, 82.15, and 82.24
This portion of the notice discusses
two sets of proposed changes to the
import process for ODS specifically
imported for destruction.34 First, the
EPA is proposing to establish a
streamlined approach for importing
used ODS for destruction. Second, the
EPA is proposing to extend that
approach to virgin ODS, as there is
currently no mechanism for the EPA to
pre-approve import of virgin ODS for
destruction.
ODS from decommissioned
equipment, unwanted stockpiles, and
mixtures that are contaminated and
cannot be reclaimed are often imported
to the United States for destruction.
Facilitating the destruction of ODS is
beneficial to the environment since it
averts ODS emissions into the
atmosphere and thus is consistent with
the overarching goal of Title VI to
protect stratospheric ozone. The
Montreal Protocol’s Scientific
34 The EPA refers to the import of ODS intended
to be destroyed in the United States throughout this
notice as ‘‘imports for destruction.’’
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Assessment Panel estimated that
capture and destruction of CFC, halon,
and HCFC banks in 2015 could avoid
1.8 million ODP-weighted metric tons of
future emission through 2050.35 It also
estimated that if all 2015 halon, CFC,
and HCFC banks 36 were destroyed in
2015, the stratospheric chlorine levels at
mid-latitude would return to 1980 levels
more than six years sooner than in the
baseline scenario. The EPA recognizes
that there is ongoing commercial
demand for certain substances, as
discussed earlier in this notice with
respect to halons and other ODS. Some
ODS may, however, be unwanted and
thus susceptible to release; this risk may
be higher when they are stored in
countries that do not have adequate
capability to properly reclaim or destroy
them. Creating a process for the import
of ODS for destruction would help
facilitate the destruction of such ODS
and thus reduce the risk of such
releases. More information on the
destruction facilities that destroy ODS
and their technologies is available in the
report entitled ‘‘U.S. Destruction in the
United States and Abroad.’’ Destruction
of unwanted ODS in the United States
may also generate revenue for domestic
destruction facilities.37
As discussed earlier in this notice, the
EPA’s petition processes for the import
of used ODS is designed to allow the
agency to verify prior use of the material
so that virgin ODS are not entering the
United States marketplace under the
pretense of being ‘‘used.’’ Under the
current regulations at §§ 82.13(g)(2) and
82.24(c)(4), anyone wishing to import
used class I or class II ODS,
respectively, for destruction must
submit a petition providing the same
information as for any other petition to
import used ODS. It is then the
obligation of the second-party
destruction facility to provide a
verification report to the importer or
producer that the material was
destroyed (§§ 82.13(k) and 82.24(e)).
Importers are required to keep records
on imports for destruction of ODS under
§§ 82.13(g)(1) and 82.24(c)(2) and to
submit quarterly reports, in accordance
35 UNEP. (2014) Scientific Assessment of Ozone
Depletion: 2014 World Meteorological Organization
Global Ozone Research and Monitoring Project—
Report No. 55 pg. 1–416. Available at: https://
www.esrl.noaa.gov/csd/assessments/ozone/2014/
report.html.
36 As used here, ‘‘banks’’ refers to the total ODS
that have already been manufactured but not yet
released to the atmosphere. This can include ODS
contained within closed cell foams, installed in
appliances, held in original containers, etc.
37 EPA. (2018) ‘‘U.S. Destruction in the United
States and Abroad’’ pg. 1–63. Available at: https://
www.epa.gov/sites/production/files/2018–03/
documents/ods-destruction-in-the-us-and-abroad_
feb2018.pdf.
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with §§ 82.13(g)(4) and 82.24(c)(1). The
current regulations contain an exception
to the prohibition on import of virgin
ODS without consumption allowances
in the case of imports for destruction
but do not provide a specific process for
such imports.
The EPA is proposing to create a new
petition process for the import of used
and virgin ODS for destruction, called a
Certification of Intent to Import ODS for
Destruction (‘‘certification’’), in
§§ 82.13(g)(6) and 82.24(c)(7). Under
this process, the importer would submit
the certification at least 30 working days
before the shipment’s departure from
the foreign port. After review, the EPA
would send either a non-objection
notice or an objection notice. The
proposed period is shorter than the
corresponding period for the import
petition process, which is 40 working
days from departure, because the
certification would contain less
information for the EPA to review and
verify than in the current process for a
petition for import of used ODS. The
EPA believes 30 working days would be
enough for the EPA to review the
certification and that this timeframe
would not impede the import. The
agency would be authorized to issue an
objection notice for any reason it could
currently issue an objection notice to a
petition to import, such as if the petition
provides insufficient information or if it
contains false or misleading
information. The EPA is also proposing
to require that the petitioner submit a
destruction verification 30 days after
destruction under §§ 82.13(g)(6) and
82.24(c)(7). The EPA is also proposing
to require the certification and any
supporting documents, including the
destruction verification, to be submitted
electronically through CDX, for the
reasons discussed in Section IV.A of
this notice. In particular, the EPA is
proposing to add the requirement for
electronic submission of these
documents via CDX in § 82.14.
The information that would be
required in the certification is modeled
in large part on the petition to import
used ODS. Specifically, the certification
would include the following elements,
which are similar those required in an
import petition: Name, commodity
code, and quantity in kilograms of each
controlled substance to be imported;
source country; intended date of import;
shipment importer number; an English
translation of the export license (or
application for an export license) from
the appropriate government agency in
the country of export and, if recovered
in a country other than the country of
export; the quantity in kilograms
authorized on the license(s); United
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States port of entry for the import;
name, address, contact person, phone,
and email address of the person
responsible for destruction at the
facility.
The EPA is proposing to omit the
detailed source information that is
required in import petitions, as that
information is not necessary if the ODS
is to be destroyed. The EPA is proposing
to collect information from the
petitioner about the destruction for the
certification process. In particular, the
certification would not include the
following: Information about all
previous source facilities from which
the ODS was recovered; a detailed
description of the previous use at each
source facility and a best estimate or
documents indicating when the specific
controlled substance was put into the
equipment at each source facility; a list
of the name, make and model number
of the equipment from which the
material was recovered at each source
facility; contact information of all
persons to whom the material was
transferred or sold after it was recovered
from the source facility; or a description
of the intended use of the ODS.
The EPA is proposing to omit these
information elements because they are
collected for import petitions to verify
that the material is used, and the agency
believes it is not necessary to verify that
ODS is used if it is being imported for
destruction. Simplifying the information
requirements would decrease the
regulatory burden on existing importers
who follow the current import petition
process to import used ODS for
destruction by providing a streamlined
regulatory mechanism for such imports.
In addition, the current information
requirements for petitions to import
used ODS has the potential to hinder
imports for destruction because
petitioners may be unable to provide all
the necessary information. Certain
elements, such as information about
each piece of equipment or each source
facility from which the controlled
substance was removed, may be
particularly difficult for petitioners to
provide because used controlled
substances intended for disposal are
often part of a mixture of chemical
waste recovered from a variety of
systems and detailed information
pertaining to each system may not be
available. Although the certification
process would in effect relax the
information requirements for importing
used ODS for destruction compared to
the existing import petition process, the
EPA believes that this relaxation would
benefit the environment because
companies wishing to import used ODS
into the United States for destruction
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would be able to do so more easily, and
therefore more used ODS would be
destroyed. This would be consistent
with the overarching goal of Title VI to
protect stratospheric ozone.
The EPA is proposing to add
provisions §§ 82.13(g)(9) and
82.24(c)(10) to require importers to keep
certain records, including records about
the destruction of the ODS. In
particular, the EPA is proposing that
importers of ODS for destruction
maintain: A copy of the certificate of
intent to import for destruction; a copy
of the non-objection notice; a copy of
the export license or export license
application; Customs and Border
Protection (CBP) entry documents for
the import that must include the
commodity codes; records of that date,
amount, and type of controlled
substance sent for destruction per
shipment; an invoice from the
destruction facility verifying shipment
was received; and a copy of the
destruction verification.
In addition to proposing to create the
Certification of Intent to Import ODS for
Destruction, the EPA is also proposing
to extend the certification to imports of
virgin ODS for destruction. While the
certification is modeled in large part on
the petition to import used ODS, the
EPA believes there are also benefits to
facilitating the import of virgin ODS for
destruction. Currently, virgin ODS that
are to be destroyed may be imported
without consumption allowances (see
§§ 82.4(d) and 82.15(b)). However, there
is no regulatory mechanism for the EPA
to review and pre-approve those
imports. As such, shipments may be
held at the border while the EPA
determines whether the import is in fact
bound for destruction. In some
instances, proactive importers have
petitioned the agency to import virgin
ODS for destruction and the EPA has
allowed these imports on a case-by-case
basis. However, the absence of a
regulatory mechanism for such
approvals has created some uncertainty
for these imports when they reach the
border. Moreover, the EPA believes that
establishing regulatory requirements for
such imports would help ensure that
imports of virgin ODS for destruction
are destroyed.
The EPA believes that providing a
mechanism to import virgin ODS for
destruction would be beneficial to
importers and the EPA. Having a
transparent process that allows approval
occur before the shipment reaches the
border would facilitate such imports
and reduce potential delays and costs
associated with the current approach to
imports of virgin ODS for destruction, as
well as providing more certainty as to
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which imports could proceed. In turn,
this would encourage imports of
unwanted virgin ODS for destruction,
potentially avoiding the emission of
such ODS. This would be consistent
with the overarching goal of Title VI to
protect stratospheric ozone. The
proposed extension would also close a
gap in regulatory provisions for the
import of virgin material for destruction.
As discussed previously in this notice,
the EPA originally established the
import petition process for used ODS to
verify that virgin ODS was not being
imported under the pretext of being
used to circumvent the regulatory
requirements for expending
consumption allowances. In the same
way, the EPA believes that a mechanism
is needed to verify that virgin ODS
imported for destruction will be
destroyed and that claims of importing
for destruction are not used to
circumvent the requirement to expend
consumption allowances. In addition,
the EPA has historically used the
petition process as a mechanism to
approve imports for destruction of used
material and has applied an analogous
but simpler process to imports of virgin
material on a case-by-case basis. Based
on this experience and these common
goals for imports of used and virgin
ODS for destruction, the EPA believes
that having the same process for imports
for destruction of both used and virgin
ODS is both feasible and appropriate.
Furthermore, establishing a consistent
process for used and virgin ODS would
simplify the administration of this
proposed approach because the same
requirements would generally apply
regardless of the type of ODS to be
imported for destruction. Thus, the EPA
is proposing to have the same
requirements for both used and virgin
ODS in this new proposed process.
As part of this proposal, the EPA
would also revise the definitions of
‘‘individual shipment’’ and ‘‘nonobjection notice’’ at § 82.3, both of
which currently refer only to the import
of used material. The EPA is proposing
to amend these definitions by removing
references to ‘‘used’’ controlled
substances, so that ‘‘individual
shipment’’ and a ‘‘non-objection notice’’
may apply to shipments of virgin ODS
imported for destruction under a
Certification of Intent to Import for
Destruction, as well as to shipments of
used ODS.
Like the proposal in the import
petitions process, the agency is also
proposing to allow flexibility for the
timing of imports for destruction. In the
current petitions process, the EPA
requires the import to occur in the same
control period (i.e., calendar year) that
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the non-objection notice was issued.
The EPA is proposing that non-objection
notices issued for the Certification of
Intent to Import for Destruction for both
used and virgin material have a year to
import the material. Therefore, once a
non-objection notice is issued, the
person receiving the non-objection
notice would be required to import the
individual shipment within a year of the
date stamped on the non-objection
notice. For instance, a non-objection
letter issued on October 1, would not
need to be destroyed until September 30
of the following year. This would
provide flexibility to imports for
destruction that may be operate on a
calendar year basis.
The EPA is soliciting comments on its
proposal to create the Certification of
Intent to Import ODS for Destruction for
both used and virgin ODS. The EPA is
particularly interested in whether the
reduced information elements
encourage additional imports of ODS for
destruction or reduce burden for
importers. The EPA is also interested in
the burden of applying the proposed
certification process to the import of
virgin ODS and providing a year to
destroy used or virgin material. The
EPA welcomes comment from entities
that currently import ODS for
destruction or that have considered
importing ODS for destruction.
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E. Prohibiting the Sale of Illegally
Imported Controlled Substances
Based on the EPA’s experience with
the CFC phaseout, the incentive to
illegally import class II substances will
increase as the allocation for HCFC–22
reaches zero in 2020. HCFC–22 is the
most widely used HCFC in the United
States and the EPA anticipates
continued demand for HCFC–22 beyond
the phaseout in 2020. In addition, there
continues to be risk of illegal imports of
class I substances. The EPA works
closely with CBP to ensure compliance
with the phaseout of ODS under CAA
sections 604–606. However, recent
illegal imports have demonstrated to the
agency that additional tools are needed
to address the potential for domestic
distribution of illegally imported
material, as such material would
generally be considered consumption.
Thus, the EPA is proposing to add to
§§ 82.4(s) and 82.15(g)(8) an express
prohibition against the sale or
distribution, or offer for sale or
distribution, of any class I or class II
substance, respectively, that the seller
knows, or has reason to know, was
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illegally imported into the United
States.38
For this proposal, the EPA is relying
primarily on its authority under CAA
sections 604(c) and 605(c). Section
604(c) directs the Administrator to
promulgate regulations to ‘‘insure that
the consumption of class I substances in
the United States is phased out and
terminated’’ in accordance with the
applicable schedules for the phaseout
and termination of production of class
I substances under the CAA. Similarly,
section 605(c) directs the Administrator
to promulgate regulations to ‘‘insure
that the consumption of class II
substances in the United States is
phased out and terminated’’ in
accordance with the applicable
schedules for the phaseout and
termination of production of class II
substances under the CAA.
‘‘Consumption’’ is defined in CAA
section 601 as the amount of a substance
produced in the United States, plus the
amount of that substance imported,
minus the amount exported.
As noted above, the EPA remains
concerned about the illegal import of
ODS. This concern is based largely on
the risk that such illegal imports would
interfere with the already-completed
phaseout of consumption of class I
substances and the ongoing phaseout of
consumption of class II substances. For
example, HCFC–22 that is imported
without allowances would generally
count toward the United States’
consumption cap unless additional
action is taken to remove the ODS from
the U.S. market (e.g., the illegally
imported ODS is destroyed or reexported in the same year). While there
is sufficient space under the HCFC cap
currently such that the illegal import
would not result in an exceedance of the
cap set forth under the Montreal
Protocol and CAA, there is be a greater
risk that illegal imports not destroyed or
re-exported could cause an exceedance
following the 2020 stepdown, and more
importantly the 2030 phaseout of
HCFCs. This is of even greater concern
for illegally imported CFCs and other
class I ODS, given that the consumption
cap for class I ODS is zero.
To address this concern, the EPA is
proposing to strengthen its ability to
enforce the phaseout of ODS by adding
at §§ 82.4(s) and 82.15(g)(8) an express
38 The EPA has previously issued restrictions on
sale as a means for implementing restrictions on
consumption. See, e.g., § 82.3(h) (‘‘No person may
sell in the U.S. any Class I controlled substance
produced explicitly for export to an Article 5
country’’); § 82.3(n)(2) (‘‘Any person selling unused
class I controlled substances produced or imported
under authority of essential-use allowances or the
essential-use exemption for uses other than an
essential-use is in violation of this subpart.’’).
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prohibition against the sale or
distribution, or offer for sale or
distribution, of any class I or class II
substance, respectively, that the seller
knows, or had reason to know, had been
imported into the United States in
violation of the import regulations. It
would therefore be illegal to sell or
distribute any material that the seller
knows or had reason to know was
imported into the United States without
expending the appropriate consumption
allowances or otherwise qualifying for
an exemption provided for in the
regulations (e.g., for transformation or
destruction, or for used ODS). The
proposed revisions would also
explicitly state that every kilogram of
illegally imported material sold or
distributed, or offered for sale or
distribution, constitutes a separate
violation.
This proposal would strengthen the
EPA’s ability to enforce against illegal
trade, which in turn helps ensure that
consumption remains under the
Montreal Protocol and CAA caps. It
would increase the EPA’s compliance
and enforcement options where the
agency is not able to identify the
importer. For example, this proposal
could allow the EPA to pursue
investigations where distributors or
other sellers of CFCs attempt to sell
virgin CFCs in the domestic market
knowing that they were imported into
the United States after the phaseout of
CFCs, which occurred in 1996, without
qualifying for any exemption from the
consumption phaseout. Actions taken
against such distributors would not only
address their violations but could also
allow the agency to gather the necessary
information to identify the smuggler
who illegally imported the material in
the first place and to pursue compliance
and enforcement action against them
under existing authorities in §§ 82.4 and
82.15, which could help deter illegal
imports. Avoiding illegal imports helps
to maintain the complete phaseout of
class I ODS and achieve the phaseout of
class II ODS, which is consistent with
CAA sections 604(c) and 605(c), as well
as with the overarching goals of Title VI
of the CAA.
Finally, this proposed change would
encourage distributors to be more
cautious when purchasing ODS that
seems suspiciously priced or packaged.
Since the phaseout of class I ODS, the
EPA has warned distributors of the risk
of purchasing black market ODS and
provided information on ways to
identify illegally-imported material.
Distributors and other resellers have
numerous ways to identify illegallyimported material. They can look at
where the ODS was produced, the brand
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name the material is being sold under,
and the name of the manufacturer. They
can also make sure the material meets
industry purity standards, ask the seller
for documents of prior ownership of the
product and a laboratory analysis of the
quality, and inspect the packaging for
the material since illegally imported
refrigerant is sometimes packaged in
wrong-size containers or fixed with
improper valves. While the incentive to
circumvent the import controls will
always exist, the EPA hopes that this
proposal would help to reduce the
market for smuggled ODS, which should
also reduce illegal imports.
The agency welcomes comments on
these proposed prohibitions against the
sale or distribution or offer for sale or
distribution of illegally imported
controlled substances.
V. Addition of Polyurethane Foam
Systems Containing CFCs to the
Nonessential Product Ban
The EPA is proposing to add
polyurethane foam systems containing
CFCs to the existing list of nonessential
products under 40 CFR part 82, subpart
C. This proposal would prohibit the sale
or distribution, or offer for sale or
distribution, of any polyurethane foam
system containing CFCs in interstate
commerce. Historically, CFC–11, CFC–
12, and CFC–114 were used as foam
blowing agents, but CFC production has
been globally phased out since 2010.
Nevertheless, recent reports show that
the rate of decline in CFC–11
concentrations in the atmosphere,
which had been steady, slowed
dramatically starting in 2013, and this
proposal is in response to those reports.
After reviewing the EPA’s import
restrictions and the nonessential
product ban, the agency has identified
the potential for sale or distribution, or
offer for sale or distribution, of imported
polyurethane foam systems 39
containing illegally-produced CFCs. The
EPA is not aware that this is currently
occurring in the United States but
believes that this is a potential gap that
can be addressed by amending the list
of nonessential products in § 82.66.
Researchers recently discovered that
starting in 2013 the concentration of
CFC–11 in the atmosphere was not
declining as rapidly as it had been in
the prior decade.40 This slowdown is
39 These systems are also referred to as polyols,
which are defined in Montreal Protocol reports as
pre-blended foam chemicals.
40 Montzka, S.A., Geoff S. Dutton, G.S., Yu, P.,
Ray, E., Portmann, R.W., Daniel, J.S., Kuijpers, L.,
Hall1, B.D., Mondeel, D., Siso, C., Nance, J.D.,
Rigby, M., Manning, A.J., Hu, L., Moore, F., Miller,
B.R., and Elkins, J.W. ‘‘An unexpected and
persistent increase in global emissions of ozonedepleting CFC–11’’ Nature 557; (2018): 413–429.
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contrary to the modeled decline based
on reported global production. In
Montzka et al., the modeled
concentration was expected to decrease
rapidly beginning in 2002, without
continued CFC–11 production.
However, CFC–11 concentrations did
not decline more rapidly each year.
Global CFC–11 atmospheric
concentrations declined at a constant
rate in the decade after 2002. CFC–11
concentrations declined about half as
quickly over the past three years
compared with the rate measured from
2002–2012. The scale of observations
suggests that there may have been
unreported production of CFC–11
despite the global phaseout of CFC
production in 2010 under the Montreal
Protocol. The researchers determined
that emissions of CFC–11 began
increasing in 2012 and that in the
period between 2014 to 2016 emissions
were higher than average annual
emissions from previous decades.
Monitoring data indicate that areas in
eastern Asia may be the sources of these
elevated emissions. The researchers
concluded that damage to the ozone
layer could be minor if the source of
these emissions can be identified and
mitigated, but if not, there would be
delays in stratospheric ozone recovery.
A subsequent investigation by the
Environmental Investigation Agency, a
non-governmental environmental
organization, indicates that CFC–11
may, in part, be used in foam systems.41
Additional monitoring data identifies
China as the source for much of the
CFC–11 emissions.42
In response to this finding, the EPA
evaluated potential uses of CFCs and
whether domestic controls were enough.
The EPA wants to ensure that the
United States is not inadvertently
contributing to demand for CFC
production. Except for feedstock
applications, production and import of
CFCs has been prohibited 43 in the
United States since 1996. The
nonessential products ban already
prohibits sale or distribution, and the
offer for sale or distribution, of certain
products manufactured with or
containing CFCs, including most plastic
foam products. The EPA is not aware of
any U.S. manufacturer currently using
41 Environmental Investigation Agency (EIA).
(2018) Blowing It: Illegal Production and Use of
Banned CFC–11 in China’s Foam Blowing Industry.
Available at: https://eia-global.org/reports/
20180709-blowing-it-illegal-production-and-use-ofbanned-cfc-11-in-chinas-foam-blowing-industry.
42 Rigby, M. et al. ‘‘Increase in CFC–11 emissions
from eastern China based on atmospheric
observations.’’ Nature 569.7757 (2019): 546–550.
43 Historically, limited amounts of CFC
production and consumption were authorized
domestically for essential uses.
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CFC–11 or any other class I substance
for polyurethane foam systems.
Nonetheless, to ensure that the United
States is not inadvertently contributing
to demand for CFCs and to avoid
potential CFC emissions in the United
States, the EPA is proposing to add
polyurethane foam systems containing
CFCs to the list of nonessential products
at § 82.66.
The EPA is also proposing to define
‘‘polyurethane foam systems’’ in § 82.62,
which is used for thermal insulation. A
polyurethane foam system typically
consists of two transfer pumps that
deliver ingredients (polyisocyanate or
isocyanate from one side and a mixture
including the blowing agent, catalysts,
flame retardants, and stabilizers from
the other side) to a metering/mixing
device which allows the components to
be delivered in the appropriate
proportions. The components are then
sent to a mixing gun and dispensed as
foam directly to a surface such as a roof
or tank. These polyurethane foam
systems are packaged and sold as
complete systems, containing all the
ingredients including the
polyisocyanate and the blowing agent.
A polyurethane foam system is
different from bulk ODS because it is
contained in a system and packaged as
a product. Under the existing
regulations in subpart A, bulk CFCs are
included in the definition of a
‘‘controlled substance’’ and thus are
subject to import controls such as the
consumption allowance regime under
§ 82.4. However, the definition of
‘‘controlled substance’’ in § 82.3
excludes ‘‘any such substance or
mixture that is in a manufactured
product other than a container used for
the transportation or storage of the
substance or mixture.’’ Because the
CFCs in polyurethane foam system are
contained in a system that is sold as a
product, they are not subject to the same
import controls as bulk CFCs. If
polyurethane foam systems are
imported and sold through distribution
chains in the United States, they could
result in emissions of CFCs during their
use. These foam systems are also
distinct from a plastic foam product in
that the foam product has already been
blown. Plastic foam products
manufactured with or containing a CFC
are currently listed at § 82.66(c) and
thus are banned from sale or
distribution, or the offer for sale or
distribution, in interstate commerce.
The EPA is concerned about the
potential sale or distribution, or offer for
sale or distribution, of polyurethane
foam systems even with the current
nonessential product ban on plastic
foam products. The proposed addition
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of polyurethane foam systems to the list
of nonessential products would result in
the prohibitions of the sale or
distribution of such products in
interstate commerce, and thus would
prevent emissions of CFCs in the United
States from domestic use of these foam
systems.
Section 610 of the CAA, titled
‘‘Nonessential products containing
chlorofluorocarbons,’’ directs the EPA to
issue regulations identifying
nonessential products that ‘‘release class
I substances into the environment
(including any release occurring during
manufacture, use, storage, or disposal)’’
and ‘‘prohibit[ing] any person from
selling or distributing any such product,
or offering any such product for sale or
distribution, in interstate commerce.’’
Section 610(b)(1) and (2) specify that
‘‘[a]t a minimum’’ this prohibition shall
apply to ‘‘chlorofluorocarbon-propelled
plastic party streamers and noise horns’’
and ‘‘chlorofluorocarbon-containing
cleaning fluids for noncommercial
electronic and photographic
equipment.’’ Section 610(b)(3) provides
that the prohibition shall apply to other
consumer products determined by the
EPA to release class I substances into
the environment (including releases
during manufacture, use, storage, and
disposal) and to be nonessential.
Section 610 further states that in
determining whether a product is
nonessential, the EPA shall consider the
following criteria: ‘‘the purpose or
intended use of the product, the
technological availability of substitutes
for such product and for such class I
substance, safety, health, and other
relevant factors.’’ The CAA requires the
EPA to consider each criterion listed in
section 610 but does not establish either
a ranking or a methodology for
comparing their relative importance, nor
does it require that any minimum
standard within each criterion be met.
Thus, section 610 provides the EPA
discretion in determining how to
consider the listed criteria and the
relative weight to give to each. In
addition, section 610 gives the EPA
latitude to consider ‘‘other relevant
factors’’ beyond the specific criteria set
forth in the statute.
As indicated above, polyurethane
foam systems are products that release
blowing agent to the environment
during use. If CFCs are used as the
blowing agent, they would be emitted
during the use of such systems. In
proposing to list polyurethane foam
systems containing CFCs as a
nonessential product, the EPA has
considered the purpose or intended use
of these systems, the technological
availability of substitutes, and safety
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and health considerations. The first
criterion, the purpose or intended use,
relates to the importance of the product,
in terms of benefits to society,
specifically whether the product is
sufficiently important that the benefits
of its continued production outweigh
the associated danger from the
continued use of a class I ozonedepleting substance in it, or
alternatively, whether the product has
little benefit, such that even a lack of
available substitutes might not prevent
the product from being considered
nonessential. While foam products,
particularly closed-cell rigid
polyurethane foams, provide benefits to
society, for more than two decades U.S.
manufacturers have replaced the use of
CFCs in foam production without
compromising these benefits.
The intended use of polyurethane
foam systems is often for insulation in
buildings and residences. While
insulation has benefits, such as reducing
energy use and costs associated with
heating and cooling, in previous
rulemakings the EPA’s consideration of
this criterion has also been informed by
consideration of whether use of the
class I substance in the product is
nonessential (see 58 FR 4474, 66 FR
57514). For example, use of a class I
substance in a product may be
considered nonessential where
substitutes are readily available, even if
the product itself is important (see 58
FR 4474, 66 FR 57514). This is
reasonable because if the social benefits
from a product can be provided by a
similar product without use of the class
I substance, that tends to support the
conclusion that the product using the
class I substance is nonessential. U.S.
manufacturers successfully transitioned
from using class I substances for foam
products more than two decades ago
meaning that they were able to also
replace the use of class I substances in
foam blowing systems. Moreover, the
same U.S. industry also replaced the use
of class II substances in these plastic
foam products. There are alternative
foam blowing agents that can be used in
foam systems as well as alternative
methods and products for insulating
buildings and residences that do not use
class I substances. For instance, there
are a variety of insulation types that can
be applied throughout the building
envelope to save energy and reduce
leaks in buildings and homes with a
similar R-value as a polyurethane foam
system intended for use in insulation.
The R-value refers to an insulating
material’s resistance to conductive heat
flow and is measured or rated in terms
of its thermal resistance. Alternative
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non-polyurethane foam insulation
products with similar R-values include:
Fiberglass, cellulose, and rigid foam
boards.
For the criterion of technological
availability of substitutes, the EPA
considers the existence and accessibility
of alternative products or alternative
chemicals for use in, or in place of,
products releasing class I substances.
The EPA has interpreted this criterion to
include both currently available
substitutes and potentially available
substitutes (see 58 FR 4474). There are
numerous substitutes for CFCs in
polyurethane foam systems that are
listed as acceptable under the SNAP
program and have been widely used by
the foam industry since the mid-1990s.
The current list of SNAP approved
substitutes is available here: https://
www.epa.gov/snap/substitutes-foamblowing-agents. In the initial class I
nonessential products rule, the EPA
stated that in sectors where the great
majority of manufacturers have already
shifted to substitutes, the use of a class
I substance in that product may very
well be nonessential (58 FR 4774). As in
previous considerations of this criterion,
in this proposal the EPA is examining
sectors where the market has previously
switched to substitutes. Given the class
I nonessential products ban that
included plastic foam products was
promulgated more than two decades ago
and there were also subsequent
restrictions on the use of class II
substances promulgated under 40 CFR
part 82, for polyurethane foam systems,
the EPA believes that all U.S.
manufacturers have switched from CFCs
to non-ODS alternatives such as
hydrofluorocarbons, hydrofluoroolefins,
hydrocarbons, carbon dioxide, water,
and other compounds listed as
acceptable substitutes under SNAP in
foam blowing.
For the criteria of safety and health,
as in prior rules related to the
nonessential product ban (see e.g., 66
FR 57514), the EPA interprets these
criteria to mean the effects on human
health and the environment of products
releasing CFCs or their substitutes. As in
past rules, in evaluating these criteria,
the EPA considers the direct and
indirect effects of product use, and the
direct and indirect effects of
alternatives, such as ozone depletion
potential, flammability, toxicity,
corrosiveness, energy efficiency,
ground-level air hazards, and other
environmental factors (see, e.g., 66 FR
57514). The ODPs of CFC–11, CFC–12,
and CFC–114 are 1. For the purposes of
evaluating other direct and indirect
effects for foam systems, the agency
does not believe there is a substantive
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of ODS in calculating production or
consumption; however, the EPA’s
longstanding regulations address this
issue. The regulatory definition of
‘‘production’’ at § 82.3 excludes
amounts that are destroyed by
technologies approved by the Parties to
the Montreal Protocol. In addition,
amounts imported for destruction are
excluded from the import prohibitions
at §§ 82.4 and 82.15.
The EPA added a definition of the
term ‘‘destruction’’ to § 82.3 in 1993. (58
FR 65047–65048). The existing
regulatory definition of ‘‘destruction’’
includes a limited list of technologies
that may be used for destruction. When
the EPA established the initial list of
destruction technologies the agency also
noted that it intended to propose
authorizing use of additional
destruction technologies through future
rulemakings, as such technologies are
approved by the Parties (58 FR 65049).
The agency is proposing to update the
definition of ‘‘destruction’’ in § 82.3 to
add destruction technologies that have
been approved by the Parties to the
Montreal Protocol since the issuance of
the 1993 rule. The agency is proposing
to add these destruction technologies so
that industry in the United States has a
greater variety of technological options
for the destruction of ODS. All of these
technologies are capable of destroying
ODS or converting them into byproducts
and can be grouped into three broad
categories: Incineration, plasma, and
other non-incineration technologies.
The EPA is proposing to add nitrogen
plasma arc, portable plasma arc, argon
plasma arc, microwave plasma, and
inductively coupled radio frequency
plasma to allow for additional plasma
technologies to allow for greater
industry flexibility for using plasma
destruction technologies. Plasma arc
technologies are generally designed to
be relatively small, compact, and
transportable. They consume a large
amount of energy in order to generate
the plasma but tend to have very high
destruction efficiencies and low
emissions. The EPA is also proposing to
add an additional incineration
technology—porous thermal reactor.
Porous reactors are high-temperature
systems with a porous layer that
facilitates the decomposition of ODS
and other industrial waste gases.
Destruction takes place in an oxidizing
atmosphere with a continuous supply of
an auxiliary gas. The EPA is also
proposing to add four non-incineration
technologies, including chemical
reaction with hydrogen (H2) and carbon
dioxide (CO2). Revising the definition of
destruction to include these
technologies would not affect the
Continued
difference between foam systems and
plastic foam products given the former
is a precursor for the latter. In
developing the class I nonessential
products ban, the agency provided
information in the docket concerning
the known alternatives at that time.
Subsequently, alternatives that were
already in use as well as additional
alternatives for foam-blowing have been
evaluated and listed as acceptable under
the SNAP program, such as
hydrofluorocarbons, hydrofluoroolefins,
hydrocarbons, carbon dioxide, and
water. The current SNAP list of
acceptable substitutes is more expansive
than what was in considered in the
initial class I nonessential products ban.
The range of alternatives includes those
that have ODPs ranging from zero to
between 0.00024 and 0.00034,
significantly lower than the ODP of
CFC–11 which is 1, and considers many
of the factors identified in the initial
class I nonessential products ban. The
Montreal Protocol’s TEAP also provides
a quadrennial global assessment of
alternatives for foam blowing including
information concerning many of the
direct and indirect factors identified
above (UNEP, 2014). The EPA
considered all these sources of
information when deciding whether to
propose to add to the list of banned
products foam systems that contain
phased out CFCs and considered that
U.S. industry has already successfully
transitioned away from using CFCs.
Considering all three factors together,
the EPA proposes to conclude that
polyurethane foam systems containing
CFCs meet the criteria in section 610 for
listing as a nonessential product.
The EPA is requesting comment on its
proposal to amend § 82.66(f) to add
polyurethane foam systems containing
CFCs to the nonessential class I product
ban and to add a definition of a
‘‘polyurethane foam system’’ to § 82.62.
Additionally, the EPA is interested in
comments on whether anyone in the
United States is using CFCs for foam
blowing or is importing foam systems
containing CFCs as a blowing agent.
While the EPA is not aware of any other
CFC-containing products that warrant
addition to the list of nonessential
products, the EPA seeks comment on
whether there are other products using
CFCs that could also create demand for
imports of illegally-produced CFCs.
VI. Updates to §§ 82.3, 82.104, and
82.270 Related to Destruction
The EPA is proposing to amend
certain provisions in 40 CFR part 82,
subparts A, E, and H related to the
concept of destruction of ODS. Title VI
does not state how to treat destruction
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applicability of other regulatory
requirements relating to use of these
technologies. Because one of the nonincineration technologies that the EPA
is proposing to add, chemical reaction
with H2 and CO2, is a conversion
technology that converts the ODS into
non-ozone depleting constituents that
are capable of being reused, the EPA is
also proposing to amend the definition
of ‘‘destruction’’ to modify the statement
that that the process must not result in
a commercially useful end product. The
EPA is also proposing edits to
provisions in § 82.104 (Subpart E ‘‘The
Labeling of Products Using OzoneDepleting Substances’’) and § 82.270
(Subpart H ‘‘Halon Emissions
Reduction’’) to conform with the
proposed changes in this definition.
The existing regulations define the
term ‘‘destruction’’ at § 82.3 and
§ 82.104. The two existing definitions
are intended to convey the same
meaning but are slightly different. For
instance, the definition in § 82.104
refers to a code of good housekeeping
contained in a United Nations
Environment Programme report while
the definition in § 82.3 does not. In
addition, both provide a list of
destruction technologies approved
under decisions of the Parties to the
Montreal Protocol. The list at § 82.3
contains seven technologies while the
list at § 82.104 contains five.44 Both lists
are out of date in that they fail to
include certain technologies that can
destroy ODS or converting them into
byproducts and have been approved
under more recent decisions of the
Parties. Similarly, the existing
prohibition on disposing of halons in
§ 82.270 includes an exception for
destruction that also provides an
outdated list of destruction
technologies. The EPA is therefore
proposing to harmonize these three
definitions of destruction and update
the list of destruction technologies to
allow the use of more destruction
technologies in the United States.
The Parties to the Montreal Protocol
have at times requested that the TEAP
report to the Parties information on
technologies for destroying surplus
stocks of ODS based on an assessment
of their technical capability to
permanently decompose all or a
significant portion of the ODS.45 The
44 Similarly, the definition of ‘‘completely
destroy’’ at § 82.104 refers to using ‘‘one of the five’’
destruction processes approved by the Parties. The
EPA is also proposing to remove that outdated
language.
45 UNEP. (2018) Montreal Protocol on Substances
on Substances that Deplete the Ozone Layer. Report
of the Technology and Economic Assessment Panel.
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Parties to the Montreal Protocol have
approved the use of destruction
technologies through various decisions,
including Decisions V/26, VII/35, XIV/
6, XXII/10, XXIII/12, and at the recent
30th MOP Decision XXX/6. With the
proposed revisions to the list of
technologies in the definition of
‘‘destruction’’ at § 82.3, the EPA’s
regulations would reflect all
technologies approved for ODS
destruction under decisions of the
Parties. Specifically, the EPA is
proposing to add the following
destruction technologies to the existing
list: Nitrogen plasma arc, portable
plasma arc, argon plasma arc, chemical
reaction with H2 and CO2, inductively
coupled radio frequency plasma,
microwave plasma, porous thermal
reactor, gas phase catalytic dehalogenation, superheated steam
reactor, and thermal reaction with
methane. An explanation of these
technologies appears in the EPA’s report
on destruction ‘‘ODS Destruction in the
United States and Abroad,’’ which is
available in the docket.
The EPA is also proposing to revise
the definition of ‘‘destruction’’ in
§ 82.104 and the prohibition in § 82.270
by removing the outdated lists found in
those provisions and adding a cross
reference to the list of destruction
technologies in § 82.3. This would
conform the list of destruction
technologies that can be used across
subparts A, E, and H. The destruction
technologies that would be included the
list in § 82.3 under the proposal
discussed above in this section are also
applicable to these other subparts,
although the EPA notes that the listing
of municipal waste incinerators in the
existing regulations at § 82.3 is limited
to the destruction of foams, and thus the
added cross reference to § 82.3 in
§ 82.270 would not make that
technology available for the exception
for the destruction of halons at § 82.270.
The addition of the cross reference to
§ 82.3 would also simplify updating
§ 82.104 and § 82.270 in the future. If
additional destruction technologies are
demonstrated in future to be capable of
destroying ODS or converting them into
byproducts, the EPA may consider
proposing to add those technologies to
the definition of ‘‘destruction’’ in § 82.3
to further increase the options for ODS
destruction in the United States, to the
extent consistent with approvals by the
Parties and as appropriate. The added
April 2018 Volume 2 Decisions XXIX/4 TEAP Task
Force Report on Destruction Technologies for
Controlled Substances; pg. 1–67. Available at:
https://conf.montreal-protocol.org/meeting/oewg/
oewg-40/presession/Background-Documents/TEAPDecXXIX4-TF-Report-April2018.pdf.
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cross references would mean that the
EPA would only need to revise the list
in § 82.3 for the technologies to be
approved for destruction under all three
provisions.
The EPA is also proposing to amend
the definitions of ‘‘destruction’’ at
§§ 82.3 and 82.104 to modify language
regarding commercially useful end
products. The current definition
contains a restriction that a destruction
technology cannot result in a
commercially useful product. The EPA
is proposing to revise that restriction in
part because one of the destruction
technologies proposed to be added to
the definition of destruction breaks
down ODS into substances that have
commercial viability. The process
‘‘Chemical Reaction with H2 and CO2’’
converts fluorinated compounds to
hydrofluoric acid, hydrochloric acid,
carbon dioxide, chlorine, and water.
The reaction technology separates and
collects the byproducts at a high purity
allowing for them to be sold, potentially
improving the economics of using this
technology. The EPA does not believe
that a process that would otherwise
qualify as ‘‘destruction’’ should fail to
qualify simply because one of the
outputs is a commercially useful end
product. The EPA is therefore proposing
to revise the definition of ‘‘destruction’’
so that the mere existence of such an
end product does not bar the technology
from being included in the definition.
The proposed revisions further clarify
that the commercial usefulness of the
end product is secondary to the act of
the ODS destruction. Thus, the EPA’s
proposed changes to the definition of
destruction recognize that while
production of a commercially useful
end product is not the primary purpose
of a destruction process, the destruction
process may nevertheless result in a
commercially useful product.
The proposed clarification that the
usefulness of an end product should be
secondary to ODS destruction is
intended to maintain a distinction
between the terms ‘‘destruction’’ and
‘‘transformation.’’ The EPA established
the definitions of ‘‘destruction,’’
‘‘production,’’ and ‘‘transformation’’ in
the 1993 rule (58 FR 65048–65049).
Among other things, the agency
excluded from the definition of
‘‘production’’: (1) Amounts of controlled
substances that are destroyed using
approved destruction technologies and
(2) the manufacture of a controlled
substance that is subsequently
transformed. Similarly, the regulatory
import prohibitions excluded both
amounts destroyed, and amounts
transformed. The definition of
‘‘destruction’’ noted that it does not
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result in a commercially useful end
product whereas the definition of
‘‘transformation’’ noted that it occurs in
a process specifically for the
manufacture of other chemicals for
commercial purposes. Thus, the original
distinction in the definitions of these
two terms related to whether the process
was undertaken to intentionally result
in a commercially useful end product or
not. The distinction mattered (and is
still relevant) because as explained in
the 1993 rule, if a portion of the ODS
remained after destruction, the
destroyed portion could be excluded
from production, but the material had to
be entirely consumed in the process
(except for trace quantities) to qualify
for the transformation exclusion (58 FR
65048). The EPA is proposing to remove
one aspect of the distinction between
these two processes in the original
definitions (whether the processes result
in a commercially useful end product).
The proposed changes to the text would
clarify that the usefulness of the product
is secondary to the act of destruction.
Conversely, transformation is the use of
ODS as a feedstock with the goal of
manufacturing other chemicals.
Intent has been an important aspect of
the distinction between ‘‘destruction’’
and ‘‘transformation’’ since these
definitions were first promulgated. For
example, in the 1993 rule establishing
the definition of ‘‘destruction,’’ in a
discussion of whether heat or energy are
commercially useful end products, the
agency said ‘‘[t]he intent of the
destruction process is to destroy the
substance, for which a byproduct in the
way of heat or energy may be produced,
rather than production of an end
product being the goal of the destruction
activity.’’ (58 FR 65049). This
discussion recognizes that something
useful may incidentally result from
destruction. Similarly, the 1993 rule
recognized the possibility of a
destruction technology converting ODS
into other useful substances. In
explaining the inclusion of reactor
cracking as a destruction technology,
the EPA stated ‘‘[s]ince 1983, this
process has treated waste gases resulting
from the production of CFCs. The gases
are converted to hydrofluoric acid,
hydrochloric acid, carbon dioxide,
chlorine, and water. The two acids are
usable in-house and/or marketable, and
the chlorine is scrubbed, leaving only
water vapor, oxygen, and carbon
dioxide as waste gases.’’ (58 FR 65047,
emphasis added).
Consistent with that recognition and
with the proposed inclusion of a new
destruction technology with
commercially useful end products, the
EPA believes that the creation of a
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commercially useful end product
should not in itself preclude a
technology from being listed in the
definition of ‘‘destruction.’’ The creation
of such an end product does not change
whether chemical decomposition
occurs. Many destruction processes
incinerate the chemicals, but other
technologies break down the controlled
substance. In breaking down the
chemical, it is possible that the result
includes a commercially valuable end
product that is not a controlled
substance. ‘‘Transformation,’’ on the
other hand, means to use and entirely
consume a controlled substance in the
manufacture of other chemicals for
commercial purposes. The purpose is to
create new compounds using the ODS
as a feedstock rather than the
decomposition of ODS as a waste.
The EPA welcomes comment on the
proposal to update and harmonize
definitions related to ODS destruction
in §§ 82.3, 82.104, and 82.270, including
the proposal to add to the list of
destruction technologies and amend the
definition of ‘‘destruction’’ to allow
inclusion of destruction technologies
that incidentally result in commercially
useful end products. The EPA
specifically invites comments from
entities that destroy ODS or send ODS
to facilities for destruction.
VII. Removing Obsolete Provisions in
§§ 82.3, 82.4, 82.9, 82.10, 82.12, 82.13,
82.15, 82.16, and 82.24
The EPA is proposing to remove
certain provisions that have been made
obsolete due to the phaseout of class I
ODS or certain class II ODS.
Specifically, this notice proposes to
remove outdated provisions for class I
ODS related to Article 5 allowances,
transformation and destruction credits,
and transfers of allowances issued prior
to the phaseout. The EPA is also
proposing to remove definitions and
reporting provisions for HCFC–141b
exemption allowances and export
production allowances.
These changes increase readability
and reduce confusion. Removing
obsolete provisions would assist the
regulated community by making it
easier to locate the currently applicable
requirements and reduce potential
confusion from presentation of
requirements that no longer apply. The
EPA is not proposing to remove
outdated provisions that provide
historical context which could assist the
reader or that would affect the level of
environmental protection provided
under subpart A.
The EPA welcomes comments on the
proposed removal of these provisions.
The agency is particularly interested in
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any comments indicating these
proposed changes may affect current
obligations or may be important to the
existing requirements.
A. Class I Article 5 Allowances
Before the worldwide phaseout of
CFCs and other class I ODS, the EPA
historically had provided additional
production allowances, known as
‘‘Article 5 allowances,’’ for production
of certain class I ODS for export to and
use by Article 5 countries consistent
with the Montreal Protocol.46 These are
countries that were subject to a later
production and consumption phaseout
schedule than non-Article 5 countries
such as the United States. Section
82.9(a) of the existing regulations
granted Article 5 allowances until 2010,
when the phaseout of these substances
was completed in Article 5 countries.
Because these provisions no longer have
any purpose or effect, the EPA is
proposing to remove the schedule for
issuing Article 5 allowances found at
§ 82.9(a) and the corresponding
recordkeeping and reporting
requirements in § 82.13(f)(2)(v) and
(f)(3)(ix). Section 82.9(b) of the existing
regulations provides that holders of
Article 5 allowances may produce class
I controlled substances for export to
Article 5 countries and transfer Article
5 allowances. Because there are no more
holders of Article 5 allowances, the EPA
is proposing to remove these provisions
as well.
B. Class I Allowances and Credits
Related to Transformation and
Destruction
Before the domestic phaseout of class
I ODS, the EPA historically had
provided additional production
allowances in cases where class I ODS
were destroyed or transformed. Because
these provisions no longer have any
purpose or effect, the EPA is proposing
to remove these provisions and to
remove references to these obsolete
allowances in certain other provisions.
Section 82.9(e) of the existing rules
contains the provisions related to such
allowances, including detailing the
information needed in a request for
allowances based on having destroyed
or transformed a specified quantity of
class I ODS. The EPA stopped issuing
such allowances in 1996 for all class I
controlled substances (except methyl
bromide) and in 2005 for methyl
bromide. The EPA is proposing to
remove § 82.9(e) and related obsolete
reporting and recordkeeping
46 For the purposes of the Montreal Protocol, this
is called production for basic domestic need.
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requirements in § 82.13(f)(2)(iv),
(g)(1)(xv), (g)(4)(xi), and (h)(4)(xi).
Section 82.9(f) authorized persons
who were nominated for an essential
use exemption to obtain destruction and
transformation credits between 1996
and 2000. The EPA established these
provisions because of the difference
between the phaseout date for class I
substances under the CAA and the
phaseout date for the same substances
under the Montreal Protocol. These
provisions include a description of the
information needed and the grounds for
which the EPA can disallow the request.
Section § 82.4(f) addresses production
and import with destruction and
information credits. The EPA stopped
issuing such credits in 2000. Because
these provisions no longer have any
purpose or effect, the EPA is proposing
to remove §§ 82.4(f) and 82.9(f).
C. Class I Consumption Allowances
Before the phaseout of class I ODS,
the EPA historically had provided
additional consumption allowances
where class I ODS were exported,
transformed or destroyed, or where an
amount of production was transferred
from another Party to the Montreal
Protocol. Section 82.10 contains
provisions related to these additional
consumption allowances, including
detailing the information needed in a
request for them. The EPA stopped
issuing those allowances in 1996 for all
class I controlled substances (except
methyl bromide) and in 2005 for methyl
bromide. Because these provisions no
longer have any purpose or effect, the
EPA is proposing to remove them and
reserve § 82.10 in its entirety. The EPA
is also proposing to remove references
to § 82.10 from the definition of
‘‘consumption allowance’’ in § 82.3;
§ 82.9(c), (e) and (f); § 82.13(h)(1) and
(2); and § 82.13(i) as those references are
no longer applicable.
D. Transfers of Class I Allowances
The EPA historically had allowed for
the transfer of production and
consumption allowances for class I
substances in various ways. Under
section 607 of the CAA, the EPA was
required to issue regulations providing
for inter-pollutant allowance transfers
and allowance transfers between
companies. For class I substances, those
regulations appear at § 82.12. Due to the
class I phaseout, the EPA no longer
allocates production or consumption
allowances for class I substances.
Because these provisions no longer have
any purpose or effect, the EPA is
proposing to remove provisions related
to pre-1996 allowance transfers for class
I ODS (and pre-2005 for methyl
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bromide) found at § 82.12(a)(1) and
(b)(1), as any such transfers occurred
years ago and these provisions no longer
have any purpose or effect.
As discussed in earlier in this section,
the EPA is proposing to remove certain
provisions governing Article 5
allowances and destruction and
transformation credits. The EPA is
therefore also proposing to remove
provisions allowing for the transfer of
Article 5 allowances and destruction
and transformation credits found at
§ 82.12(a)(2), (b)(2)–(5), and (c) as those
provisions are longer needed.
E. HCFC–141b Allowances
In 2003, the EPA issued regulations
(68 FR 2820, January 21, 2003) to ensure
compliance with the first reduction
milestone in the HCFC phaseout. In that
rule, the EPA established chemicalspecific consumption and production
baselines for HCFC–141b, HCFC–22,
and HCFC–142b for the initial
regulatory period ending December 31,
2009. The rule phased out the
production and import of HCFC–141b
effective January 1, 2003 (see § 82.16(b)).
The EPA created a petition process at
§ 82.16(h) to allow applicants to request
‘‘HCFC–141b exemption allowances’’ to
produce or import small amounts of
HCFC–141b beyond the phaseout. The
agency removed § 82.16(h) from the
regulations and terminated the HCFC–
141b exemption allowance program,
effective January 1, 2015 (79 FR 64267,
October 28, 2014). At that time, the EPA
did not remove definitions and
reporting and recordkeeping
requirements that pertain only to
HCFC–141b exemption allowances.
The EPA is now proposing to remove
the definitions in § 82.3 specific to
HCFC–141b production or import after
the 2003 phaseout, including the
definitions of ‘‘Formulator,’’ ‘‘HCFC–
141b exemption allowances,’’ and
‘‘Unexpended HCFC–141b exemption
allowances.’’ The definitions for HCFC–
141b exemption allowances are no
longer relevant since the EPA has
removed the substantive regulations that
these definitions support. For the same
reasons, the EPA is proposing to remove
references to HCFC–141b in the
definition of ‘‘Confer,’’ but would retain
the remainder of that definition. The
EPA is also proposing to remove
references and recordkeeping and
reporting requirements specifically
relating to HCFC–141b exemption
allowances. These edits would be made
in § 82.24(b)(1)(ix) and (xi);
§ 82.24(b)(2)(xiv); § 82.24(c)(1)(xi);
§ 82.24(c)(2)(xvi); and § 82.24(g).
The EPA also created provisions at
§ 82.18(b) to allow producers to use
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‘‘export production allowances’’ to
produce HCFC–141b for export beyond
the phaseout. These allowances ended
in 2010 and therefore these provisions
have no further purpose or effect. The
EPA is proposing to retain the definition
of export production allowances and
certain references where appropriate to
provide context to the reader but
remove the recordkeeping and reporting
provisions. These edits would be made
in § 82.16(e)(1) and (2); § 82.24(b)(1)(iv)
and (ix); § 82.24(b)(2)(iv), and (xii); and
§ 82.24(d)(2).
VIII. Economic Analysis
In total, the EPA estimates that the
quantified costs and benefits of this
proposal would result in a net savings
of $13,000 per year. The agency
analyzed the quantitative benefits
associated with the overall burden
reduction from transitioning to
electronic reporting, the streamlined
petition process for used ODS, the
certification to import ODS for
destruction, and costs associated with
proposed labeling requirements. For this
action, the EPA has provided in the
docket technical support documents
that consider the costs and the benefits
commensurate with changes to ODS
phaseout regulations, such as the
requirement to use electronic reporting.
Further, many of the proposed changes
to the ODS phaseout regulations, such
as the removal of obsolete requirements,
would not result in any new costs or
benefits. The quantifiable costs and
benefits of this rule primarily result
from the proposed revisions to the
reporting and recordkeeping
requirements and the requirement to use
electronic reporting. For the phaseout of
ODS, the EPA previously considered the
domestic costs and benefits of the
United States’ phaseout.47
The EPA anticipates that electronic
reporting would allow for faster review
and transmission of submissions to the
EPA. Additionally, all information
submitted electronically would be
linked in an improved tracking system,
which would facilitate document
management efforts. The intent is that
this would allow companies to manage
past and future submissions easier. The
EPA expects that the estimated burden
hours and labor costs would decrease as
a result of the complete transition from
47 The following documents are available in the
docket: ‘‘EPA. 1999. The Benefits and Costs of the
Clean Air Act: 1990 to 2010;’’ ‘‘EPA. 1992.
Regulatory Impact Analysis: Compliance with
Section 604 of the Clean Air Act for the Phaseout
of Ozone Depleting Chemicals;’’ and ‘‘EPA. 1993.
Addendum to the 1992 Phaseout Regulatory Impact
Analysis: Accelerating the Phaseout of CFCs,
Halons, Methyl Chloroform, Carbon Tetrachloride,
and HCFCs.’’
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paper to electronic reporting. Even
accounting for the one-time burden for
entities that have not yet registered in
CDX of $2,000, the electronic reporting
would result in an overall burden
reduction for respondents of
approximately $4,000. Similarly, the
estimated agency burden hours and
labor costs would also decrease. For
example, by requiring electronic
reporting the agency would no longer
have to manually enter data into the
ODS Tracking System.
The streamlined petitions process and
new certification to import ODS for
destruction would decrease the total
estimated respondent burden. There
would be a reduction in reporting
requirements for imports for destruction
relative to the current petition process.
Specifically, the number of reporting
elements for importers for destruction
would be reduced from 13 to 8 and
reduce burden hours per response by
four hours. The EPA also estimates that
exempting halon 1211 used in aircraft
bottles from the petition process would
reduce the number of responses per
respondent by one, as detailed in
descriptions of the recordkeeping and
reporting burden, including cost savings
to the agency, which can be found in the
supporting statement for the
Information Collection Request
available in the docket to this rule.
The EPA estimates that the proposed
requirements to redesign the existing
labels on containers of Halotron® I
would result in a one-time cost between
$1,000 to $3,000. Administrative and
graphic design labor costs are estimated
based on the total amount of hours
required to redesign existing labels as
well as hourly labor costs. These hourly
costs include wages, overhead rates, and
fringe rates. Additional information on
this analysis is available in the docket.
There are also effects of this rule that
the agency has not or cannot quantify.
The EPA did not conduct a specific
analysis of the benefits and costs
associated with prohibiting the sales of
QPS methyl bromide for non-QPS
purposes, prohibiting sales of
polyurethane foam systems, other
elements of the proposal, and allocating
allowances of HCFC–123 and HCFC–
124. Prohibiting both the sales of QPS
methyl bromide for non-QPS purposes
and the sales of illegally imported ODS
is designed to improve compliance with
the existing provisions. Costs are
unquantifiable as the scale of these sales
are unknown but anticipated to be
small. The proposed prohibition on
sales and distribution of polyurethane
foam systems containing CFCs should
have no cost. Updating the definition of
destruction would allow for the use of
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new destruction technologies that are
currently not in use, but the agency is
unable to estimate the market for the use
of those new technologies if they are
adopted. The proposed removal of
obsolete provisions is not anticipated to
have any material cost or benefit.
For the allocation of HCFC–123 and
124, previous analyses provide
information on the costs and benefits of
the United States’ ODS phaseout, and
specifically the phaseout of all HCFCs
through 2030, but do not quantify the
costs and benefits of each individual
phaseout step for each individual
chemical. A memorandum summarizing
these analyses, including the original
regulatory impact analysis for the full
phaseout of ODS, is available in the
docket.48 Finalizing this proposed rule
would allow for the production and
consumption of HCFC–123 and HCFC–
124 that would otherwise not be
allowed in the absence of this
rulemaking under existing regulations.
The benefit of issuing allowances
consistent with this proposal outweighs
the disbenefit associated with no action.
Since the allocation for HCFC–123 is
the largest component of this rule, the
following discusses the potential costs
and benefits of the proposed and
alternative allocation levels for HCFC–
123. As discussed in the allocation
section of this notice, the consumption
baseline of the United States under the
Montreal Protocol in 2020 for all
HCFCs, on an ODP-weighted basis, will
be 0.5% of the historic HCFC baseline.
This equates to 3,810 MT of HCFC–123.
Under section 605(c) of the CAA, the
consumption of HCFCs by any person is
limited to the quantity consumed by
that person during the baseline year.
The baseline 49 for HCFC–123 is the
aggregated quantity consumed in the
baseline years and equates to 2,014 MT.
In developing the proposed allocations,
the EPA considered the quantities
needed to satisfy estimated demand for
HCFC–123 to service equipment
manufactured before 2020. Lastly, the
EPA estimated a range for the amount
HCFC–123 that will likely be reclaimed
annually, and thus be available to meet
part of the servicing demand for HCFC–
123. These are summarized in Table 3.
TABLE 3—HCFC–123 SERVICING DEMAND AND ESTIMATED RECLAMATION (MT)
2020
Total Estimated Demand .................
Estimated Reclamation Low ............
Estimated Reclamation High ............
Total Need for New Production with
Low Reclaim .................................
Total Need for New Production with
High Reclaim ................................
2021
2022
2023
2024
2025
2026
2027
2028
2029
Total
820
300
350
790
310
378
770
320
407
750
330
436
720
340
465
700
350
494
670
360
523
650
370
552
630
380
581
600
390
610
7,100
3,450
4,796
520
480
450
420
380
350
310
280
250
210
3,650
470
412
363
314
255
206
147
98
49
0
2,314
The agency’s intent is to accomplish
the complete phaseout in 2030 in a
manner that achieves a smooth
transition to alternatives without
stranding equipment. This is important
because the EPA estimates that 36,000
appliances using HCFC–123 will still be
in operation in 2030.50 At that time, no
more HCFC–123 may be produced or
imported into the United States.
TABLE 4—PROJECTED NUMBER OF HCFC–123 AC AND REFRIGERATION UNITS IN OPERATION
[1000s of Units]
Equipment type
2020
Chillers (AC) .....................................
IPR ...................................................
47
14
The EPA does not want to strand
existing equipment because of an
inadequate supply of HCFCs, but also
must achieve a complete phaseout of
production and consumption by 2030. A
viable reclamation market is important
to support the continued availability of
HCFCs after the 2030 phaseout, and
during 2020 through 2029 can support
the fire suppression market and
decrease the need for new production
and import. As noted previously, the
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2021
2022
45
13
2023
43
13
2024
41
12
39
12
2025
37
11
EPA is requesting comment on the
HCFC demand estimates included in the
2019 Draft Servicing Tail Report, which
is included in the docket for this
rulemaking.
Table 5 presents the three allocation
amounts for HCFC–123 raised for
comment in this proposed rule. The
agency proposes to issue consumption
allowances equal to the 2020 estimated
HCFC–123 demand for servicing
existing refrigeration and airconditioning and fire suppression
2026
2027
35
11
33
10
2028
31
10
2029
29
9
2030
27
9
equipment for years 2020 through 2022
and to then decrease the number of
allowances issued in each subsequent
year by an equal amount each year such
that there are zero allowances issued in
2030. Alternative 1 is equal to the
estimated demand minus the low end of
estimated reclaim. Alternative 2 is
100% of the domestic HCFC–123
consumption baseline, which as
discussed previously is the full amount
that can be allocated under the CAA.
TABLE 5—COMPARISON OF HCFC–123 CONSUMPTION ALLOWANCE ALLOCATIONS (MT)
2020
Proposal ...........................................
650
48 EPA. 2008. ‘‘HCFC Cost Analysis.’’ and EPA.
2018. ‘‘Overview of CFC and HCFC Phaseout.’’
49 Baseline from 40 CFR 82.19.
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2021
650
2022
2023
650
570
2024
490
50 EPA. 2019. The U.S. Phaseout of HCFCs:
Projected Servicing Demands in the U.S. Air
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2025
410
2026
330
2027
250
2028
170
2029
90
Total
4,260
Conditioning, Refrigeration, and Fire Suppression
Sector (2020–2030). See Table 3.
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TABLE 5—COMPARISON OF HCFC–123 CONSUMPTION ALLOWANCE ALLOCATIONS (MT)—Continued
2020
Alternative 1 .....................................
Alternative 2 .....................................
0.5% of HCFC Consumption Baseline ................................................
2021
2022
2023
2024
2025
2026
2027
2028
2029
Total
520
2,014
480
2,014
450
2,014
420
2,014
380
2,014
350
2,014
310
2,014
280
2,014
250
2,014
210
2,014
3,650
20,140
3,810
3,810
3,810
3,810
3,810
3,810
3,810
3,810
3,810
3,810
38,100
The EPA expects more disbenefits in
allocating significantly above projected
demand. Because of the limited
numbers of allowance holders, the EPA
does not expect the price of HCFC–123
to appreciably decrease if the agency
allocates 100% of the HCFC–123
baseline (Alternative 2 in Table 5). The
disbenefits the EPA is concerned about
include near and longer term available
supply of reclaimed and recycled
HCFC–123, as well as emissions of ODS,
given the agency’s assumption that all
refrigerant produced is eventually
emitted into the atmosphere. More
allocated allowances would likely
suppress the recovery and reclamation
market and cause more HCFC material
to be vented at the end of the
equipments’ lifetime. In the near term,
this would also have an adverse effect
on the availability of reclaimed HCFC–
123 for the fire suppression sector
because reclamation is the only source
of HCFC–123 for the manufacture of
new fire suppression equipment; it is
projected that the fire suppression
sector would need between 170 to 225
MT for the manufacture of new
equipment. Thus, if the reclaim market
is suppressed from 2020 through 2029,
there will be less supply and higher
costs for HCFC–123, especially from
2030 onwards when the only supply of
HCFC–123 will be from the reclaim
market. Based on the 2019 Draft
Servicing Tail Report, HCFC–124
consumption has been approximately
250 MT per year and reclamation has
been minimal. Recent sales data from
the California Air Resources Board as
well as other information indicate that
demand for HCFC–124 should be
between 100 and 200 MT in 2020. Like
HCFC–123, providing HCFC–124
allowances significantly in excess of
demand may not foster transition. Thus,
the EPA is proposing to allocate 200 MT
for the first three years and then
gradually decrease over the next seven
years by an equal amount each year. The
EPA is taking comment on the
assumptions and projections in this
section.
Regardless of allocation level, for the
purposes of analyzing the impact of this
proposal on small business, the EPA
finds there is no significant impact on
a substantial number of small entities
(SISNOSE). The EPA performed a sales
test to assess the economic impact of a
regulatory option on small businesses
and compared the results of the sales
test. Based on the screening analysis of
allowance holders of HCFC–123 and
HCFC–124, this proposed rulemaking
could be presumed to have no SISNOSE
because it is expected to result in a net
benefit to small business through the
ability to continue producing, importing
and/or selling HCFC–123 and HCFC–
124. The EPA notes that there are only
eight companies total that hold
consumption allowances for HCFC–123
and HCFC–124, only two of which are
small businesses.
Table 6 summarizes the
environmental effect, in ODP-weighted
metric tons, of the various HCFC–123
allocation levels over the length of the
2020–2029 regulatory period. For
comparison, the EPA estimates total
demand for HCFC–123 over the next
decade to equal 7,100 MT, or 142 ODPweighted metric tons. About 70% to
75% of this amount is for servicing
existing equipment and can be met with
newly-imported HCFCs, and the
remainder must be met with reclaimed
or recycled HCFCs. Not all allowances
may be expended so this does not reflect
the actual impact to the stratospheric
ozone layer of these three options.
However, the EPA does assume that all
refrigerant produced is eventually
emitted into the atmosphere. Alternative
1 followed by the proposed allocation
amounts would have the least impact on
the stratospheric ozone layer. For
HCFC–124, the EPA estimates total
demand over the next decade equal to
1,000 to 2,000 MT, or 22 to 44 ODPweighted metric tons.
TABLE 6—ENVIRONMENTAL EFFECTS OF THE HCFC–123 AND HCFC–124 ALLOCATION AMOUNTS
[Total of 2020–2029]
MT
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Proposed HCFC–123 Allocation Amount ................................................................................................................
HCFC–123 Alternative 1 ..........................................................................................................................................
HCFC–123 Alternative 2 ..........................................................................................................................................
Proposed HCFC–124 Allocation Amount ................................................................................................................
HCFC–124 Alternative .............................................................................................................................................
IX. Statutory and Executive Order
Reviews
A. Executive Order 12866: Regulatory
Planning and Review and Executive
Order 13563: Improving Regulation and
Regulatory Review
This action is a significant regulatory
action that was submitted to the Office
of Management and Budget (OMB) for
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Jkt 247001
ODP-weighted
metric tons
4,260
3,650
20,140
1,300
2,000
85
73
403
28.6
44
review. Any changes made in response
to OMB recommendations have been
documented in the docket.
this proposed rule can be found in the
EPA’s ICR associated with this
rulemaking.
B. Executive Order 13771: Reducing
Regulations and Controlling Regulatory
Costs
C. Paperwork Reduction Act (PRA)
This action is expected to be an
Executive Order 13771 regulatory
action. Details on the estimated costs of
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The information collection activities
in this proposed rule have been
submitted for approval to the Office of
Management and Budget (OMB) under
the PRA. The ICR document that the
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EPA prepared has been assigned EPA
ICR number 1432.34. You can find a
copy of the ICR in the docket for this
rule, and it is briefly summarized here.
This ICR covers provisions under the
Montreal Protocol and Title VI of the
CAA that establish limits on total U.S.
production, import, and export of ODS.
The EPA monitors compliance with the
CAA and commitments under the
Montreal Protocol through the
recordkeeping and reporting
requirements established in the
regulations at 40 CFR part 82, subpart A.
The EPA informs the respondents that
they may assert claims of business
confidentiality for any of the
information they submit. Information
claimed as confidential will be treated
in accordance with the procedures for
handling information claimed as
confidential under 40 CFR part 2,
subpart B, and will be disclosed to the
extent, and by means of procedures, set
forth in Subpart B. If no claim of
confidentiality is asserted when the
information is received by the EPA, it
may be made available to the public
without further notice to the
respondents (40 CFR 2.203).
Respondents/affected entities:
Producers, importers, exporters, and
certain users of ozone depleting
substances; methyl bromide applicators,
distributors, and end users including
commodity storage and quarantine
users.
Respondent’s obligation to respond:
Mandatory—sections 603(b) and 114 of
the CAA.
Estimated number of respondents: 93.
Frequency of response: Quarterly,
annually, and as needed.
Total estimated burden: 2,940 hours
(per year). Burden is defined at 5 CFR
1320.3(b).
Total estimated cost: $354,068,
includes $346,693 annualized capital
and operation & maintenance costs of
$7,375.
The ICR addresses the incremental
changes to the existing reporting and
recordkeeping programs that are
approved under OMB control number
2060–0170.
An agency may not conduct or
sponsor, and a person is not required to
respond to a collection of information
unless it displays a currently valid OMB
control number. The OMB control
numbers for the EPA’s regulations in 40
CFR are listed in 40 CFR part 9.
Submit your comments on the
agency’s need for this information, the
accuracy of the provided burden
estimates and any suggested methods
for minimizing respondent burden to
the EPA using the docket identified at
the beginning of this rule. You may also
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send your ICR-related comments to
OMB’s Office of Information and
Regulatory Affairs via email to oria_
submissions@omb.eop.gov, Attention:
Desk Officer for the EPA. Since OMB is
required to decide concerning the ICR
between 30 and 60 days after receipt,
OMB must receive comments no later
than September 13, 2019. The EPA will
respond to any ICR-related comments in
the final rule.
D. Regulatory Flexibility Act (RFA)
I certify that this action will not have
a significant economic impact on a
substantial number of small entities
under the RFA. The small entities
potentially subject to increased costs
from this action include allowance
holders, distributors, applicators, and
end users of methyl bromide and
importers of ODS. The EPA estimates
that the total incremental savings
associated with this proposed rule is
$13,000 per year in 2018 dollars. Details
of this analysis are presented in Section
VIII of this notice.
E. Unfunded Mandates Reform Act
(UMRA)
This action does not contain an
unfunded mandate of $100 million or
more as described in UMRA, 2 U.S.C.
1531–1538, and does not significantly or
uniquely affect small governments.
F. Executive Order 13132: Federalism
This action does not have federalism
implications. It will not have substantial
direct effects on the states, on the
relationship between the national
government and the states, or on the
distribution of power and
responsibilities among the various
levels of government.
G. Executive Order 13175: Consultation
and Coordination With Indian Tribal
Governments
This action does not have tribal
implications as specified in Executive
Order 13175. It will not have substantial
direct effects on tribal governments, on
the relationship between the federal
government and Indian tribes, or on the
distribution of power and
responsibilities between the federal
government and Indian tribes, as
specified in Executive Order 13175.
Thus, Executive Order 13175 does not
apply to this action.
H. Executive Order 13045: Protection of
Children From Environmental Health
Risks and Safety Risks
This action is not subject to E.O.
13045 (62 FR 19885, April 23, 1997)
because it is not economically
significant as defined in E.O. 12866. The
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41543
agency nonetheless has reason to
believe that the environmental health or
safety risk addressed by this action may
have a disproportionate effect on
children. Depletion of stratospheric
ozone results in greater transmission of
the sun’s ultraviolet (UV) radiation to
the earth’s surface. The following
studies describe the effects of excessive
exposure to UV radiation on children:
(1) Westerdahl J, Olsson H, Ingvar C.
‘‘At what age do sunburn episodes play
a crucial role for the development of
malignant melanoma,’’ Eur J Cancer
1994: 30A: 1647–54; (2) Elwood JM
Japson J. ‘‘Melanoma and sun exposure:
an overview of published studies,’’ Int
J Cancer 1997; 73:198–203; (3)
Armstrong BK, ‘‘Melanoma: childhood
or lifelong sun exposure,’’ In: Grobb JJ,
Stern RS, Mackie RM, Weinstock WA,
eds. ‘‘Epidemiology, causes and
prevention of skin diseases,’’ 1st ed.
London, England: Blackwell Science,
1997: 63–6; (4) Whiteman D., Green A.
‘‘Melanoma and Sunburn,’’ Cancer
Causes Control, 1994: 5:564–72; (5)
Heenan, PJ. ‘‘Does intermittent sun
exposure cause basal cell carcinoma? A
case control study in Western
Australia,’’ Int J Cancer 1995; 60: 489–
94; (6) Gallagher, RP, Hill, GB, Bajdik,
CD, et. al. ‘‘Sunlight exposure,
pigmentary factors, and risk of
nonmelanocytic skin cancer I, Basal cell
carcinoma,’’ Arch Dermatol 1995; 131:
157–63; (7) Armstrong, DK. ‘‘How sun
exposure causes skin cancer: an
epidemiological perspective,’’
Prevention of Skin Cancer. 2004. 89–
116.
I. Executive Order 13211: Actions That
Significantly Affect Energy Supply,
Distribution, or Use
This action is not a ‘‘significant
energy action’’ because it is not likely to
have a significant adverse effect on the
supply, distribution, or use of energy.
J. National Technology Transfer and
Advancement Act (NTTAA)
This rulemaking does not involve
technical standards.
K. Executive Order 12898: Federal
Actions To Address Environmental
Justice in Minority Populations and
Low-Income Populations
The EPA believes that this action does
not have disproportionately high and
adverse human health or environmental
effects on minority populations, lowincome populations and/or indigenous
peoples, as specified in Executive Order
12898 (59 FR 7629, February 16, 1994).
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List of Subjects in 40 CFR Part 82
Environmental protection, Air
pollution control, Chemicals, Reporting
and recordkeeping requirements.
Dated: July 24, 2019.
Andrew R. Wheeler,
Administrator.
For the reasons set forth in the
preamble, the EPA proposes to amend
40 CFR part 82 as follows:
PART 82—PROTECTION OF
STRATOSPHERIC OZONE
1. The authority citation for part 82
continues to read as follows:
■
Authority: 42 U.S.C. 7414, 7601, 7671–
767q.
2. Amend § 82.3 by:
a. Adding. In alphabetical order,
definitions for ‘‘bank’’ and ‘‘Central Data
Exchange;’’
■ b. Revising the definitions for
‘‘Administrator,’’ ‘‘Aircraft halon
bottle,’’ ‘‘Confer,’’ ‘‘Consumption
allowances,’’ ‘‘Destruction,’’ ‘‘Individual
shipment,’’ ‘‘Non-Objection notice,’’ and
‘‘Production’’; and
■ c. Removing definitions for
‘‘Formulator,’’ ‘‘HCFC–141b exemption
allowances,’’ and ‘‘Unexpended HCFC–
141b exemption allowances.’’
The revisions and additions read as
follows:
■
■
§ 82.3
Definitions.
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*
*
*
*
*
Administrator means the
Administrator of the United States
Environmental Protection Agency or his
or her authorized representative.
Reports and petitions that are available
to be submitted through the Central Data
Exchange must be submitted through
that tool. Any other reports and
communications shall be submitted to
Stratospheric Protection Manager, 1200
Pennsylvania Ave. NW, Mail Code:
6205T, Washington, DC 20460.
Aircraft halon bottle means a vessel
used as a component of an aircraft fire
suppression system containing halon1301 or halon-1211 approved under
FAA rules for installation in a
certificated aircraft.
*
*
*
*
*
Bank means a facility run by a
national government or privately run
and authorized by a national
government that collects and stores
previously-recovered ozone-depleting
substances for reuse at a later date.
*
*
*
*
*
Central Data Exchange means EPA’s
centralized electronic document
receiving system, or its successors.
*
*
*
*
*
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Confer means to shift the essential-use
allowances obtained under § 82.8 from
the holder of the unexpended essentialuse allowances to a person for the
production of a specified controlled
substance.
*
*
*
*
*
Consumption allowances means the
privileges granted by this subpart to
produce and import controlled
substances; however, consumption
allowances may be used to produce
controlled substances only in
conjunction with production
allowances. A person’s consumption
allowances for class I substances are the
total of the allowances obtained under
§§ 82.6 and 82.7 as may be modified
under § 82.12 (transfer of allowances). A
person’s consumption allowances for
class II controlled substances are the
total of the allowances obtained under
§§ 82.19 and 82.20, as may be modified
under § 82.23.
*
*
*
*
*
Destruction means the expiration of a
controlled substance to the destruction
and removal efficiency actually
achieved, unless considered completely
destroyed as defined in this section.
Such destruction might result in a
commercially useful end product, but
such usefulness would be secondary to
the act of destruction. Destruction must
be achieved using one of the following
controlled processes approved by the
Parties to the Protocol:
(1) Liquid injection incineration;
(2) Reactor cracking;
(3) Gaseous/fume oxidation;
(4) Rotary kiln incineration;
(5) Cement kiln;
(6) Radio frequency plasma;
(7) Municipal waste incinerators (only
for the destruction of foams);
(8) Nitrogen plasma arc;
(9) Portable plasma arc;
(10) Argon plasma arc;
(11) Chemical reaction with H2 and
CO2;
(12) Inductively coupled radio
frequency plasma;
(13) Microwave plasma;
(14) Porous thermal reactor;
(15) Gas phase catalytic dehalogenation;
(16) Superheated steam reactor; or
(17) Thermal reaction with methane.
*
*
*
*
*
Individual shipment means the
kilograms of a controlled substance for
which a person may make one (1) U.S.
Customs entry, as identified in the nonobjection letter from the Administrator
under §§ 82.13(g)(2), (3), and (5) and
82.24(c)(4) and (6).
*
*
*
*
*
Non-Objection notice means the
privilege granted by the Administrator
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to import a specific individual shipment
of a controlled substance in accordance
with §§ 82.13(g)(2), (3), and (5) and
82.24(c)(3), (4), and (6).
*
*
*
*
*
Production means the manufacture of
a controlled substance from any raw
material or feedstock chemical, but does
not include:
(1) The manufacture of a controlled
substance that is subsequently
transformed;
(2) The reuse or recycling of a
controlled substance;
(3) Amounts that are destroyed by the
approved technologies in § 82.3; or
(4) Amounts that are spilled or vented
unintentionally.
■ 3. Amend § 82.4 by:
■ a. Removing and reserving paragraph
(f);
■ b. Revising paragraph (j); and
■ c. Adding paragraphs (r) and (s).
Revisions read as follows:
§ 82.4 Prohibitions for class I controlled
substances.
*
*
*
*
*
(j)(1) Effective January 1, 1995, no
person may import, at any time in any
control period, a used class I controlled
substance, except for Group II used
controlled substances shipped in
aircraft halon bottles for hydrostatic
testing, without having received a nonobjection notice from the Administrator
in accordance with § 82.13(g)(2) and (3).
A person who receives a non-objection
notice for the import of an individual
shipment of used controlled substances
may not transfer or confer the right to
import, and may not import any more
than the exact quantity, in kilograms, of
the used controlled substance cited in
the non-objection notice. Every kilogram
of importation of used controlled
substance in excess of the quantity cited
in the non-objection notice issued by
the Administrator in accordance with
§ 82.13(g)(2) and (3) constitutes a
separate violation.
(2) Effective September 13, 2019, no
person may import for purposes of
destruction, at any time in any control
period, a class I controlled substance for
which EPA has apportioned baseline
production and consumption
allowances, without having submitted a
certification of intent to import for
destruction to the Administrator and
received a non-objection notice in
accordance with § 82.13(g)(5). A person
issued a non-objection notice for the
import of an individual shipment of
class I controlled substances for
destruction may not transfer or confer
the right to import, and may not import
any more than the exact quantity (in
kilograms) of the class I controlled
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substance stated in the non-objection
notice. For imports intended to be
destroyed in the U.S., a person issued a
non-objection notice must destroy the
controlled substance in the year cited in
the non-objection letter, may not
transfer or confer the right to import,
and may not import any more than the
exact quantity (in kilograms) of the class
I controlled substance stated in the nonobjection notice. Every kilogram of
import of class I controlled substance in
excess of the quantity stated in the nonobjection notice issued by the
Administrator in accordance with
§ 82.13(g)(5) constitutes a separate
violation of this subpart.
*
*
*
*
*
(r) Quarantine and preshipment
exemption. No person may sell or use
methyl bromide produced or imported
under the quarantine and preshipment
exemption for any purpose other than
for quarantine applications or
preshipment applications as defined in
§ 82.3. Each kilogram of methyl bromide
produced or imported under the
authority of the quarantine and
preshipment exemption and sold or
used for a use other than quarantine or
preshipment is a separate violation of
this subpart.
(s) Effective September 13, 2019, no
person may sell or distribute, or offer for
sale or distribution, any class I
substance that they know, or have
reason to know, was imported in
violation of this section, except for such
actions needed to re-export the
controlled substance. Every kilogram of
a controlled substance imported in
contravention of this paragraph that is
sold or distributed, or offered for sale or
distribution, constitutes a separate
violation of this subpart.
■ 4. Amend § 82.9 by:
■ a. Removing and reserving paragraphs
(a), (b), (e), and (f); and
■ b. Revising paragraph (c) introductory
text.
The revision reads as follows:
§ 82.9 Availability of production
allowances in addition to baseline
production allowances for class I controlled
substances.
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(c) A company may increase or
decrease its production allowances,
including its Article 5 allowances, by
trading with another Party to the
Protocol according to the provision
under this paragraph (c). A company
may increase or decrease its essentialuse allowances for CFCs for use in
essential MDIs according to the
provisions under this paragraph (c). A
nation listed in appendix C to this
subpart (Parties to the Montreal
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Protocol) must agree either to transfer to
the person for the current control period
some amount of production or import
that the nation is permitted under the
Montreal Protocol or to receive from the
person for the current control period
some amount of production or import
that the person is permitted under this
subpart. If the controlled substance is
produced under the authority of
production allowances and is to be sold
in the United States or to another Party
(not the Party from whom the
allowances are received), the U.S.
company must expend its consumption
allowances allocated under § 82.6 and
§ 82.7 in order to produce with the
additional production allowances.
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§ 82.10
[Removed and reserved]
5. Remove and reserve § 82.10.
6. Amend § 82.12 by:
a. Revising paragraph (a)(1)
introductory text; and
■ b. Removing and reserving paragraphs
(a)(2), (b) and (c).
The revision reads as follows:
■
■
■
§ 82.12 Transfers of allowances for class I
controlled substances.
(a) * * *
(1) After January 1, 2002, any
essential-use allowance holder
(including those persons that hold
essential-use allowances issued by a
Party other than the United States)
(‘‘transferor’’) may transfer essential-use
allowances for CFCs to a metered dose
inhaler company solely for the
manufacture of essential MDIs. After
January 1, 2005, any critical use
allowance holder (‘‘transferor’’) may
transfer critical use allowances to any
other person (‘‘transferee’’).
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■ 7. Amend § 82.13 by:
■ a. Revising paragraphs (a), (c),
(f)(2)(xvii)–(xxii), (f)(3)(xiii)–(xvii),
(g)(1)(xi), (xv), (xvii)–(xxi), (g)(2)(i)–(iv),
(vi), (viii)–(xiii), (g)(3)(i)(A), (g)(3)(vii),
(g)(4)(xv)–(xviii), (h)(1) introductory
text, (h)(1)(ii)–(iii), (h)(2) introductory
text, (h)(2)(ii)–(v), (viii), (v), (w)(2), (y),
(z), (aa);
■ b. Removing and reserving paragraphs
(f)(2)(iv), (v), and (xvi), (f)(3)(iv), (ix),
(g)(2)(xiv), (g)(4)(vii), (xi), (i); and
■ c. Adding paragraphs (g)(2)(xv) and
(g)(5)–(9).
The revisions and additions read as
follows:
§ 82.13 Recordkeeping and reporting
requirements for class I controlled
substances.
(a) Unless otherwise specified, the
recordkeeping and reporting
requirements set forth in this section
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41545
take effect on January 1, 1995. For class
I, Group VIII controlled substances, the
recordkeeping and reporting
requirements set forth in this section
take effect on August 18, 2003. For
critical use methyl bromide, the
recordkeeping and reporting
requirements set forth in this section
take effect January 1, 2005.
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(c) Unless otherwise specified, reports
required by this section must be
submitted to the Administrator within
45 days of the end of the applicable
reporting period. Starting [DATE 30
DAYS AFTER EFFECTIVE DATE OF
FINAL RULE], reports that are available
for submission through the Central Data
Exchange must be submitted
electronically through that tool.
Revisions of reports that are required by
this section must be submitted to the
Administrator within 180 days of the
end of the applicable reporting period,
unless otherwise specified.
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(f) * * *
(2) * * *
(xvii) For methyl bromide, dated
records of the quantity of controlled
substances produced for quarantine and
preshipment applications and quantity
sold for quarantine and preshipment
applications;
(xviii) Written certifications that
quantities of methyl bromide produced
solely for quarantine and preshipment
applications were purchased by
distributors or applicators to be used
only for quarantine applications and
preshipment applications in accordance
with the definitions in this subpart; and
(xix) Written verifications from a U.S.
purchaser that methyl bromide
produced solely for quarantine and
preshipment applications, if exported,
will be exported solely for quarantine
applications and preshipment
applications upon receipt of a
certification in accordance with the
definitions of this subpart and
requirements in paragraph (h) of this
section.
(xx) For methyl bromide, dated
records such as invoices and order
forms, and a log of the quantity of
controlled substances produced for
critical use, specifying quantities
dedicated for pre-plant use and
quantities dedicated for post-harvest
use, and the quantity sold for critical
use, specifying quantities dedicated for
pre-plant use and quantities dedicated
for post-harvest use;
(xxi) Written certifications that
quantities of methyl bromide produced
for critical use were purchased by
distributors, applicators, or approved
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critical users to be used or sold only for
critical use in accordance with the
definitions and prohibitions in this
subpart. Certifications must be
maintained by the producer for a
minimum of three years and;
(xxii) For methyl bromide, dated
records such as invoices and order
forms, and a log of the quantity of
controlled substances produced solely
for export to satisfy critical uses
authorized by the Parties for that control
period, and the quantity sold solely for
export to satisfy critical uses authorized
by the Parties for that control period.
(3) * * *
(xiii) The amount of methyl bromide
sold or transferred during the quarter to
a person other than the producer solely
for quarantine and preshipment
applications;
(xiv) A list of the quantities of methyl
bromide produced by the producer and
exported by the producer and/or by
other U.S. companies, to a Party to the
Protocol that will be used solely for
quarantine and preshipment
applications and therefore were not
produced expending production or
consumption allowances; and
(xv) For quarantine and preshipment
applications of methyl bromide in the
United States or by a person of another
Party, one copy of a certification that the
material will be used only for
quarantine and preshipment
applications in accordance with the
definitions in this subpart from each
recipient of the material and a list of
additional quantities shipped to that
same person for the quarter.
(xvi) For critical uses of methyl
bromide, producers shall report
annually the amount of critical use
methyl bromide owned by the reporting
entity, specifying quantities dedicated
for pre-plant use and quantities
dedicated for post-harvest use, as well
as quantities held by the reporting entity
on behalf of another entity, specifying
quantities dedicated for pre-plant use
and quantities dedicated for postharvest use along with the name of the
entity on whose behalf the material is
held; and
(xvii) A list of the quantities of methyl
bromide produced by the producer and
exported by the producer and/or by
other U.S. companies in that control
period, solely to satisfy the critical uses
authorized by the Parties for that control
period; and
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(g) * * *
(1) * * *
(xi) The quantity of imports of used,
recycled or reclaimed class I controlled
substances;
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(xv) Dated records of the quantity of
controlled substances imported for an
essential use;
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(xvii) Dated records of the quantity of
methyl bromide imported for quarantine
and preshipment applications and
quantity sold for quarantine and
preshipment applications;
(xviii) Written certifications that
quantities of methyl bromide imported
solely for quarantine and preshipment
applications were purchased by
distributors or applicators to be used
only for quarantine and preshipment
applications in accordance with the
definitions in this subpart; and
(xix) Written verifications from a U.S.
purchaser that methyl bromide
imported solely for quarantine and
preshipment applications, if exported,
will be exported solely for quarantine
and preshipment applications upon
receipt of a certification in accordance
with the definitions of this Subpart and
requirements in paragraph (h) of this
section.
(xx) For methyl bromide, dated
records such as invoices and order
forms, of the quantity of controlled
substances imported for critical use,
specifying quantities dedicated for preplant use and quantities dedicated for
post-harvest use, and the quantity sold
for critical use, specifying quantities
dedicated for pre-plant use and
quantities dedicated for post-harvest
use, and;
(xxi) Written certifications that
quantities of methyl bromide imported
for critical use were purchased by
distributors, applicators, or approved
critical users to be used or sold only for
critical use in accordance with the
definitions and prohibitions in this
subpart. Certifications must be
maintained by an importer for a
minimum of three years.
(2) Petitioning—Importers of Used,
Recycled or Reclaimed Controlled
Substances. For each individual
shipment over 5 pounds of a used
controlled substance as defined in
§ 82.3, except for imports intended for
destruction and Group II used
controlled substances shipped in
aircraft halon bottles for hydrostatic
testing and imports intended for
destruction, an importer must submit
directly to the Administrator, at least 40
working days before the shipment is to
leave the foreign port of export, the
following information in a petition:
(i) Name, commodity code, and
quantity in kilograms of the used
controlled substance to be imported;
(ii) Name and address of the importer,
the importer ID number, and the contact
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person’s name, email address, and
phone number;
(iii) Name, address, contact person,
email address, and phone number of all
previous source facilities from which
the used controlled substance was
recovered or the government agency
storing the controlled substance;
(iv) A detailed description of the
previous use of the controlled substance
at each source facility and a best
estimate of when the specific controlled
substance was put into the equipment at
each source facility, and, when possible,
documents indicating the date the
material was put into the equipment; or
an official letter from the exporting
country that the controlled substance is
used;
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*
(vi) Name, address, contact person,
email address, and phone number of the
exporter and of all persons to whom the
material was transferred or sold after it
was recovered from the source facility;
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*
(viii) A description of the intended
use of the used controlled substance,
and, when possible, the name, address,
contact person, email address, and
phone number of the ultimate purchaser
in the United States;
(ix) Name, address, contact person,
email address, and phone number of the
U.S. reclamation facility, where
applicable;
(x) If someone at the source facility
recovered the controlled substance from
the equipment, the name, email address,
and phone number of that person;
(xi) If the imported controlled
substance was reclaimed in a foreign
Party, the name, address, contact
person, email address, and phone
number of any or all foreign reclamation
facility(ies) responsible for reclaiming
the cited shipment;
(xii) An English translation of the
export license, or application for an
export license, from the appropriate
government agency in the country of
export and, if recovered in another
country, the export license from the
appropriate government agency in that
country, and quantity authorized for
export in kilograms on the export
license(s);
(xiii) If the imported used controlled
substance is intended to be sold as a
refrigerant in the U.S., the name,
address, and email address of the EPAcertified U.S. reclaimer who will bring
the material to the standard required
under section 608 (§ 82.152(g)) of the
CAA, if not already reclaimed to those
specifications.
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(xv) If the used controlled substance
is stored by a foreign national
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government in a bank of used class I
controlled substances, or by a privatelyoperated bank authorized by the foreign
national government to collect and store
class I controlled substances, an official
letter from the appropriate government
agency in that country where the
material is stored may be provided in
lieu of the information required in
subparagraphs (iii) through (vi) of this
paragraph.
(3) * * *
(i) * * *
(A) If the Administrator determines
that the information is insufficient, that
is, if the petition lacks or appears to lack
any of the information required under
§ 82.13(g)(2) or other information that
may be requested during the review of
the petition necessary to verify that the
controlled substance is used;
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(vii) A person receiving the nonobjection notice is permitted to import
the individual shipment only within
one year of the date stamped on the
non-objection notice.
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(4) * * *
(xv) The amount of methyl bromide
sold or transferred during the quarter to
a person other than the importer solely
for quarantine and preshipment
applications;
(xvi) A list of the quantities of methyl
bromide exported by the importer and
or by other U.S. companies, to a Party
to the Protocol that will be used solely
for quarantine and preshipment
applications and therefore were not
imported expending consumption
allowances; and
(xvii) For quarantine and preshipment
applications of methyl bromide in the
United States or by a person of another
Party, one copy of a certification that the
material will be used only for
quarantine and preshipment
applications in accordance with the
definitions in this subpart from each
recipient of the material and a list of
additional quantities shipped to that
same person for the quarter.
(xviii) For critical uses of methyl
bromide, importers shall report
annually the amount of critical use
methyl bromide owned by the reporting
entity, specifying quantities dedicated
for pre-plant use and quantities
dedicated for post-harvest use, as well
as quantities held by the reporting entity
on behalf of another entity, specifying
quantities dedicated for pre-plant use
and quantities dedicated for postharvest use along with the name of the
entity on whose behalf the material is
held.
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(5) Certification of Intent to Import for
Destruction. For each individual
shipment of a class I controlled
substance imported with the intent to
destroy that substance, an importer
must submit electronically to the
Administrator, at least 30 working days
before the shipment is to leave the
foreign port of export, the following
information:
(i) Name, commodity code, and
quantity in kilograms of each controlled
substance to be imported,
(ii) Name and address of the importer,
the importer ID number, and the contact
person’s name, email address, and
phone number;
(iii) The U.S. port of entry for the
import, the expected date of shipment
and the vessel transporting the
chemical. If at the time of submitting the
certification of intent to import for
destruction the importer does not know
the U.S. port of entry, the expected date
of shipment and the vessel transporting
the chemical, and the importer receives
a non-objection notice for the individual
shipment in the petition, the importer is
required to notify the Administrator of
this information prior to the U.S. entry
of the individual shipment;
(iv) Name, address, contact person,
email address, and phone number of the
responsible party at the destruction
facility;
(v) An English translation of an export
license, or application for an export
license, from the appropriate
government agency in the country of
export, and quantity authorized for
export in kilograms on the export
license(s);
(vi) A certification of accuracy of the
information submitted in the
certification.
(6) For each individual shipment of a
class I controlled substance imported
with the intent to destroy that
substance, an importer must submit to
the Administrator a copy of the
destruction verification within 30 days
after destruction of the controlled
substance(s).
(7)(i) Starting on the first working day
following receipt by the Administrator
of a certification of intent to import a
class II controlled substance for
destruction, the Administrator will
initiate a review of the information
submitted under paragraph (c)(6) of this
section and take action within 30
working days to issue either an
objection-notice or a non-objection
notice for the individual shipment to
the person who submitted the
certification of intent to import the class
II controlled substance for destruction.
(ii) The Administrator may issue an
objection notice if the petition lacks or
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41547
appears to lack any of the information
required under this subparagraph or for
the reasons listed in § 82.24(c)(4)(i)(B)–
(E).
(iii) In cases where the Administrator
does not object to the petition, the
Administrator will issue a non-objection
notice.
(iv) To pass the approved class II
controlled substances through U.S.
Customs, the non-objection notice
issued by EPA must accompany the
shipment through U.S. Customs.
(v) If for some reason, following EPA’s
issuance of a non-objection notice, new
information is brought to EPA’s
attention which shows that the nonobjection notice was issued based on
false information, then EPA has the
right to:
(A) Revoke the non-objection notice;
(B) Pursue all means to ensure that
the class II controlled substance is not
imported into the U.S.; and
(C) Take appropriate enforcement
actions.
(8) A person receiving the nonobjection notice is permitted to import
the individual shipment only within
one year of the date stamped on the
non-objection notice.
(9) A person receiving a non-objection
notice from the Administrator for a
certification of intent to import class I
controlled substances for destruction
must maintain the following records:
(i) A copy of the certificate of intent
to import for destruction;
(ii) The EPA non-objection notice;
(iii) A copy of the export license or
export license application;
(iv) U.S. Customs entry documents for
the import that must include one of the
commodity codes from Appendix K to
this subpart;
(v) The date, amount, and type of
controlled substance sent for
destruction, per shipment;
(vi) An invoice from the destruction
facility verifying the shipment was
received; and
(vii) A copy of the destruction
verification from the destruction
facility.
(h) * * *
(1) For any exports of class I
controlled substances (except methyl
bromide) not reported under paragraph
(f)(3) of this section (reporting for
producers of controlled substances), the
exporter who exported a class I
controlled substance (except methyl
bromide) must submit to the
Administrator the following information
within 45 days after the end of the
control period in which the unreported
exports left the United States:
(i) * * *
(ii) The exporter’s Employer
Identification Number;
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(iii) The type and quantity of each
controlled substance exported including
the quantity of controlled substance that
is used, recycled or reclaimed.
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(2) For any exports of methyl bromide
not reported under paragraph (f)(3) of
this section (reporting for producers of
controlled substances), the exporter who
exported methyl bromide must submit
to the Administrator the following
information within 45 days after the end
of each quarter in which the unreported
exports left the United States:
(i) * * *
(ii) The exporter’s Employer
Identification Number;
(iii) The quantity of methyl bromide
exported by use (transformation,
destruction, critical use, or quarantine
and preshipment);
(iv) The date on which, and the port
from which, the methyl bromide was
exported from the United States or its
territories;
(v) The country to which the methyl
bromide was exported;
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(viii) The invoice or sales agreement
containing language similar to the
Internal Revenue Service Certificate that
the purchaser or recipient of imported
methyl bromide intends to transform
those substances, the destruction
verifications (as in paragraph (k) of this
section) showing that the purchaser or
recipient intends to destroy the
controlled substances, or the
certification that the purchaser or
recipient and the eventual applicator
will only use the material for quarantine
and preshipment applications in
accordance with the definitions in this
subpart.
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(v) Any distributor of laboratory
supplies who purchased controlled
substances under the global essential
laboratory and analytical use exemption
must submit quarterly the quantity of
each controlled substance purchased by
each laboratory customer or distributor
whose certification was previously
provided to the distributor pursuant to
paragraphs (w) of this section, the
contact information for the source
company from which material was
purchased, and the laboratories to
whom the material is sold.
(w) * * *
(2) The name, email address, and
phone number of a contact person for
the laboratory customer;
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(y) Every distributor of methyl
bromide who purchases or receives a
quantity produced or imported for
quarantine or preshipment applications
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under the exemptions in this subpart
must comply with the following
recordkeeping and reporting
requirements:
(1) Every distributor of quarantine and
preshipment methyl bromide must
certify to the producer, importer, or
distributor from whom they purchased
or received the controlled substance that
quantities purchased or received will be
sold only for quarantine applications or
preshipment applications in accordance
with the definitions in this subpart.
(2) Every distributor of quarantine and
preshipment methyl bromide must
receive from an applicator, exporter, or
distributor to whom they sell or deliver
the controlled substance a certification,
prior to delivery, stating that the
quantity will be used or sold solely for
quarantine applications or preshipment
applications in accordance with
definitions in this subpart.
(3) Every distributor of quarantine and
preshipment methyl bromide must
maintain the certifications as records for
3 years.
(4) Every distributor of quarantine and
preshipment methyl bromide must
report to the Administrator within 45
days after the end of each quarter, the
total quantity delivered to applicators or
end users for quarantine applications
and preshipment applications in
accordance with definitions in this
Subpart.
(z) Every applicator of methyl
bromide who purchases or receives a
quantity produced or imported solely
for quarantine or preshipment
applications under the exemptions in
this subpart must comply with the
following recordkeeping and reporting
requirements:
(1) Recordkeeping—Applicators.
Every applicator of methyl bromide
produced or imported for quarantine
and preshipment applications under the
exemptions of this subpart must
maintain, for every application, a
document from the commodity owner,
shipper or their agent requesting the use
of methyl bromide citing the
requirement that justifies its use in
accordance with definitions in this
subpart. These documents shall be
retained for 3 years.
(2) Reporting—Applicators. Every
applicator who purchases or receives
methyl bromide that was produced or
imported for quarantine and
preshipment applications under the
exemptions in this subpart shall provide
the distributor of the methyl bromide,
prior to shipment, with a certification
that the methyl bromide will be used
only for quarantine applications or
preshipment applications as defined in
this subpart.
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(aa) Every commodity owner, shipper
or their agent requesting an applicator to
use methyl bromide that was produced
or imported solely for quarantine and
preshipment applications under the
exemptions of this subpart must
maintain a record for 3 years, for each
request, certifying knowledge of the
requirements associated with the
exemption for quarantine and
preshipment applications in this
subpart and citing the requirement that
justifies its use. The record must
include the following statement: ‘‘I
certify knowledge of the requirements
associated with the exempted
quarantine and preshipment
applications published in 40 CFR part
82, including the requirement that this
letter cite the treatments or official
controls for quarantine applications or
the official requirements for
preshipment requirements.’’
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■ 8. Add § 82.14 to read as follows:
§ 82.14
Process for electronic reporting.
(a) Submissions of reports that are
available to be submitted through the
Central Data Exchange, import petitions,
and certifications of intent to import
ODS for destruction and any related
supporting documents must be
submitted electronically to EPA via the
Central Data Exchange.
(b) You can register and access the
Central Data Exchange as follows:
(1) Go to EPA’s Central Data Exchange
website at https://cdx.epa.gov and
follow the links for the submission of
ozone-depleting substances.
(2) Call EPA’s Central Data Exchange
Help Desk at 1–888–890–1995.
(3) Email the EPA’s Central Data
Exchange Help Desk at HelpDesk@
epacdx.net.
■ 9. Amend § 82.15 by:
■ a. Redesignating paragraphs (g)(5) and
(g)(6) as (g)(6) and (g)(7), respectively;
and
■ b. Adding paragraphs (b)(3), (g)(5) and
(g)(8).
The additions read as follows:
§ 82.15 Prohibitions for class II controlled
substances.
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*
(b) * * *
(3) Effective [date 30 days after
effective date of final rule], no person
may import for purposes of destruction,
at any time in any control period, a class
II controlled substance for which EPA
has apportioned baseline production
and consumption allowances, without
having submitted a certification of
intent to import for destruction to the
Administrator and received a nonobjection notice in accordance with
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§ 82.24(c)(6). A person issued a nonobjection notice for the import of an
individual shipment of class II
controlled substances for destruction
may not transfer or confer the right to
import, and may not import any more
than the exact quantity (in kilograms) of
the class II controlled substance stated
in the non-objection notice. For imports
intended to be destroyed in the U.S., a
person issued a non-objection notice
must destroy the controlled substance in
the year cited in the non-objection
letter, may not transfer or confer the
right to import, and may not import any
more than the exact quantity (in
kilograms) of the class II controlled
substance stated in the non-objection
notice. Every kilogram of import of class
II controlled substance in excess of the
quantity stated in the non-objection
notice issued by the Administrator in
accordance with § 82.24(c)(6)
constitutes a separate violation of this
subpart.
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(g) * * *
(5) (i) Effective January 1, 2020, no
person may introduce into interstate
commerce or use HCFC–123 or HCFC–
124 (unless used, recovered and
recycled) for any purpose other than for
use in a process resulting in its
transformation or its destruction; for use
as a refrigerant in equipment
manufactured before January 1, 2020;
for use as a fire suppression streaming
agent listed as acceptable for use or
acceptable subject to narrowed use
limits for nonresidential applications in
accordance with the regulations at
subpart G of this part to the extent
permitted under paragraph (ii) of this
subsection; for export to Article 5
Parties under § 82.18(a); as a
transshipment or heel; or for
exemptions permitted under paragraph
(f) of this section.
(ii) HCFC–123 that was produced or
imported after January 1, 2020 may be
used as a fire suppression streaming
agent only to service equipment
manufactured before January 1, 2020.
HCFC–123 that was produced or
imported prior to January 1, 2020 (or
used, recovered and recycled) may be
used as a fire suppression streaming
agent in equipment manufactured before
or after January 1, 2020.
(iii) Notwithstanding the prohibition
on use in paragraph (g)(5)(i) of this
section, the use of HCFC–123 as a
refrigerant in equipment manufactured
between January 1, 2020 and December
31, 2020 is permitted if the conditions
of this paragraph are met. The HCFC–
123 must be in the possession of an
entity that will complete the
manufacture of the appliance and
imported prior to January 1, 2020. The
appliance components must be ready for
shipment to a construction location
41549
prior to July 24, 2019 and be specified
in a building permit or a contract dated
before July 24, 2019 for use on a
particular project. All HCFC–123 used
to service such appliances on or after
January 1, 2021 must be used,
recovered, or recycled/reclaimed.
*
*
*
*
*
(8) Effective [DATE 30 DAYS AFTER
EFFECTIVE DATE OF FINAL RULE], no
person may sell or distribute, or offer for
sale or distribution, any class II
substance that they know, or have
reason to know, was imported in
violation of this section, except for such
actions needed to re-export the
controlled substance. Every kilogram of
a controlled substance imported in
contravention of this paragraph that is
sold or distributed, or offered for sale or
distribution, constitutes a separate
violation of this subpart.
10. Amend § 82.16 by revising the
tables in paragraph (a) and revising
paragraph (e).
§ 82.16 Phaseout schedule of class II
controlled substances.
(a) Calendar-year Allowances. (1) In
each control period as indicated in the
following tables, each person is granted
the specified percentage of baseline
production allowances and baseline
consumption allowances for the
specified class II controlled substances
apportioned under § 82.17 and § 82.19:
TABLE 1 TO PARAGRAPH (a) CALENDAR-YEAR HCFC PRODUCTION ALLOWANCES
khammond on DSKBBV9HB2PROD with PROPOSALS3
Control period
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Percent of
HCFC–141b
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
VerDate Sep<11>2014
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Percent of
HCFC–22
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Jkt 247001
Percent of
HCFC–142b
100
100
100
100
100
100
100
41.9
32
17.7
30.1
26.1
21.7
21.7
21.7
21.7
21.7
0
0
0
0
0
0
0
0
0
0
0
PO 00000
Frm 00041
100
100
100
100
100
100
100
0.47
4.9
4.9
4.9
4.9
0.37
0.32
0.26
0.21
0.16
0
0
0
0
0
0
0
0
0
0
0
Fmt 4701
Percent of
HCFC–123
Percent of
HCFC–124
Percent of
HCFC–225ca
Percent of
HCFC–225cb
........................
........................
........................
........................
........................
........................
........................
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
........................
........................
........................
........................
........................
........................
........................
125
125
125
125
125
5
5
5
5
5
8
8
8
7
6
5
4
3
2
1
0
........................
........................
........................
........................
........................
........................
........................
125
125
125
125
125
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
........................
........................
........................
........................
........................
........................
........................
125
125
125
125
125
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Sfmt 4702
E:\FR\FM\14AUP3.SGM
14AUP3
41550
Federal Register / Vol. 84, No. 157 / Wednesday, August 14, 2019 / Proposed Rules
TABLE 2 TO PARAGRAPH (a) CALENDAR-YEAR HCFC CONSUMPTION ALLOWANCES
Control period
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Percent of
HCFC–141b
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
.............................
Percent of
HCFC–22
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
khammond on DSKBBV9HB2PROD with PROPOSALS3
*
100
100
100
100
100
100
100
41.9
32
17.7
18
14.2
7
5.6
4.2
2.8
1.4
0
0
0
0
0
0
0
0
0
0
0
*
*
*
*
(e)(1) Effective January 1, 2020, no
person may produce HCFC–22 or
HCFC–142b for any purpose other than
for use in a process resulting in their
transformation or their destruction, for
export under § 82.18(a) using
unexpended Article 5 allowances, or for
exemptions permitted in § 82.15(f).
Effective January 1, 2020, no person
may import HCFC–22 or HCFC–142b for
any purpose other than for use in a
process resulting in their transformation
or their destruction, or for exemptions
permitted in § 82.15(f).
(2) Effective January 1, 2020, no
person may produce HCFC–123 for any
purpose other than for use in a process
resulting in its transformation or its
destruction, for use as a refrigerant in
equipment manufactured before January
1, 2020, for export under § 82.18(a)
using unexpended Article 5 allowances,
or for exemptions permitted in
§ 82.15(f). Effective January 1, 2020, no
person may import HCFC–123 for any
purpose other than for use in a process
resulting in its transformation or its
destruction, for use as a refrigerant in
equipment manufactured before January
1, 2020, for use as a fire suppression
streaming agent in equipment
manufactured before January 1, 2020
listed as acceptable for use or acceptable
subject to narrowed use limits for
VerDate Sep<11>2014
20:56 Aug 13, 2019
Jkt 247001
Percent of
HCFC–142b
100
100
100
100
100
100
100
0.47
4.9
4.9
4.9
4.9
1.7
1.5
1.2
1
0.7
0
0
0
0
0
0
0
0
0
0
0
Percent of
HCFC–123
Percent of
HCFC–124
Percent of
HCFC–225ca
Percent of
HCFC–225cb
........................
........................
........................
........................
........................
........................
........................
125
125
125
125
125
100
100
100
100
100
32.3
32.3
32.3
28
24
20
16
12
8
4
0
........................
........................
........................
........................
........................
........................
........................
125
125
125
125
125
8.3
8.3
8.3
8.3
8.3
8
8
8
7
6
5
4
3
2
1
0
........................
........................
........................
........................
........................
........................
........................
125
125
125
125
125
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
........................
........................
........................
........................
........................
........................
........................
125
125
125
125
125
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
nonresidential applications, or for
exemptions permitted in § 82.15(f).
*
*
*
*
*
■ 11. Amend § 82.23 by
■ a. Removing and reserving paragraph
(a)(i)(F); and
■ b. Adding paragraphs (b)(1)(i) and (ii).
The addition reads as follows:
§ 82.23 Transfers of allowances of class II
controlled substances.
*
*
*
*
*
(b) * * *
(1) * * *
(i) Effective January 1, 2020, a person
(transferor) may only convert
allowances for one class II controlled
substance for which EPA has issued
allowances under § 82.16 to another
class II controlled substance for which
EPA has issued allowances under
§ 82.16.
(ii) [Reserved].
*
*
*
*
*
■ 12. Amend § 82.24 by:
■ a. Revising paragraphs (a)(1),
(b)(2)(iv), (c)(3)(i)–(iii), (vi), (viii)–(xiii),
(c)(4)(i)(A), (c)(4)(vii), and (d)(1)
introductory text;
■ b. Removing and reserving paragraphs
(b)(1)(iv), (ix), and (xi), (b)(2)(xii) and
(xiv), (c)(1)(vi) and (xi), (c)(2)(xvi),
(d)(2), and (g); and
■ c. Adding paragraphs (c)(6)–(10).
The revisions and addition read as
follows:
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Sfmt 4702
§ 82.24 Recordkeeping and reporting
requirements for class II controlled
substances.
(a) * * *
(1) Reports required by this section
must be submitted to the Administrator
within 45 days of the end of the
applicable reporting period, unless
otherwise specified. Starting [date 30
days after effective date of final rule],
reports that are available for submission
through the Central Data Exchange must
be submitted electronically through that
tool.
*
*
*
*
*
(b) * * *
(2) * * *
(iv) Dated records of the quantity (in
kilograms) of class II controlled
substances produced with Article 5
allowances;
*
*
*
*
*
(c) * * *
(3) * * *
(i) The name, commodity code and
quantity (in kilograms) of the used class
II controlled substance to be imported;
(ii) The name and address of the
importer, the importer ID number, the
contact person, email address, and
phone number;
(iii) Name, address, contact person,
email address, and phone number of all
previous source facilities from which
E:\FR\FM\14AUP3.SGM
14AUP3
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the used class II controlled substance
was recovered;
*
*
*
*
*
(vi) Name, address, contact person,
email address, and phone number of the
exporter and of all persons to whom the
material was transferred or sold after it
was recovered from the source facility;
*
*
*
*
*
(viii) A description of the intended
use of the used class II controlled
substance, and, when possible, the
name, address, contact person, email
address, and phone number of the
ultimate purchaser in the United States;
(ix) The name, address, contact
person, email address, and phone
number of the U.S. reclamation facility,
where applicable;
(x) If someone at the source facility
recovered the class II controlled
substance from the equipment, the
name, email address, and phone number
of that person;
(xi) If the imported class II controlled
substance was reclaimed in a foreign
Party, the name, address, contact
person, email address, and phone
number of any or all foreign reclamation
facility(ies) responsible for reclaiming
the cited shipment;
(xii) An English translation of an
export license, or application for an
export license, from the appropriate
government agency in the country of
export and, if recovered in another
country, the export license from the
appropriate government agency in that
country, and quantity authorized for
export in kilograms on the export
license(s);
(xiii) If the imported used class II
controlled substance is intended to be
sold as a refrigerant in the U.S., the
name, address, and email address of the
EPA-certified U.S. reclaimer who will
bring the material to the standard
required under subpart F of this part, if
not already reclaimed to those
specifications.
(4) * * *
(i) * * *
(A) If the Administrator determines
that the information is insufficient, that
is, if the petition lacks or appears to lack
any of the information required under
paragraph (c)(3) of this section or other
information that may be requested
during the review of the petition
necessary to verify that the controlled
substance is used;
*
*
*
*
*
(vii) A person receiving the nonobjection notice is permitted to import
the individual shipment only within
one year of the date stamped on the
non-objection notice.
*
*
*
*
*
VerDate Sep<11>2014
20:56 Aug 13, 2019
Jkt 247001
(6) Certification of Intent to Import for
Destruction. For each individual
shipment of a class II controlled
substance imported with the intent to
destroy that substance, an importer
must submit electronically to the
Administrator, at least 30 working days
before the shipment is to leave the
foreign port of export, the following
information:
(i) Name, commodity code, and
quantity in kilograms of each controlled
substance to be imported,
(ii) Name and address of the importer,
the importer ID number, and the contact
person’s name, email address, and
phone number;
(iii) The U.S. port of entry for the
import, the expected date of shipment
and the vessel transporting the
chemical. If at the time of submitting the
certification of intent to import for
destruction the importer does not know
the U.S. port of entry, the expected date
of shipment and the vessel transporting
the chemical, and the importer receives
a non-objection notice for the individual
shipment in the petition, the importer is
required to notify the Administrator of
this information prior to the U.S. entry
of the individual shipment;
(iv) Name, address, contact person,
email address, and phone number of the
responsible party at the destruction
facility;
(v) An English translation of an export
license, or application for an export
license, from the appropriate
government agency in the country of
export, and quantity authorized for
export in kilograms on the export
license(s);
(vi) A certification of accuracy of the
information submitted in the
certification.
(7) For each individual shipment of a
class II controlled substance imported
with the intent to destroy that
substance, an importer must submit to
the Administrator a copy of the
destruction verification within 30 days
after destruction of the controlled
substance(s).
(8) (i) Starting on the first working day
following receipt by the Administrator
of a certification of intent to import a
class II controlled substance for
destruction, the Administrator will
initiate a review of the information
submitted under paragraph (c)(6) of this
section and take action within 30
working days to issue either an
objection-notice or a non-objection
notice for the individual shipment to
the person who submitted the
certification of intent to import the class
II controlled substance for destruction.
(ii) The Administrator may issue an
objection notice if the petition lacks or
PO 00000
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Sfmt 4702
41551
appears to lack any of the information
required under this subparagraph or for
the reasons listed in § 82.24(c)(4)(i)(B)–
(E).
(iii) In cases where the Administrator
does not object to the petition, the
Administrator will issue a non-objection
notice.
(iv) To pass the approved class II
controlled substances through U.S.
Customs, the non-objection notice
issued by EPA must accompany the
shipment through U.S. Customs.
(v) If for some reason, following EPA’s
issuance of a non-objection notice, new
information is brought to EPA’s
attention which shows that the nonobjection notice was issued based on
false information, then EPA has the
right to:
(A) Revoke the non-objection notice;
(B) Pursue all means to ensure that
the class II controlled substance is not
imported into the U.S.; and
(C) Take appropriate enforcement
actions.
(9) A person receiving the nonobjection notice is permitted to import
the individual shipment only within
one year of the date stamped on the
non-objection notice.
(10) A person receiving a nonobjection notice from the Administrator
for a certification of intent to import
class II controlled substances for
destruction must maintain the following
records:
(i) A copy of the certificate of intent
to import for destruction;
(ii) The EPA non-objection notice;
(iii) A copy of the export license or
export license application;
(iv) U.S. Customs entry documents for
the import that must include one of the
commodity codes from Appendix K to
this subpart;
(v) The date, amount, and type of
controlled substance sent for
destruction, per shipment;
(vi) An invoice from the destruction
facility verifying the shipment was
received; and
(vii) A copy of the destruction
verification from the destruction
facility.
(d) * * *
(1) Reporting—Exporters. For any
exports of class II controlled substances
not reported under paragraph (b)(2) of
this section (reporting for producers of
class II controlled substances), each
exporter who exported a class II
controlled substance must submit to the
Administrator the following information
within 30 days after the end of each
quarter in which the unreported exports
left the U.S.:
*
*
*
*
*
E:\FR\FM\14AUP3.SGM
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Federal Register / Vol. 84, No. 157 / Wednesday, August 14, 2019 / Proposed Rules
13. Revise Appendix K to read as
follows:
Appendix K to Subpart A of Part 82—
Commodity Codes From the
Harmonized Tariff Schedule for
Controlled Substances and Used
Controlled Substances
■
Commodity code
from harmonized
tariff schedule
Description of commodity or chemical
Class II:
HCFC-22 (Chlorodifluoromethane) .......................................................................................................................................
HCFC-123 (Dichlorotrifluoroethane) .....................................................................................................................................
HCFC-124 (Monochlorotetrafluoroethane) ...........................................................................................................................
HCFC-141b (Dichlorofluoroethane) ......................................................................................................................................
HCFC-142b (Chlorodifluoroethane) ......................................................................................................................................
HCFC-225ca, HCFC-225cb (Dichloropentafluoropropanes) ................................................................................................
HCFC-21, HCFC-31, HCFC-133, and other HCFCs ...........................................................................................................
HCFC Mixtures (R-401A, R-402A, etc.) ...............................................................................................................................
Class I:
CFC-11 (Trichlorofluoromethane) .........................................................................................................................................
CFC-12 (Dichlorodifluoromethane) .......................................................................................................................................
CFC-113 (Trichlorotrifluoroethane) .......................................................................................................................................
CFC-114 (Dichlorotetrafluoroethane) ...................................................................................................................................
CFC-115 (Monochloropentafluoroethane) ............................................................................................................................
CFC-13, CFC-111, CFC-112, CFC-211, CFC-212, CFC-213, CFC-214, CFC-215, CFC-216, CFC-217, and other
CFCs .................................................................................................................................................................................
CFC Mixtures (R-500, R-502, etc.) ......................................................................................................................................
Carbon Tetrachloride ............................................................................................................................................................
Halon 1301 (Bromotrifluoromethane) ...................................................................................................................................
Halon, other ..........................................................................................................................................................................
Methyl Bromide .....................................................................................................................................................................
Methyl Chloroform ................................................................................................................................................................
14. Amend § 82.62 by adding, in
alphabetical order, the definition for
‘‘polyurethane foam systems’’ to read as
follows:
■
§ 82.62
*
*
Definitions.
*
*
*
Polyurethane Foam System means an
item consisting of two transfer pumps
that deliver ingredients (polyisocyanate
or isocyanate from one side and a
mixture including the blowing agent,
catalysts, flame retardants, and/or
stabilizers from the other side) to a
metering/mixing device which allows
the components to be delivered in the
appropriate proportions.
*
*
*
*
*
■
15. Amend § 82.66 by:
a. Revising paragraphs (d)(2)(vi) and
(e); and
■
khammond on DSKBBV9HB2PROD with PROPOSALS3
■
b. Adding paragraph (f).
The revisions and addition read as
follows:
VerDate Sep<11>2014
20:56 Aug 13, 2019
Jkt 247001
§ 82.66 Nonessential Class I products and
exceptions.
*
*
*
*
*
(d) * * *
(2) * * *
(vi) Document preservation sprays
which contain CFC-113 as a solvent, but
which contain no other CFCs, and/or
document preservation sprays which
contain CFC-12 as a propellant, but
which contain no other CFCs, and
which are used solely on thick books,
books with coated or dense paper and
tightly bound documents;
(e) Any air-conditioning or
refrigeration appliance as defined in
CAA 601(l) that contains a Class I
substance used as a refrigerant; and
(f) Any polyurethane foam system that
contains any CFC.
■ 16. Amend § 82.104 by revising
paragraphs (c) and (h) introductory text
to read as follows:
§ 82.104
*
PO 00000
*
Definitions.
*
Frm 00044
*
Fmt 4701
*
Sfmt 4702
2903.71.0000
2903.72.0020
2903.79.1000
2903.73.0000
2903.74.0000
2903.75.0000
2903.79.9070
3824.74.0000
2903.77.0010
2903.77.0050
2903.77.0020
2903.77.0030
2903.77.0040
2903.77.0080
3824.71.0100
2903.14.0000
2903.76.0010
2903.76.0050
2903.39.1520
2903.19.6010
(c) Completely destroy means to cause
the destruction of a controlled substance
by one of the destruction processes
approved by the Parties and listed in
§ 82.3 of subpart A at a demonstrable
destruction efficiency of 98 percent or
more or a greater destruction efficiency
if required under other applicable
federal regulations.
*
*
*
*
*
(h) Destruction means the expiration
of a controlled substance to the
destruction efficiency actually achieved,
unless considered completely destroyed
as defined in this section. Such
destruction might result in a
commercially useful end product but
such usefulness would be secondary to
the act of destruction. Destruction must
be achieved using one of the controlled
processes approved by the Parties and
listed in the definition of destruction in
§ 82.3 of subpart A.
*
*
*
*
*
■ 17. Amend § 82.106 by revising
paragraph (a) to read as follows:
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Federal Register / Vol. 84, No. 157 / Wednesday, August 14, 2019 / Proposed Rules
§ 82.106
Warning statement requirements.
khammond on DSKBBV9HB2PROD with PROPOSALS3
(a) Effective January 1, 2020, each
container of fire suppression agent
containing HCFC-123 produced or
imported after that date shall bear the
following warning statement, meeting
the requirements of this subpart for
placement and form:
WARNING: Contains [insert name of
substance], a substance which harms
public health and environment by
destroying ozone in the upper
VerDate Sep<11>2014
20:56 Aug 13, 2019
Jkt 247001
atmosphere. Do not use to service
equipment manufactured on or after
January 1, 2020.
*
*
*
*
*
■ 18. Amend § 82.270 by revising
paragraph (e) introductory text to read
as follows:
§ 82.270
Prohibitions.
*
*
*
*
*
(e) Effective April 6, 1998, no person
shall dispose of halon except by sending
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41553
it for recycling to a recycler operating in
accordance with NFPA 10 and NFPA
12A standards, or by arranging for its
destruction using one of the controlled
processes approved by the Parties and
listed in the definition of destruction in
§ 82.3 of subpart A.
*
*
*
*
*
[FR Doc. 2019–17018 Filed 8–13–19; 8:45 am]
BILLING CODE 6560–50–P
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]]>Agencies
[Federal Register Volume 84, Number 157 (Wednesday, August 14, 2019)]
[Proposed Rules]
[Pages 41510-41553]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-17018]
[[Page 41509]]
Vol. 84
Wednesday,
No. 157
August 14, 2019
Part IV
Environmental Protection Agency
-----------------------------------------------------------------------
40 CFR Part 82
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Protection of Stratospheric Ozone: Adjustments to the Allowance System
for Controlling HCFC Production and Import, 2020-2029; and Other
Updates; Proposed Rule
Federal Register / Vol. 84 , No. 157 / Wednesday, August 14, 2019 /
Proposed Rules
[[Page 41510]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 82
[EPA-HQ-OAR-2016-0271; FRL-9997-57-OAR]
RIN 2060-AU26
Protection of Stratospheric Ozone: Adjustments to the Allowance
System for Controlling HCFC Production and Import, 2020-2029; and Other
Updates
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: The EPA is proposing to allocate production and consumption
allowances for specific hydrochlorofluorocarbons, a type of ozone-
depleting substance, for the years 2020 through 2029. These
hydrochlorofluorocarbons may be used to service certain equipment
manufactured before 2020. The EPA is also proposing to update other
requirements under the program for controlling production and
consumption of ozone-depleting substances, as well as proposing edits
to the regulatory text for improved readability and clarity. These
updates include revising the labeling requirements for containers of
specific hydrochlorofluorocarbons; prohibiting the conversion of
hydrochlorofluorocarbon allowances allocated through this rulemaking
into allowances for hydrochlorofluorocarbons that have already been
phased out; requiring the use of an electronic reporting system for
producers, importers, exporters, transformers, and destroyers of class
I and class II ozone-depleting substances; revising and removing
recordkeeping and reporting requirements; improving the process for
petitioning to import used substances for reuse; creating a
certification process for importing used and virgin substances for
destruction; and restricting the sale of known illegally imported
substances. This notice further includes proposed clarifications to the
certification requirements for methyl bromide quarantine and
preshipment uses. The EPA is also proposing to add polyurethane foam
systems containing ozone-depleting chlorofluorocarbons to the list of
nonessential products. Lastly, the agency is proposing to update the
definition of ``destruction'' as used in the context of the production
and consumption phaseout and remove obsolete provisions.
DATES: Comments on this notice of proposed rulemaking must be received
on or before September 30, 2019. Any party requesting a public hearing
must notify the contact listed below under FOR FURTHER INFORMATION
CONTACT by 5 p.m. Eastern Daylight Time on August 19, 2019. If a public
hearing is requested, the hearing will be held on August 29, 2019. The
hearing will be held in Washington, DC. More details concerning the
hearing, including whether a hearing has been requested, will be
available at https://www.epa.gov/ods-phaseout/phaseout-class-ii-ozone-depleting-substances.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2016-0271, to the Federal eRulemaking Portal: https://www.regulations.gov. Follow the online instructions for submitting
comments. Once submitted, comments cannot be edited or withdrawn. The
EPA may publish any comment received to its public docket. Do not
submit electronically any information you consider to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Multimedia submissions (audio, video, etc.) must
be accompanied by a written comment. The written comment is considered
the official comment and should include discussion of all points you
wish to make. The EPA will generally not consider comments or comment
contents located outside of the primary submission (e.g., on the web,
cloud, or other file sharing system). For additional submission
methods, the full EPA public comment policy, information about CBI or
multimedia submissions, and general guidance on making effective
comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets.
FOR FURTHER INFORMATION CONTACT: Katherine Sleasman, Stratospheric
Protection Division, Office of Atmospheric Programs, Mail Code 6205T,
1200 Pennsylvania Avenue NW, Washington, DC 20460; telephone number
(202) 564-7716; email address [email protected]. You may also
visit the Ozone Protection website of the EPA's Stratospheric
Protection Division at https://www.epa.gov/ods-phaseout for further
information about reporting and recordkeeping, other Stratospheric
Ozone Protection regulations, the science of ozone layer depletion, and
related topics.
SUPPLEMENTARY INFORMATION:
Acronyms and Abbreviations. The following acronyms and
abbreviations are used in this document.
ACE/ITDS--Automated Commercial Environment/International Trade Data
System
ARFF--Aircraft Rescue and Fire Fighting
CAA--Clean Air Act
CBP--Customs and Border Protection
CDC--Centers for Disease Control and Prevention
CDX--Central Data Exchange
CFC--Chlorofluorocarbon
CFR--Code of Federal Regulations
CROMERR--Cross-Media Electronic Reporting Regulation
DOT--Department of Transportation
EPA--Environmental Protection Agency
FAA--Federal Aviation Administration
FR--Federal Register
GPEA--Government Paperwork Elimination Act
HCFC--Hydrochlorofluorocarbon
HTSA--Harmonized Tariff Schedule of the United States Annotated
MMWR--Morbidity and Mortality Weekly Report
Montreal Protocol--Montreal Protocol on Substances that Deplete the
Ozone Layer
MOP--Meeting of the Parties
MT--Metric Ton
NFPA--National Fire Protection Association
ODP--Ozone Depletion Potential
ODS--Ozone-Depleting Substance
Parties to the Montreal Protocol or Party--Nations and regional
economic integration organizations that have consented to be bound
by the Montreal Protocol on Substances that Deplete the Ozone Layer
RACA--Request for Additional Consumption Allowances
SNAP--Significant New Alternatives Policy
TEAP--Technology and Economic Assessment Panel
UNEP--United Nations Environment Programme
Table of Contents
I. General Information
A. Does this Proposed Action apply to me?
B. What action is the Agency proposing?
C. What is the Agency's authority for this Proposed Action?
D. What are the incremental costs and benefits of this Proposed
Action?
II. Background
III. Allocation of HCFC Allowances for the Years 2020 Through 2029
A. Allocation of HCFC-123 Production and Consumption Allowances
B. De minimis Exemption
C. Addition of Fire Suppression Servicing Uses to the HCFC
Phaseout Schedule
D. Revisions to Labeling Requirements
E. Allocation of HCFC-124 Production and Consumption Allowances
F. Changes to Transfer of Allowance Provisions in Sec. 82.23
IV. Updates to Other Provisions of the Production and Consumption
Control Program
A. Electronic Reporting
B. Changes to Reporting Requirements in Sec. Sec. 82.13, 82.23,
and 82.24
C. Changes to Methyl Bromide Provisions in Sec. Sec. 82.4 and
82.13
D. Changes to Provisions for the Import of ODS in Sec. 82.3,
82.4, 82.13, 82.15, and 82.24
[[Page 41511]]
E. Prohibiting the Sale of Illegally Imported Controlled
Substances
V. Addition of Polyurethane Foam Systems Containing CFCs to the
Nonessential Product Ban
VI. Updates to Sec. Sec. 82.3, 82.104, and 82.270 Related to
Destruction
VII. Removing Obsolete Provisions in Sec. Sec. 82.3, 82.4, 82.9,
82.10, 82.12, 82.13, 82.15, 82.16, and 82.24
VIII. Economic Analysis
IX. 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 (PRA)
C. Regulatory Flexibility Act (RFA)
D. Unfunded Mandates Reform Act (UMRA)
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 (NTTAA)
J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
I. General Information
A. Does this Proposed Action apply to me?
You may be potentially affected by any final action on this
proposal if you manufacture, process, import, or distribute into
commerce certain ozone-depleting substances (ODS) and mixtures.
Potentially affected entities may include but are not limited to:
Air-Conditioning and Warm Air Heating Equipment and
Commercial and Industrial Refrigeration Equipment Manufacturing
entities (NAICS 333415)
Air-Conditioning Equipment and Supplies Merchant
Wholesalers (NAICS 423620)
Basic Chemical Manufacturing (NAICS 3251)
Chlorofluorocarbon Gas Manufacturing and Import (NAICS
325120)
Farm Product Warehousing and Storage (NAICS 493130)
Farm Supplies and Merchant Wholesalers (NAICS 424910)
Flour Milling (NAICS 311211)
Fire Extinguisher Chemical Preparations Manufacturing
(NAICS 325998)
Fruit and Nut Tree Farming (NAICS 1113)
General Warehousing and Storage (NAICS 493130)
Greenhouse, Nursery, and Floriculture Production (NAICS
1114)
Hazardous Waste Treatment and Disposal, Cement
Manufacturing, Clinker (NAICS 327310)
Hazardous Waste Treatment and Disposal, Incinerator,
Hazardous Waste (NAICS 562211)
Industrial Gas Manufacturing (NAICS 325120)
Materials Recovery Facilities (NAICS 562920)
Other Aircraft Parts and Auxiliary Equipment
Manufacturing (NAICS 336413)
Other Chemical and Allied Production Merchant
Wholesalers (NAICS 424690)
Other Crop Farming (NAICS 1119)
Pesticide and Other Agricultural Chemical Manufacturing
(NAICS 325320)
Plumbing, Heating, and Air-Conditioning Contractors
(NAICS 238220)
Portable Fire Extinguishers Manufacturing (NAICS
339999)
Postharvest Crop Activities (except Cotton Ginning)
(NAICS 115114)
Research and Development in Physical, Engineering, and
Life Sciences (NAICS 541710)
Rice Milling (NAICS 311212)
Soil Preparation, Planting, and Cultivating (NAICS
115112)
Vegetable and Melon Farming (NAICS 1112)
This list is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be affected by this
action. Other types of entities not listed in this section could also
be affected. The North American Industrial Classification System
(NAICS) codes have been provided to assist you and others in
determining whether this action might apply to certain entities. If you
have any questions regarding the applicability of this action to a
particular entity, consult the person listed under FOR FURTHER
INFORMATION CONTACT.
B. What action is the Agency proposing?
The EPA is proposing a number of revisions to the production and
consumption control program for ODS \1\ in 40 CFR part 82, subpart A,
which are divided into ``class I'' and ``class II'' substances. Section
602 of the Clean Air Act (CAA) contains initial lists of class I and
class II substances and addresses additions to those lists. The current
lists appear in appendices A and B in subpart A. The list of class I
substances includes chlorofluorocarbons (CFCs), halons, carbon
tetrachloride, methyl chloroform, and methyl bromide. The list of class
II substances consists entirely of hydrochlorofluorocarbons (HCFCs).
This action proposes specific revisions to the production and
consumption control program including:
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\1\ Generally speaking, when the EPA refers to ODS in this
preamble, it is referring to class I and/or class II controlled
substances. The terms ``controlled substance'' and ``ODS'' are used
interchangeably, as are the terms ``HCFC'' and ``class II
substance.''
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The allocation of production and consumption allowances
for HCFC-123 and HCFC-124 to service certain equipment manufactured
before January 1, 2020;
Requiring the use of an electronic reporting system for
producers, importers, exporters, transformers, and destroyers of ODS;
Revisions and removal of certain recordkeeping and
reporting requirements;
Clarifications to the certification requirements for
methyl bromide quarantine and preshipment uses;
Improvements to the process for petitioning to import used
substances for reuse;
Creation of a certification process for importing used and
virgin substances for destruction; and
Restrictions on the sale of known illegally imported ODS.
In addition, this action proposes changes to other subparts
supporting the ODS phaseout, specifically:
Changes to the subpart E requirements for labeling of
products containing HCFC-123 to clarify permitted uses;
Adding to the subpart C ban on sale and distribution or
offer for sale and distribution in interstate commerce of certain
products that contain class I ODS; and
Changes to subpart H for reducing halon emissions.
As summarized below, the proposed changes outlined are grouped by
relevance and thus may not be grouped by subparts as described above.
The EPA is proposing to allocate annual production and consumption
allowances for HCFC-123 and HCFC-124 for the years 2020 through 2029 to
be used for servicing certain equipment manufactured before January 1,
2020. Section 605 of the CAA addresses the production, consumption,
use, and introduction into interstate commerce of class II substances
(listed HCFCs) within the United States. Sections 605 and 606 taken
together constitute the primary source of authority for the domestic
implementation of United States' obligations to phase out HCFCs under
the Montreal Protocol on Substances that Deplete the Ozone Layer
(Montreal Protocol). The EPA regulations issued under sections 605 and
606 appear at 40 CFR part 82, subpart A. Those regulations reflect the
agreed Montreal Protocol HCFC phaseout schedule. An element of that
schedule is to phase out HCFC production and consumption by January 1,
2020, other than production and consumption for certain narrowly
[[Page 41512]]
defined uses in an amount up to 0.5% of baseline annually. Under a
previous adjustment to the Montreal Protocol in 1995, production and
consumption during the years 2020 through 2029 was restricted to the
servicing of refrigeration and air-conditioning equipment existing on
January 1, 2020.\2\ In November 2018, the Parties to the Montreal
Protocol adopted another adjustment that, among other things, added
``the servicing of fire suppression and fire protection equipment''
existing on January 1, 2020 as a permissible use.\3\ Consistent with
this adjustment and a continuing servicing demand in fire suppression
equipment using HCFCs in the United States, the EPA is proposing to
revise subpart A to add servicing of existing ``fire suppression
equipment'' to the authorized uses of newly produced or imported
quantities of HCFC-123 and HCFC-124 during the years 2020 through 2029.
To facilitate compliance, the EPA is proposing to revise labeling
requirements for containers of fire suppression agent containing HCFC-
123 that is imported during the years 2020 through 2029 in subpart E.
To align with existing regulations that prohibit the production and
import of phased out HCFCs, in particular HCFC-22, the agency is
proposing to modify the inter-pollutant allowance transfer provisions
authorized by CAA section 607 to prohibit transfers into ODS that are
already phased out.
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\2\ Section 605(a)(3) of the CAA refers to equipment
``manufactured'' prior to January 1, 2020. The EPA interprets this
to mean that an appliance ``existing on'' January 1, 2020 is one
that is ``manufactured'' by that date. The definition of
``manufactured'' can be found at 40 CFR 82.3. See also 74 FR 66439.
\3\ Decision XXX/2 and Annex I of the ``Compilation of decisions
adopted by the parties,'' adjust Article 2F of the Montreal
Protocol.
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In addition, the EPA is proposing to update the requirements under
other provisions of 40 CFR part 82, subpart A. To increase the accuracy
of reported data and to reduce burden associated with reporting ODS
data, the EPA is proposing to require that certain reports, import
petitions, and certifications of intent to import for destruction be
submitted electronically through the agency's Central Data Exchange
(CDX). Each entity must establish an account in CDX in order to
prepare, transmit, certify, and submit reports and submissions. The EPA
is also proposing to amend the recordkeeping and reporting requirements
by harmonizing requirements for class I and class II substances and
removing reporting elements that would be made unnecessary by moving to
electronic reporting. Required electronic reporting and reducing the
number of reporting elements reduce the reporting burden.
The EPA is proposing two changes to provisions related to the sale
of quarantine and preshipment (QPS) methyl bromide, a fumigant used to
control pests in agriculture and shipping, in response to the
misapplication of this ODS in Puerto Rico and the U.S. Virgin Islands.
First, the EPA is proposing to extend to all distributors of QPS methyl
bromide a certification requirement that currently applies only to
certain distributors and end users. This proposed change would help
ensure that all distributors and applicators are aware of the
restrictions on the use and sale of QPS methyl bromide. Second, the EPA
is proposing to explicitly prohibit the use of methyl bromide produced
under the QPS exemption for any use other than a quarantine use or a
preshipment use. Additionally, the EPA is proposing revisions in
Sec. Sec. 82.4, 82.8, and 82.13 for readability, including changes to
the naming convention for methyl bromide.
The EPA is also proposing to revise provisions related to the
import of ODS. The agency is proposing to modify the import petition
process by clarifying that failure to provide additional information
requested by the EPA during the process is grounds for objection, and
by allowing for information from the government of the exporting
country to be submitted in lieu of certain currently required
information for petitions to import recovered class I ODS held in ODS
banks. The agency would modify the petition process to import used
class I substances for reuse and provide a new certification process
for the import of ODS (used and virgin) for destruction in the United
States. Additionally, the EPA is proposing to exempt halon 1211, a
potent ODS used as a fire suppression streaming agent, in extinguishers
used onboard aircraft from the import petition process to make it
easier for companies to service fire suppression equipment, promoting
proper maintenance of these bottles and preventing the emission of
halon 1211.
The EPA is also proposing two changes to reduce the likelihood that
phased out ODS will be sold and distributed in the United States, and
thus reduce the potential for emissions of those substances in this
country. First, the agency is proposing to prohibit the sale or offer
for sale or distribution of any ODS that the seller knows, or has
reason to know, has been imported into the United States without
consumption allowances or is otherwise not subject to an exemption.
Second, the EPA is proposing to add polyurethane foam systems
containing CFCs to the list of class I nonessential products under 40
CFR part 82, subpart C to prohibit them from being sold or distributed
in the United States.
The agency is proposing to revise the definition of ``destruction''
to include additional technologies such as chemical conversion
processes, all of which have been approved in decisions of the Parties
to the Montreal Protocol which is found or otherwise discussed in
subparts A, E, and H. Lastly, the EPA proposes to remove outdated
provisions related to the allocation and transfer of class I ODS
credits and allowances that are no longer in use in subpart A.
C. What is the Agency's authority for this Proposed Action?
Several sections of the CAA \4\ provide authority for the actions
proposed by the EPA in this notice of proposed rulemaking. Section 603
provides authority to establish monitoring and reporting requirements
for ODS. Sections 604 and 605 provide authority to phase out production
and consumption of class I and class II substances, respectively, and
to restrict the use of class II ODS. Section 606 provides the EPA
authority to establish a more stringent phaseout schedule \5\ than that
set out in sections 604 and 605 based on: (1) Current scientific
information that a more stringent schedule may be necessary to protect
human health and the environment, (2) the availability of substitutes,
or (3) to conform to any acceleration under the Montreal Protocol.
Section 607 provides the EPA with authority to issue production and
consumption allowances and to authorize allowance transfers, including
inter-pollutant and inter-company transfers. Section 610, in relevant
part, directs the EPA to issue regulations that identify nonessential
products that release class I substances into the environment
(including any release during manufacture, use, storage, or disposal)
and prohibit any person from selling or distributing any such product,
or offering any such products for sale or distribution, in interstate
commerce. Section 611 requires the EPA to establish and implement
labeling requirements for containers of, and products containing or
manufactured with, class I or class II ODS.
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\4\ The Clean Air Act provisions addressing stratospheric ozone
protection are codified at 42 U.S.C. 7671-7671q.
\5\ The following documents are available in the docket: ``EPA.
1999. The Benefits and Costs of the Clean Air Act: 1990 to 2010,''
and ``EPA. 2018. Overview of CFC and HCFC Phaseout.''
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[[Page 41513]]
The EPA's authority for this rulemaking is supplemented by section
114, which authorizes the EPA Administrator to require recordkeeping
and reporting in carrying out any provision of the CAA (with certain
exceptions that do not apply here). Section 301 further provides
authority for the EPA to ``prescribe such regulations as are necessary
to carry out [the EPA Administrator's] functions'' under the CAA.
Additional authority for electronic reporting comes from the Government
Paperwork Elimination Act (GPEA) (44 U.S.C. 3504), which provides ``(1)
for the option of the electronic maintenance, submission, or disclosure
of information, when practicable as a substitute for paper; and (2) for
the use and acceptance of electronic signatures, when practicable.''
Additional information on the EPA's authority to establish and
manage an allocation system for the phaseout of class I and class II
substances can be found at 58 FR 65018 (December 10, 1993) and 68 FR
2820 (January 21, 2003) respectively.
D. What are the incremental costs and benefits of this Proposed Action?
The EPA considered the incremental costs and benefits associated
with this rulemaking which stem from proposed changes to reporting and
recordkeeping requirements. The revisions proposed here would require
electronic submissions through CDX, create a streamlined Certification
of Intent to Import ODS for Destruction, exempt halon 1211 in aircraft
bottles from the import petitions process, and add recordkeeping
certification requirement for methyl bromide QPS. The agency has
analyzed the impact on the regulated community associated with the
proposed regulatory changes, and the EPA estimates changes to reporting
and recordkeeping would result in a cost of approximately $5,000 per
year. However, the EPA estimates the annual costs savings to reporters
as a result of reductions in reporting elements, streamlining forms,
and added efficiencies to be approximately $13,000 per year. The one-
time redesign labeling costs for containers of fire suppression agents
are estimated to cost between $1,000 to $3,000. In addition, the EPA
analyzed the impact on small businesses and found there would be no
additional costs imposed on small business, see the docket for the
screening analysis on small businesses. A description of the results of
the analysis and the methods used can be found in Section VIII of this
notice.
II. Background
The United States was one of the original signatories to the 1987
Montreal Protocol and ratified it on April 12, 1988. After
ratification, Congress enacted, and President George H.W. Bush signed
into law, the CAA Amendments of 1990, which included Title VI on
Stratospheric Ozone Protection, codified as 42 U.S.C. Chapter 85,
Subchapter VI, to ensure that the United States could satisfy its
obligations under the Montreal Protocol, in addition to establishing
complementary measures such as the national recycling and emission
reduction programs under section 608 and the labeling requirements
under section 611.
The 1992 Copenhagen Amendment \6\ to the Montreal Protocol created
the stepwise reduction schedule, subsequently revised, and the eventual
phaseout of HCFC consumption.\7\ The next milestone is a commitment to
reduce HCFC consumption by 99.5% below the baseline by January 1, 2020,
with consumption for the years 2020 through 2029 restricted to the
servicing of refrigeration, air-conditioning, and fire suppression
equipment existing on January 1, 2020.\8\ This is referred to as the
``servicing tail.'' In November 2018, the Parties to the Montreal
Protocol agreed to add fire suppression equipment existing on January
1, 2020 to the list of permissible servicing tail uses.
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\6\ Further information on the Copenhagen Amendment is available
at https://ozone.unep.org/en/handbook-montreal-protocol-substances-deplete-ozone-layer/2199.
\7\ Consumption is defined in Sec. 82.3 as production plus
imports minus exports of a controlled substance (other than
transshipments or used controlled substances). Production is defined
in Sec. 82.3 as the manufacture of a controlled substance from any
raw material or feedstock chemical, but does not include: (1) The
manufacture of a controlled substance that is subsequently
transformed; (2) the reuse or recycling of a controlled substance;
(3) amounts that are destroyed by the approved technologies; or (4)
amounts that are spilled or vented unintentionally.
\8\ See Montreal Protocol Article 2F, paragraph 6.
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The United States has chosen to implement the Montreal Protocol
phaseout schedule of HCFCs on a chemical-by-chemical basis that employs
a ``worst-first'' approach focusing on the phaseout of certain
chemicals with higher ozone depletion potential (ODP) earlier than
others. In 1993, the EPA established a phaseout schedule to eliminate
HCFC-141b first, to greatly restrict HCFC-142b and HCFC-22 next, and to
subsequently place restrictions on all other HCFCs ultimately leading
to a complete phaseout of all HCFCs by 2030 (58 FR 15014, March 18,
1993; 58 FR 65018, December 10, 1993).
The EPA designed the allowance program to implement the production
and consumption controls of the CAA and to facilitate an orderly
phaseout. To control production, the EPA allocated baseline production
allowances to producers of specific ODS. To control consumption,\9\ the
EPA allocated baseline consumption allowances to producers and
importers of specific ODS. In the allowance program, the EPA allocates
``calendar-year'' or ``annual'' allowances to companies who expend them
when they produce or import ODS. The allowances can be traded among
companies both domestically and internationally (between countries that
are Parties to the Protocol), with certain restrictions. Allocation of
production and consumption allowances for most class I substances
(CFCs, methyl chloroform, carbon tetrachloride, and halons) ended in
1996, and in 2005 for methyl bromide. Production and consumption
allowances for class II substances (HCFCs) will be reduced to zero in
2030.\10\
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\9\ See CAA section 601(6), 42 U.S.C. 7671(6); 40 CFR 82.3.
\10\ See CAA section 605 (b)(2), 42 U.S.C. 7671(d) and Montreal
Protocol Article 2F, paragraph 6.
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Since the EPA is implementing the HCFC phaseout on a chemical-by-
chemical basis, it allocates and tracks production and consumption
allowances on an absolute kilogram basis for each chemical. An
allowance is the unit of measure that controls production and
consumption of ODS. The EPA allocates allowances for specific years;
they are valid between January 1 and December 31 of a given control
period (i.e., calendar year). In previous rulemakings, the EPA has
allocated calendar-year allowances equal to a percentage of the
baseline for specified control periods. A calendar-year allowance
represents the privilege granted to a company to produce or import one
kilogram (not ODP-weighted) of the specific substance. The EPA
allocates two types of calendar-year allowances--production allowances
and consumption allowances. To produce an HCFC, an allowance holder
must expend both production and consumption allowances. To import an
HCFC, an allowance holder must expend only consumption allowances. An
allowance holder exporting HCFCs for which it has expended consumption
allowances may obtain a refund of those consumption allowances upon
submittal of proper documentation to the EPA. Production and import of
[[Page 41514]]
virgin HCFCs without allowances are prohibited except for
transformation, destruction, transshipments, or heels (Sec. 82.15(a)
and (b)).
Under the chemical-by-chemical phaseout schedule for HCFCs, the EPA
stopped allocating production and consumption allowances for HCFC-141b
as of 2003; there will be no more production and consumption allowances
for HCFC-22 and HCFC-142b as of 2020; and beginning in 2020 the use of
newly produced or imported quantities of the remaining HCFCs will be
limited to servicing refrigeration, air-conditioning, and fire
suppression equipment existing at that date.
The EPA notes that absent specific use restrictions, HCFCs can
continue to be used after their production and import has ceased, for
example, to service existing equipment such as refrigeration and air-
conditioning systems. The EPA's intent has always been to facilitate a
smooth transition to alternatives, which means avoiding stranding
equipment that has not yet reached the end of its useful life. For
example, used HCFC-22 that is recovered and reclaimed, or virgin
material produced before the 2020 phaseout may continue to be used for
as long as it is available to service existing HCFC-22 systems.
The allowance system for production and import that reduces the
number of allowances over time is a central component of the ODS
phaseout in the United States. The EPA limits how much ODS enters the
market to meet the CAA and Montreal Protocol phaseout milestones. To
smooth the phaseout steps, the EPA also takes complementary actions
that reduce the demand for ODS, encourage recovery and recycling or
reclamation of used ODS, allow for continued servicing to avoid
stranding existing equipment, and encourage transition to alternatives
that ``reduce overall risks to human health and the environment.'' \11\
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\11\ CAA section 612, 42 U.S.C. 7671(k).
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The EPA's most recent action related to the phaseout of HCFCs was a
2014 rule that allocated production and consumption allowances for
HCFC-22, HCFC-142b, HCFC-123, and HCFC-124 for 2015-2019 (79 FR 64254,
October 28, 2014). In that action, the EPA also implemented the
provisions in CAA section 605(a) that limit production and consumption
to servicing refrigeration and air-conditioning appliances and for use
in fire suppression applications. That notice provides additional
discussion of the history of the phaseout of HCFCs.
III. Allocation of HCFC Allowances for the Years 2020 Through 2029
This section presents the EPA's proposed approach for issuing HCFC
allowances for the next regulatory period that extends from 2020
through 2029, as well as complementary changes to implement a recent
adjustment to the Montreal Protocol. The EPA is proposing to issue
consumption allowances for HCFC-123 and consumption and production
allowances for HCFC-124 consistent with the CAA, EPA regulations, and
obligations of the United States under the Montreal Protocol. These are
the two HCFCs not already slated for phaseout in the United States by
2020 under existing regulations. These HCFCs are currently used in the
refrigeration, air-conditioning, and fire suppression sectors. The EPA
is also proposing to add servicing of fire suppression equipment to the
authorized uses of newly produced or imported quantities of these HCFCs
during the years 2020 through 2029. In addition, the EPA is proposing
changes to the current labeling requirements for containers of fire
suppression agent using HCFC-123.
In this proposed action, the EPA is relying on its authority under
CAA section 605(c) to promulgate regulations phasing out the production
and restricting the use of class II substances in accordance with
section 605, subject to previous accelerations under section 606 (See
58 FR 65018, December 19, 1993 and 74 FR 66411, December 15, 2009). The
EPA is proposing limited changes to the existing regulations on
production, consumption, and use of class II ODS to provide flexibility
for the years 2020 through 2029 consistent with the requirements of
section 605 and obligations of the United States under the Montreal
Protocol.
In developing the proposed allocations for HCFC-123 and HCFC-124
for the years 2020 through 2029, the EPA considered a number of
factors, including existing company-specific consumption baselines
listed in Sec. 82.19; the uses of HCFCs that are permissible for the
years 2020 through 2029 under CAA section 605(a) and the availability
of alternatives for those uses; the types of HCFCs that may be produced
and consumed consistent with existing obligations and regulations; the
quantity needed to meet the estimated demand for each permissible use;
the estimated quantity of HCFCs that will be available from recycling
and reclamation, as well as from the potential stockpiling of virgin
HCFCs in advance of the 2020 phaseout step; \12\ and the transition
that must occur by 2030 when HCFC production and consumption will be
phased out completely. For each HCFC that will be allocated, the EPA
identifies a total number of allowances to be allocated and then sets
calendar-year allowances equal to a percentage of each company's
baseline.\13\ The following discussion describes how the EPA considered
each of these factors broadly in developing the proposed allocations.
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\12\ EPA. 2019. The U.S. Phaseout of HCFCs: Projected Servicing
Demands in the U.S. Air Conditioning, Refrigeration, and Fire
Suppression Sector (2020-2030).
\13\ The percentage of baseline allowances to be allocated for
each HCFC is determined as follows: First, all the company-specific
consumption baselines (listed in the table at Sec. 82.19) are added
to determine the aggregate amount of consumption baseline. The total
number of allowances to be allocated in a given year are then
divided by the aggregate amount of baseline allowances.
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The first factor the EPA considered when developing this proposal
was the existing limitation on permissible uses of HCFCs and the
availability of alternatives for those uses. Section 605(a) of the CAA
limited the use of newly-produced (i.e., virgin) HCFCs beginning
January 1, 2015. The statute provides that starting on that date, it
shall be unlawful for any person to introduce into interstate commerce
or use any class II substance unless such substance: (1) Has been used,
recovered, and recycled; (2) is used and entirely consumed (except for
trace quantities) in the production of other chemicals; (3) is used as
a refrigerant in appliances manufactured before January 1, 2020; or (4)
is listed as acceptable under the Significant New Alternatives Policy
(SNAP) program for use as a fire suppression agent for nonresidential
applications. As detailed in the draft report in the docket titled The
U.S. Phaseout of HCFCs: Projected Servicing Demands in the U.S. Air
Conditioning, Refrigeration, and Fire Suppression Sector (2020-2030),
hereafter referred to as the Draft Servicing Tail Report, the EPA
considered the availability of alternatives for the latter two uses,
with the understanding that it is typically best to service equipment
with the same refrigerant or fire suppression agent it was designed to
use. The SNAP program continues to review and list alternatives for
applications that use HCFCs, including refrigeration and air
conditioning and fire suppression applications that use HCFC-123.
Substitutes are listed under that regulatory program as acceptable,
unacceptable, or acceptable subject to use restrictions for specific
uses. Any future use of substitutes listed as acceptable subject to use
restrictions
[[Page 41515]]
must comport with any conditions of the SNAP program, if applicable.
Currently, the SNAP program lists a number of acceptable substitutes
for HCFCs for use as a fire suppression agent for nonresidential
applications, making a variety of allocation options practicable for
the years 2020 through 2029.
In addition to the statutory provisions in CAA section 605, the EPA
established a ``worst-first approach'' in 1993 which addressed which
HCFCs may be produced and consumed and prioritized the phaseout of
HCFCs based on their ODPs (58 FR 15014 and 58 FR 65018). These
regulations can be found in Sec. 82.16. HCFC-141b was phased out in
2003, except for certain exempted uses. HCFC-22 and HCFC-142b will be
fully phased out of production and consumption starting in 2020, with
exceptions for destruction and transformation. Consistent with that
approach, the EPA is proposing to issue allowances for production and
consumption of only HCFC-123 and HCFC-124, as these are the remaining
HCFCs that have not been phased out domestically.
Under the Montreal Protocol, the United States has committed to
phase out HCFC production and consumption by January 1, 2020, other
than production and consumption for certain narrowly defined uses in an
amount up to 0.5% of baseline annually. Under a previous Montreal
Protocol adjustment in 1995, production and consumption during the
years 2020 through 2029 were restricted to the servicing of
refrigeration and air-conditioning equipment existing on January 1,
2020. In the spring of 2018, the United States proposed adjusting the
Montreal Protocol to allow for new production and import of HCFCs
within the 0.5% cap for servicing fire suppression equipment existing
on January 1, 2020. This proposal was based on extensive stakeholder
consultation on HCFC needs during the years 2020 through 2029 and the
EPA's analysis of available information, including the 2018 Draft
Servicing Tail Report. In November 2018, the Parties to the Montreal
Protocol decided to adopt an adjustment that, among other things,\14\
added to Article 2F ``the servicing of fire suppression and fire
protection equipment'' existing on January 1, 2020 as a permissible use
for newly produced or imported HCFCs.\15\ While the term ``fire
protection'' can be understood in some contexts to refer broadly to all
measures taken to protect persons or property from harm, the terms
``fire protection'' and ``fire suppression'' have been used
interchangeably in the Montreal Protocol context to refer to
suppressing or putting out fires through the use of chemical
substances. Section 605(a) of the Clean Air Act uses the term ``fire
suppression.'' In addition, the EPA views this term as the more precise
term in the context of regulating ozone-depleting substances.
Therefore, the EPA is proposing to add servicing of ``fire suppression
equipment'' to the authorized uses of newly produced or imported
quantities of these HCFCs during the years 2020 through 2029. The
adjustment adopted in November 2018 will enter into force on June 21,
2019. The final meeting report from the 30th Meeting of the Parties and
Decision XXX/2 adopting the adjustment are included in the docket for
this rulemaking.
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\14\ The adjustment adopted at the Meeting of the Parties in
November 2018 included an essential use provision as well as the
addition of two niche applications under the 0.5% cap. In this
proposed rule, the EPA is only proposing to address the addition of
fire suppression. We are not proposing to take any action with
regard to other elements of the adjustment at this time.
\15\ Decision XXX/2 and Annex I of the ``Compilation of
decisions adopted by the parties,'' adjust Article 2F of the
Montreal Protocol.
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In developing the proposed allocations, the EPA considered the
quantities needed to satisfy estimated demand for HCFC-123 and HCFC-124
to service certain equipment manufactured before 2020. These estimates
are discussed in more detail in an updated 2019 Draft Servicing Tail
Report, which is available in the docket. This report and the proposed
allocation are based on demand projections contained in the EPA's
Vintaging Model,\16\ recent market research, discussions with industry
on current HCFC uses and trends, and the expected availability of
recovered, recycled/reclaimed, and reused material. The agency made the
April 2018 draft report available on its website and in the docket
along with a Notice of Data Availability published in the Federal
Register on May 4, 2018 (83 FR 19757) and requested comment on the data
and assumptions in the report. The EPA did not receive any substantive
comments on the report but continues to welcome further input on all
aspects of the revised report, including but not limited to the
underlying assumptions and sensitivity analyses. As a result of the
adjustment to Article 2F of the Montreal Protocol, the EPA has since
revised the 2018 Draft Servicing Tail Report to reflect the demand for
servicing fire suppression equipment manufactured before January 1,
2020. The EPA seeks comment on the 2019 Draft Servicing Tail Report
specifically related to the fire suppression sector. Since the EPA will
use the report to support the final rule, the agency requests any
relevant data and market information that would improve the accuracy of
the agency's projections. These data may be used in determining the
final allocation.
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\16\ The EPA's Vintaging Model estimates the annual chemical
emissions from industry sectors that historically used ODS,
including Ref/AC and fire suppression. The model uses information on
the market size and growth for each end-use, as well as a history
and projections of the market transition from ODS to alternatives.
The model tracks emissions of annual ``vintages'' of new equipment
that enter into operation by incorporating information on estimates
of the quantity of equipment or products sold, serviced, and retired
or converted each year, and the quantity of the compound required to
manufacture, charge, and/or maintain the equipment.
---------------------------------------------------------------------------
The last overarching factor the EPA considered is the 2030 phaseout
date for HCFC production and import, with limited exceptions, under CAA
section 605(b)(2) and (c). As for prior HCFC phaseout steps, the
agency's intent is to accomplish the 2030 phaseout step in a manner
that achieves a smooth transition to alternatives without stranding
equipment. The goal is to allow equipment owners to continue servicing
their HCFC-123 and HCFC-124 equipment that is still within its expected
lifetime. Experience with prior HCFC-22 phaseout steps indicates that
gradually decreasing allocation levels is better than an abrupt
increase or decrease to foster recovery, recycling, and reclamation of
HCFCs and an orderly transition to approved alternatives.
A. Allocation of HCFC-123 Production and Consumption Allowances
This section presents the EPA's proposed approach for determining
the amount of HCFC-123 production and consumption allowances to be
issued and takes comment on two alternatives.
The agency is proposing to not provide any HCFC-123 production
allowances for the years 2020 through 2029. In 2009, the EPA issued
zero production baseline allowances for HCFC-123 because no companies
produced HCFC-123 production in the baseline years of 2005 through
2007. As such, the EPA has not issued production allowances for HCFC-
123 in subsequent years (74 FR 66431). Under section 605(b)(1) of the
CAA, it is unlawful for any person to produce any class II substance in
an annual quantity greater than the quantity of such substance produced
by such person during the baseline year. The EPA does not propose to
issue any production allowances for HCFC-123 for the years 2020 through
2029.
[[Page 41516]]
In 2020, the consumption baseline of the United States for all
HCFCs will be 0.5% which equates to 76.2 ODP-weighted metric tons that
could be available for servicing.\17\ Under section 605(c) of the CAA,
the consumption of HCFCs by any person is also to be limited to the
quantity consumed by that person during the baseline year. The EPA has
implemented this requirement by limiting the number of annual
allowances allocated for each chemical in Sec. 82.16. Consumption of
HCFC-123 during the baseline year equates to 2,014 MT (40 ODP-weighted
MT).
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\17\ 76.2 ODP-weighted metric tons is the equivalent of 3,810 MT
of HCFC-123.
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Table 1 shows the number of HCFC-123 consumption allowances that
would be allocated each year from 2020 to 2030 under the EPA's proposed
approach and under the two alternatives on which the EPA is also taking
comment. The proposed and alternative approaches are discussed in
greater detail below.
Table 1--Comparison of HCFC-123 Consumption Allowance Allocation Approaches Between 2020-2030 (MT)
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2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Total
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Proposal.................................................... 650 650 650 570 490 410 330 250 170 90 0 4,260
Alternative 1............................................... 520 480 450 420 380 350 310 280 250 210 0 3,650
Alternative 2............................................... 2,014 2,014 2,014 2,014 2,014 2,014 2,014 2,014 2,014 2,014 0 20,140
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(1) Proposal
The agency proposes to issue consumption allowances equal to the
2020 estimated HCFC-123 demand for servicing existing refrigeration and
air-conditioning and fire suppression equipment for years 2020 through
2022 and to then decrease the number of allowances issued in each
subsequent year by an equal amount each year such that there are zero
allowances issued in 2030. In effect, this proposal would meet the
estimated, full servicing demand in 2020 with newly imported HCFC-123
and the estimated, full servicing demand in 2030 with reclaimed HCFC-
123. Under this proposal, the EPA would allocate 650 MT \18\ for the
years 2020 through 2022 to ensure adequate supply for servicing both
existing air-conditioning and fire suppression equipment. Currently the
reclamation market primarily services the refrigeration and air
conditioning sector. The EPA believes that initially providing three
years of flat allocations would allow time for the reclamation market
to enter the fire suppression sector. This is the maximum estimated
HCFC-123 demand for servicing refrigeration, air-conditioning, and fire
suppression equipment in 2020 as discussed in the 2019 Draft Servicing
Tail Report.
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\18\ 13 ODP-weighted MT.
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The EPA could use an equal yearly decrease approach beginning in
2023 but start at a higher or lower allocation. Specifically, the EPA
could use a starting allocation in the years 2020 through 2022 of up to
1,200 MT (24 ODP-weighted MT), which is the current average annual
consumption of HCFC-123 in 2012 through 2017 (83 FR 19757). The agency
could also use a lower starting allocation for years 2020 through 2022
of between 650 MT (the proposed starting allocation) and 520 MT (the
starting allocation in the first alternative discussed below). The
agency requests comment on the full range of possible starting
allocations for this option.
The EPA proposes to reduce the allocation annually beginning in
2023 by an equal amount each year to bring allocations down to zero by
2030. This approach balances the various near and longer term needs by
fostering a stable supply of HCFCs to be used for servicing throughout
the allocation period and past the phaseout date. Gradually reducing
HCFC allowances fosters transition and recycling/reclamation and is
consistent with the EPA's approach in previous HCFC allocation rules
(see 74 FR 66412, December 15, 2009; 76 FR 47451, August 5, 2011; 78 FR
20004, April 3, 2013; and 79 FR 64254, October 28, 2014). During
previous ODS phaseouts, decreasing the allocation has provided
equipment owners with the proper market signal to foster transition to
alternatives and to increase the incentive for recovery and
reclamation.
Consistent with our obligations as a party to the Montreal
Protocol, and the use limitation in CAA section 605(a) regarding
refrigeration and air-conditioning equipment, the EPA is not proposing
to issue HCFC-123 allowances for use in fire suppression or
refrigeration and air-conditioning equipment manufactured on or after
January 1, 2020. The EPA notes that new fire suppression and
refrigeration and air-conditioning equipment may be manufactured with
recovered and recycled/reclaimed HCFCs in 2020 and beyond. Section
605(a) of the CAA does not restrict the use of recycled/reclaimed HCFC-
123. For instance, as explained in the 2019 Draft Servicing Tail Report
available in the docket, the fire suppression sector has a long history
of using recovered and recycled/reclaimed ODS for both servicing and
new equipment. For example, there has been continuing demand for halons
in newly-manufactured fire suppression equipment since the 1994 halon
phaseout in the United States. This demand for halons has been
satisfied with recycled/reclaimed halons. Any demand for HCFC-123 for
charging and servicing fire suppression equipment manufactured on or
after January 1, 2020 must also be met by recycled/reclaimed HCFC-123
or HCFC-123 that was stockpiled prior to 2020.
Following the November 2018 Montreal Protocol adjustment, the EPA
revised the 2018 Draft Servicing Tail Report to disaggregate estimated
demand for fire suppression to show estimated demand for servicing
compared to demand for new equipment. The EPA consulted with industry
on the estimate of future market demand for HCFC-123 fire suppression
applications. Over the past several years, total demand (the
manufacture of new equipment and the servicing of existing equipment)
has varied, but the average has been approximately 260 MT per year. The
EPA expects the servicing demand for fire suppression servicing to be
between 35 to 90 MT based on projections \19\ from the Vintaging Model
and feedback from industry.
---------------------------------------------------------------------------
\19\ EPA. 2019. The U.S. Phaseout of HCFCs: Projected Servicing
Demands in the U.S. Air Conditioning, Refrigeration, and Fire
Suppression Sector (2020-2030), Table 5.
---------------------------------------------------------------------------
Starting the allocation levels below the estimated demand for
servicing both fire suppression and refrigeration and air-conditioning
equipment, even though the amount reclaimed is expected to be
significant, could lead to insufficient quantities of recycled/
[[Page 41517]]
reclaimed HCFC-123 to meet fire suppression demand, as indicated in the
2019 Draft Servicing Tail Report. As such, the EPA does not think it
would be prudent to reduce the allocation further to account for the
complete amount of expected reclamation in the early years. Conversely,
if the EPA allocated a higher amount than demand, more virgin HCFC-123
may be imported, reducing the need for recovered and reclaimed HCFC-
123. As a point of comparison, the EPA allocated 100% of the HCFC-123
baseline (2,014 MT, Alternative 2 in Table 1) for the years 2015
through 2019. In those years HCFC-123 could be used to manufacture new
equipment as well as service existing equipment. Allowance holders did
not use their full allocation for HCFC-123 during those years and often
used the inter-pollutant transfer mechanism to convert their HCFC-123
allowances into HCFC-22 allowances. After January 1, 2020, there is no
other market for transfers.
The EPA seeks comment on all aspects of this proposed allocation
including the proposed number of allowances to be issued for 2020. The
agency requests comment on the rationale explained above for its
proposal to allocate 650 MT HCFC-123 consumption allowances for 2020
through 2022; whether the starting allocation in 2020 should be higher
or lower; the proposal to decrease this allocation by a constant amount
each year after 2022; and whether this proposal would meet demand for
HCFC-123 during the years 2020 through 2029. The EPA also requests
comment on the expected servicing demand for fire suppression
equipment, which is based on projections from the Vintaging Model and
feedback from industry. The EPA is taking comment on whether the
proposed allocation would strand any equipment in 2020 through 2029,
and what the potential cost impacts may be for any stranded equipment.
The agency also requests comment on whether there is a significant cost
difference to users between reclaimed and virgin HCFC-123. Commenters
should provide as much detail, with as much quantitative reasoning
(e.g., benefits, market effects, etc.), as possible. When developing a
final rule, the EPA will consider any comments received on the starting
allocation number and the proposal to decrease the allocation by a
constant amount each year.
(2) Alternatives
The EPA is also seeking comment on two alternative approaches the
EPA considered for determining how many HCFC-123 consumption allowances
to issue. The first alternative approach would be to issue allowances
equal to the total modeled demand each year from 2020 through 2029
(which includes servicing of existing equipment and the manufacture of
new equipment using reclaimed HCFC-123) minus the low end of the
projection for reclamation each year from 2020 through 2029. This
contrasts with the proposed approach which, as explained above, would
neither consider demand for the manufacture of new equipment using
reclaimed HCFC-123 nor directly decrease allocations based on
projections for reclamation. The EPA's low-end estimate for reclamation
is 300 MT in 2020, rising by 10 MT per year to 390 MT in 2029. See
Table 8 of the 2019 Draft Servicing Tail Report for more discussion of
estimated reclaim. In Table 1, above, the first alternative presents
the allocations that would result from applying this approach.
Setting the initial allocation at total estimated demand in 2020
minus the low-end projections for reclamation would reflect current
total HCFC-123 market conditions and allow companies to continue
consuming HCFC-123 at a rate consistent with demand to ensure adequate
supply. Decreasing the allocations gradually over time would
potentially guard against consumption levels that are significantly
higher than demand. This approach would also account for continued
manufacture of fire suppression equipment using HCFC-based fire
suppression agent to the extent recycled/reclaimed HCFC-123 is
available. While this approach would start at a lower allocation in
2020 than the proposed approach and would allocate less HCFC-123
overall in 2020 through 2029, it would give more time for industry to
transition given the slower decrease in the allocation level over time,
it would also result in a larger drop between 2029 and 2030 compared to
the proposed approach. This could result in a situation where HCFC-123
equipment owners wait until the end of the regulatory period to
transition or are unprepared for the 2030 phaseout.
While the EPA estimates that the level of reclaimed HCFC-123, at
300 MT per year, will be higher than the estimated demand for new fire
suppression equipment, the agency expects that much of this reclaimed
material will be sold into the refrigeration and air-conditioning
market given current business relationships. Based on industry
feedback, the EPA has tentatively concluded that reclaimed HCFC-123 is
currently sold exclusively into the refrigeration and air-conditioning
market. Thus, it might not be immediately available for fire
suppression. More availability of virgin HCFC-123 would allow time for
the market for recycled/reclaimed HCFC-123 to shift towards new fire
suppression equipment, as consumption of HCFC-123 under the Montreal
Protocol is only for servicing equipment.
The EPA seeks comment on this first alternate approach. The EPA
requests comment on accounting for the anticipated continued
manufacture of fire suppression equipment using reclaimed HCFC-123. The
EPA also requests comment on using the low end or the high end of the
estimate for reclamation, or a point in between. Using the current high
end of the expected reclamation estimate would equate to an allocation
of approximately 470 MT in 2020, 220 MT in 2025, and 20 MT in 2029. The
EPA also seeks comment on whether it should start at a higher amount in
2020 (up to 1,200 MT) consistent with current average consumption of
HCFC-123, or a lower amount consistent with the high end of the
expected reclamation estimate provided in Table 9 of the 2019 Draft
Servicing Tail Report. Commenters should provide as much detail, with
as much quantitative reasoning (e.g., benefits, market effects, etc.),
as possible.
Lastly, the EPA is seeking comment on a second alternative approach
under which, as shown in Table 1 above, the EPA would issue 2,014 MT of
HCFC-123 consumption allowances for each year for the years 2020
through 2029. This is equal to 100 percent of the aggregate consumption
baseline allowances for HCFC-123 and is the maximum allocation allowed
under section 605(c) of the CAA. This approach would allocate
approximately half of the annual consumption cap allowed under the
Montreal Protocol. Specifically, this allocation would equal 40.3 ODP-
weighted MT compared to 76.2 ODP-weighted MT allowed during each year
between 2020 through 2029. This approach could be warranted given the
relatively low ODP of HCFC-123 (0.02) and the long lifetime of
equipment using HCFC-123.
The agency believes this approach would provide significantly more
allowances than are needed to meet demand for HCFC-123. The existing
regulatory prohibition on producing or importing HCFC-123 for most
uses, including in the manufacture of refrigeration and air-
conditioning and fire suppression equipment as of January 1, 2020 will
significantly reduce the demand for HCFC-123. However, this approach
would be consistent with
[[Page 41518]]
the EPA's past approach of issuing the maximum allocation for HCFC-123
during the 2015-2019 control periods. This option does not account for
recycling or reclamation and might lead to higher consumption than
demand for HCFC-123. This situation risks decreased incentive to
reclaim refrigerant at the end of life and during servicing,
potentially resulting in higher emissions. It also would not
incorporate specific reductions to foster reclamation and recycling or
the transition to alternatives. The EPA anticipates it may also
significantly curtail the existing market in the refrigeration and air-
conditioning sector, since the only remaining market for reclaimed
HCFC-123 would be for the manufacture of new fire suppression
equipment. This approach would also result in an abrupt decrease in
allowances in 2030 when the allocation would decrease from 2,014 MT to
zero, which is inconsistent with past practice of fostering a smooth
transition to alternatives. The EPA welcomes comment on this
alternative approach of issuing 2,014 MT in each year. Commenters
should provide as much detail, with as much quantitative reasoning
(e.g., benefits, market effects, etc.), as possible.
B. De Minimis Exemption
The EPA is proposing to create a de minimis exemption from the use
prohibition in CAA section 605(a) to allow virgin HCFC-123 to be used
for the manufacture of chillers that meet specific criteria through
December 31, 2020. This proposal aims to address a unique situation
that has arisen because certain construction projects that ordered
HCFC-123 chillers for installation in 2019 are behind schedule and the
chillers may not be installed by the end of 2019. The EPA understands
that many of the chillers and the virgin HCFC-123 to charge them are
already on site at these construction projects and that companies
purchased virgin HCFC-123 for charging these chillers given the
expectation that they would be installed in 2019. However, due to
construction delays, the final steps in the manufacture of these
chillers (including charging with refrigerant) may not occur until
after January 1, 2020. CAA section 605(a) prohibits the introduction
into interstate commerce or use of any class II substance as a
refrigerant unless such substance is used as a refrigerant in
appliances manufactured before January 1, 2020. To address this unique
circumstance, the EPA is proposing to create a de minimis exemption to
allow virgin HCFC-123 to be used for the manufacture of chillers that
meet specific criteria through December 31, 2020. This exemption would
only apply if the HCFC-123 chiller unit and other components were ready
for shipment to a construction location and the components were
specified for installation under a building permit or contract dated on
or before the date of signature of the proposed rule, the HCFC-123 was
imported prior to 2020 and is in the possession of the entity that will
complete the manufacture of the appliance, and all refrigerant added to
that appliance after December 31, 2020 is used, recovered, or recycled/
reclaimed. This proposal is based on the information currently
available to the agency. We will consider all comments on the merits of
this proposal and its potential impacts before deciding whether to take
final action to create such a de minimis exemption.
(1) Background
As described in Section III of this notice, the CAA restricts
introduction into interstate commerce and use of HCFCs over time with
limited exceptions. The CAA prohibits the use of HCFCs to manufacture
new appliances effective January 1, 2020, unless the HCFCs are used,
recovered, and recycled. The CAA also phases out production and
consumption of HCFCs, with an interim milestone in 2015 and the full
phaseout in 2030. Additionally, the Montreal Protocol phases out the
production and consumption of HCFCs as of January 1, 2020, while
allowing a limited amount of new production and consumption for
servicing existing refrigeration and air-conditioning appliances, as
well as other uses described in Section III. The EPA codified the CAA
use and interstate commerce restrictions related to refrigeration and
air-conditioning appliances at 40 CFR part 82, subpart A in prior
rulemakings.
As defined in the regulations, the term manufactured \20\ ``for an
appliance, means the date upon which the appliance's refrigerant
circuit is complete, the appliance can function, the appliance holds a
full refrigerant charge, and the appliance is ready for use for its
intended purposes; . . .'' Appliances used in commercial refrigeration,
such as large chillers, and industrial process refrigeration typically
involve more complex installation processes, which may require custom-
built parts, and typically are manufactured on-site. Appliances, such
as these, that are field charged or have the refrigerant circuit
completed on-site, regardless of whether additional refrigerant is
added or not, are manufactured at the point when installation of all
the components and other parts are completed, and the appliance is
fully charged with refrigerant and able to operate.
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\20\ The definition of ``manufactured'' can be found at Sec.
82.3. See also 74 FR 66439.
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Recently, the EPA learned that a limited number of HCFC-123
chillers specified for installation in 2019 may not be fully
manufactured prior to January 1, 2020. The key uncharged components, in
particular the chiller units themselves, were ready for shipment to the
construction location in the first half of 2019. The agency understands
that chiller manufacturers ceased factory operations for making new
HCFC-123 chiller units at the end of April 2019. However, for some
delayed projects, even though the units and refrigerant may already be
on-site, the final steps to manufacture the appliance, in particular
charging the chiller with refrigerant, may not occur until 2020. Thus,
if no regulatory relief is provided, the virgin HCFC-123 could not be
used to charge these chillers even if it has already been purchased and
is on site.
(2) Proposed De Minimis Exemption
To provide flexibility to complete the manufacture of HCFC-123
chillers from components that are ready for shipment to a construction
location, the EPA is proposing to create a de minimis exemption to the
use prohibition in 605(a). This exemption would allow HCFC-123 to be
used for the initial charging of certain chillers manufactured between
January 1, 2020 and December 31, 2020 provided they meet specific
conditions. The proposed exemption would only apply if the HCFC-123
chiller unit and components are ready for shipment to a construction
location and the components were specified for installation under a
building permit or contract dated on or before the date of signature of
the proposed rule, the HCFC-123 was imported prior to 2020 and is in
the possession of an entity involved in the manufacture of the
appliance, and all refrigerant added to that appliance after December
31, 2020 is used, recovered, or recycled/reclaimed.
The EPA has implied authority to propose a de minimis exemption
from the section 605(a) use restriction. The United States Court of
Appeals for the District of Columbia Circuit has recognized that
``[u]nless Congress has been extraordinarily rigid, there is likely a
basis for an implication of de minimis authority to provide exemption
when the burdens of regulation yield a gain of trivial or no value.''
Alabama Power Co.
[[Page 41519]]
v. Costle, 636 F.2d 323, 360-61 (D.C. Cir. 1980).
In Alabama Power, the Court held that ``[c]ategorical exemptions
from statutory commands may . . . be permissible as an exercise of
agency power, inherent in most statutory schemes, to overlook
circumstances that in context may fairly be considered de minimis. It
is commonplace, of course, that the law does not concern itself with
trifling matters, and this principle has often found application in the
administrative context. Courts should be reluctant to apply the literal
terms of a statute to mandate pointless expenditures of effort.'' Id.
(internal citations omitted). In an earlier case cited by the court in
Alabama Power, the court described the doctrine as follows: ``The `de
minimis' doctrine that was developed to prevent trivial items from
draining the time of the courts has room for sound application to
administration by the Government of its regulatory programs . . . The
ability, which we describe here, to exempt de minimis situations from a
statutory command is not an ability to depart from the statute, but
rather a tool to be used in implementing the legislative design.''
District of Columbia v. Orleans, 406 F.2d 957, 959 (1968).
In this respect, the Alabama Power opinion observed in a footnote
that the de minimis principle ``is a cousin of the doctrine that,
notwithstanding the `plain meaning' of a statute, a court must look
beyond the words to the purpose of the act where its literal terms lead
to `absurd or futile' results.'' Alabama Power at 360 n. 89 (citations
omitted). To apply an exclusion based on the de minimis doctrine, ``the
agency will bear the burden of making the required showing'' that a
matter is truly de minimis which naturally will turn on the assessment
of particular circumstances. Id. The Alabama Power opinion concluded
that ``most regulatory statutes, including the CAA, permit such agency
showings in appropriate cases.'' Id.
A notable limitation on the de minimis doctrine is that it does not
authorize the agency to exclude something based on a cost-benefit
analysis. As the court explained, this ``implied authority is not
available for a situation where the regulatory function does provide
benefits, in the sense of furthering the regulatory objectives, but the
agency concludes that the acknowledged benefits are exceeded by the
costs.'' Id. The court held that any ``implied authority to make cost-
benefit decisions must be based not on a general doctrine but on a fair
reading of the specific statute, its aims and legislative history.''
Id.
Courts have continued to recognize that authority to create de
minimis exemptions may be implied where ``the burdens of regulation
yield a gain of trivial or no value.'' Envtl. Def. Fund Inc. v. EPA, 82
F.3d 451, 455 (D.C. Cir. 1996) (internal quotation marks omitted) see
also e.g., Ass'n of Admin Law Judges v. FLRA, 397 F.3d 957, 961-62
(D.C. Cir. 2005).
The EPA believes it has authority to provide flexibility by
creating a de minimis exemption to the 605(a) use prohibition. Section
605(a) is not extraordinarily rigid and is ambiguous as it does not
speak directly to the circumstance presented here. In addition,
providing flexibility is consistent with the statutory intent.
The EPA does not view section 605(a) as ``extraordinarily rigid.''
Title VI of the CAA can generally be summarized into three principal
areas: The phaseout of the production and import of ODS (section 602-
607); the reduction of emissions of ODS via various means such as
required servicing practices, restrictions on sale and distribution of
products, and consumer education (section 608-611); and the transition
to alternatives that reduce overall risk to human health and the
environment (section 612). Section 605 specifically addresses the
phase-out of production and consumption of class II substances. For
class II substances, section 605 established specific restrictions
beginning in 2015 on use, introduction into interstate commerce and
production, while establishing a complete phaseout of HCFCs in 2030.
Congress' overall approach to the class II phaseout was generally less
rigid than its approach to the class I phaseout, given the longer
timeframes and the presence of only one intermediate reduction step
(see section 605(b)). Given this context, the EPA does not view section
605(a) as ``extraordinarily rigid.''
The EPA finds that section 605(a) is ambiguous as it does not speak
directly to the circumstance presented here. Section 605(a) does not
explicitly address whether virgin HCFC-123 may be used in a chiller
where all the chiller components were ready for shipment to a
construction site before January 1, 2020 but where the initial charge
is not completed until after January 1, 2020. Because the statute does
not specify when manufacture is complete, it does not unambiguously
prohibit the use of virgin HCFC-123 for the initial charge of chillers
where all the chiller components were ready for shipment before January
1. 2020. Thus, the EPA has authority to resolve the ambiguity through
regulation and determine whether the use prohibition should apply in
this circumstance.
The EPA views the proposed de minimis exemption as consistent with
statutory intent. The proposed flexibility would ensure the orderly
phaseout of ODS and be consistent with the past practice of preventing
the stranding of existing appliances without being counter to the three
principle areas of Title VI described previously. First, it would not
contribute to additional production and consumption of HCFCs and thus
would not inhibit the United States from reaching the CAA phaseout date
of 2030 or complying with the Montreal Protocol. Second, these chillers
would continue to be subject to the servicing practices and labeling
requirements applicable to all ODS appliances. Third, it would not slow
the transition to alternatives. As discussed below, the components to
assemble these chillers have already been made ready for shipment and
they have been purchased for installation. While these chillers may one
day be retrofitted to an alternative, such as R-514A, Title VI does not
require the retrofitting of existing equipment.
In addition, rigid application of CAA section 605(a) in the unique
circumstances presented here would ``yield a gain of trivial or no
value.'' Envtl. Def. Fund Inc. v. EPA, 82 F.3d 451, 455 (D.C. Cir.
1996) (internal quotation marks omitted). The EPA believes that there
would be no environmental benefit associated with rigidly applying
605(a). First, because the HCFC-123 used to initially charge these
chillers must have been imported prior to 2020, existing allowances
would have to have been expended. There would therefore not be any
increase in U.S. consumption compared to the current allowed level of
consumption for 2019. Second, this exemption would not encourage the
manufacture of additional HCFC-123 chiller units because factory
operations for making them have already ceased and the exemption would
not permit such operations for additional units.
The number of chillers is also anticipated to be small. Based on
consultations with industry, the EPA understands that the manufacture
of up to five percent of the chillers expected to be installed in 2019
could be delayed beyond January 1, 2020. The EPA expects the number of
HCFC-123 chillers to be affected is 33. As detailed in the 2019 Draft
Servicing Tail Report, the EPA assumes an average charge size for an
HCFC-123 commercial chiller is approximately 445 kg. Thus, the EPA
[[Page 41520]]
estimates about 15 MT of HCFC-123 could be needed to complete the
manufacture of chillers in 2020 if the proposed exemption is finalized.
This would equate to about 0.4 percent of all HCFCs allocated in 2019.
Because the EPA has implemented the HCFC phaseout under the CAA
using a ``worst first'' approach, this final step in the phaseout means
that the HCFCs that remain, like HCFC-123, have the lowest ozone-
depleting potential of all HCFCs. Specifically, the ODP of HCFC-123 is
0.02. Thus, the 15 MT of HCFC-123 anticipated to be used to initially
charge these chillers equates to only 0.3 ODP-weighted metric tons.
Comparing again to the consumption allowances allocated for 2019, this
time on an ODP-weighted basis, this use would be only 0.02 percent of
what was allocated in 2019.
Beyond the HCFC-123 needed for the initial charge, the EPA has also
analyzed whether this proposed exemption could increase the servicing
demand for HCFC-123 in the years 2020 through 2029 compared to not
providing this proposed flexibility. As an initial matter, the modeled
servicing demand described in the 2019 Draft Servicing Tail Report
includes the demand from the appliances affected by this exemption. The
report assumes that chillers expected to be manufactured in 2019 are
manufactured in that year. Because the chillers that would be affected
by this proposed exemption were anticipated to be manufactured in 2019,
they would not increase expected demand. This exemption would not alter
the requirement that used, recovered, or recycled/reclaimed HCFC-123 be
used for all subsequent servicing events on these chillers. Further,
HCFC-123 chillers have very low leak rates, and thus the amount of
replacement refrigerant would be low. Therefore, the EPA does not
anticipate that future servicing demand will affect the market for
reclaimed HCFC-123 in a manner that the EPA has not already considered
when proposing allowance allocation amounts for 2020-2029.
The proposed exemption also contains numerous constraints that
limit its potential impact. The proposed exemption from the 605(a)
prohibition on use in appliances manufactured before January 1, 2020
would apply only for one year and only in a limited set of
circumstances. It would apply only if the refrigerant used to
manufacture the appliance was in the possession of an entity involved
in the manufacture of the appliance and imported prior to January 1,
2020. In addition, any servicing of the equipment after December 31,
2020 would need to be done with HCFC-123 that is used, recovered, or
recycled/reclaimed. Further, the exemption would not allow for the
manufacture of additional chillers beyond those for which the
components had already been made ready for shipment to a construction
location and the components were specified for installation under a
building permit or contract dated on or before the date of signature of
the proposed rule.
The proposed de minimis exemption is also consistent with past EPA
practice in this program. The EPA, on past occasions, has provided
limited flexibility around use restrictions and phaseout dates.
Existing regulations have typically prevented the stranding of
appliances and past investments while phasing out controlled
substances. For example, a concern similar to the one at issue here
came to the EPA's attention in 2009 when commenters requested a limited
waiver from a regulatory prohibition on manufacturing HCFC-22
appliances that was to begin in 2010 (74 FR 66412, 66440-41, December
15, 2009). Commenters identified scenarios in which HCFC-22 appliances
had been scheduled for use in projects, such as construction projects,
prior to January 1, 2010 but for a variety of reasons their manufacture
could not be completed prior to January 1, 2010. The EPA agreed to
grant flexibility by providing an exemption from the regulatory
deadline to allow HCFC-22 to be used as refrigerant in appliances
manufactured between January 1, 2010 and December 31, 2011 if their
components were manufactured prior to January 1, 2010 and were
specified in a building permit or contract dated before January 1, 2010
for use on a project. The EPA explained that providing flexibility
would not result in additional consumption of HCFCs, because companies
had previously produced or imported the HCFCs for use in the
manufacture of appliances, and it did not affect long-term projections
on servicing needs because this equipment was already planned to be
installed in the previous year (74 FR 66441).
The EPA also previously created a de minimis exemption from the
statutory prohibition on the use of previously-imported virgin HCFCs.
In a 2014 rule, the EPA created an exemption from the 605(a) use
prohibition to provide limited flexibility regarding the use of HCFCs
for sectors other than refrigeration and air-conditioning and fire
suppression. For example, the EPA allowed continued use of a small
amount of material that was previously produced and/or imported using
the appropriate allowances and in inventory prior to the CAA's 2015 use
restriction for solvents. The EPA determined that the continued use of
previously produced/imported material was consistent with past
practices, that production and consumption would not be higher than
that already allowed for and that the environmental effect would be
limited. (79 FR 64254, October 28, 2014).
The EPA also recognizes that in the circumstances presented here,
there could be negative impacts if the agency did not provide
flexibility. Without the proposed flexibility, chiller manufacturers
would not be able to use virgin HCFC-123 to initially charge and
install new equipment even though that virgin HCFC-123 may already be
on-site. Granting flexibility would allow the installation to continue
using the HCFC-123 available and prevent further delay of the
installation.
For the reasons described above, the EPA is proposing to create a
de minimis exemption to the 605(a) use restriction and to revise 40 CFR
82.15(g)(5)(iii) to allow virgin HCFC-123 to be used for the initial
charging of certain chillers manufactured between January 1, 2020 and
December 31, 2020 provided they meet specific conditions. The proposed
exemption would only apply if the HCFC-123 chiller unit was ready for
shipment to a construction location and the components were specified
for installation under a building permit or contract dated on or before
the date of signature of the proposed rule, the HCFC-123 was imported
prior to 2020 and is in the possession of an entity that will complete
the manufacture of the appliance, and any service on the appliance
after December 31, 2020 is done using refrigerant that is used,
recovered, or recycled/reclaimed. In sum, the proposed exemption would
apply only in limited instances where projects have begun but due to
delays have not yet been completed prior to January 1, 2020. The EPA
believes this would address concerns that were expressed by
stakeholders, would not result in an environmental effect, and is
consistent with statutory intent.
The EPA is taking comment on this proposal to establish an
exemption to allow limited flexibility for the manufacture of chillers
with HCFCs past January 1, 2020. Specifically, the EPA is requesting
comment on several aspects of the proposal, including:
Whether there is enough availability of reclaimed material
for the initial charge of chillers whose manufacture is delayed until
2020 and whether rushed installations would
[[Page 41521]]
result in unintended emissions of HCFCs;
Whether the EPA has appropriately assessed the
environmental effects of providing or not providing flexibility, such
as whether up to five percent of chiller installations may be delayed;
Whether factory operations for making uncharged HCFC-123
chiller equipment have ceased in the United States as of May 1, 2019;
Whether HCFC-123 chillers will in fact be stranded in the
absence of this proposed exemption;
Whether any additional conditions would be appropriate to
further narrow the scope of the exemption; and
Whether the agency has authority to establish a de minimis
exemption in this situation.
C. Addition of Fire Suppression Servicing Uses to the HCFC Phaseout
Schedule
The EPA is proposing to modify the regulations in 40 CFR part 82
consistent with CAA section 605 and the November 2018 adjustment to
Article 2F of the Montreal Protocol that allows for the continued
production and consumption of HCFCs for servicing fire suppression
equipment manufactured before January 1, 2020. Specifically, the EPA is
proposing to modify Sec. Sec. 82.16(e) and 82.15(g) to allow for HCFC-
123 to be produced and imported, as well as introduced into interstate
commerce and used, during the years 2020 through 2029, to service fire
suppression equipment existing on January 1, 2020,\21\ so long as it is
being used as a streaming agent listed as acceptable for use or
acceptable subject to narrowed use limits for nonresidential
applications in accordance with the SNAP regulations.
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\21\ This proposal would expand the permitted uses under
Sec. Sec. 82.15 and 82.16 which also allow for use and introduction
into interstate commerce, as well as production and consumption, of
HCFCs for use as a refrigerant in equipment manufactured before
January 1, 2020.
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The EPA is proposing to modify Sec. 82.16(e)(2) to permit the
production and import of HCFC-123 for servicing fire suppression
equipment manufactured before January 1, 2020. While the agency is
proposing to include the term ``production'' in this regulatory change,
as stated above, this action does not propose to allocate production
allowances for HCFC-123 given the lack of production in the United
States. Section 82.16(e) establishes limits on the production and
import of HCFC-123 starting on January 1, 2020. It provides that HCFC-
123 may not be produced or imported for any purposes other than the
listed permissible uses. The proposed revision would add to the list of
permissible uses the following: Use as a fire suppression streaming
agent listed under the SNAP program as acceptable for use or acceptable
subject to narrowed use limits for nonresidential applications. This
revision would allow for this additional use in the years 2020 through
2029.
The EPA is also proposing to add a new paragraph after Sec.
82.15(g)(4) to ensure consistency with the proposed change to Sec.
82.16(e)(2). Section 82.15(g) establishes limits on the introduction
into interstate commerce and use of certain HCFCs at certain dates in
accordance with the worst-first approach discussed previously. Section
82.15(g)(4)(i) establishes limits that apply to many HCFCs including
HCFC-123 and HCFC-124, effective January 1, 2015.\22\ The EPA is
proposing a new paragraph after Sec. 82.15(g)(4) that repeats the
limits in Sec. 82.15(g)(4)(i) but may be helpful in clarifying the
permissible uses of HCFC-123 and HCFC-124 produced or imported after
January 1, 2020. Consistent with the restrictions on production and
import in the Montreal Protocol (as modified through the adjustment
adopted in 2018) and Sec. 82.16, with regard to fire suppression,
HCFC-123 produced or imported after January 1, 2020, may only be used
for servicing fire suppression equipment manufactured before January 1,
2020. Existing inventories of HCFC-123 produced or imported prior to
January 1, 2020, may continue to be used to manufacture and service new
fire suppression equipment after January 1, 2020. This change would
ensure that the regulations are clear and consistent between Sec. Sec.
82.15 and 82.16, and, as a practical matter, would add no additional
limitations to those in Sec. 82.16.
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\22\ Section 82.15(g)(4)(i) applies to all HCFCs not governed by
paragraphs Sec. 82.15(g)(1) through (g)(3).
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These proposed revisions, if finalized, would provide flexibility
consistent with the November 2018 adjustment to the phaseout schedule
for HCFCs in the Montreal Protocol. The United States was a proponent
of adjusting the phaseout schedule to allow for the continued
production and consumption of HCFCs to service existing fire
suppression equipment for years 2020 through 2029. The EPA's analysis
indicates that in theory, the United States could meet its own domestic
fire suppression needs with alternatives and recycled/reclaimed HCFC-
123, absent competing demands from other sectors. Past phase-outs, such
as the halon phaseout, demonstrated that the availability of recycled/
reclaimed and stockpiled material provides flexibility for users of ODS
long after the phaseout date. However, recycled/reclaimed HCFC-123,
which is currently being sold predominately into the refrigeration and
air-conditioning market,\23\ may not be immediately available to the
fire suppression sector. The EPA is concerned that reclaimers and
distributors would need to adjust current distribution and sales
practices to ensure that reclaimed material is available for fire
suppression. At least in the near term this could affect the
availability and price of HCFC-123. Given that a lack of HCFC-123 based
fire suppression agents could present a safety issue, especially for
applications where there is not an approved alternative clean agent,
such as for Aircraft Rescue and Fire Fighting (ARFF) vehicles, allowing
continued consumption of HCFC-123 for the years 2020 through 2029 for
servicing existing fire suppression equipment is prudent. This is also
consistent with the EPA's long-standing policy of working to avoid the
premature retirement of existing ODS-based equipment while fostering
the transition to alternatives.
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\23\ Based on conversation with industry.
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The EPA notes that the November 2018 adjustment adopted by the
Parties to the Montreal Protocol also contains an essential use
provision and adds other uses under the Article 2F cap, namely solvent
applications in rocket engine manufacturing and topical medical aerosol
applications for the specialized treatment of burns. The EPA is only
proposing regulatory changes that would allow production and
consumption for the servicing of fire suppression equipment
manufactured before 2020. The EPA does not currently have any
information indicating a need in the United States for the additional
flexibilities added to Article 2F; for that reason, the EPA has not
assessed their practicality or its authority to implement them under
the CAA, and we are not proposing any action on them at this time.
D. Revisions to Labeling Requirements
This section presents the EPA's proposal to adjust the current
labeling requirements to reflect the proposed change to 40 CFR part 82,
subpart A, which would allow the use of newly-imported HCFC-123 for
servicing fire suppression equipment manufactured before January 1,
2020. The proposed changes to Sec. Sec. 82.15 and 82.16 in subpart A
are discussed in Section III.B of this notice. Revising the existing
labeling requirements in 40 CFR part 82, subpart
[[Page 41522]]
E to reflect the limited ability to use HCFC-123 for fire suppression
servicing would increase awareness of individuals servicing fire
suppression equipment about the restriction on HCFC-123 use and support
compliance with the proposed revisions to subpart A. In proposing to
revise the current labeling requirements, the EPA is relying on
authority under section 605(c) to issue regulations phasing out the
production and consumption and restricting the use of class II
substances that may be needed for compliance. To further support
awareness of these new requirements, the EPA intends to conduct
outreach initiatives for technicians, distributors, and service
providers.
If the proposed change to subpart A is finalized, HCFC-123 imported
on or after January 1, 2020 could be used to make Halotron[supreg] I, a
fire suppression agent produced with HCFC-123, and could be used to
service fire suppression equipment manufactured before January 1, 2020.
It could not, however, be used in the manufacture of new equipment on
or after January 1, 2020 or to service equipment manufactured after
January 1, 2020. Only Halotron[supreg] I produced with HCFC-123 that is
reclaimed or was imported prior to 2020 may be used for those purposes.
Labeling of products manufactured with or containing HCFCs has been
required under CAA Section 611 since 2015, and the EPA has not seen a
movement away from these fire suppression agents due to current
labeling requirements. Similarly, the EPA does not expect a proposed
addition to the existing labeling requirement would cause a movement
away from Halotron[supreg] I. The EPA identified this addition as the
lowest cost option to ensure the United States meets its international
obligation that newly-produced HCFC-123 only be used to service
existing equipment, since this would only modify the text of the
existing label to provide more information to technicians. Thus, in
addition to adding a labeling requirement, users will need to be able
to know the date of manufacture of fire suppression equipment. They
will also need to be able to distinguish fire suppression agents that
may be used only for servicing equipment manufactured before January 1,
2020 from fire suppression agents that may be used for manufacturing
new equipment or servicing equipment regardless of the date of
manufacture.
The EPA believes that users will be able to identify the date of
equipment manufacture using existing methods as is the case with
refrigeration and air-conditioning equipment. However, without
additional labeling of containers of fire suppression agents that
contain HCFC-123, namely Halotron[supreg] I, it may not be possible for
users to distinguish containers that may only be used to service fire
suppression equipment manufactured before January 1, 2020 from other
containers. Therefore, the EPA is proposing to modify the current
labeling requirements codified at 40 CFR part 82 subpart E for such
containers. The EPA is proposing to conclude that such modified
labeling is necessary to ensure that users will have enough information
to determine which containers of fire suppression agent may be used in
which equipment, in order to comply with the proposed revisions to the
HCFC phaseout regulations. The existing CAA section 611 label is on
reclaimed and virgin product. This proposal would modify only labels of
product containing virgin HCFC. The EPA is also taking comment on
whether to modify the current labeling requirements for containers of
fire suppression agents that contain HCFC-123 that is either reclaimed
or was imported before 2020, and if there are any other low-cost ways
to distinguish containers for servicing fire suppression equipment.
To the EPA's knowledge, the only HCFC used in a fire suppression
agent is HCFC-123, and it is only used in an agent sold under the name
Halotron[supreg] I. Clean agents like Halotron[supreg] I do not leave a
residue, and are commonly used in applications such as data centers,
clean rooms, and aircraft where high-value or life-saving equipment
will not be damaged by its use, thereby minimizing economic damages
from a fire (e.g., shorter equipment downtime or lower costs to
repair). There are three main fire suppression streaming end uses where
clean agents are used in the United States: (1) Hand-held portables;
(2) 150-pound wheeled units; and (3) ARFF vehicles.
As per the National Fire Protection Association (NFPA) and DOT
regulations at 49 CFR 180.250, all portable fire extinguishers must be
maintained in a fully charged operable condition and undergo
hydrostatic testing. NFPA is a codes and standards organization
accredited by the American National Standards Institute established to
minimize the risk and effects of fire by establishing criteria for
building, processing, design, service, and installation around the
world. Fire extinguishers, which include portable hand-held devices and
wheeled units, are recommended to undergo maintenance to ensure that an
extinguisher will operate effectively and safely in the event of
fire.\24\ Equipment should be recharged after being used to extinguish
a fire for it to be usable again. Technicians who conduct hydrostatic
testing, perform inspections, or recharge fire suppression equipment
after a discharge may need additional information to aid in
distinguishing between the permissible uses of specific containers of
Halotron[supreg] I.
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\24\ National Fire Protection Association. (2018) ``Standards
for Portable Fire Extinguishers'' available at: https://www.nfpa.org/codes-and-standards/all-codes-and-standards/list-of-codes-and-standards/detail?code=10.
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The EPA is proposing to modify the existing label required by
section 611 of the CAA for certain containers of fire suppression
agent. Section 611 requires containers of ODS to have a label and
demonstrates that Congress recognized that labeling requirements may be
needed to effectively implement the phaseout. In 1993, the EPA
established the labeling requirements for both class I and class II
substances in 40 CFR part 82, subpart E (58 FR 8136, February 1, 1993).
Containers in which ODS are stored or transported must bear a clearly
legible and conspicuous warning label that can be read by consumers
before they can be introduced into interstate commerce. Section 611
provides specific language for the label: ``Warning: Contains [insert
name of substance], a substance that harms public health and
environment by destroying ozone in the upper atmosphere.'' This is
reflected in the implementing regulations at Sec. 82.106. According to
CAA section 611, the label must be ``clearly legible and conspicuous.''
Labels generally should be within the principal display panel, the
warning statement should be in sharp contrast to any background upon
which it appears, and if there is any outer package for the container
(e.g., cylinder, isotank, or other container), labels should be on the
outside packaging. Specific requirements on the size, text, and
location of the label are provided in Sec. Sec. 82.106-82.110.
The EPA is proposing to modify the required labeling of all
containers of fire suppression agent made with HCFCs imported on or
after January 1, 2020. The EPA believes that Halotron[supreg] I is the
only fire suppression agent that uses HCFCs that would be manufactured
after 2020. Containers of Halotron[supreg] I must currently be labeled
per Sec. 82.102(a) because they contain a class II substance. The EPA
is proposing to modify the current required label for all containers of
Halotron[supreg] I made with HCFC-123, imported on or after January 1,
2020, by adding the following sentence: ``Do not use to service
[[Page 41523]]
equipment manufactured on or after January 1, 2020.'' The EPA believes
that this information may be necessary for technicians to determine
which containers of Halotron[supreg] I may or may not be used to
service new fire suppression equipment after 2020, thereby aiding
compliance with applicable regulations. Technicians would still need to
locate the manufacture date on all fire extinguishers or ARFF vehicles
to determine which container of Halotron[supreg] I may be used to
service the equipment. The EPA is requesting comment on this proposal.
The EPA is also requesting comment on whether it should also
require a modified label for containers of Halotron[supreg] I made with
recycled/reclaimed HCFC-123 or HCFC-123 imported before 2020. While
there would be limited additional cost, this could help technicians
distinguish between specific containers of Halotron[supreg] I. A second
sentence could therefore be added to the existing label for containers
of Halotron[supreg] I made with recycled/reclaimed HCFC-123 or HCFC-123
imported before 2020 that reads ``Not restricted to use in servicing
pre-2020 equipment.'' Additionally, the EPA is requesting comment on
whether there is another low-cost way to distinguish containers for
servicing fire suppression equipment, such as having all containers
labeled ``Virgin material may not be used to service equipment
manufactured on or after January 1, 2020,'' and then include additional
labeling on containers that distinguish ``virgin'' vs. ``reclaimed''
material. This may result in a cost of about $3,000 to the industry.
The agency intends to develop outreach materials in concert with
the final rule and distribute them to appropriate stakeholders to
ensure industry awareness of the servicing requirements. The EPA
believes that there are existing methods to determine the date of
manufacture of fire suppression equipment, as follows.
DOT fire extinguisher regulations at 49 CFR 173.309 require that
each fire extinguisher be tested before initial shipment and marked to
indicate the year of the test. Technicians could use this date as a
guide for determining servicing with Halotron[supreg] I. The agency
recommends that technicians inspect the date on hand-held and wheeled
fire extinguishers to determine if they were manufactured before or
after January 1, 2020.
For servicing ARFF vehicles, the EPA recommends that technicians
inspect the manufactured date on the vehicle. For class I-III all-wheel
drive commercial vehicles, vehicle identification numbers (VINs) are
required by DOT per 49 CFR 565. VINs are located on the lower right-
hand corner of the windshield. For smaller class IV and V vehicles, a
Vehicle Information Data Plate must be in the cab of the vehicle and
contain all the information in the ``Aircraft Rescue and Fire-Fighting
Vehicle Tilt Table Certification'' per NFPA 414, including the make and
model year.\25\ Locating the year the vehicle was manufactured would
aid the technician in determining whether a container of
Halotron[supreg] I can be used for servicing.
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\25\ National Fire Protection Association. (2018) ``Standards
for Aircraft Rescue and Fire-fighting Services at Airports''
available at: https://arco-hvac.ir/wp-content/uploads/2018/04/NFPA-403-Std-Aircrft-Rscu-Fire-Ftg-Srvs-at-Airprts-2018.pdf.
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The EPA requests comment on whether individuals servicing fire
suppression equipment can readily identify the date the equipment was
manufactured and whether the EPA's understanding of the location of
this information is accurate. The EPA also takes comment on ways
technicians can identify the manufacture date of fire suppression
equipment and whether manufacturers and service technicians typically
reuse Halotron[supreg] I cylinders to hold recovered fire suppression
agent or imported HCFC-123. The EPA is taking comment on whether the
manufacture of Halotron[supreg] I can designate cylinders for use in
servicing existing equipment.
E. Allocation of HCFC-124 Production and Consumption Allowances
This section presents the EPA's proposed approach for determining
the amount of HCFC-124 production and consumption allowances to be
issued for the years 2020 through 2029. HCFC-124 is minimally used as a
refrigerant. It is a component in refrigerant blends such as R-401A,
which is used in industrial process and transport refrigeration
equipment. It is also used as a stand-alone refrigerant in some niche
applications that reach high condensing temperatures. It is not
currently used for fire suppression.
As previously noted, under section 605(b)(1) and (c) of the CAA, it
is unlawful for any person to produce or consume any class II substance
in an annual quantity greater than the quantity of such substance
produced or consumed by such person during the baseline year. This
would equate to a maximum production amount of 4,029 MT (89 ODP-
weighted MT) and a maximum consumption amount of 2,396 MT (53 ODP-
weighted MT). Over the past five years, consumption has been
approximately 250 MT per year and reclamation has been minimal. Based
on recent sales data from the California Air Resources Board, the EPA
estimates that annual demand for HCFC-124 is between 100 to 200 MT for
servicing refrigeration and air-conditioning equipment nationally. More
information on anticipated demand for HCFC-124 is in the 2018 Draft
Servicing Tail Report.
Given the small projected need for HCFC-124 beyond 2019 and the
continued use of certain refrigerant blends containing HCFC-124, the
agency is proposing to issue HCFC-124 production and consumption
allowances in the years 2020 through 2029 consistent with the level of
demand in the 2018 Draft Servicing Tail Report. Based on Vintaging
Model estimates, along with industry feedback on anticipated demand,
uses of HCFC-124, and the use of HCFC-124 allowances in recent years,
the EPA is proposing to allocate 200 MT for the first three years and
then gradually decrease over the next seven years by an equal amount
each year, as shown in Table 2. The EPA's goal is to ensure that
servicing needs can be met, while also encouraging recovery and reuse
and transition to alternatives. The EPA believes providing consistent
allocations for the first three years would assist in establishing an
inventory of HCFC-124 to be used for servicing throughout the
allocation period and past the phaseout date for the expected lifetimes
of all existing equipment. The EPA does not want to strand existing
equipment because of an inadequate supply of HCFC-124. This proposed
allocation supports this goal because it accounts for allowed end uses
of HCFC-124 that may not be captured by the Vintaging Model (e.g., use
of niche refrigerant blends containing HCFC-124 to service equipment
manufactured before 2020). The EPA is taking comment on this approach.
The EPA is also taking comment on whether, to ensure adequate
supply, the agency should issue 200 MT annually beginning in 2020
without any decrease (Alternative in Table 2). Without significant
reclamation of HCFC-124, it may be preferable to err toward a higher
allocation. This is a small quantity in the broader context and would
not have significant environmental effects given the low ODP (0.022) of
HCFC-124.
[[Page 41524]]
Table 2--Comparison of HCFC-124 Production and Consumption Allowance Allocation Options Between 2020-2030
[MT]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Cumulative
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposal................................................... 200 200 200 175 150 125 100 75 50 25 0 1,300
Alternative: No Annual Decrease............................ 200 200 200 200 200 200 200 200 200 200 0 2,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
The EPA is requesting comment on all aspects of this proposal, as
well as whether to issue 200 MT or some other number of allowances per
year without any decline or waiting until 2023 before starting to
decrease allowances. Commenters should provide as much detail, with as
much quantitative reasoning (e.g., benefits, market effects, etc.), as
possible.
F. Changes To Transfer of Allowance Provisions in Section 82.23
This section presents the EPA's proposal to prohibit the transfer
of allowances for phased out HCFCs to allowances for HCFC-123 and HCFC-
124. The proposal would prohibit calendar-year inter-pollutant
transfers into ODS that are already phased out of production and
consumption. This proposal responds to stakeholder inquiries about
inter-pollutant transfers to phased out HCFCs. HCFC-123 and HCFC-124
are the only remaining HCFCs that can be produced or imported in the
years 2020 through 2029, with limited exceptions. As such, the EPA is
proposing to issue allowances for only these two substances. Production
and import of HCFC-141b, HCFC-225ca, and HCFC-225cb have already been
phased out and production and import of HCFC-22 and HCFC-142b are
phased out starting in 2020. Demand for some of these HCFCs,
particularly HCFC-22, will continue beyond 2020. This could create an
incentive for HCFC-123 and HCFC-124 allowance holders to attempt to
convert their allowances into allowances for phased out HCFCs, such as
HCFC-22.
Under CAA section 607, the EPA has issued regulations at Sec.
82.23 which provide for both inter-pollutant and inter-company
transfers of allowances for class II ODS under certain conditions. In
an inter-pollutant transfer, an allowance holder converts allowances
for one class II ODS into allowances for another class II ODS (Sec.
82.23(b)). The EPA is concerned about the potential for allowance
holders to attempt inter-pollutant transfers that would be inconsistent
with the established chemical-by-chemical phaseout.
The EPA views Sec. 82.16 as effectively prohibiting this practice
by prohibiting production and import of HCFCs that have already been
phased out. Section 82.16(b)-(e) prohibits individuals from producing
or importing certain HCFCs that have been phased out, with limited
exceptions. For example, production and import of HCFC-22 and HCFC-142b
are prohibited in 2020, with limited exceptions that are not considered
to be United States consumption under the CAA or Montreal Protocol.
These provisions do not explicitly prohibit the transfer of HCFC-123 or
HCFC-124 allowances into allowances for a phased out ODS even though
the entity would be violating Sec. 82.16(e)(1) if it produced or
imported that phased out ODS for any purpose other than the few listed
exceptions, such as for use in a process resulting in its
transformation.
Given the EPA has already received several inquiries about whether
inter-pollutant transfers from HCFC-123 or HCFC-124 to HCFC-22 will be
allowed after the phaseout of HCFC-22, the EPA is proposing to
explicitly prohibit calendar-year inter-pollutant transfers of HCFC-123
and HCFC-124 to phased out HCFCs in Sec. 82.23(b) to ensure clarity
for the regulated community. Section 82.23(d) already prohibits
permanent inter-pollutant transfers of baseline allowances, so there is
no additional change needed in that paragraph. The proposed change to
Sec. 82.23(b) would not have a practical effect on the ability of
allowance holders to legally produce or import phased out ODS given the
prohibition in Sec. 82.16. However, the proposed change would minimize
confusion and reduce the likelihood that an allowance holder attempts
to request an inter-pollutant transfer of HCFC-123 or HCFC-124
allowances to phased out HCFCs. Inter-pollutant transfers between HCFC-
123 and HCFC-124 may continue so long as the newly produced or imported
HCFC-123 and HCFC-124 are for an allowed use, such as for servicing
refrigeration and air-conditioning appliances manufactured before
January 1, 2020.
The EPA is soliciting comments on the proposed prohibition on
calendar-year inter-pollutant transfers into ODS that are already
phased out of production and consumption to improve the clarity of the
regulations at Sec. 82.23.
IV. Updates to Other Provisions of the Production and Consumption
Control Program
This section presents the EPA's proposal to update several other
provisions in 40 CFR part 82, subpart A--Production and Consumption
Controls. To decrease the burden of ODS reporting and increase the
accuracy of reports, the EPA is proposing to require that certain
reports, import petitions, and certifications of intent to import ODS
for destruction be submitted electronically through CDX. To reduce the
reporting burden, the EPA is proposing to update the reporting
regulations, consolidate reporting elements, and harmonize reporting
requirements for class I and class II substances. The EPA is also
proposing changes to the recordkeeping provisions for QPS uses of
methyl bromide to increase awareness of the existing use restrictions
and to amend the regulatory text for readability. In addition, to
better monitor imports into the United States and to facilitate imports
of ODS for destruction, the EPA is proposing changes to provisions
related to imports of ODS.
A. Electronic Reporting
The EPA began allowing electronic reporting as an option for most
types of reported information under this program in 2008 (73 FR 15520).
The EPA provided electronic reporting forms and instructions to assist
entities in fulfilling reporting requirements in Sec. Sec. 82.13,
82.20, and 82.24 but did not require their use and allowed the
submission of hard-copy forms. Upon receipt of the reports, the EPA
either enters the data manually or imports it electronically via CDX
into the ODS Tracking System. Manual entry of data provided in hard
copy is time consuming for the agency as well as a potential source of
error. On July 1, 2018 the EPA launched a new electronic platform for
the ODS Tracking System along with revised and streamlined electronic
forms. The EPA is proposing to require the use of the agency's CDX to
submit reports electronically and is proposing a compliance date for
this
[[Page 41525]]
requirement that is 30 days after the effective date of the final rule,
to ensure that stakeholders have adequate time to register in CDX. To
achieve this, the EPA would update the definition of ``Administrator''
in Sec. 82.3, define ``Central Data Exchange'' in Sec. 82.3, add a
new section at Sec. 82.14 with instructions on the process for
electronic reporting, and revise provisions at Sec. Sec. 82.13(c) and
82.24(a)(1) to indicate that reporters must comply with the requirement
to report electronically through CDX 30 days after the effective date
of the final rule.
Currently, the definition of ``Administrator'' instructs submitters
to mail all reports and petitions to import ODS. The EPA is proposing
to amend the definition of ``Administrator'' to require electronic
reporting for the reports and petitions that are available in CDX,
which includes the majority of reports under subpart A, as well as the
import petitions and the Certification of Intent to Import ODS for
Destruction, a new process which the EPA is proposing to create, as
discussed further in Section IV.D of this notice. The EPA is also
proposing to revise Sec. Sec. 82.13, 82.23, and 82.24 to clarify that
where a form is electronically available in CDX it must be submitted
electronically through that tool. The EPA is also proposing to add the
definition of ``Central Data Exchange'' and provide instructions on how
to register in CDX and submit information electronically in a new
section at Sec. 82.14. Each entity must establish an account in CDX in
order to prepare, transmit, certify, and submit reports and
submissions.
CDX is the EPA's electronic system for environmental data exchange
and serves as the EPA's main mechanism for receiving and exchanging
electronic information reported via the internet. CDX provides the
capability for submitters to access their data using web services. CDX
enables the EPA to work with stakeholders to enable streamlined
electronic submission of data via the internet. All information sent
via CDX is transmitted securely to protect CBI. A reporting entity may
register for a CDX account or gain access to an existing CDX account at
https://cdx.epa.gov, as discussed further below.
The ODS Tracking System is a secure database that serves as the
primary vehicle for tracking the production and consumption of ODS in
the United States. The ODS Tracking System allows producers, importers,
and exporters of class I (excluding methyl bromide) and class II
substances to submit quarterly and annual reports electronically. The
ODS Tracking System maintains the data submitted to the EPA and helps
the agency to: (1) Maintain oversight over total production and
consumption of ODS in the United States; (2) monitor compliance of
individual companies with domestic limits and restrictions on
production, imports, and transfers and with specific exemptions from
the phaseout; (3) enforce against entities illegally importing without
allowances; and (4) assess and report on compliance with the United
States production and consumption caps established under the Montreal
Protocol, as implemented through the CAA.
Providing a system to facilitate electronic reporting is consistent
with the EPA's E-Enterprise initiative to reduce transaction costs and
burdens for the regulated community by leveraging technologies.
Eliminating paper-based submissions in favor of electronic reporting,
including use of the revised Microsoft Excel reporting forms, and CDX,
is part of broader government efforts to move to modern electronic
methods of information gathering. One of the objectives of E-Enterprise
is to reduce paperwork burden for the regulated community by offering
electronic reporting, optimized operations, and advanced real-time
monitoring tools. For more information on the EPA's E-Enterprise
efforts please visit: https://www.epa.gov/e-enterprise.
Section 603 of the CAA grants the EPA the authority to issue
certain regulations on the monitoring and reporting of ODS. The EPA may
also use the information gathering authority under CAA section 114(a)
to carry out the provisions of Title VI, including the production and
consumption controls, and may require anyone who is subject to Title
VI, or who may have information necessary to carry out Title VI, to
make such reports as may reasonably be required. It is reasonable to
require electronic reporting for the reasons set forth in this notice.
Using electronic reporting enables more efficient data transmittal and
reduces errors through built-in validation procedures. It reduces the
reporting burden for submitters by reducing the cost and time required
to review, edit, and transmit data to the agency. It also promotes
efficiency in communications and cost savings in submissions and
correspondence. Additional support for electronic reporting comes from
the Government Paperwork Elimination Act (GPEA) (44 U.S.C. 3504), which
states that Executive agencies are to provide ``(1) for the option of
the electronic maintenance, submission, or disclosure of information,
when practicable as a substitute for paper; and (2) for the use and
acceptance of electronic signatures, when practicable.'' The EPA's
Cross-Media Electronic Reporting Regulation (CROMERR) (40 CFR part 3),
published in the Federal Register on October 13, 2005 (70 FR 59848),
provides that any requirement in title 40 of the CFR to submit a report
directly to the EPA can be satisfied with an electronic submission that
meets certain conditions once the agency has published a notice in the
Federal Register announcing that the EPA is prepared to receive certain
documents in electronic form. See 40 CFR 3.2(a). For more information
about CROMERR, go to https://www.epa.gov/cromerr.
The EPA designed the electronic reporting forms with input from
stakeholders to reduce effort and allow submitters to paste
transaction-level data into the form from other spreadsheets. They
contain built-in validations, drop-down lists, and auto-populated cells
to reduce errors from data entry. Once the form is complete, users
generate a comma separated value (CSV) file and submit the Microsoft
Excel report, CSV file, and any required supporting attachments via
CDX. Refer to the EPA's website for additional information on
electronic form submission: https://www.epa.gov/ods-phaseout/ods-recordkeeping-and-reporting. The web-based tool, as appropriate, also
allows the user to choose ``Print,'' ``Save,'' or ``Transmit through
CDX.'' The reporting tool encrypts the file and electronically submits
it through CDX. The user can also check the status of their submissions
at any time via CDX. Upon successful receipt of the submission by the
EPA, the status of the submissions will be flagged as completed. The
CDX inbox is currently used to notify the users of any correspondence
related to user registration.
Under this proposal, entities generally would be required to submit
the first quarter reports for the 2020 reporting year, due April 1,
2020, through CDX. Other reports that are available for submission
through CDX, including import petitions and certifications of intent to
import ODS for destruction, also would be required to be submitted
electronically through CDX starting April 1, 2020. The EPA believes
this would give the regulated community enough time to register in CDX
and familiarize themselves with the revised electronic reporting forms
and format. If this rule is finalized as proposed, reporting entities
would be required to register and electronically submit most reports
and petitions through CDX. Specifically, for production, import,
export, destruction, transformation, transfers, and trades of ODS
entities must use specified forms to allow for
[[Page 41526]]
submission through CDX. Some reports are not required to be submitted
through CDX and would continue to be submitted to the EPA in hardcopy.
These are low-volume reports for which the EPA has not released an
electronic form, and include the laboratory use certifications and
applications for critical use exemptions for methyl bromide. The OMB
control number for this information collection request (ICR) and these
forms is 2060-0170. The following electronic forms were released on
July 1, 2018 and are available at https://www.epa.gov/ods-phaseout/ods-recordkeeping-and-reporting and through CDX:
--Class I Producer Quarterly Report (EPA Form 5900-151);
--Class I Importer Quarterly Report (EPA Form 5900-150);
--Class I Exporter Annual Report (EPA Form 5900-149);
--Class I Laboratory Supplier Quarterly Report (EPA Form 5900-153);
--Second-Party Transformation Annual Report (EPA Form 5900-147);
--Second-Party Destruction Annual Report (EPA Form 5900-148);
--Class II Producer Quarterly Report (EPA Form 5900-202);
--Class II Importer Quarterly Report (EPA Form 5900-200);
--Class II Exporter Quarterly Report (EPA Form 5900-199);
--Class II Trades (EPA Form 5900-205);
--Class II Request for Additional Consumption Allowances (EPA Form
5900-201).
--Methyl Bromide Producer Quarterly Report (EPA Form 5900-141);
--Methyl Bromide Importer Quarterly Report (EPA Form 5900-144);
--Methyl Bromide Exporter Quarterly Report (EPA 5900-140);
--Distributor of QPS Methyl Bromide Quarterly Report (EPA Form 5900-
155); and
--Methyl Bromide Pre-2005 Stocks Annual Report (EPA Form 5900-142).
Petitioners currently have the option of using CDX to submit
petitions. The current CDX process guides users through a series of
drop downs, fillable fields, and uploads of PDF attachments using an
electronic webform. The EPA is proposing to require reporting entities
importing ODS for reuse or destruction to submit their reports through
CDX because it would enable more efficient data transmittal and would
reduce errors, as it has built-in validation procedures. For instance,
missing information in a required field would prevent the petitioner
from submitting the petition until all fields are completed. Thus, the
EPA and entities would expect to benefit from electronic reporting by
receiving complete submissions in a system that allows for secure
electronic communication.
The EPA estimates that entities submitting ODS reports who have not
yet registered in CDX would incur a one-time burden associated with
registration. Most entities have already registered with CDX to
voluntarily submit electronic ODS Tracking System forms or for other
agency regulatory programs. The EPA estimates 20 respondents would need
to incur the one-time CDX registration burden. Based on the EPA's
CROMERR (ICR number 2002.07; OMB Control No. 2025-0003), the EPA
assumes that entities would spend fifteen minutes per employee to
register with CDX and complete LexisNexis identity proofing.
Furthermore, the EPA assumes that an average of two technical staff
members would need to register for each company, resulting in 20
minutes of burden per entity.
The EPA estimates that only those entities who have not yet
registered in CDX would incur a one-time burden for this change. Based
on the number of entities that are already reporting through CDX, the
EPA expects more than 90% of reporting entities were reporting
electronically at the start of 2019. Thus, the EPA estimates initial
CDX registration and electronic signature costs incurred in the first
year would be $2,000 because most entities have previously registered
in CDX and are reporting electronically. The EPA estimates the annual
costs savings to reporters to be $4,000 per year for electronic
reporting.
As discussed in the supporting statement for the accompanying ICR
available in the docket to this rule, the EPA also expects to reduce
its own burden as the result of receiving electronic submissions and
communicating electronically with entities. The agency resources and
time requirements to review and process data would decrease, and
document storage and retrieval would require fewer resources. The
electronic submission of data through CDX would allow for the direct
import of data into the ODS Tracking System. This would reduce the time
the agency spends manually entering data into the ODS Tracking System
from paper forms as well as reduce the potential for human error that
exists when data are entered by hand. Agency personnel would also be
able to communicate more efficiently with entities electronically. The
conversion to an electronic reporting system as well as the adoption of
CDX to facilitate form submission and processing are expected to create
long-term burden reductions and increased efficiencies for the EPA.
Annual costs to the EPA would be associated with the operation and
maintenance of CDX for the data flow.
The EPA seeks comment on its proposal to require electronic
reporting for ODS data under 40 CFR part 82, subpart A, with exceptions
for a few low-volume forms. In addition, the EPA seeks input on
experience to date with electronic reporting of ODS data and whether
entities that have already transitioned to electronic reporting have
been able to lower their reporting costs, and if so, by how much. The
EPA also requests comment on the proposal that the requirement for
electronic reporting would begin 30 days after the effective date of
any final rule and on whether additional time would be needed to comply
with the electronic reporting requirements.
B. Changes to Reporting Requirements in Sec. Sec. 82.13, 82.23, and
82.24
This section presents the EPA's proposal to consolidate and
harmonize ODS reporting elements. The agency has provided the option of
electronic reporting for most submissions since 2008 to assist
stakeholders in the reporting process. The proposed regulatory changes
would reflect current practices by entities that can be designed into
electronic forms. The EPA monitors company compliance, in part, through
the recordkeeping and reporting regulations at Sec. Sec. 82.13 and
82.24. The EPA is proposing these updates under CAA sections 603 and
114. Many of these proposed regulatory changes would ease the reporting
burden. For example, the EPA is proposing to remove reporting elements
in Sec. Sec. 82.23(a), 82.24(b), and 82.24(c) that require the
reporter to calculate values from data already provided. Requiring this
of the entity is unnecessary because if finalized as proposed, the
requirement to report electronically through CDX means these values can
automatically be calculated and populated. This would save reporting
entities time in reporting and reduce errors in submissions. The EPA is
also proposing to change Sec. Sec. 82.13(h) and 82.24(d) so that the
quantity (rather than the percentage) of used, recycled, or reclaimed
class I and class II substances, respectively, would be a required
reporting element. This change would improve consistency with the
importer reporting requirements and correspond with the way companies
report their annual data. It would also streamline the exporter
reporting forms by eliminating the need for an entity to calculate a
percentage. The EPA is also proposing to remove references to expended
and unexpended production and consumption allowances at Sec.
82.13(f)(3)(iv) and (g)(4)(viii), which
[[Page 41527]]
likewise can be calculated automatically with the use of electronic
reporting forms.
Other proposed regulatory changes would harmonize the requirements
for class I and class II substances. For example, the EPA is proposing
that the timeframe submitters have to make revisions to forms for class
I and class II substances be the same. Currently under Sec. 82.24
class II reporters have 180 days from the end of the applicable
reporting period to make revisions while the class I provisions in
Sec. 82.13 are silent on the issue. The EPA is proposing to address
this omission in the class I regulations by adding a provision that
revisions to reports for class I substances under Sec. 82.13 be made
within 180 days of the end of the applicable reporting period. This
would conform to the current practices followed by entities that make
revisions to class I reports and is consistent with the EPA's current
practice of allowing such revisions to the reports for class I
substances. These changes would also be consistent with the current
regulations in Sec. 82.24 for revisions to reports for class II
substances.
The EPA is further proposing to amend Sec. 82.24(d)(1) to clarify
that exporters who submit a Request for Additional Consumption
Allowances (RACA) must still include that export on their quarterly
exporter report. Under Sec. 82.20, companies may submit a request for
additional consumption allowances if they export class II substances
that were previously produced in or imported into the United States
using consumption allowances. Currently, the regulatory text at Sec.
82.24(d)(1) excludes from quarterly reporting those RACAs even though
exporters do typically include those exports in their quarterly
reporting. For ease of review by the EPA and for consistency of
reporting by exporters, the agency is proposing that all exports be
included in the quarterly export report, even if the EPA had issued
additional consumption allowances to the exporter for that export. This
proposed change matches current practice, so the agency does not
anticipate an increase in burden for the exporter.
The EPA is also proposing to amend the reporting requirements at
Sec. 82.13(v) to add the contact information for the source company
from which the material was purchased and the laboratories to whom the
material is sold. This proposal would allow the EPA to better track the
sale of ODS for laboratory purposes through the Class I Laboratory
Supplier Report.
Lastly, the EPA is proposing to correct class I reporting
requirements for exporters by replacing the term ``Employee
Identification Number'' with the correct term ``Employer Identification
Number'' in Sec. 82.13(h).
The EPA seeks comment on its proposed regulatory changes to the
reporting requirements under 40 CFR part 82, subpart A. The EPA
welcomes comment on any other changes that would ease burden on
reporters.
C. Changes to Methyl Bromide Provisions in Sec. Sec. 82.4 and 82.13
The EPA is proposing to amend the existing regulatory provisions
related to the QPS exemption for methyl bromide under CAA section
604(d)(5) and ensure that QPS methyl bromide is not used in a manner
inconsistent with the exemption. The EPA's regulations implementing CAA
section 604(h) set January 1, 2005 as the production and import
phaseout date (Sec. 82.4(b), (d)). Certain exceptions apply, including
an exemption for methyl bromide produced or imported for quarantine and
preshipment applications. Quarantine applications and preshipment
applications are both defined at Sec. 82.3. Briefly, quarantine
applications are treatments to prevent the introduction, establishment,
and/or spread of quarantine pests (including diseases), or to ensure
their official control. These can include commodities entering or
leaving the United States or any State (or political subdivision
thereof). Preshipment applications are those non-quarantine
applications applied within 21 days before export to meet the official
requirements of the importing country or existing official requirements
of the exporting country. The current recordkeeping and reporting
regulations relating to QPS methyl bromide appear at Sec. 82.13 and
establish specific requirements for producers, importers, distributors,
and applicators, including in some instances requirements for written
certifications that the methyl bromide will be used only for QPS
applications in accordance with the definitions in Sec. 82.3.
This section discusses three types of proposed changes to the QPS
regulations. As a brief overview, first, the EPA is proposing to
clarify that it is a violation to sell or use methyl bromide produced
under the QPS exemption for any uses other than QPS applications.
Second, the EPA is proposing to extend the existing certification
requirements to all purchasers of QPS methyl bromide. Third, the EPA is
proposing to make non-substantive changes to Sec. Sec. 82.4 and 82.13
to improve readability, including changes to the naming convention for
methyl bromide where appropriate and removal of unnecessary references
to ``used'' material.
These proposed changes are, in part, in response to the misuse of
QPS methyl bromide by applicators and distributors in the U.S. Virgin
Islands and Puerto Rico. As described in the Centers for Disease
Control's (CDC) Morbidity and Mortality Weekly Report (MMWR), on March
18, 2015,\26\ a U.S. Virgin Islands pest control company, Terminix
International USVI LLC, fumigated a condominium complex in St. John
with a product containing methyl bromide for the purpose of
exterminating household pests. As a result, a family of four suffered
acute methyl bromide poisoning resulting in three family members having
life-altering illnesses. On March 25, 2015, the U.S. Virgin Islands
Department of Planning and Natural Resources issued a stop-use order
for methyl bromide to the company that performed the fumigation. A
subsequent investigation by the Department of Planning and Natural
Resources and the EPA revealed that a previous fumigation with methyl
bromide had occurred on October 20, 2014, at the same condominium
resort. In total, 37 persons may have been exposed to methyl bromide as
a result of the October 2014 and March 2015 fumigations (Kulkarni et
al., 2015). Terminix, LP and Terminix, USVI were sentenced to pay a
total of $10 million in criminal fines and restitution for violating
the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).\27\
The companies were also ordered to perform community service following
an investigation and guilty pleas to their use and application of
illegal fumigants in multiple residential locations in the U.S. Virgin
Islands.
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\26\ 1. Kulkarni, P.A., Duncan, M.A, Watters, M.T., Graziano,
L.T., Vaouli, E., Cseh, L.F., Risher, J.F., Orr, M.F., Hunte-Ceasar,
T.C., Ellis, E.M. (2015) Severe Illness from Methyl Bromide Exposure
at a Condominium Resort-U.S. Virgin Islands, March 2015 Morbidity
Monthly and Weekly Report (MMWR) Center for Disease Control, 64(28);
pg. 763-766. Available at: https://www.cdc.gov/mmwr/preview/mmwrhtml/mm6428a4.htm.
\27\ EPA. (2017). ``Press Release: Terminix Companies Sentenced
for Applying Restricted-Use Pesticide to Residences in the U.S.
Virgin Islands.'' Available at: https://www.epa.gov/newsreleases/terminix-companies-sentenced-applying-restricted-use-pesticide-residences-us-virgin.
---------------------------------------------------------------------------
As a result of the exposures in the U.S. Virgin Islands, as well as
documented misuse of QPS methyl bromide in Puerto Rico, and the high
health risk potential from mishandling or misuse of QPS methyl bromide,
the EPA is proposing to add a regulatory provision at Sec. 82.4(r) to
expressly prohibit the sale or use of QPS methyl
[[Page 41528]]
bromide for any uses other than QPS applications. The proposed
provision would also explicitly state that it is a violation of subpart
A to sell or use methyl bromide produced or imported under the QPS
exemption for any uses other than QPS applications.
The existing regulations at Sec. 82.13(y)(1) and (z)(2) require
certification statements from distributors, applicators, commodity
owners, shippers or their agent that methyl bromide ``will be used only
for quarantine and preshipment applications.'' Similarly, Sec.
82.13(f)(2)(xviii) and (xix) describe the exempted quantities of methyl
bromide as ``produced solely for quarantine and preshipment
applications.'' The EPA interprets this existing text as already
prohibiting the use of methyl bromide produced or imported under the
QPS exemption for any uses other than QPS applications. Although the
EPA is proposing to add an express statement of the prohibition at
Sec. 82.4(r) to add clarity and enforceability to this prohibition,
the EPA does not view this as changing the existing requirements. The
proposed prohibition that would appear at Sec. 82.4(r) for the QPS
exemption is modelled on the language at Sec. 82.4(n), which contains
an express prohibition on using controlled substances produced under
the essential use exemption.
Second, to help avoid future exposures stemming from misuse of QPS
methyl bromide, the EPA is proposing to extend the existing
certification requirements to all purchasers of QPS methyl bromide,
including purchasers who purchase for further distribution. Under the
existing recordkeeping and reporting requirements at Sec.
82.13(f)(2)(xviii), producers of methyl bromide must maintain
certifications that methyl bromide produced for QPS applications has
been purchased by distributors or applicators to be used only for QPS
applications. Under Sec. 82.13(y), distributors of QPS methyl bromide
must certify when they purchase or receive QPS material from producers
and importers that the controlled substances will be used only for QPS
applications. Applicators of QPS methyl bromide must also certify to
distributors that the controlled substance will only be used only for
QPS applications under the existing regulation at Sec. 82.13(z).
The EPA has identified a gap in this certification chain when the
material is sold through multiple distributors before reaching the
applicator. When one distributor sells to a second distributor, neither
distributor is required to certify or maintain a certification that the
material will be used only for a QPS application. The EPA is proposing
to revise Sec. 82.13(y) to extend the certification requirement to
purchasers who purchase or receive material for further distribution to
address this gap.
The proposed extension of the certification requirement would help
to ensure that distributors are knowledgeable of the requirements for
the sale of QPS methyl bromide. The sales and misapplications of QPS
methyl bromide in Puerto Rico and the U.S. Virgin Islands demonstrate
that distributors may not have been aware of, or may have ignored, the
limitations on the use of this material. The purpose of the requirement
when established was to ensure that anyone selling or purchasing QPS
methyl bromide signed a certification verifying that they would comply
with requirements under Title VI of the CAA (66 FR 37760). Distributors
are more likely to make themselves aware of those requirements and be
mindful of the fact that QPS methyl bromide can only be used for QPS
applications if they are required to sign a certification addressing
these requirements and provide it before each purchase. This proposal
would fill the gap in the distribution chain and ensure the original
intent of the regulation is implemented.
The EPA is therefore proposing to extend the existing requirement
that every distributor of QPS methyl bromide certify to the producer or
importer from whom they purchased or received the material that
quantities purchased or received would be sold only for quarantine
applications or preshipment applications to also require such a
certification when the material is purchased or received from a
distributor. Likewise, the existing requirement that such distributors
receive from any applicator, to whom they sold or delivered the methyl
bromide a certification, prior to delivery of the quantity, stating
that the quantity would be used or sold solely for QPS applications in
accordance with definitions in subpart A would be extended to sales and
deliveries to any exporter or distributor under the proposed changes.
For exporters, the invoice or sales agreement currently required in
Sec. 82.13(h)(2)(viii) is enough for this purpose. The EPA is
proposing to make these changes to Sec. 82.13(y).
The EPA is also proposing that the distributor certify that they
are selling the material for a QPS application rather than certify that
it will be used for a QPS application, as is required in the existing
regulations. This would better align the rule text with the
distributor's role. The proper sale of the material is within the
distributor's control whereas the use may not be, given that the
material may be resold by another distributor and applied by an end
user or third-party applicator.
The EPA seeks comment on its proposed addition of Sec. 82.4(r)
relating to the prohibition against using QPS methyl bromide for
anything other than QPS uses and its proposed changes to the
certification requirements for QPS methyl bromide.
The EPA is also proposing edits to Sec. 82.13(h)(2), which
contains the recordkeeping requirements for exporters of certain
``types'' of methyl bromide by companies that did not produce the
material. The EPA is proposing edits to clarify what is meant by
``type'' of methyl bromide. Specifically, the EPA is proposing to more
clearly state that the provision requires reporting of the quantity of
methyl bromide exported for transformation, destruction, critical use,
and QPS uses. These are the only exempted uses of methyl bromide, and
this would match the information requested in the existing reporting
forms. The EPA is also proposing to remove the requirement in the
existing provision that exporters state how much of the exports are of
``used, recycled or reclaimed material.'' Unlike other ODS, methyl
bromide is a product that is registered and controlled under FIFRA and
thus is not sold ``used'' or ``recycled'' or ``reclaimed.'' Therefore,
these adjectives are not applicable to methyl bromide and this phrase
is not needed.
Lastly, the EPA is proposing to replace references to ``class I,
Group VI controlled substances'' with ``methyl bromide'' where
appropriate for readability throughout Sec. Sec. 82.4 and 82.13.
``Class I, Group VI controlled substances'' is how methyl bromide is
classified under the EPA's regulations in appendix A to subpart A, but
methyl bromide is the only compound within this category. Using the
common name would improve the readability of the QPS regulations.
The EPA seeks comment on these proposed changes to Sec. Sec. 82.4
and 82.13 for readability and clarity of the regulations, as well as on
the proposed changes to the recordkeeping requirements at Sec.
82.13(h)(2) for exports of certain types of methyl bromide.
D. Changes to Provisions for the Import of Ozone-Depleting Substances
in Sec. Sec. 82.3, 82.4, 82.13, 82.15, and 82.24
Under CAA sections 604, 605, and 606, the EPA restricts the import
of ODS consistent with both the CAA and the
[[Page 41529]]
Montreal Protocol. As discussed previously in Section II of this
notice, importing virgin ODS requires the importer to expend
consumption allowances. Controlling the number of allowances and
knowing who holds those allowances allows the EPA to ensure that the
phaseout obligations under the Montreal Protocol as implemented through
the CAA are met. Used ODS \28\ can be imported without consumption
allowances, and generally without use restrictions, if certain
conditions are satisfied. Imports of used ODS are currently regulated
under Sec. 82.13(g)(2)-(3) (for imports of used class I substances)
and Sec. 82.24(c)(3)-(4) (for imports of used class II substances).
The EPA has reviewed the import petition process and is proposing
amendments to improve data collection. Such changes would require
collection of additional information when additional verification is
needed to determine whether the material has been previously used and
remove data elements that are currently collected but that are no
longer needed. The EPA is also proposing to create a procedure for
imports of both used and virgin ODS when they are imported for
destruction. This proposal may lead to more used ODS being imported for
reuse or destruction because of the less burdensome reporting
requirements, which is beneficial for fostering a smooth transition to
alternatives and reducing emissions of ODS to the atmosphere. In a
recent example, the EPA granted a petition for the import of virgin ODS
for destruction. The agency anticipates additional petitions for
imports of virgin material may be received by the agency as the global
phaseout of HCFCs continues and because the United States has a greater
capacity for destruction. Additionally, these proposals would reduce
the chance that virgin ODS are imported under the false pretense that
it is ``used.''
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\28\ Used ODS have been recovered from their intended use
systems (e.g., refrigeration and AC equipment) and may include
controlled substances that have been, or may be subsequently,
recycled or reclaimed. See 40 CFR 82.3
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Anyone wanting to import used ODS must currently submit a petition
to the agency and receive a ``non-objection notice'' approving the
import. The petition to import a used ODS must contain certain
information, which the EPA considers in determining whether the ODS is
in fact used. Required information includes: A description of the
previous use of the substance; the identity of source facilities from
which the material was recovered; a contact person at each source
facility; the name, make, and model number of the equipment from which
the material was recovered at each source facility; a best estimate of
when the material was removed; and an export license from the
appropriate government agency from the country of export. See
Sec. Sec. 82.13(g)(2) and 82.24(c)(3). After review, the EPA responds
to the petition by issuing either a ``non-objection notice,'' which
allows the import to proceed, or an ``objection notice,'' which has the
effect of prohibiting the import because a non-objection notice is
required for the lawful import of such material.
The EPA established the petition process to import used class I ODS
(under CAA sections 603 and 604) in 1998 (63 FR 41626) and in 2003 (68
FR 2819) for class II ODS (under CAA sections 603 and 605) out of
concern that some importers were circumventing the production and
import controls by importing virgin class I and class II substances
that had been intentionally mislabeled as used. The petition process
has been effective in addressing this potential problem because the
information requirements and the review undertaken by the EPA make it
difficult for importers to falsify documents. Sections 604, 605, and
606 of the CAA provide statutory authority for controlling the import
of ODS, including the petition process and the proposed changes to that
process. Section 603 of the CAA requires reporting of the amount of ODS
imported on a quarterly basis or on a basis determined by the
Administrator. To the extent that these proposed changes involve
recordkeeping and reporting of information, the EPA also relies upon
its authority under CAA section 114, which authorizes the EPA to
require recordkeeping and reporting in carrying out any provision of
the CAA (with certain exceptions that do not apply here). Specifically,
the EPA is proposing changes to the recordkeeping and reporting
requirements to carry out the import provisions of sections 604, 605,
and 606.
Despite the effectiveness of the petition process at providing
information that allows the EPA to verify that ODS are used before they
are imported, the EPA has identified potential improvements to the
process. For example, the current requirements are difficult to satisfy
if the imported material comes from a halon bank or other ODS banks.
The current regulations exempt only halon 1301 aircraft bottles from
the petition process for hydrostatic testing, yet aircraft bottles
containing halon 1211 are also imported for such testing. The current
petition process also does not distinguish imports of used ODS that are
intended to be destroyed from imports of all other used material that
are intended to be reclaimed for continued use, though the agency
recognizes that the verification requirements do not need to be as
rigorous when the ODS are to be destroyed. The existing regulations
also do not provide a mechanism to pre-approve the import of virgin
material for destruction, resulting in delays at the port of entry
while the shipment is verified by the EPA.
i. Changes to the Petition Process To Import Used ODS for Reuse in
Sec. Sec. 82.13 and 82.24
The EPA is proposing changes to the petition process that would
generally ease the burden on importers, while still allowing the agency
to verify that the material being imported is used. Specifically, the
agency is proposing to: Allow, under certain circumstances, submission
of an official letter from the appropriate government agency in that
country where the material is stored attesting that a class I substance
is ``used'' in lieu of detailed equipment-level source information;
\29\ allow submission of an application for an export license in lieu
of the license itself; require that petitions include email addresses
in contact information (while removing the requirement to provide fax
numbers) and commodity codes for the material; and specifically
authorize the agency to request additional information when additional
verification is needed before issuing a non-objection notice. In
general, the EPA anticipates these changes would increase the
availability of used class I substances in the United States and thus
help to provide a greater supply of used material for servicing
existing equipment, which might otherwise have to be retired before the
end of its useful life.
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\29\ The EPA is not proposing similar changes for class II ODS
given the production phaseout for these substances is still
underway.
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First, the EPA is proposing to amend Sec. 82.13(g)(2) in
recognition that banks \30\ of halon and other class I ODS overseas are
a potential source of used ODS. Since halons were phased out in the
United States and other non-Article 5 countries in 1994, many countries
and organizations established halon banks where they aggregate and
store
[[Page 41530]]
previously used and recovered halon for reuse in fire suppression
applications.\31\ In most cases the managers of such banks do not have
the complete information required by the EPA's petition process
especially since the material may have been recovered more than two
decades ago. As detailed above, the import petition must currently
contain information about the used ODS including the source facility
and name, make, and model number of the equipment and from which the
material was recovered. Petitioners sourcing class I substances from
banks, therefore, rarely have enough records to provide all the
information required in the petition process, and as a result the
petitions are subject to denial.
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\30\ The EPA uses the term ``bank'' here to refer to a company-
run or nationally government-run facility that collects and stores
previously-recovered ODS (e.g., a halon bank) for reuse at a later
date, not the ``bank'' of ODS installed in existing equipment and
products.
\31\ Halons were phased out in Article 5 countries in 2010.
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The EPA is proposing to waive the requirement for specific source
information for halon and other class I substances stored in either a
national government ODS bank or a privately-operated bank authorized by
a national government to collect and manage ODS if the petitioners
include an official letter from the appropriate national government
agency of the exporting country attesting that the class I substance(s)
proposed for export to the United States is used. The EPA would
consider this official letter along with all the other evidence
provided in determine whether the material is used. However, providing
an official letter does not mean that the EPA would automatically
approve the petition. The EPA is proposing to define ``bank'' for
clarity in the regulatory text.
Stakeholders have indicated to the agency that this type of change
to the petition process would allow U.S. companies to potentially
access large reserves of halon held overseas for which source
information cannot be obtained. Halons are used for fire protection
applications, such as in civil aviation, military, and oil and gas
drilling and the continued availability of used halons remains
important to many U.S. operations. Industry in the United States has
successfully managed the recovery and use of halons since the domestic
phaseout of production in 1994 and the EPA anticipates that they will
continue to do so. However, as we get further from the phaseout, the
available supply of halons decreases.
The Montreal Protocol's Technology and Economic Assessment Panel
(TEAP) has provided information on the availability and expected need
for halons in the future. The TEAP issued a report in September 2018,
noting continued demand for halons, in particular for servicing fire
suppression equipment for civilian aviation.\32\ Civil aircraft will
continue to need halon to meet fire protection requirements for
lavatory bottles, handheld extinguishers, engine nacelles, auxiliary
power units, and cargo compartments \33\ until there is a transition to
alternatives for all applications on new aircraft as well as to service
the civil aircraft fleet. This proposal would allow halon to be more
easily sourced from overseas banks and thus should make more halon
available to service aircraft in the United States. In addition, the
military and oil and gas drillers continue to need halons for fire
suppression applications.
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\32\ UNEP. (2018) Montreal Protocol on Substances on Substances
that Deplete the Ozone Layer. Report of the Technology and Economic
Assessment Panel. September 2018 Volume 2 Decision XXIX/8 on the
Future Availability of Halons and their Alternatives; pg. 1-32.
Available at: https://ozone.unep.org/index.php.
\33\ FAA (2004). ``FAA Halon ARC Final Report Findings &
Recommendations'' Halon Replacement Aviation Rulemaking Committee;
pg. 1-49. Available at: https://www.faa.gov/regulations_policies/rulemaking/committees/documents/index.cfm/committee/browse/committeeID/397.
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Second, the EPA is proposing to amend the criteria for when the EPA
may issue an objection notice to a petition to import a used ODS. When
enough information is not provided with the initial petition for a
determination, the EPA requests additional information from the
petitioner in order to verify that the material was used. The EPA is
therefore proposing to clarify that not providing this requested
information could be grounds for issuing an objection notice to the
petition. As one example of information that may be requested, the EPA
may request results of purity sampling of class I or class II
substances. The EPA understands that if a halon is used, the purity
will typically be much lower (on the order of 90 to 95 percent pure)
than if the material is virgin. The EPA may request the results of
purity tests in situations where having those results would give the
EPA and the company receiving the used ODS information that could
confirm, before the material is imported, that the ODS is in fact used.
Under this proposal, if petitioners fail to respond to requests from
the agency for addition information, the EPA could issue an objection
notice.
Other examples of information that the EPA has requested in
reviewing petitions to verify the substances is used before issuing a
non-objection notice include: A photo of each unit that contained the
used ODS, with serial numbers visible; photos of a representative
sample of the cylinders, with serial numbers visible; a description of
the facility from which the used ODS originates, which includes what is
produced at the facility, the location of the facility, and how long
the facility has been in the location; a description of each unit from
which the used ODS originates; links to websites showing brochures,
photographs, and/or descriptions of each different unit from which the
used ODS originates; copies of the original, signed work orders
authorizing collecting of the used ODS; copies of the paperwork showing
that the company completed the work; copies of payment to the company
that collected the used ODS for their services, with redactions for
confidential or sensitive information such as bank account numbers;
copies of business licenses from the government authorizing collection
companies to do this type of work; and information on how transport
will occur within the exporting country and to the United States. For
used ODS from Europe, the EPA has requested a screenshot of the
European Commission export license; the name and contact information
for the European Commission official who signed the Export License; and
copies of all paperwork required for movement within the European
Union, such as the ``Notification document for transboundary movement/
shipments of waste.'' The EPA is not proposing to collect all such
information for each petition and thus is not proposing to revise the
regulatory text to require that it be provided in every petition.
However, the agency does wish to provide notice to petitioners that it
may request additional information to confirm that the ODS is in fact
used and is proposing to amend the regulations to make clear that
failure to provide such information when requested would be a ground to
issue an objection notice. The EPA specifically requests comment on
this proposal for an additional ground for denying a petition to import
used ODS and on whether the EPA should specifically list the types of
information in the regulations that the agency may, on a case by case
basis, request from the petitioner after reviewing the initial
submission to confirm that the material is used. If the agency were to
add a list of specific types of information that it might request on a
case-by-case basis, that list could include some or all the information
described in the prior paragraphs of this notice that the EPA has
requested in reviewing petitions in the past.
Third, the EPA is proposing multiple minor amendments to the
petition
[[Page 41531]]
process to ensure accuracy, faster review, and facilitate the import of
used ODS. In particular, the EPA is proposing to update the requested
contact information by requiring email addresses and removing fax
numbers. The EPA is also proposing to require that the petition for
import include the amount of material authorized under the export
license or export license application to ensure the petitioned amount
is equal to or less than the amount that arrives at the United States
port of entry. The EPA is also proposing to require that petitioners
provide the commodity code associated with the ODS to be imported. The
commodity codes are classifications for goods and services traded among
countries. This proposal would match the agency's other import and
export requirements in Sec. Sec. 82.13(g) and (h) and 82.24(c) and (d)
and help to ensure that the data are correctly entered in Customs and
Border Protection's Automated Commercial Environment and International
Trade Data System (ACE/ITDS).
The EPA is also proposing to update the commodity codes for HCFC-
123 and HCFC-124 in Appendix K. The U.S. International Trade Commission
is responsible for publishing the Harmonized Tariff Schedule of the
United States Annotated (HTSA). The HTSA provides the applicable tariff
rates and statistical categories for all merchandise imported into the
United States. It is based on the international Harmonized System, the
global system of nomenclature that is used to describe most world trade
in goods. This action updates the commodity codes for HCFC-123 and
HCFC-124 in the appendix so that they coincide with those currently in
effect and in use by the U.S. International Trade Commission.
In addition, the EPA is proposing to amend Sec. Sec. 82.13(g)(2)
and 82.24(c)(3) to allow importers of class I and class II substances,
respectively, to provide an application for an export license in lieu
of an actual export license, as is currently required. For example,
Canada, the largest exporter of used ODS to the United States, requires
the EPA to approve the export before they issue an export license. As
such, petitioners are only able to provide the submitted application
for an export license with their petition. Considering this, the agency
has worked with Canada to accept the submitted application in lieu of
the export license. However, there may be other countries that also
require approval prior to export, and the EPA wants to ensure all
countries receive equal treatment and that all petitioners are aware of
this option. As such, the agency desires to formalize the option in the
regulations. The EPA is also proposing to require an English
translation of the export license application or export license to
facilitate the agency's review.
The existing regulations for petitions for imports of used material
also require that if the imported substance is intended to be sold as a
refrigerant, the petition must include contact information for the U.S.
reclaimer who will bring the material to the standard required under
CAA section 608 and Sec. 82.152(g), if it is not already reclaimed to
those specifications. The EPA is proposing to add ``EPA-certified'' to
the description of reclamation facilities in the provisions containing
this requirement, Sec. Sec. 82.13(g)(2)(xiii) and 82.24(c)(3)(xiii).
This proposal would highlight the existing expectation for petitions to
import used material to be sold as a refrigerant that the reclamation
facility that will receive the material in the United States must be
EPA-certified. The EPA's reclamation program is described at https://www.epa.gov/section608/stationary-refrigeration-refrigerant-reclamation-requirements.
Finally, the agency is proposing to allow flexibility for the
timing of the import when the non-objection notices was issued towards
the end of the year. The EPA currently requires the import to occur in
the same control period (i.e., calendar year) that the non-objection
notice was issued. However, this can result in petitioners postponing
their requests until the start of the next year. To avoid that
unnecessary delay, the EPA is proposing that importers have one year
from the date stamped on the non-objection notice to import that
shipment.
The EPA is soliciting comments on these proposed changes to the
petition process for importing used ODS. The agency is particularly
interested in whether streamlining the petition process, including to
facilitate imports of material from banks for class I ODS, would affect
compliance with the prohibition on import of virgin ODS. The EPA
welcomes suggestions from the regulated community on how the petition
process may be further streamlined while ensuring compliance.
b. Exemption for Imports of Halon 1211 Aircraft Bottles in Sec. 82.3
To facilitate the import and testing of more types of aircraft
halon bottles for hydrostatic testing, the EPA is proposing to extend
the definition of ``aircraft halon bottles'' in Sec. 82.3 to also
include vessels containing halon 1211. The current regulations in Sec.
82.13(g)(2) exempt aircraft halon bottles that are imported for
hydrostatic testing from the import petition process. The EPA has
defined ``aircraft halon bottle'' in Sec. 82.3 as a vessel used as a
component of an aircraft fire suppression system containing halon 1301.
FAA regulations at 14 CFR 25.851(a)(6) require the presence of
halon bottles, or the equivalent, aboard transport category aircraft,
and they must be tested under United States Department of
Transportation (DOT) regulations in 49 CFR 180.205 and per National
Fire Protection Association standards if damaged or discharged (NFPA,
2018a). In particular, such bottles undergo hydrostatic testing, which
detects leakage and determines whether the bottles are functioning
properly. This testing is important both for safety as well as for
detecting and averting emissions of halon, a highly potent ODS.
In 2009, the EPA exempted aircraft fire extinguishing spherical
pressure vessels containing halon 1301 (``aircraft halon bottles'')
being imported for hydrostatic testing from the import petition
requirements (74 FR 10182). The EPA sought comment in that rule on
whether to include halon 1211 in the exemption for aircraft halon
bottles, and the agency did not receive comment indicating these
imports occur. Therefore, the EPA limited the exemption only to
aircraft halon bottles containing halon 1301. The 2009 rule reduced the
administrative burden on entities when they import aircraft halon
bottles for the purpose of maintaining these bottles to commercial
safety specifications and standards. More information on the history
and the goals of the import petition process and an explanation of why
an exemption was warranted for aircraft halon bottles containing halon
1301 can be found in the 2009 rule.
Since that time, the EPA has determined based on import petitions
received for halon 1211 and discussions with stakeholders that aircraft
halon bottles containing halon 1211 are imported for hydrostatic
testing. Thus, the EPA is proposing to extend the exemption created for
aircraft bottles containing halon 1301 to those containing halon 1211.
This proposed change would be accomplished by adding aircraft bottles
containing halon 1211 to the definition of ``aircraft halon bottles''
in Sec. 82.3. The reasons for exempting bottles containing halon 1211
are the same as for bottles containing halon 1301, discussed at 74 FR
10182. For example, this proposed exemption would facilitate proper
maintenance of bottles containing halon 1211 and allow transit and
testing to
[[Page 41532]]
occur more quickly for such bottles. Promoting proper maintenance of
these additional fire suppression devices would help ensure the bottles
operate correctly to extinguish fires on aircraft. Proper maintenance
of the storage vessels also prevents the accidental emission of this
high-ODP compound. Lastly, reducing the import petition requirements
could also allow hydrostatically tested bottles to be available more
readily for aircraft.
The proposed exemption of imports of aircraft bottles containing
halon 1211 for hydrostatic testing would only exempt them from the
petition process. Recordkeeping and reporting are currently required,
and would still be required, for the import and export of aircraft
halon bottles. In particular, if the proposed exemption were finalized,
importers of such bottles would still need to maintain import records,
as set forth in Sec. 82.13(g)(1), submit quarterly reports within 30
days of the end of the applicable quarter in accordance with Sec.
82.13(g)(4), and submit an annual export report 30 days after the end
of the calendar year, in accordance with Sec. 82.13(h).
The EPA seeks comment on this proposal and is particularly
interested in whether this would affect the ability of technicians,
aircraft owners, and fire suppression equipment manufacturers to
continue maintaining existing equipment.
c. Changes to Requirements for Imports of ODS for Destruction in
Sec. Sec. 82.3, 82.4, 82.13, 82.15, and 82.24
This portion of the notice discusses two sets of proposed changes
to the import process for ODS specifically imported for
destruction.\34\ First, the EPA is proposing to establish a streamlined
approach for importing used ODS for destruction. Second, the EPA is
proposing to extend that approach to virgin ODS, as there is currently
no mechanism for the EPA to pre-approve import of virgin ODS for
destruction.
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\34\ The EPA refers to the import of ODS intended to be
destroyed in the United States throughout this notice as ``imports
for destruction.''
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ODS from decommissioned equipment, unwanted stockpiles, and
mixtures that are contaminated and cannot be reclaimed are often
imported to the United States for destruction. Facilitating the
destruction of ODS is beneficial to the environment since it averts ODS
emissions into the atmosphere and thus is consistent with the
overarching goal of Title VI to protect stratospheric ozone. The
Montreal Protocol's Scientific Assessment Panel estimated that capture
and destruction of CFC, halon, and HCFC banks in 2015 could avoid 1.8
million ODP-weighted metric tons of future emission through 2050.\35\
It also estimated that if all 2015 halon, CFC, and HCFC banks \36\ were
destroyed in 2015, the stratospheric chlorine levels at mid-latitude
would return to 1980 levels more than six years sooner than in the
baseline scenario. The EPA recognizes that there is ongoing commercial
demand for certain substances, as discussed earlier in this notice with
respect to halons and other ODS. Some ODS may, however, be unwanted and
thus susceptible to release; this risk may be higher when they are
stored in countries that do not have adequate capability to properly
reclaim or destroy them. Creating a process for the import of ODS for
destruction would help facilitate the destruction of such ODS and thus
reduce the risk of such releases. More information on the destruction
facilities that destroy ODS and their technologies is available in the
report entitled ``U.S. Destruction in the United States and Abroad.''
Destruction of unwanted ODS in the United States may also generate
revenue for domestic destruction facilities.\37\
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\35\ UNEP. (2014) Scientific Assessment of Ozone Depletion: 2014
World Meteorological Organization Global Ozone Research and
Monitoring Project--Report No. 55 pg. 1-416. Available at: https://www.esrl.noaa.gov/csd/assessments/ozone/2014/report.html.
\36\ As used here, ``banks'' refers to the total ODS that have
already been manufactured but not yet released to the atmosphere.
This can include ODS contained within closed cell foams, installed
in appliances, held in original containers, etc.
\37\ EPA. (2018) ``U.S. Destruction in the United States and
Abroad'' pg. 1-63. Available at: https://www.epa.gov/sites/production/files/2018-03/documents/ods-destruction-in-the-us-and-abroad_feb2018.pdf.
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As discussed earlier in this notice, the EPA's petition processes
for the import of used ODS is designed to allow the agency to verify
prior use of the material so that virgin ODS are not entering the
United States marketplace under the pretense of being ``used.'' Under
the current regulations at Sec. Sec. 82.13(g)(2) and 82.24(c)(4),
anyone wishing to import used class I or class II ODS, respectively,
for destruction must submit a petition providing the same information
as for any other petition to import used ODS. It is then the obligation
of the second-party destruction facility to provide a verification
report to the importer or producer that the material was destroyed
(Sec. Sec. 82.13(k) and 82.24(e)). Importers are required to keep
records on imports for destruction of ODS under Sec. Sec. 82.13(g)(1)
and 82.24(c)(2) and to submit quarterly reports, in accordance with
Sec. Sec. 82.13(g)(4) and 82.24(c)(1). The current regulations contain
an exception to the prohibition on import of virgin ODS without
consumption allowances in the case of imports for destruction but do
not provide a specific process for such imports.
The EPA is proposing to create a new petition process for the
import of used and virgin ODS for destruction, called a Certification
of Intent to Import ODS for Destruction (``certification''), in
Sec. Sec. 82.13(g)(6) and 82.24(c)(7). Under this process, the
importer would submit the certification at least 30 working days before
the shipment's departure from the foreign port. After review, the EPA
would send either a non-objection notice or an objection notice. The
proposed period is shorter than the corresponding period for the import
petition process, which is 40 working days from departure, because the
certification would contain less information for the EPA to review and
verify than in the current process for a petition for import of used
ODS. The EPA believes 30 working days would be enough for the EPA to
review the certification and that this timeframe would not impede the
import. The agency would be authorized to issue an objection notice for
any reason it could currently issue an objection notice to a petition
to import, such as if the petition provides insufficient information or
if it contains false or misleading information. The EPA is also
proposing to require that the petitioner submit a destruction
verification 30 days after destruction under Sec. Sec. 82.13(g)(6) and
82.24(c)(7). The EPA is also proposing to require the certification and
any supporting documents, including the destruction verification, to be
submitted electronically through CDX, for the reasons discussed in
Section IV.A of this notice. In particular, the EPA is proposing to add
the requirement for electronic submission of these documents via CDX in
Sec. 82.14.
The information that would be required in the certification is
modeled in large part on the petition to import used ODS. Specifically,
the certification would include the following elements, which are
similar those required in an import petition: Name, commodity code, and
quantity in kilograms of each controlled substance to be imported;
source country; intended date of import; shipment importer number; an
English translation of the export license (or application for an export
license) from the appropriate government agency in the country of
export and, if recovered in a country other than the country of export;
the quantity in kilograms authorized on the license(s); United
[[Page 41533]]
States port of entry for the import; name, address, contact person,
phone, and email address of the person responsible for destruction at
the facility.
The EPA is proposing to omit the detailed source information that
is required in import petitions, as that information is not necessary
if the ODS is to be destroyed. The EPA is proposing to collect
information from the petitioner about the destruction for the
certification process. In particular, the certification would not
include the following: Information about all previous source facilities
from which the ODS was recovered; a detailed description of the
previous use at each source facility and a best estimate or documents
indicating when the specific controlled substance was put into the
equipment at each source facility; a list of the name, make and model
number of the equipment from which the material was recovered at each
source facility; contact information of all persons to whom the
material was transferred or sold after it was recovered from the source
facility; or a description of the intended use of the ODS.
The EPA is proposing to omit these information elements because
they are collected for import petitions to verify that the material is
used, and the agency believes it is not necessary to verify that ODS is
used if it is being imported for destruction. Simplifying the
information requirements would decrease the regulatory burden on
existing importers who follow the current import petition process to
import used ODS for destruction by providing a streamlined regulatory
mechanism for such imports. In addition, the current information
requirements for petitions to import used ODS has the potential to
hinder imports for destruction because petitioners may be unable to
provide all the necessary information. Certain elements, such as
information about each piece of equipment or each source facility from
which the controlled substance was removed, may be particularly
difficult for petitioners to provide because used controlled substances
intended for disposal are often part of a mixture of chemical waste
recovered from a variety of systems and detailed information pertaining
to each system may not be available. Although the certification process
would in effect relax the information requirements for importing used
ODS for destruction compared to the existing import petition process,
the EPA believes that this relaxation would benefit the environment
because companies wishing to import used ODS into the United States for
destruction would be able to do so more easily, and therefore more used
ODS would be destroyed. This would be consistent with the overarching
goal of Title VI to protect stratospheric ozone.
The EPA is proposing to add provisions Sec. Sec. 82.13(g)(9) and
82.24(c)(10) to require importers to keep certain records, including
records about the destruction of the ODS. In particular, the EPA is
proposing that importers of ODS for destruction maintain: A copy of the
certificate of intent to import for destruction; a copy of the non-
objection notice; a copy of the export license or export license
application; Customs and Border Protection (CBP) entry documents for
the import that must include the commodity codes; records of that date,
amount, and type of controlled substance sent for destruction per
shipment; an invoice from the destruction facility verifying shipment
was received; and a copy of the destruction verification.
In addition to proposing to create the Certification of Intent to
Import ODS for Destruction, the EPA is also proposing to extend the
certification to imports of virgin ODS for destruction. While the
certification is modeled in large part on the petition to import used
ODS, the EPA believes there are also benefits to facilitating the
import of virgin ODS for destruction. Currently, virgin ODS that are to
be destroyed may be imported without consumption allowances (see
Sec. Sec. 82.4(d) and 82.15(b)). However, there is no regulatory
mechanism for the EPA to review and pre-approve those imports. As such,
shipments may be held at the border while the EPA determines whether
the import is in fact bound for destruction. In some instances,
proactive importers have petitioned the agency to import virgin ODS for
destruction and the EPA has allowed these imports on a case-by-case
basis. However, the absence of a regulatory mechanism for such
approvals has created some uncertainty for these imports when they
reach the border. Moreover, the EPA believes that establishing
regulatory requirements for such imports would help ensure that imports
of virgin ODS for destruction are destroyed.
The EPA believes that providing a mechanism to import virgin ODS
for destruction would be beneficial to importers and the EPA. Having a
transparent process that allows approval occur before the shipment
reaches the border would facilitate such imports and reduce potential
delays and costs associated with the current approach to imports of
virgin ODS for destruction, as well as providing more certainty as to
which imports could proceed. In turn, this would encourage imports of
unwanted virgin ODS for destruction, potentially avoiding the emission
of such ODS. This would be consistent with the overarching goal of
Title VI to protect stratospheric ozone. The proposed extension would
also close a gap in regulatory provisions for the import of virgin
material for destruction. As discussed previously in this notice, the
EPA originally established the import petition process for used ODS to
verify that virgin ODS was not being imported under the pretext of
being used to circumvent the regulatory requirements for expending
consumption allowances. In the same way, the EPA believes that a
mechanism is needed to verify that virgin ODS imported for destruction
will be destroyed and that claims of importing for destruction are not
used to circumvent the requirement to expend consumption allowances. In
addition, the EPA has historically used the petition process as a
mechanism to approve imports for destruction of used material and has
applied an analogous but simpler process to imports of virgin material
on a case-by-case basis. Based on this experience and these common
goals for imports of used and virgin ODS for destruction, the EPA
believes that having the same process for imports for destruction of
both used and virgin ODS is both feasible and appropriate. Furthermore,
establishing a consistent process for used and virgin ODS would
simplify the administration of this proposed approach because the same
requirements would generally apply regardless of the type of ODS to be
imported for destruction. Thus, the EPA is proposing to have the same
requirements for both used and virgin ODS in this new proposed process.
As part of this proposal, the EPA would also revise the definitions
of ``individual shipment'' and ``non-objection notice'' at Sec. 82.3,
both of which currently refer only to the import of used material. The
EPA is proposing to amend these definitions by removing references to
``used'' controlled substances, so that ``individual shipment'' and a
``non-objection notice'' may apply to shipments of virgin ODS imported
for destruction under a Certification of Intent to Import for
Destruction, as well as to shipments of used ODS.
Like the proposal in the import petitions process, the agency is
also proposing to allow flexibility for the timing of imports for
destruction. In the current petitions process, the EPA requires the
import to occur in the same control period (i.e., calendar year) that
[[Page 41534]]
the non-objection notice was issued. The EPA is proposing that non-
objection notices issued for the Certification of Intent to Import for
Destruction for both used and virgin material have a year to import the
material. Therefore, once a non-objection notice is issued, the person
receiving the non-objection notice would be required to import the
individual shipment within a year of the date stamped on the non-
objection notice. For instance, a non-objection letter issued on
October 1, would not need to be destroyed until September 30 of the
following year. This would provide flexibility to imports for
destruction that may be operate on a calendar year basis.
The EPA is soliciting comments on its proposal to create the
Certification of Intent to Import ODS for Destruction for both used and
virgin ODS. The EPA is particularly interested in whether the reduced
information elements encourage additional imports of ODS for
destruction or reduce burden for importers. The EPA is also interested
in the burden of applying the proposed certification process to the
import of virgin ODS and providing a year to destroy used or virgin
material. The EPA welcomes comment from entities that currently import
ODS for destruction or that have considered importing ODS for
destruction.
E. Prohibiting the Sale of Illegally Imported Controlled Substances
Based on the EPA's experience with the CFC phaseout, the incentive
to illegally import class II substances will increase as the allocation
for HCFC-22 reaches zero in 2020. HCFC-22 is the most widely used HCFC
in the United States and the EPA anticipates continued demand for HCFC-
22 beyond the phaseout in 2020. In addition, there continues to be risk
of illegal imports of class I substances. The EPA works closely with
CBP to ensure compliance with the phaseout of ODS under CAA sections
604-606. However, recent illegal imports have demonstrated to the
agency that additional tools are needed to address the potential for
domestic distribution of illegally imported material, as such material
would generally be considered consumption. Thus, the EPA is proposing
to add to Sec. Sec. 82.4(s) and 82.15(g)(8) an express prohibition
against the sale or distribution, or offer for sale or distribution, of
any class I or class II substance, respectively, that the seller knows,
or has reason to know, was illegally imported into the United
States.\38\
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\38\ The EPA has previously issued restrictions on sale as a
means for implementing restrictions on consumption. See, e.g., Sec.
82.3(h) (``No person may sell in the U.S. any Class I controlled
substance produced explicitly for export to an Article 5 country'');
Sec. 82.3(n)(2) (``Any person selling unused class I controlled
substances produced or imported under authority of essential-use
allowances or the essential-use exemption for uses other than an
essential-use is in violation of this subpart.'').
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For this proposal, the EPA is relying primarily on its authority
under CAA sections 604(c) and 605(c). Section 604(c) directs the
Administrator to promulgate regulations to ``insure that the
consumption of class I substances in the United States is phased out
and terminated'' in accordance with the applicable schedules for the
phaseout and termination of production of class I substances under the
CAA. Similarly, section 605(c) directs the Administrator to promulgate
regulations to ``insure that the consumption of class II substances in
the United States is phased out and terminated'' in accordance with the
applicable schedules for the phaseout and termination of production of
class II substances under the CAA. ``Consumption'' is defined in CAA
section 601 as the amount of a substance produced in the United States,
plus the amount of that substance imported, minus the amount exported.
As noted above, the EPA remains concerned about the illegal import
of ODS. This concern is based largely on the risk that such illegal
imports would interfere with the already-completed phaseout of
consumption of class I substances and the ongoing phaseout of
consumption of class II substances. For example, HCFC-22 that is
imported without allowances would generally count toward the United
States' consumption cap unless additional action is taken to remove the
ODS from the U.S. market (e.g., the illegally imported ODS is destroyed
or re-exported in the same year). While there is sufficient space under
the HCFC cap currently such that the illegal import would not result in
an exceedance of the cap set forth under the Montreal Protocol and CAA,
there is be a greater risk that illegal imports not destroyed or re-
exported could cause an exceedance following the 2020 stepdown, and
more importantly the 2030 phaseout of HCFCs. This is of even greater
concern for illegally imported CFCs and other class I ODS, given that
the consumption cap for class I ODS is zero.
To address this concern, the EPA is proposing to strengthen its
ability to enforce the phaseout of ODS by adding at Sec. Sec. 82.4(s)
and 82.15(g)(8) an express prohibition against the sale or
distribution, or offer for sale or distribution, of any class I or
class II substance, respectively, that the seller knows, or had reason
to know, had been imported into the United States in violation of the
import regulations. It would therefore be illegal to sell or distribute
any material that the seller knows or had reason to know was imported
into the United States without expending the appropriate consumption
allowances or otherwise qualifying for an exemption provided for in the
regulations (e.g., for transformation or destruction, or for used ODS).
The proposed revisions would also explicitly state that every kilogram
of illegally imported material sold or distributed, or offered for sale
or distribution, constitutes a separate violation.
This proposal would strengthen the EPA's ability to enforce against
illegal trade, which in turn helps ensure that consumption remains
under the Montreal Protocol and CAA caps. It would increase the EPA's
compliance and enforcement options where the agency is not able to
identify the importer. For example, this proposal could allow the EPA
to pursue investigations where distributors or other sellers of CFCs
attempt to sell virgin CFCs in the domestic market knowing that they
were imported into the United States after the phaseout of CFCs, which
occurred in 1996, without qualifying for any exemption from the
consumption phaseout. Actions taken against such distributors would not
only address their violations but could also allow the agency to gather
the necessary information to identify the smuggler who illegally
imported the material in the first place and to pursue compliance and
enforcement action against them under existing authorities in
Sec. Sec. 82.4 and 82.15, which could help deter illegal imports.
Avoiding illegal imports helps to maintain the complete phaseout of
class I ODS and achieve the phaseout of class II ODS, which is
consistent with CAA sections 604(c) and 605(c), as well as with the
overarching goals of Title VI of the CAA.
Finally, this proposed change would encourage distributors to be
more cautious when purchasing ODS that seems suspiciously priced or
packaged. Since the phaseout of class I ODS, the EPA has warned
distributors of the risk of purchasing black market ODS and provided
information on ways to identify illegally-imported material.
Distributors and other resellers have numerous ways to identify
illegally-imported material. They can look at where the ODS was
produced, the brand
[[Page 41535]]
name the material is being sold under, and the name of the
manufacturer. They can also make sure the material meets industry
purity standards, ask the seller for documents of prior ownership of
the product and a laboratory analysis of the quality, and inspect the
packaging for the material since illegally imported refrigerant is
sometimes packaged in wrong-size containers or fixed with improper
valves. While the incentive to circumvent the import controls will
always exist, the EPA hopes that this proposal would help to reduce the
market for smuggled ODS, which should also reduce illegal imports.
The agency welcomes comments on these proposed prohibitions against
the sale or distribution or offer for sale or distribution of illegally
imported controlled substances.
V. Addition of Polyurethane Foam Systems Containing CFCs to the
Nonessential Product Ban
The EPA is proposing to add polyurethane foam systems containing
CFCs to the existing list of nonessential products under 40 CFR part
82, subpart C. This proposal would prohibit the sale or distribution,
or offer for sale or distribution, of any polyurethane foam system
containing CFCs in interstate commerce. Historically, CFC-11, CFC-12,
and CFC-114 were used as foam blowing agents, but CFC production has
been globally phased out since 2010. Nevertheless, recent reports show
that the rate of decline in CFC-11 concentrations in the atmosphere,
which had been steady, slowed dramatically starting in 2013, and this
proposal is in response to those reports. After reviewing the EPA's
import restrictions and the nonessential product ban, the agency has
identified the potential for sale or distribution, or offer for sale or
distribution, of imported polyurethane foam systems \39\ containing
illegally-produced CFCs. The EPA is not aware that this is currently
occurring in the United States but believes that this is a potential
gap that can be addressed by amending the list of nonessential products
in Sec. 82.66.
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\39\ These systems are also referred to as polyols, which are
defined in Montreal Protocol reports as pre-blended foam chemicals.
---------------------------------------------------------------------------
Researchers recently discovered that starting in 2013 the
concentration of CFC-11 in the atmosphere was not declining as rapidly
as it had been in the prior decade.\40\ This slowdown is contrary to
the modeled decline based on reported global production. In Montzka et
al., the modeled concentration was expected to decrease rapidly
beginning in 2002, without continued CFC-11 production. However, CFC-11
concentrations did not decline more rapidly each year. Global CFC-11
atmospheric concentrations declined at a constant rate in the decade
after 2002. CFC-11 concentrations declined about half as quickly over
the past three years compared with the rate measured from 2002-2012.
The scale of observations suggests that there may have been unreported
production of CFC-11 despite the global phaseout of CFC production in
2010 under the Montreal Protocol. The researchers determined that
emissions of CFC-11 began increasing in 2012 and that in the period
between 2014 to 2016 emissions were higher than average annual
emissions from previous decades. Monitoring data indicate that areas in
eastern Asia may be the sources of these elevated emissions. The
researchers concluded that damage to the ozone layer could be minor if
the source of these emissions can be identified and mitigated, but if
not, there would be delays in stratospheric ozone recovery. A
subsequent investigation by the Environmental Investigation Agency, a
non-governmental environmental organization, indicates that CFC-11 may,
in part, be used in foam systems.\41\ Additional monitoring data
identifies China as the source for much of the CFC-11 emissions.\42\
---------------------------------------------------------------------------
\40\ Montzka, S.A., Geoff S. Dutton, G.S., Yu, P., Ray, E.,
Portmann, R.W., Daniel, J.S., Kuijpers, L., Hall1, B.D., Mondeel,
D., Siso, C., Nance, J.D., Rigby, M., Manning, A.J., Hu, L., Moore,
F., Miller, B.R., and Elkins, J.W. ``An unexpected and persistent
increase in global emissions of ozone-depleting CFC-11'' Nature 557;
(2018): 413-429.
\41\ Environmental Investigation Agency (EIA). (2018) Blowing
It: Illegal Production and Use of Banned CFC-11 in China's Foam
Blowing Industry. Available at: https://eia-global.org/reports/20180709-blowing-it-illegal-production-and-use-of-banned-cfc-11-in-chinas-foam-blowing-industry.
\42\ Rigby, M. et al. ``Increase in CFC-11 emissions from
eastern China based on atmospheric observations.'' Nature 569.7757
(2019): 546-550.
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In response to this finding, the EPA evaluated potential uses of
CFCs and whether domestic controls were enough. The EPA wants to ensure
that the United States is not inadvertently contributing to demand for
CFC production. Except for feedstock applications, production and
import of CFCs has been prohibited \43\ in the United States since
1996. The nonessential products ban already prohibits sale or
distribution, and the offer for sale or distribution, of certain
products manufactured with or containing CFCs, including most plastic
foam products. The EPA is not aware of any U.S. manufacturer currently
using CFC-11 or any other class I substance for polyurethane foam
systems. Nonetheless, to ensure that the United States is not
inadvertently contributing to demand for CFCs and to avoid potential
CFC emissions in the United States, the EPA is proposing to add
polyurethane foam systems containing CFCs to the list of nonessential
products at Sec. 82.66.
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\43\ Historically, limited amounts of CFC production and
consumption were authorized domestically for essential uses.
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The EPA is also proposing to define ``polyurethane foam systems''
in Sec. 82.62, which is used for thermal insulation. A polyurethane
foam system typically consists of two transfer pumps that deliver
ingredients (polyisocyanate or isocyanate from one side and a mixture
including the blowing agent, catalysts, flame retardants, and
stabilizers from the other side) to a metering/mixing device which
allows the components to be delivered in the appropriate proportions.
The components are then sent to a mixing gun and dispensed as foam
directly to a surface such as a roof or tank. These polyurethane foam
systems are packaged and sold as complete systems, containing all the
ingredients including the polyisocyanate and the blowing agent.
A polyurethane foam system is different from bulk ODS because it is
contained in a system and packaged as a product. Under the existing
regulations in subpart A, bulk CFCs are included in the definition of a
``controlled substance'' and thus are subject to import controls such
as the consumption allowance regime under Sec. 82.4. However, the
definition of ``controlled substance'' in Sec. 82.3 excludes ``any
such substance or mixture that is in a manufactured product other than
a container used for the transportation or storage of the substance or
mixture.'' Because the CFCs in polyurethane foam system are contained
in a system that is sold as a product, they are not subject to the same
import controls as bulk CFCs. If polyurethane foam systems are imported
and sold through distribution chains in the United States, they could
result in emissions of CFCs during their use. These foam systems are
also distinct from a plastic foam product in that the foam product has
already been blown. Plastic foam products manufactured with or
containing a CFC are currently listed at Sec. 82.66(c) and thus are
banned from sale or distribution, or the offer for sale or
distribution, in interstate commerce.
The EPA is concerned about the potential sale or distribution, or
offer for sale or distribution, of polyurethane foam systems even with
the current nonessential product ban on plastic foam products. The
proposed addition
[[Page 41536]]
of polyurethane foam systems to the list of nonessential products would
result in the prohibitions of the sale or distribution of such products
in interstate commerce, and thus would prevent emissions of CFCs in the
United States from domestic use of these foam systems.
Section 610 of the CAA, titled ``Nonessential products containing
chlorofluorocarbons,'' directs the EPA to issue regulations identifying
nonessential products that ``release class I substances into the
environment (including any release occurring during manufacture, use,
storage, or disposal)'' and ``prohibit[ing] any person from selling or
distributing any such product, or offering any such product for sale or
distribution, in interstate commerce.'' Section 610(b)(1) and (2)
specify that ``[a]t a minimum'' this prohibition shall apply to
``chlorofluorocarbon-propelled plastic party streamers and noise
horns'' and ``chlorofluorocarbon-containing cleaning fluids for
noncommercial electronic and photographic equipment.'' Section
610(b)(3) provides that the prohibition shall apply to other consumer
products determined by the EPA to release class I substances into the
environment (including releases during manufacture, use, storage, and
disposal) and to be nonessential.
Section 610 further states that in determining whether a product is
nonessential, the EPA shall consider the following criteria: ``the
purpose or intended use of the product, the technological availability
of substitutes for such product and for such class I substance, safety,
health, and other relevant factors.'' The CAA requires the EPA to
consider each criterion listed in section 610 but does not establish
either a ranking or a methodology for comparing their relative
importance, nor does it require that any minimum standard within each
criterion be met. Thus, section 610 provides the EPA discretion in
determining how to consider the listed criteria and the relative weight
to give to each. In addition, section 610 gives the EPA latitude to
consider ``other relevant factors'' beyond the specific criteria set
forth in the statute.
As indicated above, polyurethane foam systems are products that
release blowing agent to the environment during use. If CFCs are used
as the blowing agent, they would be emitted during the use of such
systems. In proposing to list polyurethane foam systems containing CFCs
as a nonessential product, the EPA has considered the purpose or
intended use of these systems, the technological availability of
substitutes, and safety and health considerations. The first criterion,
the purpose or intended use, relates to the importance of the product,
in terms of benefits to society, specifically whether the product is
sufficiently important that the benefits of its continued production
outweigh the associated danger from the continued use of a class I
ozone-depleting substance in it, or alternatively, whether the product
has little benefit, such that even a lack of available substitutes
might not prevent the product from being considered nonessential. While
foam products, particularly closed-cell rigid polyurethane foams,
provide benefits to society, for more than two decades U.S.
manufacturers have replaced the use of CFCs in foam production without
compromising these benefits.
The intended use of polyurethane foam systems is often for
insulation in buildings and residences. While insulation has benefits,
such as reducing energy use and costs associated with heating and
cooling, in previous rulemakings the EPA's consideration of this
criterion has also been informed by consideration of whether use of the
class I substance in the product is nonessential (see 58 FR 4474, 66 FR
57514). For example, use of a class I substance in a product may be
considered nonessential where substitutes are readily available, even
if the product itself is important (see 58 FR 4474, 66 FR 57514). This
is reasonable because if the social benefits from a product can be
provided by a similar product without use of the class I substance,
that tends to support the conclusion that the product using the class I
substance is nonessential. U.S. manufacturers successfully transitioned
from using class I substances for foam products more than two decades
ago meaning that they were able to also replace the use of class I
substances in foam blowing systems. Moreover, the same U.S. industry
also replaced the use of class II substances in these plastic foam
products. There are alternative foam blowing agents that can be used in
foam systems as well as alternative methods and products for insulating
buildings and residences that do not use class I substances. For
instance, there are a variety of insulation types that can be applied
throughout the building envelope to save energy and reduce leaks in
buildings and homes with a similar R-value as a polyurethane foam
system intended for use in insulation. The R-value refers to an
insulating material's resistance to conductive heat flow and is
measured or rated in terms of its thermal resistance. Alternative non-
polyurethane foam insulation products with similar R-values include:
Fiberglass, cellulose, and rigid foam boards.
For the criterion of technological availability of substitutes, the
EPA considers the existence and accessibility of alternative products
or alternative chemicals for use in, or in place of, products releasing
class I substances. The EPA has interpreted this criterion to include
both currently available substitutes and potentially available
substitutes (see 58 FR 4474). There are numerous substitutes for CFCs
in polyurethane foam systems that are listed as acceptable under the
SNAP program and have been widely used by the foam industry since the
mid-1990s. The current list of SNAP approved substitutes is available
here: https://www.epa.gov/snap/substitutes-foam-blowing-agents. In the
initial class I nonessential products rule, the EPA stated that in
sectors where the great majority of manufacturers have already shifted
to substitutes, the use of a class I substance in that product may very
well be nonessential (58 FR 4774). As in previous considerations of
this criterion, in this proposal the EPA is examining sectors where the
market has previously switched to substitutes. Given the class I
nonessential products ban that included plastic foam products was
promulgated more than two decades ago and there were also subsequent
restrictions on the use of class II substances promulgated under 40 CFR
part 82, for polyurethane foam systems, the EPA believes that all U.S.
manufacturers have switched from CFCs to non-ODS alternatives such as
hydrofluorocarbons, hydrofluoroolefins, hydrocarbons, carbon dioxide,
water, and other compounds listed as acceptable substitutes under SNAP
in foam blowing.
For the criteria of safety and health, as in prior rules related to
the nonessential product ban (see e.g., 66 FR 57514), the EPA
interprets these criteria to mean the effects on human health and the
environment of products releasing CFCs or their substitutes. As in past
rules, in evaluating these criteria, the EPA considers the direct and
indirect effects of product use, and the direct and indirect effects of
alternatives, such as ozone depletion potential, flammability,
toxicity, corrosiveness, energy efficiency, ground-level air hazards,
and other environmental factors (see, e.g., 66 FR 57514). The ODPs of
CFC-11, CFC-12, and CFC-114 are 1. For the purposes of evaluating other
direct and indirect effects for foam systems, the agency does not
believe there is a substantive
[[Page 41537]]
difference between foam systems and plastic foam products given the
former is a precursor for the latter. In developing the class I
nonessential products ban, the agency provided information in the
docket concerning the known alternatives at that time. Subsequently,
alternatives that were already in use as well as additional
alternatives for foam-blowing have been evaluated and listed as
acceptable under the SNAP program, such as hydrofluorocarbons,
hydrofluoroolefins, hydrocarbons, carbon dioxide, and water. The
current SNAP list of acceptable substitutes is more expansive than what
was in considered in the initial class I nonessential products ban. The
range of alternatives includes those that have ODPs ranging from zero
to between 0.00024 and 0.00034, significantly lower than the ODP of
CFC-11 which is 1, and considers many of the factors identified in the
initial class I nonessential products ban. The Montreal Protocol's TEAP
also provides a quadrennial global assessment of alternatives for foam
blowing including information concerning many of the direct and
indirect factors identified above (UNEP, 2014). The EPA considered all
these sources of information when deciding whether to propose to add to
the list of banned products foam systems that contain phased out CFCs
and considered that U.S. industry has already successfully transitioned
away from using CFCs.
Considering all three factors together, the EPA proposes to
conclude that polyurethane foam systems containing CFCs meet the
criteria in section 610 for listing as a nonessential product.
The EPA is requesting comment on its proposal to amend Sec.
82.66(f) to add polyurethane foam systems containing CFCs to the
nonessential class I product ban and to add a definition of a
``polyurethane foam system'' to Sec. 82.62. Additionally, the EPA is
interested in comments on whether anyone in the United States is using
CFCs for foam blowing or is importing foam systems containing CFCs as a
blowing agent. While the EPA is not aware of any other CFC-containing
products that warrant addition to the list of nonessential products,
the EPA seeks comment on whether there are other products using CFCs
that could also create demand for imports of illegally-produced CFCs.
VI. Updates to Sec. Sec. 82.3, 82.104, and 82.270 Related to
Destruction
The EPA is proposing to amend certain provisions in 40 CFR part 82,
subparts A, E, and H related to the concept of destruction of ODS.
Title VI does not state how to treat destruction of ODS in calculating
production or consumption; however, the EPA's longstanding regulations
address this issue. The regulatory definition of ``production'' at
Sec. 82.3 excludes amounts that are destroyed by technologies approved
by the Parties to the Montreal Protocol. In addition, amounts imported
for destruction are excluded from the import prohibitions at Sec. Sec.
82.4 and 82.15.
The EPA added a definition of the term ``destruction'' to Sec.
82.3 in 1993. (58 FR 65047-65048). The existing regulatory definition
of ``destruction'' includes a limited list of technologies that may be
used for destruction. When the EPA established the initial list of
destruction technologies the agency also noted that it intended to
propose authorizing use of additional destruction technologies through
future rulemakings, as such technologies are approved by the Parties
(58 FR 65049).
The agency is proposing to update the definition of ``destruction''
in Sec. 82.3 to add destruction technologies that have been approved
by the Parties to the Montreal Protocol since the issuance of the 1993
rule. The agency is proposing to add these destruction technologies so
that industry in the United States has a greater variety of
technological options for the destruction of ODS. All of these
technologies are capable of destroying ODS or converting them into
byproducts and can be grouped into three broad categories:
Incineration, plasma, and other non-incineration technologies. The EPA
is proposing to add nitrogen plasma arc, portable plasma arc, argon
plasma arc, microwave plasma, and inductively coupled radio frequency
plasma to allow for additional plasma technologies to allow for greater
industry flexibility for using plasma destruction technologies. Plasma
arc technologies are generally designed to be relatively small,
compact, and transportable. They consume a large amount of energy in
order to generate the plasma but tend to have very high destruction
efficiencies and low emissions. The EPA is also proposing to add an
additional incineration technology--porous thermal reactor. Porous
reactors are high-temperature systems with a porous layer that
facilitates the decomposition of ODS and other industrial waste gases.
Destruction takes place in an oxidizing atmosphere with a continuous
supply of an auxiliary gas. The EPA is also proposing to add four non-
incineration technologies, including chemical reaction with hydrogen
(H2) and carbon dioxide (CO2). Revising the
definition of destruction to include these technologies would not
affect the applicability of other regulatory requirements relating to
use of these technologies. Because one of the non-incineration
technologies that the EPA is proposing to add, chemical reaction with
H2 and CO2, is a conversion technology that
converts the ODS into non-ozone depleting constituents that are capable
of being reused, the EPA is also proposing to amend the definition of
``destruction'' to modify the statement that that the process must not
result in a commercially useful end product. The EPA is also proposing
edits to provisions in Sec. 82.104 (Subpart E ``The Labeling of
Products Using Ozone-Depleting Substances'') and Sec. 82.270 (Subpart
H ``Halon Emissions Reduction'') to conform with the proposed changes
in this definition.
The existing regulations define the term ``destruction'' at Sec.
82.3 and Sec. 82.104. The two existing definitions are intended to
convey the same meaning but are slightly different. For instance, the
definition in Sec. 82.104 refers to a code of good housekeeping
contained in a United Nations Environment Programme report while the
definition in Sec. 82.3 does not. In addition, both provide a list of
destruction technologies approved under decisions of the Parties to the
Montreal Protocol. The list at Sec. 82.3 contains seven technologies
while the list at Sec. 82.104 contains five.\44\ Both lists are out of
date in that they fail to include certain technologies that can destroy
ODS or converting them into byproducts and have been approved under
more recent decisions of the Parties. Similarly, the existing
prohibition on disposing of halons in Sec. 82.270 includes an
exception for destruction that also provides an outdated list of
destruction technologies. The EPA is therefore proposing to harmonize
these three definitions of destruction and update the list of
destruction technologies to allow the use of more destruction
technologies in the United States.
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\44\ Similarly, the definition of ``completely destroy'' at
Sec. 82.104 refers to using ``one of the five'' destruction
processes approved by the Parties. The EPA is also proposing to
remove that outdated language.
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The Parties to the Montreal Protocol have at times requested that
the TEAP report to the Parties information on technologies for
destroying surplus stocks of ODS based on an assessment of their
technical capability to permanently decompose all or a significant
portion of the ODS.\45\ The
[[Page 41538]]
Parties to the Montreal Protocol have approved the use of destruction
technologies through various decisions, including Decisions V/26, VII/
35, XIV/6, XXII/10, XXIII/12, and at the recent 30th MOP Decision XXX/
6. With the proposed revisions to the list of technologies in the
definition of ``destruction'' at Sec. 82.3, the EPA's regulations
would reflect all technologies approved for ODS destruction under
decisions of the Parties. Specifically, the EPA is proposing to add the
following destruction technologies to the existing list: Nitrogen
plasma arc, portable plasma arc, argon plasma arc, chemical reaction
with H2 and CO2, inductively coupled radio
frequency plasma, microwave plasma, porous thermal reactor, gas phase
catalytic de-halogenation, superheated steam reactor, and thermal
reaction with methane. An explanation of these technologies appears in
the EPA's report on destruction ``ODS Destruction in the United States
and Abroad,'' which is available in the docket.
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\45\ UNEP. (2018) Montreal Protocol on Substances on Substances
that Deplete the Ozone Layer. Report of the Technology and Economic
Assessment Panel. April 2018 Volume 2 Decisions XXIX/4 TEAP Task
Force Report on Destruction Technologies for Controlled Substances;
pg. 1-67. Available at: https://conf.montreal-protocol.org/meeting/oewg/oewg-40/presession/Background-Documents/TEAP-DecXXIX4-TF-Report-April2018.pdf.
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The EPA is also proposing to revise the definition of
``destruction'' in Sec. 82.104 and the prohibition in Sec. 82.270 by
removing the outdated lists found in those provisions and adding a
cross reference to the list of destruction technologies in Sec. 82.3.
This would conform the list of destruction technologies that can be
used across subparts A, E, and H. The destruction technologies that
would be included the list in Sec. 82.3 under the proposal discussed
above in this section are also applicable to these other subparts,
although the EPA notes that the listing of municipal waste incinerators
in the existing regulations at Sec. 82.3 is limited to the destruction
of foams, and thus the added cross reference to Sec. 82.3 in Sec.
82.270 would not make that technology available for the exception for
the destruction of halons at Sec. 82.270. The addition of the cross
reference to Sec. 82.3 would also simplify updating Sec. 82.104 and
Sec. 82.270 in the future. If additional destruction technologies are
demonstrated in future to be capable of destroying ODS or converting
them into byproducts, the EPA may consider proposing to add those
technologies to the definition of ``destruction'' in Sec. 82.3 to
further increase the options for ODS destruction in the United States,
to the extent consistent with approvals by the Parties and as
appropriate. The added cross references would mean that the EPA would
only need to revise the list in Sec. 82.3 for the technologies to be
approved for destruction under all three provisions.
The EPA is also proposing to amend the definitions of
``destruction'' at Sec. Sec. 82.3 and 82.104 to modify language
regarding commercially useful end products. The current definition
contains a restriction that a destruction technology cannot result in a
commercially useful product. The EPA is proposing to revise that
restriction in part because one of the destruction technologies
proposed to be added to the definition of destruction breaks down ODS
into substances that have commercial viability. The process ``Chemical
Reaction with H2 and CO2'' converts fluorinated
compounds to hydrofluoric acid, hydrochloric acid, carbon dioxide,
chlorine, and water. The reaction technology separates and collects the
byproducts at a high purity allowing for them to be sold, potentially
improving the economics of using this technology. The EPA does not
believe that a process that would otherwise qualify as ``destruction''
should fail to qualify simply because one of the outputs is a
commercially useful end product. The EPA is therefore proposing to
revise the definition of ``destruction'' so that the mere existence of
such an end product does not bar the technology from being included in
the definition. The proposed revisions further clarify that the
commercial usefulness of the end product is secondary to the act of the
ODS destruction. Thus, the EPA's proposed changes to the definition of
destruction recognize that while production of a commercially useful
end product is not the primary purpose of a destruction process, the
destruction process may nevertheless result in a commercially useful
product.
The proposed clarification that the usefulness of an end product
should be secondary to ODS destruction is intended to maintain a
distinction between the terms ``destruction'' and ``transformation.''
The EPA established the definitions of ``destruction,'' ``production,''
and ``transformation'' in the 1993 rule (58 FR 65048-65049). Among
other things, the agency excluded from the definition of
``production'': (1) Amounts of controlled substances that are destroyed
using approved destruction technologies and (2) the manufacture of a
controlled substance that is subsequently transformed. Similarly, the
regulatory import prohibitions excluded both amounts destroyed, and
amounts transformed. The definition of ``destruction'' noted that it
does not result in a commercially useful end product whereas the
definition of ``transformation'' noted that it occurs in a process
specifically for the manufacture of other chemicals for commercial
purposes. Thus, the original distinction in the definitions of these
two terms related to whether the process was undertaken to
intentionally result in a commercially useful end product or not. The
distinction mattered (and is still relevant) because as explained in
the 1993 rule, if a portion of the ODS remained after destruction, the
destroyed portion could be excluded from production, but the material
had to be entirely consumed in the process (except for trace
quantities) to qualify for the transformation exclusion (58 FR 65048).
The EPA is proposing to remove one aspect of the distinction between
these two processes in the original definitions (whether the processes
result in a commercially useful end product). The proposed changes to
the text would clarify that the usefulness of the product is secondary
to the act of destruction. Conversely, transformation is the use of ODS
as a feedstock with the goal of manufacturing other chemicals.
Intent has been an important aspect of the distinction between
``destruction'' and ``transformation'' since these definitions were
first promulgated. For example, in the 1993 rule establishing the
definition of ``destruction,'' in a discussion of whether heat or
energy are commercially useful end products, the agency said ``[t]he
intent of the destruction process is to destroy the substance, for
which a byproduct in the way of heat or energy may be produced, rather
than production of an end product being the goal of the destruction
activity.'' (58 FR 65049). This discussion recognizes that something
useful may incidentally result from destruction. Similarly, the 1993
rule recognized the possibility of a destruction technology converting
ODS into other useful substances. In explaining the inclusion of
reactor cracking as a destruction technology, the EPA stated ``[s]ince
1983, this process has treated waste gases resulting from the
production of CFCs. The gases are converted to hydrofluoric acid,
hydrochloric acid, carbon dioxide, chlorine, and water. The two acids
are usable in-house and/or marketable, and the chlorine is scrubbed,
leaving only water vapor, oxygen, and carbon dioxide as waste gases.''
(58 FR 65047, emphasis added).
Consistent with that recognition and with the proposed inclusion of
a new destruction technology with commercially useful end products, the
EPA believes that the creation of a
[[Page 41539]]
commercially useful end product should not in itself preclude a
technology from being listed in the definition of ``destruction.'' The
creation of such an end product does not change whether chemical
decomposition occurs. Many destruction processes incinerate the
chemicals, but other technologies break down the controlled substance.
In breaking down the chemical, it is possible that the result includes
a commercially valuable end product that is not a controlled substance.
``Transformation,'' on the other hand, means to use and entirely
consume a controlled substance in the manufacture of other chemicals
for commercial purposes. The purpose is to create new compounds using
the ODS as a feedstock rather than the decomposition of ODS as a waste.
The EPA welcomes comment on the proposal to update and harmonize
definitions related to ODS destruction in Sec. Sec. 82.3, 82.104, and
82.270, including the proposal to add to the list of destruction
technologies and amend the definition of ``destruction'' to allow
inclusion of destruction technologies that incidentally result in
commercially useful end products. The EPA specifically invites comments
from entities that destroy ODS or send ODS to facilities for
destruction.
VII. Removing Obsolete Provisions in Sec. Sec. 82.3, 82.4, 82.9,
82.10, 82.12, 82.13, 82.15, 82.16, and 82.24
The EPA is proposing to remove certain provisions that have been
made obsolete due to the phaseout of class I ODS or certain class II
ODS. Specifically, this notice proposes to remove outdated provisions
for class I ODS related to Article 5 allowances, transformation and
destruction credits, and transfers of allowances issued prior to the
phaseout. The EPA is also proposing to remove definitions and reporting
provisions for HCFC-141b exemption allowances and export production
allowances.
These changes increase readability and reduce confusion. Removing
obsolete provisions would assist the regulated community by making it
easier to locate the currently applicable requirements and reduce
potential confusion from presentation of requirements that no longer
apply. The EPA is not proposing to remove outdated provisions that
provide historical context which could assist the reader or that would
affect the level of environmental protection provided under subpart A.
The EPA welcomes comments on the proposed removal of these
provisions. The agency is particularly interested in any comments
indicating these proposed changes may affect current obligations or may
be important to the existing requirements.
A. Class I Article 5 Allowances
Before the worldwide phaseout of CFCs and other class I ODS, the
EPA historically had provided additional production allowances, known
as ``Article 5 allowances,'' for production of certain class I ODS for
export to and use by Article 5 countries consistent with the Montreal
Protocol.\46\ These are countries that were subject to a later
production and consumption phaseout schedule than non-Article 5
countries such as the United States. Section 82.9(a) of the existing
regulations granted Article 5 allowances until 2010, when the phaseout
of these substances was completed in Article 5 countries. Because these
provisions no longer have any purpose or effect, the EPA is proposing
to remove the schedule for issuing Article 5 allowances found at Sec.
82.9(a) and the corresponding recordkeeping and reporting requirements
in Sec. 82.13(f)(2)(v) and (f)(3)(ix). Section 82.9(b) of the existing
regulations provides that holders of Article 5 allowances may produce
class I controlled substances for export to Article 5 countries and
transfer Article 5 allowances. Because there are no more holders of
Article 5 allowances, the EPA is proposing to remove these provisions
as well.
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\46\ For the purposes of the Montreal Protocol, this is called
production for basic domestic need.
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B. Class I Allowances and Credits Related to Transformation and
Destruction
Before the domestic phaseout of class I ODS, the EPA historically
had provided additional production allowances in cases where class I
ODS were destroyed or transformed. Because these provisions no longer
have any purpose or effect, the EPA is proposing to remove these
provisions and to remove references to these obsolete allowances in
certain other provisions.
Section 82.9(e) of the existing rules contains the provisions
related to such allowances, including detailing the information needed
in a request for allowances based on having destroyed or transformed a
specified quantity of class I ODS. The EPA stopped issuing such
allowances in 1996 for all class I controlled substances (except methyl
bromide) and in 2005 for methyl bromide. The EPA is proposing to remove
Sec. 82.9(e) and related obsolete reporting and recordkeeping
requirements in Sec. 82.13(f)(2)(iv), (g)(1)(xv), (g)(4)(xi), and
(h)(4)(xi).
Section 82.9(f) authorized persons who were nominated for an
essential use exemption to obtain destruction and transformation
credits between 1996 and 2000. The EPA established these provisions
because of the difference between the phaseout date for class I
substances under the CAA and the phaseout date for the same substances
under the Montreal Protocol. These provisions include a description of
the information needed and the grounds for which the EPA can disallow
the request. Section Sec. 82.4(f) addresses production and import with
destruction and information credits. The EPA stopped issuing such
credits in 2000. Because these provisions no longer have any purpose or
effect, the EPA is proposing to remove Sec. Sec. 82.4(f) and 82.9(f).
C. Class I Consumption Allowances
Before the phaseout of class I ODS, the EPA historically had
provided additional consumption allowances where class I ODS were
exported, transformed or destroyed, or where an amount of production
was transferred from another Party to the Montreal Protocol. Section
82.10 contains provisions related to these additional consumption
allowances, including detailing the information needed in a request for
them. The EPA stopped issuing those allowances in 1996 for all class I
controlled substances (except methyl bromide) and in 2005 for methyl
bromide. Because these provisions no longer have any purpose or effect,
the EPA is proposing to remove them and reserve Sec. 82.10 in its
entirety. The EPA is also proposing to remove references to Sec. 82.10
from the definition of ``consumption allowance'' in Sec. 82.3; Sec.
82.9(c), (e) and (f); Sec. 82.13(h)(1) and (2); and Sec. 82.13(i) as
those references are no longer applicable.
D. Transfers of Class I Allowances
The EPA historically had allowed for the transfer of production and
consumption allowances for class I substances in various ways. Under
section 607 of the CAA, the EPA was required to issue regulations
providing for inter-pollutant allowance transfers and allowance
transfers between companies. For class I substances, those regulations
appear at Sec. 82.12. Due to the class I phaseout, the EPA no longer
allocates production or consumption allowances for class I substances.
Because these provisions no longer have any purpose or effect, the EPA
is proposing to remove provisions related to pre-1996 allowance
transfers for class I ODS (and pre-2005 for methyl
[[Page 41540]]
bromide) found at Sec. 82.12(a)(1) and (b)(1), as any such transfers
occurred years ago and these provisions no longer have any purpose or
effect.
As discussed in earlier in this section, the EPA is proposing to
remove certain provisions governing Article 5 allowances and
destruction and transformation credits. The EPA is therefore also
proposing to remove provisions allowing for the transfer of Article 5
allowances and destruction and transformation credits found at Sec.
82.12(a)(2), (b)(2)-(5), and (c) as those provisions are longer needed.
E. HCFC-141b Allowances
In 2003, the EPA issued regulations (68 FR 2820, January 21, 2003)
to ensure compliance with the first reduction milestone in the HCFC
phaseout. In that rule, the EPA established chemical-specific
consumption and production baselines for HCFC-141b, HCFC-22, and HCFC-
142b for the initial regulatory period ending December 31, 2009. The
rule phased out the production and import of HCFC-141b effective
January 1, 2003 (see Sec. 82.16(b)). The EPA created a petition
process at Sec. 82.16(h) to allow applicants to request ``HCFC-141b
exemption allowances'' to produce or import small amounts of HCFC-141b
beyond the phaseout. The agency removed Sec. 82.16(h) from the
regulations and terminated the HCFC-141b exemption allowance program,
effective January 1, 2015 (79 FR 64267, October 28, 2014). At that
time, the EPA did not remove definitions and reporting and
recordkeeping requirements that pertain only to HCFC-141b exemption
allowances.
The EPA is now proposing to remove the definitions in Sec. 82.3
specific to HCFC-141b production or import after the 2003 phaseout,
including the definitions of ``Formulator,'' ``HCFC-141b exemption
allowances,'' and ``Unexpended HCFC-141b exemption allowances.'' The
definitions for HCFC-141b exemption allowances are no longer relevant
since the EPA has removed the substantive regulations that these
definitions support. For the same reasons, the EPA is proposing to
remove references to HCFC-141b in the definition of ``Confer,'' but
would retain the remainder of that definition. The EPA is also
proposing to remove references and recordkeeping and reporting
requirements specifically relating to HCFC-141b exemption allowances.
These edits would be made in Sec. 82.24(b)(1)(ix) and (xi); Sec.
82.24(b)(2)(xiv); Sec. 82.24(c)(1)(xi); Sec. 82.24(c)(2)(xvi); and
Sec. 82.24(g).
The EPA also created provisions at Sec. 82.18(b) to allow
producers to use ``export production allowances'' to produce HCFC-141b
for export beyond the phaseout. These allowances ended in 2010 and
therefore these provisions have no further purpose or effect. The EPA
is proposing to retain the definition of export production allowances
and certain references where appropriate to provide context to the
reader but remove the recordkeeping and reporting provisions. These
edits would be made in Sec. 82.16(e)(1) and (2); Sec. 82.24(b)(1)(iv)
and (ix); Sec. 82.24(b)(2)(iv), and (xii); and Sec. 82.24(d)(2).
VIII. Economic Analysis
In total, the EPA estimates that the quantified costs and benefits
of this proposal would result in a net savings of $13,000 per year. The
agency analyzed the quantitative benefits associated with the overall
burden reduction from transitioning to electronic reporting, the
streamlined petition process for used ODS, the certification to import
ODS for destruction, and costs associated with proposed labeling
requirements. For this action, the EPA has provided in the docket
technical support documents that consider the costs and the benefits
commensurate with changes to ODS phaseout regulations, such as the
requirement to use electronic reporting. Further, many of the proposed
changes to the ODS phaseout regulations, such as the removal of
obsolete requirements, would not result in any new costs or benefits.
The quantifiable costs and benefits of this rule primarily result from
the proposed revisions to the reporting and recordkeeping requirements
and the requirement to use electronic reporting. For the phaseout of
ODS, the EPA previously considered the domestic costs and benefits of
the United States' phaseout.\47\
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\47\ The following documents are available in the docket: ``EPA.
1999. The Benefits and Costs of the Clean Air Act: 1990 to 2010;''
``EPA. 1992. Regulatory Impact Analysis: Compliance with Section 604
of the Clean Air Act for the Phaseout of Ozone Depleting
Chemicals;'' and ``EPA. 1993. Addendum to the 1992 Phaseout
Regulatory Impact Analysis: Accelerating the Phaseout of CFCs,
Halons, Methyl Chloroform, Carbon Tetrachloride, and HCFCs.''
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The EPA anticipates that electronic reporting would allow for
faster review and transmission of submissions to the EPA. Additionally,
all information submitted electronically would be linked in an improved
tracking system, which would facilitate document management efforts.
The intent is that this would allow companies to manage past and future
submissions easier. The EPA expects that the estimated burden hours and
labor costs would decrease as a result of the complete transition from
paper to electronic reporting. Even accounting for the one-time burden
for entities that have not yet registered in CDX of $2,000, the
electronic reporting would result in an overall burden reduction for
respondents of approximately $4,000. Similarly, the estimated agency
burden hours and labor costs would also decrease. For example, by
requiring electronic reporting the agency would no longer have to
manually enter data into the ODS Tracking System.
The streamlined petitions process and new certification to import
ODS for destruction would decrease the total estimated respondent
burden. There would be a reduction in reporting requirements for
imports for destruction relative to the current petition process.
Specifically, the number of reporting elements for importers for
destruction would be reduced from 13 to 8 and reduce burden hours per
response by four hours. The EPA also estimates that exempting halon
1211 used in aircraft bottles from the petition process would reduce
the number of responses per respondent by one, as detailed in
descriptions of the recordkeeping and reporting burden, including cost
savings to the agency, which can be found in the supporting statement
for the Information Collection Request available in the docket to this
rule.
The EPA estimates that the proposed requirements to redesign the
existing labels on containers of Halotron[supreg] I would result in a
one-time cost between $1,000 to $3,000. Administrative and graphic
design labor costs are estimated based on the total amount of hours
required to redesign existing labels as well as hourly labor costs.
These hourly costs include wages, overhead rates, and fringe rates.
Additional information on this analysis is available in the docket.
There are also effects of this rule that the agency has not or
cannot quantify. The EPA did not conduct a specific analysis of the
benefits and costs associated with prohibiting the sales of QPS methyl
bromide for non-QPS purposes, prohibiting sales of polyurethane foam
systems, other elements of the proposal, and allocating allowances of
HCFC-123 and HCFC-124. Prohibiting both the sales of QPS methyl bromide
for non-QPS purposes and the sales of illegally imported ODS is
designed to improve compliance with the existing provisions. Costs are
unquantifiable as the scale of these sales are unknown but anticipated
to be small. The proposed prohibition on sales and distribution of
polyurethane foam systems containing CFCs should have no cost. Updating
the definition of destruction would allow for the use of
[[Page 41541]]
new destruction technologies that are currently not in use, but the
agency is unable to estimate the market for the use of those new
technologies if they are adopted. The proposed removal of obsolete
provisions is not anticipated to have any material cost or benefit.
For the allocation of HCFC-123 and 124, previous analyses provide
information on the costs and benefits of the United States' ODS
phaseout, and specifically the phaseout of all HCFCs through 2030, but
do not quantify the costs and benefits of each individual phaseout step
for each individual chemical. A memorandum summarizing these analyses,
including the original regulatory impact analysis for the full phaseout
of ODS, is available in the docket.\48\ Finalizing this proposed rule
would allow for the production and consumption of HCFC-123 and HCFC-124
that would otherwise not be allowed in the absence of this rulemaking
under existing regulations. The benefit of issuing allowances
consistent with this proposal outweighs the disbenefit associated with
no action.
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\48\ EPA. 2008. ``HCFC Cost Analysis.'' and EPA. 2018.
``Overview of CFC and HCFC Phaseout.''
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Since the allocation for HCFC-123 is the largest component of this
rule, the following discusses the potential costs and benefits of the
proposed and alternative allocation levels for HCFC-123. As discussed
in the allocation section of this notice, the consumption baseline of
the United States under the Montreal Protocol in 2020 for all HCFCs, on
an ODP-weighted basis, will be 0.5% of the historic HCFC baseline. This
equates to 3,810 MT of HCFC-123. Under section 605(c) of the CAA, the
consumption of HCFCs by any person is limited to the quantity consumed
by that person during the baseline year. The baseline \49\ for HCFC-123
is the aggregated quantity consumed in the baseline years and equates
to 2,014 MT. In developing the proposed allocations, the EPA considered
the quantities needed to satisfy estimated demand for HCFC-123 to
service equipment manufactured before 2020. Lastly, the EPA estimated a
range for the amount HCFC-123 that will likely be reclaimed annually,
and thus be available to meet part of the servicing demand for HCFC-
123. These are summarized in Table 3.
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\49\ Baseline from 40 CFR 82.19.
Table 3--HCFC-123 Servicing Demand and Estimated Reclamation (MT)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Estimated Demand............................... 820 790 770 750 720 700 670 650 630 600 7,100
Estimated Reclamation Low............................ 300 310 320 330 340 350 360 370 380 390 3,450
Estimated Reclamation High........................... 350 378 407 436 465 494 523 552 581 610 4,796
Total Need for New Production with Low Reclaim....... 520 480 450 420 380 350 310 280 250 210 3,650
Total Need for New Production with High Reclaim...... 470 412 363 314 255 206 147 98 49 0 2,314
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The agency's intent is to accomplish the complete phaseout in 2030
in a manner that achieves a smooth transition to alternatives without
stranding equipment. This is important because the EPA estimates that
36,000 appliances using HCFC-123 will still be in operation in
2030.\50\ At that time, no more HCFC-123 may be produced or imported
into the United States.
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\50\ EPA. 2019. The U.S. Phaseout of HCFCs: Projected Servicing
Demands in the U.S. Air Conditioning, Refrigeration, and Fire
Suppression Sector (2020-2030). See Table 3.
Table 4--Projected Number of HCFC-123 AC and Refrigeration Units in Operation
[1000s of Units]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Equipment type 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
--------------------------------------------------------------------------------------------------------------------------------------------------------
Chillers (AC)........................................ 47 45 43 41 39 37 35 33 31 29 27
IPR.................................................. 14 13 13 12 12 11 11 10 10 9 9
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The EPA does not want to strand existing equipment because of an
inadequate supply of HCFCs, but also must achieve a complete phaseout
of production and consumption by 2030. A viable reclamation market is
important to support the continued availability of HCFCs after the 2030
phaseout, and during 2020 through 2029 can support the fire suppression
market and decrease the need for new production and import. As noted
previously, the EPA is requesting comment on the HCFC demand estimates
included in the 2019 Draft Servicing Tail Report, which is included in
the docket for this rulemaking.
Table 5 presents the three allocation amounts for HCFC-123 raised
for comment in this proposed rule. The agency proposes to issue
consumption allowances equal to the 2020 estimated HCFC-123 demand for
servicing existing refrigeration and air-conditioning and fire
suppression equipment for years 2020 through 2022 and to then decrease
the number of allowances issued in each subsequent year by an equal
amount each year such that there are zero allowances issued in 2030.
Alternative 1 is equal to the estimated demand minus the low end of
estimated reclaim. Alternative 2 is 100% of the domestic HCFC-123
consumption baseline, which as discussed previously is the full amount
that can be allocated under the CAA.
Table 5--Comparison of HCFC-123 Consumption Allowance Allocations (MT)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposal............................................. 650 650 650 570 490 410 330 250 170 90 4,260
[[Page 41542]]
Alternative 1........................................ 520 480 450 420 380 350 310 280 250 210 3,650
Alternative 2........................................ 2,014 2,014 2,014 2,014 2,014 2,014 2,014 2,014 2,014 2,014 20,140
0.5% of HCFC Consumption Baseline.................... 3,810 3,810 3,810 3,810 3,810 3,810 3,810 3,810 3,810 3,810 38,100
--------------------------------------------------------------------------------------------------------------------------------------------------------
The EPA expects more disbenefits in allocating significantly above
projected demand. Because of the limited numbers of allowance holders,
the EPA does not expect the price of HCFC-123 to appreciably decrease
if the agency allocates 100% of the HCFC-123 baseline (Alternative 2 in
Table 5). The disbenefits the EPA is concerned about include near and
longer term available supply of reclaimed and recycled HCFC-123, as
well as emissions of ODS, given the agency's assumption that all
refrigerant produced is eventually emitted into the atmosphere. More
allocated allowances would likely suppress the recovery and reclamation
market and cause more HCFC material to be vented at the end of the
equipments' lifetime. In the near term, this would also have an adverse
effect on the availability of reclaimed HCFC-123 for the fire
suppression sector because reclamation is the only source of HCFC-123
for the manufacture of new fire suppression equipment; it is projected
that the fire suppression sector would need between 170 to 225 MT for
the manufacture of new equipment. Thus, if the reclaim market is
suppressed from 2020 through 2029, there will be less supply and higher
costs for HCFC-123, especially from 2030 onwards when the only supply
of HCFC-123 will be from the reclaim market. Based on the 2019 Draft
Servicing Tail Report, HCFC-124 consumption has been approximately 250
MT per year and reclamation has been minimal. Recent sales data from
the California Air Resources Board as well as other information
indicate that demand for HCFC-124 should be between 100 and 200 MT in
2020. Like HCFC-123, providing HCFC-124 allowances significantly in
excess of demand may not foster transition. Thus, the EPA is proposing
to allocate 200 MT for the first three years and then gradually
decrease over the next seven years by an equal amount each year. The
EPA is taking comment on the assumptions and projections in this
section.
Regardless of allocation level, for the purposes of analyzing the
impact of this proposal on small business, the EPA finds there is no
significant impact on a substantial number of small entities (SISNOSE).
The EPA performed a sales test to assess the economic impact of a
regulatory option on small businesses and compared the results of the
sales test. Based on the screening analysis of allowance holders of
HCFC-123 and HCFC-124, this proposed rulemaking could be presumed to
have no SISNOSE because it is expected to result in a net benefit to
small business through the ability to continue producing, importing
and/or selling HCFC-123 and HCFC-124. The EPA notes that there are only
eight companies total that hold consumption allowances for HCFC-123 and
HCFC-124, only two of which are small businesses.
Table 6 summarizes the environmental effect, in ODP-weighted metric
tons, of the various HCFC-123 allocation levels over the length of the
2020-2029 regulatory period. For comparison, the EPA estimates total
demand for HCFC-123 over the next decade to equal 7,100 MT, or 142 ODP-
weighted metric tons. About 70% to 75% of this amount is for servicing
existing equipment and can be met with newly-imported HCFCs, and the
remainder must be met with reclaimed or recycled HCFCs. Not all
allowances may be expended so this does not reflect the actual impact
to the stratospheric ozone layer of these three options. However, the
EPA does assume that all refrigerant produced is eventually emitted
into the atmosphere. Alternative 1 followed by the proposed allocation
amounts would have the least impact on the stratospheric ozone layer.
For HCFC-124, the EPA estimates total demand over the next decade equal
to 1,000 to 2,000 MT, or 22 to 44 ODP-weighted metric tons.
Table 6--Environmental Effects of the HCFC-123 and HCFC-124 Allocation
Amounts
[Total of 2020-2029]
------------------------------------------------------------------------
ODP-weighted
MT metric tons
------------------------------------------------------------------------
Proposed HCFC-123 Allocation Amount..... 4,260 85
HCFC-123 Alternative 1.................. 3,650 73
HCFC-123 Alternative 2.................. 20,140 403
Proposed HCFC-124 Allocation Amount..... 1,300 28.6
HCFC-124 Alternative.................... 2,000 44
------------------------------------------------------------------------
IX. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review
This action is a significant regulatory action that was submitted
to the Office of Management and Budget (OMB) for review. Any changes
made in response to OMB recommendations have been documented in the
docket.
B. Executive Order 13771: Reducing Regulations and Controlling
Regulatory Costs
This action is expected to be an Executive Order 13771 regulatory
action. Details on the estimated costs of this proposed rule can be
found in the EPA's ICR associated with this rulemaking.
C. Paperwork Reduction Act (PRA)
The information collection activities in this proposed rule have
been submitted for approval to the Office of Management and Budget
(OMB) under the PRA. The ICR document that the
[[Page 41543]]
EPA prepared has been assigned EPA ICR number 1432.34. You can find a
copy of the ICR in the docket for this rule, and it is briefly
summarized here.
This ICR covers provisions under the Montreal Protocol and Title VI
of the CAA that establish limits on total U.S. production, import, and
export of ODS. The EPA monitors compliance with the CAA and commitments
under the Montreal Protocol through the recordkeeping and reporting
requirements established in the regulations at 40 CFR part 82, subpart
A. The EPA informs the respondents that they may assert claims of
business confidentiality for any of the information they submit.
Information claimed as confidential will be treated in accordance with
the procedures for handling information claimed as confidential under
40 CFR part 2, subpart B, and will be disclosed to the extent, and by
means of procedures, set forth in Subpart B. If no claim of
confidentiality is asserted when the information is received by the
EPA, it may be made available to the public without further notice to
the respondents (40 CFR 2.203).
Respondents/affected entities: Producers, importers, exporters, and
certain users of ozone depleting substances; methyl bromide
applicators, distributors, and end users including commodity storage
and quarantine users.
Respondent's obligation to respond: Mandatory--sections 603(b) and
114 of the CAA.
Estimated number of respondents: 93.
Frequency of response: Quarterly, annually, and as needed.
Total estimated burden: 2,940 hours (per year). Burden is defined
at 5 CFR 1320.3(b).
Total estimated cost: $354,068, includes $346,693 annualized
capital and operation & maintenance costs of $7,375.
The ICR addresses the incremental changes to the existing reporting
and recordkeeping programs that are approved under OMB control number
2060-0170.
An agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for the
EPA's regulations in 40 CFR are listed in 40 CFR part 9.
Submit your comments on the agency's need for this information, the
accuracy of the provided burden estimates and any suggested methods for
minimizing respondent burden to the EPA using the docket identified at
the beginning of this rule. You may also send your ICR-related comments
to OMB's Office of Information and Regulatory Affairs via email to
[email protected], Attention: Desk Officer for the EPA.
Since OMB is required to decide concerning the ICR between 30 and 60
days after receipt, OMB must receive comments no later than September
13, 2019. The EPA will respond to any ICR-related comments in the final
rule.
D. Regulatory Flexibility Act (RFA)
I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. The
small entities potentially subject to increased costs from this action
include allowance holders, distributors, applicators, and end users of
methyl bromide and importers of ODS. The EPA estimates that the total
incremental savings associated with this proposed rule is $13,000 per
year in 2018 dollars. Details of this analysis are presented in Section
VIII of this notice.
E. Unfunded Mandates Reform Act (UMRA)
This action does not contain an unfunded mandate of $100 million or
more as described in UMRA, 2 U.S.C. 1531-1538, and does not
significantly or uniquely affect small governments.
F. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the national government and the states, or on the distribution of power
and responsibilities among the various levels of government.
G. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This action does not have tribal implications as specified in
Executive Order 13175. It will not have substantial direct effects on
tribal governments, on the relationship between the federal government
and Indian tribes, or on the distribution of power and responsibilities
between the federal government and Indian tribes, as specified in
Executive Order 13175. Thus, Executive Order 13175 does not apply to
this action.
H. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
This action is not subject to E.O. 13045 (62 FR 19885, April 23,
1997) because it is not economically significant as defined in E.O.
12866. The agency nonetheless has reason to believe that the
environmental health or safety risk addressed by this action may have a
disproportionate effect on children. Depletion of stratospheric ozone
results in greater transmission of the sun's ultraviolet (UV) radiation
to the earth's surface. The following studies describe the effects of
excessive exposure to UV radiation on children: (1) Westerdahl J,
Olsson H, Ingvar C. ``At what age do sunburn episodes play a crucial
role for the development of malignant melanoma,'' Eur J Cancer 1994:
30A: 1647-54; (2) Elwood JM Japson J. ``Melanoma and sun exposure: an
overview of published studies,'' Int J Cancer 1997; 73:198-203; (3)
Armstrong BK, ``Melanoma: childhood or lifelong sun exposure,'' In:
Grobb JJ, Stern RS, Mackie RM, Weinstock WA, eds. ``Epidemiology,
causes and prevention of skin diseases,'' 1st ed. London, England:
Blackwell Science, 1997: 63-6; (4) Whiteman D., Green A. ``Melanoma and
Sunburn,'' Cancer Causes Control, 1994: 5:564-72; (5) Heenan, PJ.
``Does intermittent sun exposure cause basal cell carcinoma? A case
control study in Western Australia,'' Int J Cancer 1995; 60: 489-94;
(6) Gallagher, RP, Hill, GB, Bajdik, CD, et. al. ``Sunlight exposure,
pigmentary factors, and risk of nonmelanocytic skin cancer I, Basal
cell carcinoma,'' Arch Dermatol 1995; 131: 157-63; (7) Armstrong, DK.
``How sun exposure causes skin cancer: an epidemiological
perspective,'' Prevention of Skin Cancer. 2004. 89-116.
I. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use
This action is not a ``significant energy action'' because it is
not likely to have a significant adverse effect on the supply,
distribution, or use of energy.
J. National Technology Transfer and Advancement Act (NTTAA)
This rulemaking does not involve technical standards.
K. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
The EPA believes that this action does not have disproportionately
high and adverse human health or environmental effects on minority
populations, low-income populations and/or indigenous peoples, as
specified in Executive Order 12898 (59 FR 7629, February 16, 1994).
[[Page 41544]]
List of Subjects in 40 CFR Part 82
Environmental protection, Air pollution control, Chemicals,
Reporting and recordkeeping requirements.
Dated: July 24, 2019.
Andrew R. Wheeler,
Administrator.
For the reasons set forth in the preamble, the EPA proposes to
amend 40 CFR part 82 as follows:
PART 82--PROTECTION OF STRATOSPHERIC OZONE
0
1. The authority citation for part 82 continues to read as follows:
Authority: 42 U.S.C. 7414, 7601, 7671-767q.
0
2. Amend Sec. 82.3 by:
0
a. Adding. In alphabetical order, definitions for ``bank'' and
``Central Data Exchange;''
0
b. Revising the definitions for ``Administrator,'' ``Aircraft halon
bottle,'' ``Confer,'' ``Consumption allowances,'' ``Destruction,''
``Individual shipment,'' ``Non-Objection notice,'' and ``Production'';
and
0
c. Removing definitions for ``Formulator,'' ``HCFC-141b exemption
allowances,'' and ``Unexpended HCFC-141b exemption allowances.''
The revisions and additions read as follows:
Sec. 82.3 Definitions.
* * * * *
Administrator means the Administrator of the United States
Environmental Protection Agency or his or her authorized
representative. Reports and petitions that are available to be
submitted through the Central Data Exchange must be submitted through
that tool. Any other reports and communications shall be submitted to
Stratospheric Protection Manager, 1200 Pennsylvania Ave. NW, Mail Code:
6205T, Washington, DC 20460.
Aircraft halon bottle means a vessel used as a component of an
aircraft fire suppression system containing halon-1301 or halon-1211
approved under FAA rules for installation in a certificated aircraft.
* * * * *
Bank means a facility run by a national government or privately run
and authorized by a national government that collects and stores
previously-recovered ozone-depleting substances for reuse at a later
date.
* * * * *
Central Data Exchange means EPA's centralized electronic document
receiving system, or its successors.
* * * * *
Confer means to shift the essential-use allowances obtained under
Sec. 82.8 from the holder of the unexpended essential-use allowances
to a person for the production of a specified controlled substance.
* * * * *
Consumption allowances means the privileges granted by this subpart
to produce and import controlled substances; however, consumption
allowances may be used to produce controlled substances only in
conjunction with production allowances. A person's consumption
allowances for class I substances are the total of the allowances
obtained under Sec. Sec. 82.6 and 82.7 as may be modified under Sec.
82.12 (transfer of allowances). A person's consumption allowances for
class II controlled substances are the total of the allowances obtained
under Sec. Sec. 82.19 and 82.20, as may be modified under Sec. 82.23.
* * * * *
Destruction means the expiration of a controlled substance to the
destruction and removal efficiency actually achieved, unless considered
completely destroyed as defined in this section. Such destruction might
result in a commercially useful end product, but such usefulness would
be secondary to the act of destruction. Destruction must be achieved
using one of the following controlled processes approved by the Parties
to the Protocol:
(1) Liquid injection incineration;
(2) Reactor cracking;
(3) Gaseous/fume oxidation;
(4) Rotary kiln incineration;
(5) Cement kiln;
(6) Radio frequency plasma;
(7) Municipal waste incinerators (only for the destruction of
foams);
(8) Nitrogen plasma arc;
(9) Portable plasma arc;
(10) Argon plasma arc;
(11) Chemical reaction with H2 and CO2;
(12) Inductively coupled radio frequency plasma;
(13) Microwave plasma;
(14) Porous thermal reactor;
(15) Gas phase catalytic de-halogenation;
(16) Superheated steam reactor; or
(17) Thermal reaction with methane.
* * * * *
Individual shipment means the kilograms of a controlled substance
for which a person may make one (1) U.S. Customs entry, as identified
in the non-objection letter from the Administrator under Sec. Sec.
82.13(g)(2), (3), and (5) and 82.24(c)(4) and (6).
* * * * *
Non-Objection notice means the privilege granted by the
Administrator to import a specific individual shipment of a controlled
substance in accordance with Sec. Sec. 82.13(g)(2), (3), and (5) and
82.24(c)(3), (4), and (6).
* * * * *
Production means the manufacture of a controlled substance from any
raw material or feedstock chemical, but does not include:
(1) The manufacture of a controlled substance that is subsequently
transformed;
(2) The reuse or recycling of a controlled substance;
(3) Amounts that are destroyed by the approved technologies in
Sec. 82.3; or
(4) Amounts that are spilled or vented unintentionally.
0
3. Amend Sec. 82.4 by:
0
a. Removing and reserving paragraph (f);
0
b. Revising paragraph (j); and
0
c. Adding paragraphs (r) and (s).
Revisions read as follows:
Sec. 82.4 Prohibitions for class I controlled substances.
* * * * *
(j)(1) Effective January 1, 1995, no person may import, at any time
in any control period, a used class I controlled substance, except for
Group II used controlled substances shipped in aircraft halon bottles
for hydrostatic testing, without having received a non-objection notice
from the Administrator in accordance with Sec. 82.13(g)(2) and (3). A
person who receives a non-objection notice for the import of an
individual shipment of used controlled substances may not transfer or
confer the right to import, and may not import any more than the exact
quantity, in kilograms, of the used controlled substance cited in the
non-objection notice. Every kilogram of importation of used controlled
substance in excess of the quantity cited in the non-objection notice
issued by the Administrator in accordance with Sec. 82.13(g)(2) and
(3) constitutes a separate violation.
(2) Effective September 13, 2019, no person may import for purposes
of destruction, at any time in any control period, a class I controlled
substance for which EPA has apportioned baseline production and
consumption allowances, without having submitted a certification of
intent to import for destruction to the Administrator and received a
non-objection notice in accordance with Sec. 82.13(g)(5). A person
issued a non-objection notice for the import of an individual shipment
of class I controlled substances for destruction may not transfer or
confer the right to import, and may not import any more than the exact
quantity (in kilograms) of the class I controlled
[[Page 41545]]
substance stated in the non-objection notice. For imports intended to
be destroyed in the U.S., a person issued a non-objection notice must
destroy the controlled substance in the year cited in the non-objection
letter, may not transfer or confer the right to import, and may not
import any more than the exact quantity (in kilograms) of the class I
controlled substance stated in the non-objection notice. Every kilogram
of import of class I controlled substance in excess of the quantity
stated in the non-objection notice issued by the Administrator in
accordance with Sec. 82.13(g)(5) constitutes a separate violation of
this subpart.
* * * * *
(r) Quarantine and preshipment exemption. No person may sell or use
methyl bromide produced or imported under the quarantine and
preshipment exemption for any purpose other than for quarantine
applications or preshipment applications as defined in Sec. 82.3. Each
kilogram of methyl bromide produced or imported under the authority of
the quarantine and preshipment exemption and sold or used for a use
other than quarantine or preshipment is a separate violation of this
subpart.
(s) Effective September 13, 2019, no person may sell or distribute,
or offer for sale or distribution, any class I substance that they
know, or have reason to know, was imported in violation of this
section, except for such actions needed to re-export the controlled
substance. Every kilogram of a controlled substance imported in
contravention of this paragraph that is sold or distributed, or offered
for sale or distribution, constitutes a separate violation of this
subpart.
0
4. Amend Sec. 82.9 by:
0
a. Removing and reserving paragraphs (a), (b), (e), and (f); and
0
b. Revising paragraph (c) introductory text.
The revision reads as follows:
Sec. 82.9 Availability of production allowances in addition to
baseline production allowances for class I controlled substances.
* * * * *
(c) A company may increase or decrease its production allowances,
including its Article 5 allowances, by trading with another Party to
the Protocol according to the provision under this paragraph (c). A
company may increase or decrease its essential-use allowances for CFCs
for use in essential MDIs according to the provisions under this
paragraph (c). A nation listed in appendix C to this subpart (Parties
to the Montreal Protocol) must agree either to transfer to the person
for the current control period some amount of production or import that
the nation is permitted under the Montreal Protocol or to receive from
the person for the current control period some amount of production or
import that the person is permitted under this subpart. If the
controlled substance is produced under the authority of production
allowances and is to be sold in the United States or to another Party
(not the Party from whom the allowances are received), the U.S. company
must expend its consumption allowances allocated under Sec. 82.6 and
Sec. 82.7 in order to produce with the additional production
allowances.
* * * * *
Sec. 82.10 [Removed and reserved]
0
5. Remove and reserve Sec. 82.10.
0
6. Amend Sec. 82.12 by:
0
a. Revising paragraph (a)(1) introductory text; and
0
b. Removing and reserving paragraphs (a)(2), (b) and (c).
The revision reads as follows:
Sec. 82.12 Transfers of allowances for class I controlled substances.
(a) * * *
(1) After January 1, 2002, any essential-use allowance holder
(including those persons that hold essential-use allowances issued by a
Party other than the United States) (``transferor'') may transfer
essential-use allowances for CFCs to a metered dose inhaler company
solely for the manufacture of essential MDIs. After January 1, 2005,
any critical use allowance holder (``transferor'') may transfer
critical use allowances to any other person (``transferee'').
* * * * *
0
7. Amend Sec. 82.13 by:
0
a. Revising paragraphs (a), (c), (f)(2)(xvii)-(xxii), (f)(3)(xiii)-
(xvii), (g)(1)(xi), (xv), (xvii)-(xxi), (g)(2)(i)-(iv), (vi), (viii)-
(xiii), (g)(3)(i)(A), (g)(3)(vii), (g)(4)(xv)-(xviii), (h)(1)
introductory text, (h)(1)(ii)-(iii), (h)(2) introductory text,
(h)(2)(ii)-(v), (viii), (v), (w)(2), (y), (z), (aa);
0
b. Removing and reserving paragraphs (f)(2)(iv), (v), and (xvi),
(f)(3)(iv), (ix), (g)(2)(xiv), (g)(4)(vii), (xi), (i); and
0
c. Adding paragraphs (g)(2)(xv) and (g)(5)-(9).
The revisions and additions read as follows:
Sec. 82.13 Recordkeeping and reporting requirements for class I
controlled substances.
(a) Unless otherwise specified, the recordkeeping and reporting
requirements set forth in this section take effect on January 1, 1995.
For class I, Group VIII controlled substances, the recordkeeping and
reporting requirements set forth in this section take effect on August
18, 2003. For critical use methyl bromide, the recordkeeping and
reporting requirements set forth in this section take effect January 1,
2005.
* * * * *
(c) Unless otherwise specified, reports required by this section
must be submitted to the Administrator within 45 days of the end of the
applicable reporting period. Starting [DATE 30 DAYS AFTER EFFECTIVE
DATE OF FINAL RULE], reports that are available for submission through
the Central Data Exchange must be submitted electronically through that
tool. Revisions of reports that are required by this section must be
submitted to the Administrator within 180 days of the end of the
applicable reporting period, unless otherwise specified.
* * * * *
(f) * * *
(2) * * *
(xvii) For methyl bromide, dated records of the quantity of
controlled substances produced for quarantine and preshipment
applications and quantity sold for quarantine and preshipment
applications;
(xviii) Written certifications that quantities of methyl bromide
produced solely for quarantine and preshipment applications were
purchased by distributors or applicators to be used only for quarantine
applications and preshipment applications in accordance with the
definitions in this subpart; and
(xix) Written verifications from a U.S. purchaser that methyl
bromide produced solely for quarantine and preshipment applications, if
exported, will be exported solely for quarantine applications and
preshipment applications upon receipt of a certification in accordance
with the definitions of this subpart and requirements in paragraph (h)
of this section.
(xx) For methyl bromide, dated records such as invoices and order
forms, and a log of the quantity of controlled substances produced for
critical use, specifying quantities dedicated for pre-plant use and
quantities dedicated for post-harvest use, and the quantity sold for
critical use, specifying quantities dedicated for pre-plant use and
quantities dedicated for post-harvest use;
(xxi) Written certifications that quantities of methyl bromide
produced for critical use were purchased by distributors, applicators,
or approved
[[Page 41546]]
critical users to be used or sold only for critical use in accordance
with the definitions and prohibitions in this subpart. Certifications
must be maintained by the producer for a minimum of three years and;
(xxii) For methyl bromide, dated records such as invoices and order
forms, and a log of the quantity of controlled substances produced
solely for export to satisfy critical uses authorized by the Parties
for that control period, and the quantity sold solely for export to
satisfy critical uses authorized by the Parties for that control
period.
(3) * * *
(xiii) The amount of methyl bromide sold or transferred during the
quarter to a person other than the producer solely for quarantine and
preshipment applications;
(xiv) A list of the quantities of methyl bromide produced by the
producer and exported by the producer and/or by other U.S. companies,
to a Party to the Protocol that will be used solely for quarantine and
preshipment applications and therefore were not produced expending
production or consumption allowances; and
(xv) For quarantine and preshipment applications of methyl bromide
in the United States or by a person of another Party, one copy of a
certification that the material will be used only for quarantine and
preshipment applications in accordance with the definitions in this
subpart from each recipient of the material and a list of additional
quantities shipped to that same person for the quarter.
(xvi) For critical uses of methyl bromide, producers shall report
annually the amount of critical use methyl bromide owned by the
reporting entity, specifying quantities dedicated for pre-plant use and
quantities dedicated for post-harvest use, as well as quantities held
by the reporting entity on behalf of another entity, specifying
quantities dedicated for pre-plant use and quantities dedicated for
post-harvest use along with the name of the entity on whose behalf the
material is held; and
(xvii) A list of the quantities of methyl bromide produced by the
producer and exported by the producer and/or by other U.S. companies in
that control period, solely to satisfy the critical uses authorized by
the Parties for that control period; and
* * * * *
(g) * * *
(1) * * *
(xi) The quantity of imports of used, recycled or reclaimed class I
controlled substances;
* * * * *
(xv) Dated records of the quantity of controlled substances
imported for an essential use;
* * * * *
(xvii) Dated records of the quantity of methyl bromide imported for
quarantine and preshipment applications and quantity sold for
quarantine and preshipment applications;
(xviii) Written certifications that quantities of methyl bromide
imported solely for quarantine and preshipment applications were
purchased by distributors or applicators to be used only for quarantine
and preshipment applications in accordance with the definitions in this
subpart; and
(xix) Written verifications from a U.S. purchaser that methyl
bromide imported solely for quarantine and preshipment applications, if
exported, will be exported solely for quarantine and preshipment
applications upon receipt of a certification in accordance with the
definitions of this Subpart and requirements in paragraph (h) of this
section.
(xx) For methyl bromide, dated records such as invoices and order
forms, of the quantity of controlled substances imported for critical
use, specifying quantities dedicated for pre-plant use and quantities
dedicated for post-harvest use, and the quantity sold for critical use,
specifying quantities dedicated for pre-plant use and quantities
dedicated for post-harvest use, and;
(xxi) Written certifications that quantities of methyl bromide
imported for critical use were purchased by distributors, applicators,
or approved critical users to be used or sold only for critical use in
accordance with the definitions and prohibitions in this subpart.
Certifications must be maintained by an importer for a minimum of three
years.
(2) Petitioning--Importers of Used, Recycled or Reclaimed
Controlled Substances. For each individual shipment over 5 pounds of a
used controlled substance as defined in Sec. 82.3, except for imports
intended for destruction and Group II used controlled substances
shipped in aircraft halon bottles for hydrostatic testing and imports
intended for destruction, an importer must submit directly to the
Administrator, at least 40 working days before the shipment is to leave
the foreign port of export, the following information in a petition:
(i) Name, commodity code, and quantity in kilograms of the used
controlled substance to be imported;
(ii) Name and address of the importer, the importer ID number, and
the contact person's name, email address, and phone number;
(iii) Name, address, contact person, email address, and phone
number of all previous source facilities from which the used controlled
substance was recovered or the government agency storing the controlled
substance;
(iv) A detailed description of the previous use of the controlled
substance at each source facility and a best estimate of when the
specific controlled substance was put into the equipment at each source
facility, and, when possible, documents indicating the date the
material was put into the equipment; or an official letter from the
exporting country that the controlled substance is used;
* * * * *
(vi) Name, address, contact person, email address, and phone number
of the exporter and of all persons to whom the material was transferred
or sold after it was recovered from the source facility;
* * * * *
(viii) A description of the intended use of the used controlled
substance, and, when possible, the name, address, contact person, email
address, and phone number of the ultimate purchaser in the United
States;
(ix) Name, address, contact person, email address, and phone number
of the U.S. reclamation facility, where applicable;
(x) If someone at the source facility recovered the controlled
substance from the equipment, the name, email address, and phone number
of that person;
(xi) If the imported controlled substance was reclaimed in a
foreign Party, the name, address, contact person, email address, and
phone number of any or all foreign reclamation facility(ies)
responsible for reclaiming the cited shipment;
(xii) An English translation of the export license, or application
for an export license, from the appropriate government agency in the
country of export and, if recovered in another country, the export
license from the appropriate government agency in that country, and
quantity authorized for export in kilograms on the export license(s);
(xiii) If the imported used controlled substance is intended to be
sold as a refrigerant in the U.S., the name, address, and email address
of the EPA-certified U.S. reclaimer who will bring the material to the
standard required under section 608 (Sec. 82.152(g)) of the CAA, if
not already reclaimed to those specifications.
* * * * *
(xv) If the used controlled substance is stored by a foreign
national
[[Page 41547]]
government in a bank of used class I controlled substances, or by a
privately-operated bank authorized by the foreign national government
to collect and store class I controlled substances, an official letter
from the appropriate government agency in that country where the
material is stored may be provided in lieu of the information required
in subparagraphs (iii) through (vi) of this paragraph.
(3) * * *
(i) * * *
(A) If the Administrator determines that the information is
insufficient, that is, if the petition lacks or appears to lack any of
the information required under Sec. 82.13(g)(2) or other information
that may be requested during the review of the petition necessary to
verify that the controlled substance is used;
* * * * *
(vii) A person receiving the non-objection notice is permitted to
import the individual shipment only within one year of the date stamped
on the non-objection notice.
* * * * *
(4) * * *
(xv) The amount of methyl bromide sold or transferred during the
quarter to a person other than the importer solely for quarantine and
preshipment applications;
(xvi) A list of the quantities of methyl bromide exported by the
importer and or by other U.S. companies, to a Party to the Protocol
that will be used solely for quarantine and preshipment applications
and therefore were not imported expending consumption allowances; and
(xvii) For quarantine and preshipment applications of methyl
bromide in the United States or by a person of another Party, one copy
of a certification that the material will be used only for quarantine
and preshipment applications in accordance with the definitions in this
subpart from each recipient of the material and a list of additional
quantities shipped to that same person for the quarter.
(xviii) For critical uses of methyl bromide, importers shall report
annually the amount of critical use methyl bromide owned by the
reporting entity, specifying quantities dedicated for pre-plant use and
quantities dedicated for post-harvest use, as well as quantities held
by the reporting entity on behalf of another entity, specifying
quantities dedicated for pre-plant use and quantities dedicated for
post-harvest use along with the name of the entity on whose behalf the
material is held.
* * * * *
(5) Certification of Intent to Import for Destruction. For each
individual shipment of a class I controlled substance imported with the
intent to destroy that substance, an importer must submit
electronically to the Administrator, at least 30 working days before
the shipment is to leave the foreign port of export, the following
information:
(i) Name, commodity code, and quantity in kilograms of each
controlled substance to be imported,
(ii) Name and address of the importer, the importer ID number, and
the contact person's name, email address, and phone number;
(iii) The U.S. port of entry for the import, the expected date of
shipment and the vessel transporting the chemical. If at the time of
submitting the certification of intent to import for destruction the
importer does not know the U.S. port of entry, the expected date of
shipment and the vessel transporting the chemical, and the importer
receives a non-objection notice for the individual shipment in the
petition, the importer is required to notify the Administrator of this
information prior to the U.S. entry of the individual shipment;
(iv) Name, address, contact person, email address, and phone number
of the responsible party at the destruction facility;
(v) An English translation of an export license, or application for
an export license, from the appropriate government agency in the
country of export, and quantity authorized for export in kilograms on
the export license(s);
(vi) A certification of accuracy of the information submitted in
the certification.
(6) For each individual shipment of a class I controlled substance
imported with the intent to destroy that substance, an importer must
submit to the Administrator a copy of the destruction verification
within 30 days after destruction of the controlled substance(s).
(7)(i) Starting on the first working day following receipt by the
Administrator of a certification of intent to import a class II
controlled substance for destruction, the Administrator will initiate a
review of the information submitted under paragraph (c)(6) of this
section and take action within 30 working days to issue either an
objection-notice or a non-objection notice for the individual shipment
to the person who submitted the certification of intent to import the
class II controlled substance for destruction.
(ii) The Administrator may issue an objection notice if the
petition lacks or appears to lack any of the information required under
this subparagraph or for the reasons listed in Sec. 82.24(c)(4)(i)(B)-
(E).
(iii) In cases where the Administrator does not object to the
petition, the Administrator will issue a non-objection notice.
(iv) To pass the approved class II controlled substances through
U.S. Customs, the non-objection notice issued by EPA must accompany the
shipment through U.S. Customs.
(v) If for some reason, following EPA's issuance of a non-objection
notice, new information is brought to EPA's attention which shows that
the non-objection notice was issued based on false information, then
EPA has the right to:
(A) Revoke the non-objection notice;
(B) Pursue all means to ensure that the class II controlled
substance is not imported into the U.S.; and
(C) Take appropriate enforcement actions.
(8) A person receiving the non-objection notice is permitted to
import the individual shipment only within one year of the date stamped
on the non-objection notice.
(9) A person receiving a non-objection notice from the
Administrator for a certification of intent to import class I
controlled substances for destruction must maintain the following
records:
(i) A copy of the certificate of intent to import for destruction;
(ii) The EPA non-objection notice;
(iii) A copy of the export license or export license application;
(iv) U.S. Customs entry documents for the import that must include
one of the commodity codes from Appendix K to this subpart;
(v) The date, amount, and type of controlled substance sent for
destruction, per shipment;
(vi) An invoice from the destruction facility verifying the
shipment was received; and
(vii) A copy of the destruction verification from the destruction
facility.
(h) * * *
(1) For any exports of class I controlled substances (except methyl
bromide) not reported under paragraph (f)(3) of this section (reporting
for producers of controlled substances), the exporter who exported a
class I controlled substance (except methyl bromide) must submit to the
Administrator the following information within 45 days after the end of
the control period in which the unreported exports left the United
States:
(i) * * *
(ii) The exporter's Employer Identification Number;
[[Page 41548]]
(iii) The type and quantity of each controlled substance exported
including the quantity of controlled substance that is used, recycled
or reclaimed.
* * * * *
(2) For any exports of methyl bromide not reported under paragraph
(f)(3) of this section (reporting for producers of controlled
substances), the exporter who exported methyl bromide must submit to
the Administrator the following information within 45 days after the
end of each quarter in which the unreported exports left the United
States:
(i) * * *
(ii) The exporter's Employer Identification Number;
(iii) The quantity of methyl bromide exported by use
(transformation, destruction, critical use, or quarantine and
preshipment);
(iv) The date on which, and the port from which, the methyl bromide
was exported from the United States or its territories;
(v) The country to which the methyl bromide was exported;
* * * * *
(viii) The invoice or sales agreement containing language similar
to the Internal Revenue Service Certificate that the purchaser or
recipient of imported methyl bromide intends to transform those
substances, the destruction verifications (as in paragraph (k) of this
section) showing that the purchaser or recipient intends to destroy the
controlled substances, or the certification that the purchaser or
recipient and the eventual applicator will only use the material for
quarantine and preshipment applications in accordance with the
definitions in this subpart.
* * * * *
(v) Any distributor of laboratory supplies who purchased controlled
substances under the global essential laboratory and analytical use
exemption must submit quarterly the quantity of each controlled
substance purchased by each laboratory customer or distributor whose
certification was previously provided to the distributor pursuant to
paragraphs (w) of this section, the contact information for the source
company from which material was purchased, and the laboratories to whom
the material is sold.
(w) * * *
(2) The name, email address, and phone number of a contact person
for the laboratory customer;
* * * * *
(y) Every distributor of methyl bromide who purchases or receives a
quantity produced or imported for quarantine or preshipment
applications under the exemptions in this subpart must comply with the
following recordkeeping and reporting requirements:
(1) Every distributor of quarantine and preshipment methyl bromide
must certify to the producer, importer, or distributor from whom they
purchased or received the controlled substance that quantities
purchased or received will be sold only for quarantine applications or
preshipment applications in accordance with the definitions in this
subpart.
(2) Every distributor of quarantine and preshipment methyl bromide
must receive from an applicator, exporter, or distributor to whom they
sell or deliver the controlled substance a certification, prior to
delivery, stating that the quantity will be used or sold solely for
quarantine applications or preshipment applications in accordance with
definitions in this subpart.
(3) Every distributor of quarantine and preshipment methyl bromide
must maintain the certifications as records for 3 years.
(4) Every distributor of quarantine and preshipment methyl bromide
must report to the Administrator within 45 days after the end of each
quarter, the total quantity delivered to applicators or end users for
quarantine applications and preshipment applications in accordance with
definitions in this Subpart.
(z) Every applicator of methyl bromide who purchases or receives a
quantity produced or imported solely for quarantine or preshipment
applications under the exemptions in this subpart must comply with the
following recordkeeping and reporting requirements:
(1) Recordkeeping--Applicators. Every applicator of methyl bromide
produced or imported for quarantine and preshipment applications under
the exemptions of this subpart must maintain, for every application, a
document from the commodity owner, shipper or their agent requesting
the use of methyl bromide citing the requirement that justifies its use
in accordance with definitions in this subpart. These documents shall
be retained for 3 years.
(2) Reporting--Applicators. Every applicator who purchases or
receives methyl bromide that was produced or imported for quarantine
and preshipment applications under the exemptions in this subpart shall
provide the distributor of the methyl bromide, prior to shipment, with
a certification that the methyl bromide will be used only for
quarantine applications or preshipment applications as defined in this
subpart.
(aa) Every commodity owner, shipper or their agent requesting an
applicator to use methyl bromide that was produced or imported solely
for quarantine and preshipment applications under the exemptions of
this subpart must maintain a record for 3 years, for each request,
certifying knowledge of the requirements associated with the exemption
for quarantine and preshipment applications in this subpart and citing
the requirement that justifies its use. The record must include the
following statement: ``I certify knowledge of the requirements
associated with the exempted quarantine and preshipment applications
published in 40 CFR part 82, including the requirement that this letter
cite the treatments or official controls for quarantine applications or
the official requirements for preshipment requirements.''
* * * * *
0
8. Add Sec. 82.14 to read as follows:
Sec. 82.14 Process for electronic reporting.
(a) Submissions of reports that are available to be submitted
through the Central Data Exchange, import petitions, and certifications
of intent to import ODS for destruction and any related supporting
documents must be submitted electronically to EPA via the Central Data
Exchange.
(b) You can register and access the Central Data Exchange as
follows:
(1) Go to EPA's Central Data Exchange website at https://cdx.epa.gov and follow the links for the submission of ozone-depleting
substances.
(2) Call EPA's Central Data Exchange Help Desk at 1-888-890-1995.
(3) Email the EPA's Central Data Exchange Help Desk at
[email protected].
0
9. Amend Sec. 82.15 by:
0
a. Redesignating paragraphs (g)(5) and (g)(6) as (g)(6) and (g)(7),
respectively; and
0
b. Adding paragraphs (b)(3), (g)(5) and (g)(8).
The additions read as follows:
Sec. 82.15 Prohibitions for class II controlled substances.
* * * * *
(b) * * *
(3) Effective [date 30 days after effective date of final rule], no
person may import for purposes of destruction, at any time in any
control period, a class II controlled substance for which EPA has
apportioned baseline production and consumption allowances, without
having submitted a certification of intent to import for destruction to
the Administrator and received a non-objection notice in accordance
with
[[Page 41549]]
Sec. 82.24(c)(6). A person issued a non-objection notice for the
import of an individual shipment of class II controlled substances for
destruction may not transfer or confer the right to import, and may not
import any more than the exact quantity (in kilograms) of the class II
controlled substance stated in the non-objection notice. For imports
intended to be destroyed in the U.S., a person issued a non-objection
notice must destroy the controlled substance in the year cited in the
non-objection letter, may not transfer or confer the right to import,
and may not import any more than the exact quantity (in kilograms) of
the class II controlled substance stated in the non-objection notice.
Every kilogram of import of class II controlled substance in excess of
the quantity stated in the non-objection notice issued by the
Administrator in accordance with Sec. 82.24(c)(6) constitutes a
separate violation of this subpart.
* * * * *
(g) * * *
(5) (i) Effective January 1, 2020, no person may introduce into
interstate commerce or use HCFC-123 or HCFC-124 (unless used, recovered
and recycled) for any purpose other than for use in a process resulting
in its transformation or its destruction; for use as a refrigerant in
equipment manufactured before January 1, 2020; for use as a fire
suppression streaming agent listed as acceptable for use or acceptable
subject to narrowed use limits for nonresidential applications in
accordance with the regulations at subpart G of this part to the extent
permitted under paragraph (ii) of this subsection; for export to
Article 5 Parties under Sec. 82.18(a); as a transshipment or heel; or
for exemptions permitted under paragraph (f) of this section.
(ii) HCFC-123 that was produced or imported after January 1, 2020
may be used as a fire suppression streaming agent only to service
equipment manufactured before January 1, 2020. HCFC-123 that was
produced or imported prior to January 1, 2020 (or used, recovered and
recycled) may be used as a fire suppression streaming agent in
equipment manufactured before or after January 1, 2020.
(iii) Notwithstanding the prohibition on use in paragraph (g)(5)(i)
of this section, the use of HCFC-123 as a refrigerant in equipment
manufactured between January 1, 2020 and December 31, 2020 is permitted
if the conditions of this paragraph are met. The HCFC-123 must be in
the possession of an entity that will complete the manufacture of the
appliance and imported prior to January 1, 2020. The appliance
components must be ready for shipment to a construction location prior
to July 24, 2019 and be specified in a building permit or a contract
dated before July 24, 2019 for use on a particular project. All HCFC-
123 used to service such appliances on or after January 1, 2021 must be
used, recovered, or recycled/reclaimed.
* * * * *
(8) Effective [DATE 30 DAYS AFTER EFFECTIVE DATE OF FINAL RULE], no
person may sell or distribute, or offer for sale or distribution, any
class II substance that they know, or have reason to know, was imported
in violation of this section, except for such actions needed to re-
export the controlled substance. Every kilogram of a controlled
substance imported in contravention of this paragraph that is sold or
distributed, or offered for sale or distribution, constitutes a
separate violation of this subpart.
10. Amend Sec. 82.16 by revising the tables in paragraph (a) and
revising paragraph (e).
Sec. 82.16 Phaseout schedule of class II controlled substances.
(a) Calendar-year Allowances. (1) In each control period as
indicated in the following tables, each person is granted the specified
percentage of baseline production allowances and baseline consumption
allowances for the specified class II controlled substances apportioned
under Sec. 82.17 and Sec. 82.19:
Table 1 to Paragraph (a) Calendar-Year HCFC Production Allowances
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent of Percent of Percent of Percent of Percent of Percent of Percent of
Control period HCFC-141b HCFC-22 HCFC-142b HCFC-123 HCFC-124 HCFC-225ca HCFC-225cb
--------------------------------------------------------------------------------------------------------------------------------------------------------
2003.................................... 0 100 100 .............. .............. .............. ..............
2004.................................... 0 100 100 .............. .............. .............. ..............
2005.................................... 0 100 100 .............. .............. .............. ..............
2006.................................... 0 100 100 .............. .............. .............. ..............
2007.................................... 0 100 100 .............. .............. .............. ..............
2008.................................... 0 100 100 .............. .............. .............. ..............
2009.................................... 0 100 100 .............. .............. .............. ..............
2010.................................... 0 41.9 0.47 0 125 125 125
2011.................................... 0 32 4.9 0 125 125 125
2012.................................... 0 17.7 4.9 0 125 125 125
2013.................................... 0 30.1 4.9 0 125 125 125
2014.................................... 0 26.1 4.9 0 125 125 125
2015.................................... 0 21.7 0.37 0 5 0 0
2016.................................... 0 21.7 0.32 0 5 0 0
2017.................................... 0 21.7 0.26 0 5 0 0
2018.................................... 0 21.7 0.21 0 5 0 0
2019.................................... 0 21.7 0.16 0 5 0 0
2020.................................... 0 0 0 0 8 0 0
2021.................................... 0 0 0 0 8 0 0
2022.................................... 0 0 0 0 8 0 0
2023.................................... 0 0 0 0 7 0 0
2024.................................... 0 0 0 0 6 0 0
2025.................................... 0 0 0 0 5 0 0
2026.................................... 0 0 0 0 4 0 0
2027.................................... 0 0 0 0 3 0 0
2028.................................... 0 0 0 0 2 0 0
2029.................................... 0 0 0 0 1 0 0
2030.................................... 0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 41550]]
Table 2 to Paragraph (a) Calendar-Year HCFC Consumption Allowances
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent of Percent of Percent of Percent of Percent of Percent of Percent of
Control period HCFC-141b HCFC-22 HCFC-142b HCFC-123 HCFC-124 HCFC-225ca HCFC-225cb
--------------------------------------------------------------------------------------------------------------------------------------------------------
2003.................................... 0 100 100 .............. .............. .............. ..............
2004.................................... 0 100 100 .............. .............. .............. ..............
2005.................................... 0 100 100 .............. .............. .............. ..............
2006.................................... 0 100 100 .............. .............. .............. ..............
2007.................................... 0 100 100 .............. .............. .............. ..............
2008.................................... 0 100 100 .............. .............. .............. ..............
2009.................................... 0 100 100 .............. .............. .............. ..............
2010.................................... 0 41.9 0.47 125 125 125 125
2011.................................... 0 32 4.9 125 125 125 125
2012.................................... 0 17.7 4.9 125 125 125 125
2013.................................... 0 18 4.9 125 125 125 125
2014.................................... 0 14.2 4.9 125 125 125 125
2015.................................... 0 7 1.7 100 8.3 0 0
2016.................................... 0 5.6 1.5 100 8.3 0 0
2017.................................... 0 4.2 1.2 100 8.3 0 0
2018.................................... 0 2.8 1 100 8.3 0 0
2019.................................... 0 1.4 0.7 100 8.3 0 0
2020.................................... 0 0 0 32.3 8 0 0
2021.................................... 0 0 0 32.3 8 0 0
2022.................................... 0 0 0 32.3 8 0 0
2023.................................... 0 0 0 28 7 0 0
2024.................................... 0 0 0 24 6 0 0
2025.................................... 0 0 0 20 5 0 0
2026.................................... 0 0 0 16 4 0 0
2027.................................... 0 0 0 12 3 0 0
2028.................................... 0 0 0 8 2 0 0
2029.................................... 0 0 0 4 1 0 0
2030.................................... 0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
* * * * *
(e)(1) Effective January 1, 2020, no person may produce HCFC-22 or
HCFC-142b for any purpose other than for use in a process resulting in
their transformation or their destruction, for export under Sec.
82.18(a) using unexpended Article 5 allowances, or for exemptions
permitted in Sec. 82.15(f). Effective January 1, 2020, no person may
import HCFC-22 or HCFC-142b for any purpose other than for use in a
process resulting in their transformation or their destruction, or for
exemptions permitted in Sec. 82.15(f).
(2) Effective January 1, 2020, no person may produce HCFC-123 for
any purpose other than for use in a process resulting in its
transformation or its destruction, for use as a refrigerant in
equipment manufactured before January 1, 2020, for export under Sec.
82.18(a) using unexpended Article 5 allowances, or for exemptions
permitted in Sec. 82.15(f). Effective January 1, 2020, no person may
import HCFC-123 for any purpose other than for use in a process
resulting in its transformation or its destruction, for use as a
refrigerant in equipment manufactured before January 1, 2020, for use
as a fire suppression streaming agent in equipment manufactured before
January 1, 2020 listed as acceptable for use or acceptable subject to
narrowed use limits for nonresidential applications, or for exemptions
permitted in Sec. 82.15(f).
* * * * *
0
11. Amend Sec. 82.23 by
0
a. Removing and reserving paragraph (a)(i)(F); and
0
b. Adding paragraphs (b)(1)(i) and (ii).
The addition reads as follows:
Sec. 82.23 Transfers of allowances of class II controlled substances.
* * * * *
(b) * * *
(1) * * *
(i) Effective January 1, 2020, a person (transferor) may only
convert allowances for one class II controlled substance for which EPA
has issued allowances under Sec. 82.16 to another class II controlled
substance for which EPA has issued allowances under Sec. 82.16.
(ii) [Reserved].
* * * * *
0
12. Amend Sec. 82.24 by:
0
a. Revising paragraphs (a)(1), (b)(2)(iv), (c)(3)(i)-(iii), (vi),
(viii)-(xiii), (c)(4)(i)(A), (c)(4)(vii), and (d)(1) introductory text;
0
b. Removing and reserving paragraphs (b)(1)(iv), (ix), and (xi),
(b)(2)(xii) and (xiv), (c)(1)(vi) and (xi), (c)(2)(xvi), (d)(2), and
(g); and
0
c. Adding paragraphs (c)(6)-(10).
The revisions and addition read as follows:
Sec. 82.24 Recordkeeping and reporting requirements for class II
controlled substances.
(a) * * *
(1) Reports required by this section must be submitted to the
Administrator within 45 days of the end of the applicable reporting
period, unless otherwise specified. Starting [date 30 days after
effective date of final rule], reports that are available for
submission through the Central Data Exchange must be submitted
electronically through that tool.
* * * * *
(b) * * *
(2) * * *
(iv) Dated records of the quantity (in kilograms) of class II
controlled substances produced with Article 5 allowances;
* * * * *
(c) * * *
(3) * * *
(i) The name, commodity code and quantity (in kilograms) of the
used class II controlled substance to be imported;
(ii) The name and address of the importer, the importer ID number,
the contact person, email address, and phone number;
(iii) Name, address, contact person, email address, and phone
number of all previous source facilities from which
[[Page 41551]]
the used class II controlled substance was recovered;
* * * * *
(vi) Name, address, contact person, email address, and phone number
of the exporter and of all persons to whom the material was transferred
or sold after it was recovered from the source facility;
* * * * *
(viii) A description of the intended use of the used class II
controlled substance, and, when possible, the name, address, contact
person, email address, and phone number of the ultimate purchaser in
the United States;
(ix) The name, address, contact person, email address, and phone
number of the U.S. reclamation facility, where applicable;
(x) If someone at the source facility recovered the class II
controlled substance from the equipment, the name, email address, and
phone number of that person;
(xi) If the imported class II controlled substance was reclaimed in
a foreign Party, the name, address, contact person, email address, and
phone number of any or all foreign reclamation facility(ies)
responsible for reclaiming the cited shipment;
(xii) An English translation of an export license, or application
for an export license, from the appropriate government agency in the
country of export and, if recovered in another country, the export
license from the appropriate government agency in that country, and
quantity authorized for export in kilograms on the export license(s);
(xiii) If the imported used class II controlled substance is
intended to be sold as a refrigerant in the U.S., the name, address,
and email address of the EPA-certified U.S. reclaimer who will bring
the material to the standard required under subpart F of this part, if
not already reclaimed to those specifications.
(4) * * *
(i) * * *
(A) If the Administrator determines that the information is
insufficient, that is, if the petition lacks or appears to lack any of
the information required under paragraph (c)(3) of this section or
other information that may be requested during the review of the
petition necessary to verify that the controlled substance is used;
* * * * *
(vii) A person receiving the non-objection notice is permitted to
import the individual shipment only within one year of the date stamped
on the non-objection notice.
* * * * *
(6) Certification of Intent to Import for Destruction. For each
individual shipment of a class II controlled substance imported with
the intent to destroy that substance, an importer must submit
electronically to the Administrator, at least 30 working days before
the shipment is to leave the foreign port of export, the following
information:
(i) Name, commodity code, and quantity in kilograms of each
controlled substance to be imported,
(ii) Name and address of the importer, the importer ID number, and
the contact person's name, email address, and phone number;
(iii) The U.S. port of entry for the import, the expected date of
shipment and the vessel transporting the chemical. If at the time of
submitting the certification of intent to import for destruction the
importer does not know the U.S. port of entry, the expected date of
shipment and the vessel transporting the chemical, and the importer
receives a non-objection notice for the individual shipment in the
petition, the importer is required to notify the Administrator of this
information prior to the U.S. entry of the individual shipment;
(iv) Name, address, contact person, email address, and phone number
of the responsible party at the destruction facility;
(v) An English translation of an export license, or application for
an export license, from the appropriate government agency in the
country of export, and quantity authorized for export in kilograms on
the export license(s);
(vi) A certification of accuracy of the information submitted in
the certification.
(7) For each individual shipment of a class II controlled substance
imported with the intent to destroy that substance, an importer must
submit to the Administrator a copy of the destruction verification
within 30 days after destruction of the controlled substance(s).
(8) (i) Starting on the first working day following receipt by the
Administrator of a certification of intent to import a class II
controlled substance for destruction, the Administrator will initiate a
review of the information submitted under paragraph (c)(6) of this
section and take action within 30 working days to issue either an
objection-notice or a non-objection notice for the individual shipment
to the person who submitted the certification of intent to import the
class II controlled substance for destruction.
(ii) The Administrator may issue an objection notice if the
petition lacks or appears to lack any of the information required under
this subparagraph or for the reasons listed in Sec. 82.24(c)(4)(i)(B)-
(E).
(iii) In cases where the Administrator does not object to the
petition, the Administrator will issue a non-objection notice.
(iv) To pass the approved class II controlled substances through
U.S. Customs, the non-objection notice issued by EPA must accompany the
shipment through U.S. Customs.
(v) If for some reason, following EPA's issuance of a non-objection
notice, new information is brought to EPA's attention which shows that
the non-objection notice was issued based on false information, then
EPA has the right to:
(A) Revoke the non-objection notice;
(B) Pursue all means to ensure that the class II controlled
substance is not imported into the U.S.; and
(C) Take appropriate enforcement actions.
(9) A person receiving the non-objection notice is permitted to
import the individual shipment only within one year of the date stamped
on the non-objection notice.
(10) A person receiving a non-objection notice from the
Administrator for a certification of intent to import class II
controlled substances for destruction must maintain the following
records:
(i) A copy of the certificate of intent to import for destruction;
(ii) The EPA non-objection notice;
(iii) A copy of the export license or export license application;
(iv) U.S. Customs entry documents for the import that must include
one of the commodity codes from Appendix K to this subpart;
(v) The date, amount, and type of controlled substance sent for
destruction, per shipment;
(vi) An invoice from the destruction facility verifying the
shipment was received; and
(vii) A copy of the destruction verification from the destruction
facility.
(d) * * *
(1) Reporting--Exporters. For any exports of class II controlled
substances not reported under paragraph (b)(2) of this section
(reporting for producers of class II controlled substances), each
exporter who exported a class II controlled substance must submit to
the Administrator the following information within 30 days after the
end of each quarter in which the unreported exports left the U.S.:
* * * * *
[[Page 41552]]
0
13. Revise Appendix K to read as follows:
Appendix K to Subpart A of Part 82--Commodity Codes From the Harmonized
Tariff Schedule for Controlled Substances and Used Controlled
Substances
------------------------------------------------------------------------
Commodity code
Description of commodity or chemical from harmonized
tariff schedule
------------------------------------------------------------------------
Class II:
HCFC-22 (Chlorodifluoromethane)................. 2903.71.0000
HCFC-123 (Dichlorotrifluoroethane).............. 2903.72.0020
HCFC-124 (Monochlorotetrafluoroethane).......... 2903.79.1000
HCFC-141b (Dichlorofluoroethane)................ 2903.73.0000
HCFC-142b (Chlorodifluoroethane)................ 2903.74.0000
HCFC-225ca, HCFC-225cb 2903.75.0000
(Dichloropentafluoropropanes)..................
HCFC-21, HCFC-31, HCFC-133, and other HCFCs..... 2903.79.9070
HCFC Mixtures (R-401A, R-402A, etc.)............ 3824.74.0000
Class I:
CFC-11 (Trichlorofluoromethane)................. 2903.77.0010
CFC-12 (Dichlorodifluoromethane)................ 2903.77.0050
CFC-113 (Trichlorotrifluoroethane).............. 2903.77.0020
CFC-114 (Dichlorotetrafluoroethane)............. 2903.77.0030
CFC-115 (Monochloropentafluoroethane)........... 2903.77.0040
CFC-13, CFC-111, CFC-112, CFC-211, CFC-212, CFC- 2903.77.0080
213, CFC-214, CFC-215, CFC-216, CFC-217, and
other CFCs.....................................
CFC Mixtures (R-500, R-502, etc.)............... 3824.71.0100
Carbon Tetrachloride............................ 2903.14.0000
Halon 1301 (Bromotrifluoromethane).............. 2903.76.0010
Halon, other.................................... 2903.76.0050
Methyl Bromide.................................. 2903.39.1520
Methyl Chloroform............................... 2903.19.6010
------------------------------------------------------------------------
0
14. Amend Sec. 82.62 by adding, in alphabetical order, the definition
for ``polyurethane foam systems'' to read as follows:
Sec. 82.62 Definitions.
* * * * *
Polyurethane Foam System means an item consisting of two transfer
pumps that deliver ingredients (polyisocyanate or isocyanate from one
side and a mixture including the blowing agent, catalysts, flame
retardants, and/or stabilizers from the other side) to a metering/
mixing device which allows the components to be delivered in the
appropriate proportions.
* * * * *
0
15. Amend Sec. 82.66 by:
0
a. Revising paragraphs (d)(2)(vi) and (e); and
0
b. Adding paragraph (f).
The revisions and addition read as follows:
Sec. 82.66 Nonessential Class I products and exceptions.
* * * * *
(d) * * *
(2) * * *
(vi) Document preservation sprays which contain CFC-113 as a
solvent, but which contain no other CFCs, and/or document preservation
sprays which contain CFC-12 as a propellant, but which contain no other
CFCs, and which are used solely on thick books, books with coated or
dense paper and tightly bound documents;
(e) Any air-conditioning or refrigeration appliance as defined in
CAA 601(l) that contains a Class I substance used as a refrigerant; and
(f) Any polyurethane foam system that contains any CFC.
0
16. Amend Sec. 82.104 by revising paragraphs (c) and (h) introductory
text to read as follows:
Sec. 82.104 Definitions.
* * * * *
(c) Completely destroy means to cause the destruction of a
controlled substance by one of the destruction processes approved by
the Parties and listed in Sec. 82.3 of subpart A at a demonstrable
destruction efficiency of 98 percent or more or a greater destruction
efficiency if required under other applicable federal regulations.
* * * * *
(h) Destruction means the expiration of a controlled substance to
the destruction efficiency actually achieved, unless considered
completely destroyed as defined in this section. Such destruction might
result in a commercially useful end product but such usefulness would
be secondary to the act of destruction. Destruction must be achieved
using one of the controlled processes approved by the Parties and
listed in the definition of destruction in Sec. 82.3 of subpart A.
* * * * *
0
17. Amend Sec. 82.106 by revising paragraph (a) to read as follows:
[[Page 41553]]
Sec. 82.106 Warning statement requirements.
(a) Effective January 1, 2020, each container of fire suppression
agent containing HCFC-123 produced or imported after that date shall
bear the following warning statement, meeting the requirements of this
subpart for placement and form:
WARNING: Contains [insert name of substance], a substance which
harms public health and environment by destroying ozone in the upper
atmosphere. Do not use to service equipment manufactured on or after
January 1, 2020.
* * * * *
0
18. Amend Sec. 82.270 by revising paragraph (e) introductory text to
read as follows:
Sec. 82.270 Prohibitions.
* * * * *
(e) Effective April 6, 1998, no person shall dispose of halon
except by sending it for recycling to a recycler operating in
accordance with NFPA 10 and NFPA 12A standards, or by arranging for its
destruction using one of the controlled processes approved by the
Parties and listed in the definition of destruction in Sec. 82.3 of
subpart A.
* * * * *
[FR Doc. 2019-17018 Filed 8-13-19; 8:45 am]
BILLING CODE 6560-50-P
