[Federal Register Volume 59, Number 176 (Tuesday, September 13, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-22586]


[[Page Unknown]]

[Federal Register: September 13, 1994]


      
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Part V





Environmental Protection Agency





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Protection of Stratospheric Ozone; Labeling; Petitions for Exemption; 
Notice
ENVIRONMENTAL PROTECTION AGENCY

[FRL-5070-8]

 
Protection of Stratospheric Ozone; Labeling; Petitions for 
Exemption

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice for proposed decision.

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SUMMARY: On February 11, 1993, the U.S. Environmental Protection Agency 
(EPA) published the final labeling regulations implementing section 611 
of the Clean Air Act (CAA), as amended by the Clean Air Act Amendments 
(CAAA) of 1990. The regulations include a section which permits a 
manufacturer to petition EPA to temporarily exempt a product 
manufactured with a class I substance from the labeling requirements. 
The company must prove that there are no substitutes that: do not rely 
on the use of a class I substance; reduce the overall risk to human 
health and the environment; and, are currently or potentially 
available. Through this action, EPA proposes to grant petitions for 
such exemptions for the two specific applications of products 
manufactured with class I substances described below, because 
substitutes that do not rely on the use of class I substances and 
reduce the overall risk to human health and the environment are neither 
potentially nor currently available. The effect of this action will be 
to provide the extensions necessary for these two petitioners to 
develop potentially available substitutes.

ADDRESSES: Copies of information relevant to these petitions are 
available for inspection in public docket A-91-60 at the Air Docket 
(LE-131) of the EPA, room M-1500, 401 M Street, SW., Washington, DC 
20460 between the hours of 8:30 a.m. to noon and 1:30 p.m. to 3:30 p.m. 
Monday through Friday.
    Any comments, in duplicate, from interested parties should be 
addressed to the docket with a copy forwarded to Mavis Sanders, 
Stratospheric Protection Division (6205-J), Office of Air and 
Radiation, U.S. Environmental Protection Agency, 401 M Street, SW., 
Washington, DC 20460. A reasonable fee may be charged for copying 
services.

FOR FURTHER INFORMATION CONTACT: Mavis Sanders, Stratospheric 
Protection Division (6205-J), Office of Air and Radiation, U.S. 
Environmental Protection Agency, 401 M Street, SW., Washington, DC 
20460, (202) 233-9737.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 611 of the Clean Air Act, as amended, requires EPA to 
promulgate regulations requiring labeling of products manufactured 
with, and products and containers containing, ozone-depleting 
substances. On February 11, 1993 at 58 FR 8136, EPA published the final 
regulations at 40 CFR part 82, subpart E (40 CFR 82.100 et seq). 
Section 82.120 of the final labeling regulations (40 CFR 82.120), 
states that a company may petition EPA to temporarily exempt a product 
manufactured with a class I substance. To get the exemption, the 
company must prove that there are no substitutes that: (1) Do not rely 
on the use of a class I substance; (2) reduce the overall risk to human 
health and the environment; and (3) are currently or potentially 
available. In the regulations, EPA defines ``potentially available'' to 
mean that adequate information exists to support a determination that a 
substitute for a class I substance is environmentally acceptable, 
economically viable, and technologically feasible.
    The petition provision allows the Agency to exempt products 
manufactured with class I substances from the labeling requirements 
where a company shows that it has been unsuccessful in identifying a 
commercially or potentially available alternative substance or 
manufacturing process for its current use of the class I substance and 
where the Agency finds that no such alternative substance or process is 
``potentially available.'' The two petitions claimed that alternatives 
were not ``potentially available'' at this time. In one case, the 
argument was made that additional time is required in order to 
accommodate an extensive evaluation and approval process required by 
another Federal entity; and, in the other case, implementation of 
possible substitutes/manufacturing processes remain uncertain, 
requiring additional development of the possible alternative process 
before full-scale construction of three new manufacturing facilities 
can begin.
    As part of the petition review process, EPA developed criteria by 
which to evaluate the submissions. Unlike the Significant New 
Alternatives Policy Program (SNAP) petitions naming acceptable 
substitutes for eight sectors of industry submitted under section 612 
of the CAA, the petitions submitted under section 611 are reviewed on a 
case-by-case basis with careful attention given to each application of 
a class I substance in a manufacturing process. The Agency considered 
all of the factors below in determining whether to accept or reject a 
petition with regard to the technological feasibility and the 
environmental acceptability of a substitute.
    In evaluating technological feasibility, EPA considers when the 
company first began investigating alternative substances or processes 
to replace their uses of class I substances; EPA's knowledge about the 
product/manufacturing process and possible substitutes; whether 
parallel manufacturers of similar products have come up with 
substitutes; whether a timeline has been developed for implementation 
of a substitute, including research and development of a substitute 
process where applicable; and, whether the timeline seems reasonable 
where no substitute is commercially available. In addition, the Agency 
considers a company's constraints (technology, other Federal 
requirements, etc.) in order to determine whether a change is within 
the control of the company; whether a company is able to state what it 
must specifically do to implement the substitute; whether training and 
procurement of equipment and manufacturing materials are accessible; 
what measures have been taken to understand and solve the ``unknowns;'' 
whether vendors exist that can meet the product's manufacturing needs; 
and whether the company has discussed its manufacturing needs with 
these vendors.
    In evaluating environmental acceptability, EPA considers whether a 
substitute is environmentally implementable in terms of the available 
technology.
    In general these criteria were considered collectively. However, 
EPA believes that for most companies, implementation of an alternative, 
whether it be a drop-in replacement or a complete overhaul of the 
production process, often entails significant cost and time 
constraints. EPA recognizes that companies need lead time in 
establishing a labeling program or installing an alternative technology 
where companies have chosen to switch from a class I substance to a 
substitute in order to comply with the regulations. Companies that have 
not implemented a substitute are required to label their products until 
they have implemented a substitute. Therefore, where a company's early 
efforts to replace its uses of controlled substances are prevented 
through unavoidable obstacles beyond its control, such as a required 
Federal review or permit program, or where a substitute requires 
additional development through testing due to unknown or unavoidable 
impediments, EPA has placed greater weight on such circumstances in 
developing its determinations, because the ability of a company to 
switch to an alternative is seriously hampered by circumstances outside 
of its control.
    EPA emphasizes that its process of evaluating a company's request 
for exemption from the labeling requirements is a different review 
process from the essential use exemption authorized by the Parties to 
the Montreal Protocol on Substances that Deplete the Ozone Layer (the 
Parties) and could well reach different conclusions. Under the Montreal 
Protocol process, member countries can put forth nominations for 
essential use exemptions that would allow for continued production of 
ozone-depleting substances after the production phaseout, to be used in 
an application for which there are no suitable substitutes. The Parties 
receive and review these applications individually and may decide to 
grant particular exemption requests. If the Parties agree that a 
particular applications is essential, additional production of an 
ozone-depleting substance will be authorized for that particular 
application after the phaseout has taken effect.
    EPA published a notice in the Federal Register on May 20, 1993 (58 
FR 29410), requesting essential use nominations for CFCs, carbon 
tetrachloride, methyl chloroform and HBFCs by July 19, 1993. The Agency 
requested nominations for essential uses of halons on February 12, 1993 
(58 FR 6788). Companies nominated their specific applications of a 
controlled substance to receive an exemption from the production and 
consumption phaseout schedule. These nominations are reviewed first by 
EPA and then by the Montreal Protocol Parties. The Parties recognized 
the need for such exemptions because of the accelerated phaseout dates. 
Exemptions, if any, will be granted at the Sixth Meeting of the 
Parties, which may be held as early as June 1994. Nominations for halon 
essential uses will be considered earlier since halons are subject to 
an even more rapid phaseout schedule. Nominations for essential uses 
will continue to be considered each year at subsequent meetings of the 
Parties; thus, companies will have additional opportunities to request 
an essential use exemption in the future. The process will entail a 
rigorous international review process, which is described in Decision 
IV/25 of the Fourth Meeting of the Protocol. Therefore, if a company 
requests a temporary exemption from the labeling requirements through 
Sec. 82.120 of the labeling regulations, and also wishes to request an 
exemption for use of controlled substances beyond the phaseout date, 
the company must separately nominate its use for an essential use 
exemption to EPA.

II. Petitions for Exemption

    Today, EPA proposes to accept two petitions. The first petition, 
submitted by the Upjohn Company (Upjohn), contends that Upjohn has a 
substitute for its use of CFC-12 as a sterilant; however, a review and 
evaluation period is required by the Food and Drug Administration (FDA) 
before the alternative can be approved and then implemented. The 
company therefore contends that a substitute is not potentially 
available until the FDA review is completed. EPA is proposing to grant 
this exemption until August 31, 1994.
    The other petition, submitted by the E.I. DuPont de Nemours & Co. 
(DuPont), is classified as confidential business information and thus, 
EPA cannot disclose the name of its product. (Dupont has produced a 
petition containing nonconfidential information that has been placed 
into the docket). This product, which consists of certain fine 
synthetic fibers, uses CFC-11 as a basic process solvent in the fiber 
manufacturing process. Although Dupont has identified a possible 
substitute, it must develop, implement and test a major process change 
to replace the existing manufacturing facilities. Therefore, Dupont 
contends that a substitute is not potentially available until this 
process has been identified and current facilities have been 
successfully modified to ensure that this alternative can in fact be 
accommodated.

A. The Upjohn Company

    The Upjohn Company (Upjohn) submitted a petition to exempt six of 
its pharmaceutical products that are currently sterilized using CFC-12 
from the labeling requirements. The products are Hydrocortisone, 
Isoflupredone Acetate, Methylprednisolone acetate, Medroxyprogesterone 
acetate, Neomycin Sulfate and Prednisolone Hydrous USP. The company has 
submitted a request to the Food and Drug Administration (FDA) to accept 
Spectinomycin Hydrochloride, a non-ozone-depleting substance, as a 
replacement for CFC-12. The alternative is currently used by Upjohn to 
sterilize some of its other products; however, FDA review and 
evaluation is required before it can make a change. Therefore, Upjohn 
is submitting this petition based on the premise that the above 
mentioned products are not currently or potentially available until FDA 
approval is obtained. There are no environmental concerns identified 
with this substitution; the company clearly has an alternative which it 
has instituted in other applications and requires additional time 
before it can use the substitute in the above applications.
    Without an exemption, the company asserts that it would be required 
to label the five products until FDA concludes its review, which would 
result in a substantial financial loss with little if any environmental 
benefit. The company also maintains that by labeling its five products 
while FDA reviews their submission, users could become confused by the 
warning statement and could decide to discontinue use of the products 
against the advice of their physicians. Upjohn indicates that such an 
outcome could result in increased absenteeism from work and potentially 
severe negative health effects and expenses incurred by society.

B. DuPont

    DuPont currently manufactures a fine synthetic fiber using a 
chlorofluorocarbon (CFC-11). DuPont began searching for an alternative 
in 1987 and initiated a research and development (R&D) program to find 
an alternative substance for the CFC-11. The R&D program was comprised 
of the following activities: identifying all non-CFC candidates for 
replacements; acquiring or fabricating (where none were commercially 
available) all potential candidates for testing; conducting tests to 
ascertain that each candidate possessed the desired properties; further 
evaluating those which passed the initial tests in laboratory reviews; 
performing additional examinations once the candidates passed the 
laboratory tests; then performing testing to determine the 
acceptability of the test product. For six years, DuPont has researched 
over 100 potential candidates which hold specific properties required 
for production of the fiber. This search has included all reasonable 
chemical classes including (but not limited to): HCFCs, HFCs, 
perfluorinated hydrocarbons, alcohols, and amines. After consideration 
of these and other potential alternatives, Dupont determined that no 
drop-in or replacement compound (i.e. a substitute that does not 
require retrofitting of equipment) for the current manufacturing 
process was possible. Dupont identified only one or two possible 
replacement candidates, which will require complete testing and 
development and which, even if successful, will require specially 
designed and engineered new production facilities. All of the 
unsuccessful replacement candidates failed to possess at least one of 
the physical and chemical properties needed in the manufacturing 
process. The critical properties include corrosion characteristics, 
critical temperature, toxicity, boiling point and ozone depletion 
potential. Moreover, use of the possible non-CFC replacement at the 
current manufacturing facilities is not compatible with the existing 
plant process and permits, as well as OSHA and other safety code 
restrictions. Thus, testing of any non-CFC replacement must occur at 
new specially designed and engineered facilities.
    Although a candidate substance has been identified as a possible 
substitute, Dupont continues to face various technical difficulties in 
implementing a new process change. Once a substitute is identified as a 
possible replacement, pilot testing of the candidate in a smaller 
version of a large-scale production facility, the preparation of the 
design of the larger facilities, and construction of the plants must 
ensue in order for the alternative to be tested for large scale 
production. DuPont has obtained the necessary local, state and Federal 
operating permits and general approval from the appropriate 
environmental authorities to design, construct and test the pilot plant 
which will further verify the production technology and equipment, the 
new process, and establish new procedures and practices for the 
facility operators. In May 1993, this specially engineered and 
constructed pilot plant was constructed.
    DuPont indicates that it will spend millions of dollars over the 
next several years for implementation and production trials in the new 
facilities. Two years of development activities are planned for the 
pilot facility in order to test and refine the manufacturing process. 
The plant continues to be modified as the need for technical 
adjustments arise from the trial runs. This occurs simultaneously with 
the design of the first facility, selection of a contractor and 
construction of the facility. There will be additional actions required 
to prepare for the first round of commercial production trials once the 
facility is built. DuPont will need to certify that each end use for 
the new fiber product meets the standards of each customer base, 
including industry, local, state, and Federal standards. The standards 
vary, requiring distinct examinations in order to determine whether for 
each end use, the product is capable of the same performance standards 
as the product made with a CFC. In addition, personnel require 
retraining, a new workforce is necessary to carry out the tests for 
product standards and certifications, and process control systems need 
monitoring.
    DuPont contends that until all of the plants have been constructed, 
fully evaluated for their productability, and full-scale production of 
the saleable fiber product has been initiated following completion of 
the standards testing, no substitute is potentially available. Because 
of these various technical difficulties in design, and process changes 
to accommodate further investigation of the potential alternative, the 
Agency concurs that Dupont has subsequently shown that an alternative 
is neither potentially nor currently available.
    Although DuPont estimates it will be unable to meet the global 
demand for its product by the end of 1996, the substitute would then be 
considered to be potentially available, as some of the plants will have 
undergone equipment quality checks and production tests and begun 
producing the product.

III. Proposed Decisions

    EPA proposes to accept these two petitions for temporary exemptions 
from the labeling requirements until the dates specified by the 
petitioners. No company may exceed its deadline without first obtaining 
approval by the EPA. If the need for an additional extension is 
required by either company, an addendum to the petition must be 
submitted to the Agency requesting an extension.

A. Upjohn

    EPA believes that in this case, the alternative identified in the 
petition is neither potentially nor currently available, due to 
additional Federal requirements regarding approval or disapproval of 
the substitute, which preclude the company from implementing the change 
until after a determination under such requirements is made. The 
circumstances are outside of the company's control. Absent the FDA 
requirements, Upjohn would be able to introduce the alternative 
substance to its sterilizing operation. This proposed determination is 
consistent with regulations implementing section 610 of the Clean Air 
Act Amendments of 1990 which state that companies seeking Federal 
approval of substitute chemicals or reformulations may receive a 
temporary exemption (ninety days) from the product ban requirements (58 
FR 69667). In those regulations, EPA recognized that other Federal 
approval processes can be time-consuming and beyond the control of the 
manufacturer. Until approval is obtained, a substitute is not 
potentially available. EPA maintains that it would be inappropriate for 
the federal government to deny a manufacturer a temporary exemption 
from the labeling regulations while at the same time preventing them 
from implementing a substitute pending receipt of a required Federal 
approval for their alternative substance or process.

B. DuPont

    EPA believes that DuPont's request for a temporary exemption from 
the labeling requirements is appropriate given the task and the 
uncertainties it has encountered and continues to face in developing a 
substitute and implementing a major process change to replace an 
existing system that currently depends on the use of a CFC. DuPont 
contends that its alternative process is not potentially available 
until the company is certain that the alternative process works in its 
facilities. In order for the company to ensure that large scale 
production is possible, it must first construct new facilities, test 
the functioning of the new systems and perform full scale production 
tests. Until production tests are completed in these facilities, due to 
significant differences in technical design, no substitutes are 
potentially available. DuPont indicates that current problems it is 
experiencing with the pilot facility are due to unanticipated and 
unknown factors, requiring delays in testing of the new design until 
the problems are resolved and the necessary modifications are made to 
the system. However, as the new system is undergoing the required 
tests, DuPont is constructing its new facilities. The designs of the 
facilities are based solely on the results of the trials at the pilot 
facility, rather than on existing designs, thereby creating unknown 
obstacles which can significantly impede the company's switch to an 
alternative process.
    EPA believes that a substitute process is not potentially available 
for the fiber product, which currently depends on a process that uses a 
CFC, until the company can be reasonably assured that its new systems 
actually work with the candidate substitute and can produce a product 
that meets the company's and its customers' quality standards in a 
large scale production process. While EPA believes that this waiver 
should be granted until January 1, 1996, EPA would like any information 
on whether extending the waiver to this January 1, 1996 is appropriate.

IV. Changes to the Conditions of the Petition

    EPA proposes to establish provisions to ensure that petitioners 
meet the conditions agreed upon in a petition exemption. Companies that 
receive a temporary exemption from the labeling requirements must 
notify EPA if the agreed-upon conditions of the exemption change in any 
way, such as a modification in a Federal entity's schedule for 
evaluation, slippage in a company's implementation of an alternative 
substance or process, or a shift in corporate priorities. Failure to 
notify the Agency of such changes to the agreement will result in the 
Agency's withdrawal of the exemption.

V. Statutory Authority

    Authority for the action proposed in this notice is section 
611(e) of the Clean Air Act, as amended (42 U.S.C. 7625-1(a)(1)).

VI. Administrative Designation and Regulatory Analysis

    Under Executive Order (EO) 12866, the Agency must judge whether a 
regulation is ``significant'' and thus subject to OMB review. The 
decision proposed today is not a regulation, rule or significant 
regulatory action, as defined in EO 12866; therefore, no OMB review is 
necessary.

VII. Impact on Small Entities

    Pursuant to the Regulatory Flexibility Act, 5 U.S.C. 601 through 
612, whenever the Agency is required to publish a general notice of 
rulemaking for any proposed or final rule, it must prepare and make 
available for public comment a regulatory flexibility analysis which 
describes the impact on small entities. Since today's proposed decision 
does not have a significant impact on a substantial number of small 
entities, no regulatory flexibility analysis has been prepared.

VIII. Paperwork Reduction Act

    The Paperwork Reduction Act of 1980, 44 U.S.C. 3501 et seq. and 
implementing regulations, 5 CFR part 1320, do not apply to this action 
as it does not involve the collection of information as defined 
therein.

    Dated: September 6, 1994.
Mary D. Nichols,
Assistant Administrator.
[FR Doc. 94-22586 Filed 9-12-94; 8:45 am]
BILLING CODE 6560-50-P