[Federal Register Volume 67, Number 210 (Wednesday, October 30, 2002)]
[Notices]
[Pages 66147-66149]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-27623]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL-7401-8]


Request for Applications for Essential Use Exemptions to the 
Production and Import Phaseout of Ozone Depleting Substances Under the 
Montreal Protocol for the Years 2004 and 2005

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: Through this action, the Environmental Protection Agency (EPA) 
is requesting applications for essential use allowances for calendar 
years 2004 and 2005. Essential-use allowances provide exemptions to the 
production and import phaseout of ozone-depleting substances and must 
be authorized by the Parties to the Montreal Protocol on Substances 
that Deplete the Ozone Layer. The U.S. government will use the 
applications received in response to this notice as the basis for its 
nomination of essential use allowances at the Fifteenth Meeting of the 
Parties to the Montreal Protocol on Substances that Deplete the Ozone 
Layer (the Protocol), to be held in 2003.

DATES: Applications for essential use exemptions must be submitted to 
EPA no later than November 29, 2002, in order for the United States 
(U.S.) Government to complete its review and to submit nominations to 
the United Nations Environment Programme and the Protocol Parties in a 
timely manner.

ADDRESSES: Send two copies of application materials to: Scott Monroe, 
Global Programs Division (6205J), U.S. Environmental Protection Agency, 
1200 Pennsylvania Avenue, NW., Washington, DC 20460. (For applications 
sent via courier service, use the following direct mailing address: 501 
3rd Street, NW., Washington, DC 20001.) Send one copy of non-
confidential application materials to: Air Docket A-93-39, EPA Docket 
Center (EPA/DC), EPA West, Mail Code 6102T, 1200 Pennsylvania Avenue, 
NW., Washington, DC 20460.

Confidentiality: Application materials that are sent to the Air Docket 
should not contain confidential or proprietary information. Such 
confidential information should be submitted under separate cover and 
be clearly identified as ``trade secret,'' ``proprietary,'' or 
``company confidential.'' Information covered by a claim of business 
confidentiality will be disclosed only to authorized government 
personnel. If no claim of confidentiality accompanies the information 
when it is received by EPA, the information may be made available to 
the public by EPA without further notice to the company (40 CFR 2.203).

FOR FURTHER INFORMATION CONTACT: Scott Monroe at the above address, or 
by telephone at (202) 564-9712, by fax at (202) 565-2155, or by email 
at [email protected]. General information may be obtained from EPA's 
stratospheric protection Web site at http://www.epa.gov/ozone.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background--The Essential Use Nomination Process.
II. Information Required for Essential Use Applications for 
Production or Importation of Class I Substances in 2004 and 2005.
III. Information to Assess the Need for Potential Campaign 
Production for the Years Beyond 2005.

I. Background--The Essential Use Nomination Process

    As described in previous Federal Register (FR) documents,\1\ the 
Parties to the Protocol agreed during the Fourth Meeting in Copenhagen 
on November 23-25, 1992, to accelerate the phase-out schedules for 
Class I ozone-depleting substances. Specifically, the Parties agreed 
that non-Article 5 Parties (developed countries) would phase out the 
production and consumption of halons by January 1, 1994, and the 
production and consumption of other class I substances (under 40 CFR 
part 82, subpart A), except methyl bromide, by January 1, 1996. The 
Parties also reached decisions and adopted resolutions on a variety of 
other matters, including the criteria to be used for allowing 
``essential use'' exemptions from the phaseout of production and 
importation of controlled substances. Decision IV/25 of the Fourth 
Meeting of the Parties details the specific criteria and review process 
for granting essential use exemptions.
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    \1\ 58 FR 29410, May 20, 1993; 59 FR 52544, October 18, 1994; 60 
FR 54349, October 23, 1995; 61 FR 51110, 0 30, 1996, 62 FR 51655, 
October 2, 1997; 63 FR 42629, August 10, 1998; 64 FR 50083, 
September 15, 1999; 65 FR 65377, November 1, 2000; and 200166 FR 
56102, November 6, 2001.
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    Decision IV/25 states that ``* * * a use of a controlled substance 
should qualify as ``essential'' only if: (i) it is necessary for the 
health, safety or is critical for the functioning of society 
(encompassing cultural and intellectual aspects); and (ii) there are no 
available technically and economically feasible alternatives or 
substitutes that are acceptable from the standpoint of environment and 
health.'' In addition, the Parties agreed ``that production and 
consumption, if any, of a controlled substance, for essential uses 
should be permitted only if: (i) all economically feasible steps have 
been taken to minimize the essential use and any associated emission of 
the controlled substance; and (ii) the controlled substance is not 
available in sufficient quantity and quality from the existing stocks 
of banked or recycled controlled substances * * *.'' Decision XII/2 
taken at the thirteenth meeting of the Parties states that any CFC 
metered dose inhaler (MDI) product approved after December 31, 2000, is 
non-essential unless the product meets the criteria in Decision IV/25 
paragraph 1(a).
    The first step in obtaining essential use allowances is for the 
user to consider whether the use of the controlled substance meets the 
criteria of Decision IV/25. If the essential use request is for an MDI 
product, that

[[Page 66148]]

product must also meet the criteria of Decision XII/2. The user should 
then send a completed application in order to notify EPA of the 
candidate use and provide information for U.S. government agencies and 
the Protocol Parties to evaluate that use according to the criteria 
under the Protocol.
    Upon receipt of the essential use exemption application, EPA 
reviews the information provided and works with other interested 
Federal agencies to determine whether it meets the essential use 
criteria and warrants being nominated by the United States for an 
exemption. In the case of multiple exemption requests for a single use 
such as for MDIs, EPA aggregates exemption requests received from 
individual entities into a single U.S. request. An important part of 
the EPA review of requests for CFCs for MDIs is to determine that the 
aggregate request for a particular future year adequately reflects the 
total market need for CFC MDIs and expected availability of CFC 
substitutes by that point in time. If the sum of individual requests 
does not account for such factors, the U.S. government may adjust the 
aggregate request to better reflect true market needs.
    Nominations submitted by the United States and other Parties are 
forwarded from the United Nations Ozone Secretariat to the Montreal 
Protocol's Technical and Economic Assessment Panel (TEAP) and its 
Technical Options Committees (TOCs), which review the submissions and 
make recommendations to the Protocol Parties for essential use 
exemptions. Those recommendations are then considered by the Parties at 
their annual meeting for final decision. If the Parties declare a 
specified use of a controlled substance as essential, and issue the 
necessary exemption from the production and consumption phaseout, EPA 
may propose regulatory changes to reflect the decisions by the Parties, 
but only to the extent such action is consistent with the Clean Air Act 
(CAA or Act). Applicants should be aware that essential use exemptions 
granted to the United States for the year 2003 under the Protocol were 
limited to chlorofluorocarbons (CFCs) for metered dose inhalers (MDIs) 
to treat asthma and chronic obstructive pulmonary disease, and methyl 
chloroform for use in manufacturing solid rocket motors.
    The timing of this process is such that in any given year the 
Parties review nominations for essential use exemptions from the 
production and consumption phaseout intended for the following year and 
subsequent years. This means that, if nominated, applications submitted 
in response to today's notice for an exemption in 2004 and 2005 will be 
considered by the Parties in 2003 for final action.
    The quantities of controlled ODSs that are requested in response to 
this notice, if approved by the Parties to the Montreal Protocol in 
2003, will then be allocated as essential-use allowances (EUAs) to the 
specific U.S. companies through notice and comment rulemaking. EUAs for 
the year 2004 will be allocated to U.S. companies at the end of 2003, 
and EUAs for the year 2005 will be made at the end of 2004.

II. Information Required for Essential Use Applications for Production 
or Importation of Class I Substances in 2004 and 2005

    Through this action, EPA requests applications for essential use 
exemptions for all class I substances, except methyl bromide, for 
calendar years 2004 and 2005. The Parties to the Montreal Protocol have 
approved 2,975 metric tons of CFCs for the year 2004; therefore, this 
notice is the last opportunity to submit new or revised applications 
for 2004. This notice is also the first opportunity to submit requests 
for 2005. Companies will have an opportunity to submit new, 
supplemental, or amended applications for 2005 next year. All requests 
for exemptions submitted to EPA must present information as prescribed 
in the current version of the TEAP ``Handbook on Essential Use 
Nominations'' (or ``handbook''), which was published in June 2001. The 
handbook is available electronically on the web at http://www.teap.org, 
or at http://www.epa.gov/ozone.
    In brief, the TEAP Handbook states that applicants must present 
information on:
    [sbull] Role of use in society;
    [sbull] Alternatives to use;
    [sbull] Steps to minimize use;
    [sbull] Steps to minimize emissions;
    [sbull] Recycling and stockpiling;
    [sbull] Quantity of controlled substances requested; and
    [sbull] Approval date and indications (for MDIs).
    First, in order to obtain complete information from essential use 
applicants for CFC MDIs, EPA requires that parties (such as the 
International Pharmaceutical Aerosol Consortium) who request CFCs for 
multiple pharmaceutical companies make clear the amount of CFCs 
requested for each member company. Second, all essential use 
applications for CFCs must provide a breakdown of the quantity of CFCs 
necessary for each MDI product to be produced. This detailed breakdown 
of EUAs will allow EPA and the Food and Drug Administration to make 
informed decisions on the amount of CFC to be nominated by the U.S. 
Government for the years 2004 and 2005. Third, all new drug application 
(NDA) holders for CFC MDI products produced in the United States must 
submit a complete application for essential use allowances either on 
their own or in conjunction with their contract filler. In the case 
where a contract filler produces a portion of an NDA holder's CFC MDIs, 
the contract filler and the NDA holder must determine the total amount 
of CFCs necessary to produce the NDA holder's entire product line of 
CFC MDIs. The NDA holder must provide an estimate of how the CFCs would 
be split between the contract filler and the NDA holder in the 
allocation year. This estimate will be used only as a basis for 
determining the nomination amount, and may be adjusted prior to 
allocation of EUAs. Since the U.S. Government cannot forward incomplete 
or inadequate nominations to the Ozone Secretariat, it is important for 
applicants to provide all information requested in the Handbook, 
including the information specified in the supplemental research and 
development form (page 45).
    The accounting framework matrix in the handbook entitled ``Table 
IV: Reporting Accounting Framework for Essential Uses Other Than 
Laboratory and Analytical'' requests data for the year 2002 on the 
amount of ODS exempted for an essential use, the amount acquired by 
production, the amount acquired by import, the amount on hand at the 
start of the year, the amount available for use in 2002, the amount 
used for the essential use, the quantity contained in exported 
products, the amount destroyed, and the amount on hand at the end of 
2002. Because the data necessary to complete Table IV will not be 
available until after January 1, 2003, companies should not include 
this chart with their EUA applications in response to this action. EPA 
plans to send letters to each essential use applicant requesting the 
information in Table IV in the first two weeks of January 2003. 
Companies will have only fourteen days in which to respond since EPA 
must compile companies' responses to complete the U.S. CFC Accounting 
Framework for submission to the Parties to the Montreal Protocol by the 
end of January.
    EPA anticipates that the Parties' review of MDI essential use 
requests will focus extensively on the United States' progress in 
developing alternatives to CFC MDIs, including education programs to 
inform patients

[[Page 66149]]

and health care providers of the CFC phaseout and the transition to 
alternatives. Accordingly, applicants are strongly advised to present 
detailed information on these points, including the scope and cost of 
such efforts and the medical and patient organizations involved in the 
work. Applicants should submit their exemption requests to EPA as noted 
in the Addresses section at the beginning of today's document.

III. Availability of Pharmaceutical Grade CFCs for the Year 2005 and 
Beyond

    The plant that currently produces pharmaceutical grade CFCs for 
U.S. MDIs is scheduled to close at the end of 2005. As such, it is 
necessary for MDI manufacturers who wish to continue production after 
that time to identify a source of pharmaceutical grade CFC past this 
date. The Parties to the Protocol have identified two possible options. 
One is to qualify another plant to continue to produce pharmaceutical 
grade CFCs on a just-in-time basis. A second option is to request that 
CFCs be produced from the existing plant in a ``final campaign'' 
production of CFC to be produced in 2005. The CFCs produced in a final 
campaign could, in theory, then supply the remainder of the transition 
to CFC-free MDIs. It is important to note that this second option is 
under consideration but has not yet been approved by the Parties.
    In order for EPA to plan effectively for the future of the 
essential use process, and in order for the U.S. Government to be fully 
informed, EPA must gather information about how MDI manufacturers 
intend to procure CFCs after 2005. Therefore, we request that all 
essential use applicants for MDIs answer the following two questions as 
completely as possible.
    1. What steps has your company taken to ensure a continued supply 
of CFCs beyond 2005? Please be specific and explain whether there are 
plans to qualify a plant to produce pharmaceutical grade CFCs. Please 
identify the chemical company, the location of the plant, and the date 
the new plant is expected to begin production.
    2. Does your company wish to make an essential use request for 
final campaign production of pharmaceutical grade CFCs for the year 
2005 and beyond? If yes, how much CFCs does your company anticipate 
requesting?
    The answers you provide will be considered confidential business 
information, and will only be shared with authorized government 
officials. While we are requesting information related to the 
possibility of campaign production of CFCs for MDIs in 2005, we are not 
requesting that companies make an official nomination for campaign 
production in 2005. If it is determined that campaign production is 
necessary and allowed under the Montreal Protocol, EPA will issue a 
separate notice requesting nominations for campaign production.

    Dated: October 22, 2002.
Robert Brenner,
Acting Assistant Administrator, Office of Air and Radiation.
[FR Doc. 02-27623 Filed 10-29-02; 8:45 am]
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