[Federal Register Volume 77, Number 241 (Friday, December 14, 2012)]
[Proposed Rules]
[Pages 74435-74449]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-30225]



[[Page 74435]]

-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[EPA-HQ-OAR-2010-0280; FRL-9714-4]
RIN 2060-AR41


Protection of Stratospheric Ozone: The 2013 Critical Use 
Exemption From the Phaseout of Methyl Bromide

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: EPA is proposing uses that qualify for the 2013 critical use 
exemption. EPA is also proposing to amend the regulatory framework to 
determine the amount of methyl bromide that may be produced, imported, 
or supplied from existing pre-phaseout inventory for those uses in 
2013. EPA is taking action under the authority of the Clean Air Act to 
reflect a recent consensus decision taken by the Parties to the 
Montreal Protocol on Substances that Deplete the Ozone Layer at the 
Twenty-Third Meeting of the Parties. EPA is seeking comment on the list 
of critical uses and on EPA's determination of the specific amounts of 
methyl bromide that may be produced and imported, or sold from pre-
phaseout inventory for those uses.

DATES: Comments must be submitted by January 28, 2013. Any party 
requesting a public hearing must notify the contact person listed below 
by 5 p.m. Eastern Standard Time on December 19, 2012. If a hearing is 
requested it will be held on December 31, 2012. EPA will post 
information regarding a hearing, if one is requested, on the Ozone 
Protection Web site www.epa.gov/ozone/strathome.html. Persons 
interested in attending a public hearing should consult with the 
contact person below regarding the location and time of the hearing.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2010-0280, by one of the following methods:
     www.regulations.gov: Follow the on-line instructions for 
submitting comments.
     Email: [email protected].
     Fax: (202) 566-9744.
     Phone: (202) 566-1742.
     U.S. Mail: Docket EPA-HQ-OAR-2010-0280, U.S. Environmental 
Protection Agency, EPA Docket Center, Air and Radiation Docket, Mail 
Code 28221T, 1200 Pennsylvania Avenue NW., Washington, DC 20460.
     Hand Delivery or Courier: Docket EPA-HQ-OAR-2010-0280, EPA 
Docket Center--Public Reading Room, EPA West Building, Room 3334, 1301 
Constitution Avenue NW., Washington, DC 20004. Such deliveries are only 
accepted during the Docket's normal hours of operation, and special 
arrangements should be made for deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2010-0280. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
www.regulations.gov, including any personal information provided, 
unless the comment includes information claimed to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Do not submit information that you consider to 
be CBI or otherwise protected through www.regulations.gov or email. The 
www.regulations.gov Web site is an ``anonymous access'' system, which 
means EPA will not know your identity or contact information unless you 
provide it in the body of your comment. If you send an email comment 
directly to EPA without going through www.regulations.gov your email 
address will be automatically captured and included as part of the 
comment that is placed in the public docket and made available on the 
Internet. If you submit an electronic comment, EPA recommends that you 
include your name and other contact information in the body of your 
comment and with any disk or CD-ROM you submit. If EPA cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, EPA may not be able to consider your comment. Electronic 
files should avoid the use of special characters, any form of 
encryption, and be free of any defects or viruses. For additional 
information about EPA's public docket visit the EPA Docket Center 
homepage at http://www.epa.gov/epahome/dockets.htm.
    Docket: All documents in the docket are listed in the 
www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in www.regulations.gov or in hard copy at the Air and Radiation Docket, 
EPA/DC, EPA West, Room 3334, 1301 Constitution Ave. NW., Washington, 
DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday 
through Friday, excluding legal holidays. The telephone number for the 
Public Reading Room is (202) 566-1744, and the telephone number for the 
Air and Radiation Docket is (202) 566-1742).

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

SUPPLEMENTARY INFORMATION: This proposed rule concerns Clean Air Act 
(CAA) restrictions on the consumption, production, and use of methyl 
bromide (a Class I, Group VI controlled substance) for critical uses 
during calendar year 2013. Under the Clean Air Act, methyl bromide 
consumption (consumption is defined under section 601 of the CAA as 
production plus imports minus exports) and production were phased out 
on January 1, 2005, apart from allowable exemptions, such as the 
critical use and the quarantine and preshipment (QPS) exemptions. With 
this action, EPA is proposing and seeking comment on the uses that will 
qualify for the 2013 critical use exemption as well as specific amounts 
of methyl bromide that may be produced and imported, or sold from pre-
phaseout inventory (also referred to as ``stocks'' or ``inventory'') 
for proposed critical uses in 2013.

Table of Contents

I. General Information
    A. Regulated Entities
    B. What should I consider when preparing my comments?
II. What is methyl bromide?
III. What is the background to the phaseout regulations for ozone-
depleting substances?
IV. What is the legal authority for exempting the production and 
import of methyl bromide for critical uses authorized by the parties 
to the Montreal Protocol?
V. What is the critical use exemption process?
    A. Background of the Process
    B. How does this proposed rule relate to previous critical use 
exemption rules?
    C. Stocks of Methyl Bromide
    D. Proposed Critical Uses
    E. Proposed Critical Use Amounts

[[Page 74436]]

    1. Approach for Determining Critical Stock Allowances
    2. Approach for Determining New Production and Import Allowances
    F. The Criteria in Decisions IX/6 and Ex. I/4
    G. Emissions Minimization
VI. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions to Address 
Environmental Justice in Minority Populations and Low-Income 
Populations

I. General Information

A. Regulated Entities

    Entities potentially regulated by this proposed action are those 
associated with the production, import, export, sale, application, and 
use of methyl bromide covered by an approved critical use exemption. 
Potentially regulated categories and entities include producers, 
importers, and exporters of methyl bromide; applicators and 
distributors of methyl bromide; and users of methyl bromide that 
applied for the 2013 critical use exemption including growers of 
vegetable crops, fruits and nursery stock, and owners of stored food 
commodities and structures such as grain mills and processors. This 
list is not intended to be exhaustive, but rather to provide a guide 
for readers regarding entities likely to be regulated by this proposed 
action. To determine whether your facility, company, business, or 
organization could be regulated by this proposed action, you should 
carefully examine the regulations promulgated at 40 CFR part 82, 
subpart A. If you have questions regarding the applicability of this 
action to a particular entity, consult the person listed in the 
preceding section.

B. What should I consider when preparing my comments?

    1. Confidential Business Information. Do not submit confidential 
business information (CBI) to EPA through www.regulations.gov or email. 
Clearly mark the part or all of the information that you claim to be 
CBI. For CBI information in a disk or CD-ROM that you mail to EPA, mark 
the outside of the disk or CD-ROM as CBI and then identify 
electronically within the disk or CD-ROM the specific information that 
is claimed as CBI. Information so marked will not be disclosed except 
in accordance with procedures set forth in 40 CFR part 2. In addition 
to one complete version of the comment that includes information 
claimed as CBI, a copy of the comment that does not contain the 
information claimed as CBI must be submitted for inclusion in the 
public docket.
    2. Tips for Preparing Your Comments. When submitting comments, 
remember to:
     Identify the rulemaking by docket number and other 
identifying information (subject heading, Federal Register date, and 
page number).
     Follow directions--The agency may ask you to respond to 
specific questions or organize comments by referencing a Code of 
Federal Regulations (CFR) part or section number.
     Explain why you agree or disagree; suggest alternatives 
and substitute language for your requested changes.
     Describe any assumptions and provide any technical 
information and/or data that you used.
     If you estimate potential costs or burdens, explain how 
you arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
     Provide specific examples to illustrate your concerns, and 
suggest alternatives.
     Explain your views as clearly as possible, avoiding the 
use of profanity or personal threats.
     Make sure to submit your comments by the comment period 
deadline identified.

II. What is methyl bromide?

    Methyl bromide is an odorless, colorless, toxic gas which is used 
as a broad-spectrum pesticide and is controlled under the CAA as a 
Class I ozone-depleting substance (ODS). Methyl bromide was once widely 
used as a fumigant to control a variety of pests such as insects, 
weeds, rodents, pathogens, and nematodes. Information on methyl bromide 
can be found at http://www.epa.gov/ozone/mbr.
    Methyl bromide is also regulated by EPA under the Federal 
Insecticide, Fungicide, and Rodenticide Act (FIFRA) and other statutes 
and regulatory authority, as well as by States under their own statutes 
and regulatory authority. Under FIFRA, methyl bromide is a restricted 
use pesticide. Restricted use pesticides are subject to Federal and 
State requirements governing their sale, distribution, and use. Nothing 
in this proposed rule implementing the Clean Air Act is intended to 
derogate from provisions in any other Federal, State, or local laws or 
regulations governing actions including, but not limited to, the sale, 
distribution, transfer, and use of methyl bromide. Entities affected by 
this proposal must continue to comply with FIFRA and other pertinent 
statutory and regulatory requirements for pesticides (including, but 
not limited to, requirements pertaining to restricted use pesticides) 
when importing, exporting, acquiring, selling, distributing, 
transferring, or using methyl bromide for critical uses. The provisions 
in this proposed action are intended only to implement the CAA 
restrictions on the production, consumption, and use of methyl bromide 
for critical uses exempted from the phaseout of methyl bromide.

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

    The regulatory requirements of the stratospheric ozone protection 
program that limit production and consumption of ozone-depleting 
substances are in 40 CFR part 82, subpart A. The regulatory program was 
originally published in the Federal Register on August 12, 1988 (53 FR 
30566), in response to the 1987 signing and subsequent ratification of 
the Montreal Protocol on Substances that Deplete the Ozone Layer 
(Montreal Protocol). The Montreal Protocol is the international 
agreement aimed at reducing and eliminating the production and 
consumption of stratospheric ozone-depleting substances. The United 
States was one of the original signatories to the 1987 Montreal 
Protocol and the United States ratified the Protocol on April 12, 1988. 
Congress then enacted, and President George H.W. Bush signed into law, 
the Clean Air Act Amendments of 1990 (CAAA of 1990) which included 
Title VI on Stratospheric Ozone Protection, codified as 42 U.S.C. 
Chapter 85, Subchapter VI, to ensure that the United States could 
satisfy its obligations under the Protocol. EPA issued regulations to 
implement this legislation and has since amended the regulations as 
needed.
    Methyl bromide was added to the Protocol as an ozone-depleting 
substance in 1992 through the Copenhagen Amendment to the Protocol. The 
Parties to the Montreal Protocol (Parties) agreed that each developed 
country's level of methyl bromide production and consumption in 1991 
should be the baseline for establishing a freeze on the level of

[[Page 74437]]

methyl bromide production and consumption for developed countries. EPA 
published a final rule in the Federal Register on December 10, 1993 (58 
FR 65018), listing methyl bromide as a Class I, Group VI controlled 
substance. This rule froze U.S. production and consumption at the 1991 
baseline level of 25,528,270 kilograms, and set forth the percentage of 
baseline allowances for methyl bromide granted to companies in each 
control period (each calendar year) until 2001, when the complete 
phaseout would occur. This phaseout date was established in response to 
a petition filed in 1991 under sections 602(c)(3) and 606(b) of the 
CAAA of 1990, requesting that EPA list methyl bromide as a Class I 
substance and phase out its production and consumption. This date was 
consistent with section 602(d) of the CAAA of 1990, which, for newly 
listed Class I ozone-depleting substances provides that ``no extension 
[of the phaseout schedule in section 604] under this subsection may 
extend the date for termination of production of any class I substance 
to a date more than 7 years after January 1 of the year after the year 
in which the substance is added to the list of class I substances.''
    At the Seventh Meeting of the Parties (MOP) in 1995, the Parties 
made adjustments to the methyl bromide control measures and agreed to 
reduction steps and a 2010 phaseout date for developed countries with 
exemptions permitted for critical uses. At that time, the United States 
continued to have a 2001 phaseout date in accordance with section 
602(d) of the CAAA of 1990. At the Ninth MOP in 1997, the Parties 
agreed to further adjustments to the phaseout schedule for methyl 
bromide in developed countries, with reduction steps leading to a 2005 
phaseout. The Parties also established a phaseout date of 2015 for 
Article 5 countries.

IV. What is the legal authority for exempting the production and import 
of methyl bromide for critical uses authorized by the parties to the 
Montreal Protocol?

    In October 1998, the U.S. Congress amended the Clean Air Act (CAA) 
to prohibit the termination of production of methyl bromide prior to 
January 1, 2005, to require EPA to bring the U.S. phaseout of methyl 
bromide in line with the schedule specified under the Protocol, and to 
authorize EPA to provide certain exemptions. These amendments were 
contained in Section 764 of the 1999 Omnibus Consolidated and Emergency 
Supplemental Appropriations Act (Pub. L. 105-277, October 21, 1998) and 
were codified in section 604 of the CAA, 42 U.S.C. 7671c. The amendment 
that specifically addresses the critical use exemption appears at 
section 604(d)(6), 42 U.S.C. 7671c(d)(6). EPA revised the phaseout 
schedule for methyl bromide production and consumption in a direct 
final rulemaking on November 28, 2000 (65 FR 70795), which allowed for 
the reduction in methyl bromide consumption specified under the 
Protocol and extended the phaseout to 2005 while creating a placeholder 
for critical use exemptions. EPA again amended the regulations to allow 
for an exemption for quarantine and preshipment (QPS) purposes through 
an interim final rule on July 19, 2001 (66 FR 37751), and a final rule 
on January 2, 2003 (68 FR 238).
    On December 23, 2004 (69 FR 76982), EPA published a final rule (the 
``Framework Rule'') that established the framework for the critical use 
exemption, set forth a list of approved critical uses for 2005, and 
specified the amount of methyl bromide that could be supplied in 2005 
from stocks and new production or import to meet the needs of approved 
critical uses. EPA subsequently published rules applying the critical 
use exemption framework for each of the annual control periods from 
2006 to 2012. Under authority of section 604(d)(6) of the CAA, today's 
action proposes the uses that will qualify as approved critical uses in 
2013 and the amount of methyl bromide that may be produced, imported, 
or supplied from inventory to satisfy those uses.
    This proposed action on critical uses for 2013 reflects Decision 
XXIII/4, taken at the Twenty-Third Meeting of the Parties in November 
2011. In accordance with Article 2H(5), the Parties have issued several 
Decisions pertaining to the critical use exemption. These include 
Decisions IX/6 and Ex. I/4, which set forth criteria for reviewing 
proposed critical uses. The status of Decisions is addressed in NRDC v. 
EPA, (464 F.3d 1, DC Cir. 2006) and in EPA's ``Supplemental Brief for 
the Respondent,'' filed in NRDC v. EPA and available in the docket for 
this action. In this proposed rule on critical uses for 2013, EPA is 
honoring commitments made by the United States in the Montreal Protocol 
context.

V. What is the critical use exemption process?

A. Background of the Process

    The critical use exemption is designed to permit the production and 
import of methyl bromide for uses that do not have technically and 
economically feasible alternatives that are acceptable from the 
standpoint of environment and health and for which the lack of methyl 
bromide would result in significant market disruption (40 CFR 82.3). 
Article 2H of the Montreal Protocol established the critical use 
exemption provision. At the Ninth Meeting of the Parties (1997), the 
Parties established the criteria for an exemption in Decision IX/6. In 
that Decision, the Parties agreed that ``a use of methyl bromide should 
qualify as `critical' only if the nominating Party determines that: (i) 
The specific use is critical because the lack of availability of methyl 
bromide for that use would result in a significant market disruption; 
and (ii) there are no technically and economically feasible 
alternatives or substitutes available to the user that are acceptable 
from the standpoint of environment and public health and are suitable 
to the crops and circumstances of the nomination.'' These criteria are 
reflected in EPA's definition of ``critical use'' at 40 CFR 82.3. In 
addition, the Parties decided that production and consumption, if any, 
of methyl bromide for critical uses should be permitted only if a 
variety of conditions have been met, including that all technically and 
economically feasible steps have been taken to minimize the critical 
use and any associated emission of methyl bromide, that research 
programs are in place to develop and deploy alternatives and 
substitutes, and that methyl bromide is not available in sufficient 
quantity and quality from existing stocks of banked or recycled methyl 
bromide.
    In response to EPA's request for critical use exemption 
applications published in the Federal Register on July 15, 2010 (75 FR 
41177), applicants provided data on the technical and economic 
feasibility of using alternatives to methyl bromide. Applicants also 
submitted data on their use of methyl bromide, ongoing research 
programs into the use of alternatives to methyl bromide in their 
sector, and efforts to minimize use and emissions of methyl bromide.
    EPA reviews the data submitted by applicants, as well as data from 
governmental and academic sources, to establish whether there are 
technically and economically feasible alternatives available for a 
particular use of methyl bromide, and whether there would be a 
significant market disruption if no exemption were available. In 
addition, an interagency workgroup reviews other parameters of the 
exemption applications such as dosage and emissions minimization 
techniques and applicants' research or transition plans.

[[Page 74438]]

This assessment process culminates in the development of a document 
referred to as the U.S. critical use nomination (CUN). Since 2003, the 
U.S. Department of State has submitted a CUN annually to the United 
Nations Environment Programme (UNEP) Ozone Secretariat. The Methyl 
Bromide Technical Options Committee (MBTOC) and the Technology and 
Economic Assessment Panel (TEAP), which are advisory bodies to Parties 
to the Montreal Protocol, review each Party's CUN and make 
recommendations to the Parties on the nominations. The Parties then 
take Decisions to authorize critical use exemptions for particular 
Parties, including how much methyl bromide may be supplied for the 
exempted critical uses. As required in section 604(d)(6) of the CAA, 
for each exemption period, EPA consults with the United States 
Department of Agriculture (USDA) and other departments and institutions 
of the Federal government that have regulatory authority related to 
methyl bromide, and provides an opportunity for public comment on the 
amounts and specific uses of methyl bromide that the agency is 
proposing to exempt.
    On February 4, 2011, the U.S. Government (USG) submitted the ninth 
Nomination for a Critical Use Exemption for Methyl Bromide for the 
United States of America to the Ozone Secretariat of UNEP. This 
nomination contained the request for 2013 critical uses. In February 
2011, MBTOC sent questions to the USG concerning technical and economic 
issues in the 2013 nomination. The USG transmitted responses to MBTOC 
in February, 2011. These documents, together with reports by the 
advisory bodies noted above, are in the public docket for this 
rulemaking. The proposed critical uses and amounts reflect the analysis 
contained in those documents.

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

    The December 23, 2004, Framework Rule (69 FR 76982) established the 
framework for the critical use exemption program in the United States, 
including definitions, prohibitions, trading provisions, and 
recordkeeping and reporting obligations. The preamble to the Framework 
Rule included EPA's determinations on key issues for the critical use 
exemption program.
    Since publishing the Framework Rule, EPA has annually promulgated 
regulations to exempt specific quantities of production and import of 
methyl bromide, to determine the amounts that may be supplied from pre-
phaseout inventory, and to indicate which uses meet the criteria for 
the exemption program for that year. See 71 FR 5985 (February 6, 2006), 
71 FR 75386 (December 14, 2006), 72 FR 74118 (December 28, 2007), 74 FR 
19878 (April 30, 2009), 75 FR 23167 (May 3, 2010), 76 FR 60737 
(September 30, 2011), and 77 FR 29218 (May 17, 2012).
    Today's action proposes to amend the regulatory framework to 
determine the amounts of Critical Use Allowances (CUAs) and Critical 
Stock Allowances (CSAs) to be allocated for critical uses in 2013. A 
CUA is the privilege granted through 40 CFR part 82 to produce or 
import 1 kg of methyl bromide for an approved critical use during the 
specified control period. These allowances expire at the end of the 
control period and, as explained in the Framework Rule, are not 
bankable from one year to the next. The proposed CUA allocation is 
subject to the trading provisions at 40 CFR 82.12, which are discussed 
in section V.G. of the preamble to the Framework Rule (69 FR 76982).
    A CSA is the right granted through 40 CFR part 82 to sell 1 kg of 
methyl bromide from inventory produced or imported prior to the January 
1, 2005, phaseout date for an approved critical use during the 
specified control period. The Framework Rule established provisions 
governing the sale of pre-phaseout inventories for critical uses, 
including the concept of CSAs and a prohibition on the sale of pre-
phaseout inventories for critical uses in excess of the amount of CSAs 
held by the seller. It also established trading provisions that allow 
CUAs to be converted into CSAs.

C. Stocks of Methyl Bromide

    An approved critical user may purchase methyl bromide produced or 
imported with CUAs, as well as limited inventories of pre-phaseout 
methyl bromide, the combination of which constitute the supply of 
``critical use methyl bromide'' intended to meet the needs of approved 
critical uses. EPA considers all pre-phaseout inventory to be suitable 
for both pre-plant and post harvest uses. The aggregate amount of pre-
phaseout methyl bromide reported as being in inventory at the beginning 
of 2012 is 1,248,876 kg. This amount does not include critical use 
methyl bromide that was produced after January 1, 2005, and carried 
over into subsequent years. Nor does it include methyl bromide produced 
(1) Under the quarantine and preshipment (QPS) exemption, (2) with 
Article 5 allowances to meet the basic domestic needs of Article 5 
countries, or (3) for feedstock or transformation purposes. As in prior 
years, the Agency will continue to closely monitor CUA and CSA data. As 
stated in the final 2006 CUE Rule, if an inventory shortage occurs, EPA 
may consider various options including authorizing the conversion of a 
limited number of CSAs to CUAs through a rulemaking, bearing in mind 
the upper limit on U.S. production/import for critical uses. In 
sections V.D. and V.G. of this preamble, EPA seeks comment on the 
amount of critical use methyl bromide to come from inventory compared 
to new production and import.
    As explained in the 2008 CUE Rule, the agency intends to continue 
releasing aggregate methyl bromide inventory information reported to 
the agency under the reporting requirements at 40 CFR 82.13 at the end 
of each control period. EPA notes that if the number of competitors in 
the industry were to decline appreciably, EPA would revisit the 
question of whether the aggregate is entitled to treatment as 
confidential information and whether to release the aggregate without 
notice. EPA is not proposing to change the treatment of submitted 
information but welcomes information concerning the composition of the 
industry in this regard. The aggregate information for 2003 through 
2012 is available in the docket for this rulemaking.

D. Proposed Critical Uses

    In Decision XXIII/4, taken in November 2011, the Parties to the 
Protocol agreed ``to permit, for the agreed critical-use categories for 
2013 set forth in table A of the annex to the present decision for each 
party, subject to the conditions set forth in the present decision and 
in decision Ex.I/4 to the extent that those conditions are applicable, 
the levels of production and consumption for 2013 set forth in table B 
of the annex to the present decision which are necessary to satisfy 
critical uses * * * ''
    The following uses are those set forth in table A of the annex to 
Decision XXIII/4 for the United States:

     Commodities
     Mills and food processing structures
     Dried cured pork
     Cucurbits
     Eggplant--field
     Nursery stock--fruit, nuts, flowers
     Orchard replants
     Ornamentals
     Peppers--field
     Strawberry--field
     Strawberry runners
     Tomatoes--field

    EPA is seeking comment on the technical analysis contained in the 
U.S. nomination (available for public review in the docket to this 
rulemaking), and

[[Page 74439]]

seeks information regarding any changes to the registration (including 
cancellation or new registrations), use, or efficacy of alternatives 
that have transpired after the 2013 U.S. CUN was forwarded. EPA 
recognizes that as the market for alternatives evolves, the thresholds 
for what constitutes ``significant market disruption'' or ``technical 
and economic feasibility'' may change. Comments on technical data 
contained in the CUN, or new information, could potentially alter the 
agency's analysis on the uses and amounts of methyl bromide qualifying 
for the critical use exemption. The agency may, in response to new 
information, reduce the proposed quantities of critical use methyl 
bromide, or decide not to approve uses authorized by the Parties. 
However, the agency will not increase the quantities or add new uses in 
the final rule beyond those authorized by the Parties.
    EPA is also proposing to modify the table in 40 CFR part 82, 
subpart A, appendix L to reflect the agreed critical use categories 
identified in Decision XXIII/4. The agency is amending the table of 
critical uses and critical users based in part on the technical 
analysis contained in the 2013 U.S. nomination that assesses data 
submitted by applicants to the CUE program. First, EPA is proposing to 
remove two users who did not submit applications and therefore were not 
included in the U.S. nomination. These users are California rose 
nursery growers and Maryland tomato growers.
    Second, EPA is proposing to remove the National Pest Management 
Association (NPMA) food processing use from the list for 2013. The NPMA 
did not initially apply to be a critical user in 2013 and the Parties 
have not authorized a critical use for this purpose for 2013. Members 
of the NPMA have worked to transition from methyl bromide to 
alternative practices and alternative fumigants like sulfuryl fluoride. 
In January 2004, EPA registered the first food uses of sulfuryl 
fluoride for control of insect pests in grain processing facilities and 
in harvested and processed food commodities such as cereal grains, 
dried fruits, and tree nuts. In July 2005, EPA approved sulfuryl 
fluoride for treatment of additional harvested and processed food 
commodities such as coffee and cocoa beans, and for fumigation of food 
handling and processing facilities.
    On January 19, 2011, EPA proposed to revoke the residue limits on 
food, known as tolerances, for fluoride on the food commodities 
approved for treatment with sulfuryl fluoride (76 FR 3422). In response 
to this proposal, the NPMA submitted a supplemental request for 2013 
during the open period for 2014 applications. The USG did not include 
NPMA's supplemental request in the 2014 nomination submitted to UNEP on 
January 31, 2012, because EPA has only proposed to revoke the 
tolerances for sulfuryl fluoride and has not taken action in any final 
rule. U.S. critical use nominations have been based on final decisions 
about alternatives. Additionally, the proposed tolerance revocation 
rule includes a staggered implementation scheme, making it unlikely 
that any specific revocation will be effective in 2013. Therefore, EPA 
is not proposing NPMA as a critical use in 2013.
    Third, EPA is proposing to remove sectors or users that applied for 
a critical use in 2013 but that the United States did not nominate for 
2013. EPA conducted a thorough technical assessment of each application 
and considered the effects that the loss of methyl bromide would have 
for each agricultural sector, and whether significant market disruption 
would occur as a result. As a result of this technical review, the U.S. 
Government did not find that certain sectors or users met the critical 
use criteria in Decision IX/6 and they were therefore not included in 
the 2013 Critical Use Nomination. EPA notified these sectors of their 
status in July 2011. These sectors are: members of the Southeastern 
Cucurbit Consortium and cucurbit growers in Maryland and Delaware; 
growers in the forest nursery sector (Southern Forest Nursery 
Management Cooperative, Northeastern Forest and Conservation Nursery 
Association, and Michigan seedling growers); members of the 
Southeastern Pepper Consortium; members of the Southeastern Strawberry 
Consortium and Florida strawberry growers; California sweet potato slip 
growers; members of the Southeastern Tomato Consortium and Virginia 
tomato growers. For each of these uses, EPA found that there are 
technically and economically feasible alternatives to methyl bromide.
    Finally, EPA is proposing to limit the CUE for cucurbit, eggplant, 
pepper, and tomato sectors in Georgia to small growers. The EPA review 
of the available information for Georgia indicates that farmers growing 
fewer than 10 acres of these crops need an additional year to 
successfully transition to the alternatives. These small growers do not 
have as much experience with the alternatives and need to convert their 
equipment to the University of Georgia (UGA) ``3-Way'' mixture (a 
combination of 1,3-dichloropropene, chloropicrin, and metam). The EPA 
conducted an economic assessment of small growers' ability to convert 
their equipment (see revised nomination, dated July 15, in the docket). 
The assessment demonstrates that despite the UGA 3-Way mixture being 
more affordable than methyl bromide plus chloropicrin on a per acre 
basis, retrofitting farm equipment to use the UGA 3-Way mixture at a 
cost of $3,450 is not affordable for growers under four acres, 
amortized over 10 years at 7% interest (7% is a home equity loan rate 
for this region at the time the nomination was submitted; interest on 
agricultural loans could be lower). However, due to variations in 
impacts for individual growers and uncertainties in the assumptions 
used in the economic analysis, farms smaller than 10 acres are 
reasonably expected to incur negative impacts from having to covert to 
the UGA 3-Way mixture. Therefore, EPA is proposing to limit the Georgia 
cucurbit, eggplant, pepper, and tomato critical uses to small growers, 
which EPA is proposing to define as growers growing fewer than 10 
acres. EPA seeks comment on these proposed changes to Appendix L.
    EPA is not proposing other changes to the table but is repeating 
the following clarifications made in previous years for ease of 
reference. The ``local township limits prohibiting 1,3-
dichloropropene'' are prohibitions on the use of 1,3-dichloropropene 
products in cases where local township limits on use of this 
alternative have been reached. In addition, ``pet food'' under 
subsection B of Food Processing refers to food for domesticated dogs 
and cats. Finally, ``rapid fumigation'' for commodities is when a buyer 
provides short (two working days or fewer) notification for a purchase 
or there is a short period after harvest in which to fumigate and there 
is limited silo availability for using alternatives.

E. Proposed Critical Use Amounts

    Table A of the annex to Decision XXIII/4 lists critical uses and 
amounts agreed to by the Parties to the Montreal Protocol. When added 
together, the total authorized critical use for 2013 for the United 
States is 562,326 kilograms (kg), which is equivalent to 2.2% of the 
U.S. 1991 methyl bromide consumption baseline of 25,528,270 kg. The 
maximum amount of new production and import for U.S. critical uses, 
specified in Table B of Decision XXIII/4, is 562,326 kg, minus 
available stocks. In previous years, the maximum amount of new 
production has been less than the total authorization, with the

[[Page 74440]]

difference representing the minimum amount that the Parties expect to 
be used from pre-phaseout inventory. For 2013 the Parties indicated 
that the United States should use ``available stocks,'' but unlike 
previous years, Decision XXIII/4 did not indicate a minimum amount 
expected to be taken from stocks. Consistent with EPA's past practice, 
and our commitments to the Parties, EPA is considering the level of 
``available stocks'' that may be allocated in this rulemaking. However, 
EPA is seeking comment on changing the approach for determining the 
availability of stocks in this rule.
    As established in earlier rulemakings, EPA views the determination 
of the total allocation, up to the amount authorized by the Parties, as 
an appropriate exercise of discretion. The Agency may decide to 
allocate less than the full amount authorized by the Parties, and in 
past CUE rules EPA has made reductions to the total allocation after 
considering several factors, including new data on alternatives, such 
as the registration of a new alternative not considered when the CUN 
was submitted to UNEP, and carryover from prior years. For 2013, EPA 
does not have new data regarding the uptake of new alternatives. 
However, iodomethane, an alternative that was available when the CUN 
was submitted, is no longer available. EPA believes this is an 
important factor that should be considered in determining the total 
amount of the allocation; however, because of the schedule for 
consideration under the Montreal Protocol, the timing of withdrawal 
complicates any recognition by the Parties of this development for 
2013. In addition, as detailed below, carryover for 2012 is zero and 
EPA is not proposing reductions on that basis. EPA is therefore 
proposing to allocate 562,326 kg, the full amount authorized by the 
Parties, in particular due to the loss of iodomethane. EPA welcomes 
comment on the proposed levels of exempted new production and import 
for critical uses and the amount of material that may be sold from pre-
phaseout inventory for critical uses.
1. Approach for Determining Critical Stock Allowances
    EPA is proposing a new approach for determining the amount of CSAs 
and CUAs to allocate. EPA is proposing to calculate ``available 
stocks'' as a percentage of the existing inventory, as was reported to 
EPA on January 1, 2012. Under this approach, EPA is soliciting comment 
on two different amounts of ``available stocks'', and thus two 
different possible allocations of CSAs. EPA is also soliciting comment 
on a separate approach that would continue to use the framework 
methodology to calculate the amount of ``available stocks'' by 
estimating drawdown during 2012 and providing for a supply chain factor 
for 2013. As noted above, EPA is proposing to not reduce the critical 
use authorization of the Parties, and thus is proposing that any 
authorized amount not allocated as CSAs be allocated as new production 
and import allowances.
    In past CUE allocation rules, EPA allocated CSAs in amounts that 
represented not only the difference between the total authorized CUE 
amount and the amount of authorized new production and import but also 
an additional amount to reflect available stocks. After determining the 
CSA amount, EPA determined the portion of CUE methyl bromide to come 
from new production and import such that the total amount of methyl 
bromide exempted for critical uses did not exceed the total amount 
authorized by the Parties for that year.
    EPA views the decision whether to include these additional amounts 
in the calculation of the year's overall CSA level as an appropriate 
exercise of discretion. The Agency is not required to allocate the full 
amount of authorized new production and consumption. The Parties only 
agree to ``permit'' a particular level of production and consumption; 
they do not--and cannot--mandate that the United States authorize this 
level of production and consumption domestically. Nor does the CAA 
require EPA to allow the full amount permitted by the Parties. Section 
604(d)(6) of the CAA does not require EPA to exempt any amount of 
production and consumption from the phaseout, but instead specifies 
that the Agency ``may'' create an exemption for critical uses, 
providing EPA with substantial discretion.
    When determining the CSA amounts, EPA considers what portion of 
existing stocks would be ``available'' for critical uses during that 
control period. The Parties to the Protocol recognized in their 
Decisions that the level of existing stocks may differ from the level 
of available stocks. Decision XXIII/4 states that ``production and 
consumption of methyl bromide for critical uses should be permitted 
only if methyl bromide is not available in sufficient quantity and 
quality from existing stocks * * *.'' In addition, earlier Decisions 
refer to the use of ``quantities of methyl bromide from stocks that the 
Party has recognized to be available.'' Thus, it is clear that 
individual Parties have the ability to determine their level of 
available stocks. Decision XXIII/4 further reinforces this concept by 
including the phrase ``minus available stocks'' as a footnote to the 
United States' authorized level of production and consumption in Table 
B. Section 604(d)(6) of the CAA does not require EPA to adjust the 
amount of new production and import to reflect the availability of 
stocks; however, as explained in previous rulemakings, making such an 
adjustment is a reasonable exercise of EPA's discretion under this 
provision.
    In recent CUE rules, EPA has calculated the amount of ``available 
stocks'' using a formula adopted in the 2008 CUE rule: ASCP 
= ESPP-DPP-SCFCP, where 
ASCP would be the available stocks on the first day of the 
control period; ESPP would be the existing pre-phaseout 
stocks of methyl bromide held in the United States by producers, 
importers, and distributors on the first day of the prior control 
period; DPP would be the estimated drawdown of existing 
stocks during the prior control period; and SCFCP would be 
the supply chain factor for the control period. In the section below, 
EPA is taking comment on using this approach, and is alternatively 
proposing a new approach, for determining the amount of available 
stocks.
Option 1: Percentage of Existing Inventory
    For 2013, EPA is proposing a new approach that would allocate 
critical stock allowances in an amount equal to a percentage of the 
existing inventory. Under this approach, EPA proposes to calculate 
``available stocks'' as a percentage of the existing inventory, as was 
reported to EPA on January 1, 2012. EPA is considering alternate 
approaches for allocating critical stock allowances because the old 
approach, discussed as option 2 below, may be increasingly inaccurate 
as the amount of inventory declines, overly complex, and contributing 
to delay in issuing the final critical use exemption. Furthermore, EPA 
believes that efforts to in estimate available inventory may be further 
complicated for 2013 by the recent withdrawal of iodomethane from the 
market.
    In the 2012 Final Rule, EPA recognized ``that its estimates [of 
available stocks] have become increasingly inexact in characterizing 
actual drawdown of pre-phaseout inventory, as the amounts in inventory 
have declined over time. EPA intends to consider the adequacy of using 
this formula to assess `available stocks' in a future action.'' 
Initially, the drawdown estimate was a simple linear model based on 
past years' rates. EPA modified

[[Page 74441]]

the approach when it became apparent that the inventory drawdown was 
decreasing exponentially rather than linearly. EPA noted in the 2009 
CUE Rule that the rate of drawdown was based mostly on the business 
decisions of the companies that hold pre-phaseout inventory, and 
included aspects that are difficult for EPA to know or quantify, such 
as honoring long-term relationships with non-CUE customers or holding 
inventory in response to price fluctuations. To refine the analysis in 
subsequent rules EPA separately analyzed the use of inventory on 
critical uses, for which there are a set number of allowances, and non-
critical uses, for which there are not. This approach is discussed in 
more detail below.
    Despite increased specificity, precise estimates still proved 
elusive. In successive years, EPA substantially overestimated inventory 
drawdown. Most recently, in the 2012 Rule, EPA estimated a drawdown of 
1,110,633 kg, when the actual drawdown was half that amount, or 556,794 
kg. The results of the methodology using the updated data were 
sufficiently different that EPA considered providing additional notice 
and the opportunity to comment to incorporate them into the final 
allocation rule. EPA is concerned that as the total amount of both the 
U.S. authorization and the pre-phaseout stocks become smaller, efforts 
to perfect EPA estimates in this area will delay needed rulemaking.
    Moreover, EPA believes that the fact that its projections 
consistently over-estimate the amount of inventory that will be drawn 
down is evidence that EPA has been substantially over-estimating the 
availability of pre-phaseout stocks. EPA has received comments in past 
rulemakings that existing inventory was not actually available to users 
because of reductions in the number of distributors, and decisions by 
distributors not to sell inventory. While EPA believes it is 
appropriate to rely on market flexibility and efficiency to distribute 
existing stocks of inventory, EPA recognizes that the data appear to 
show that inventory is less ``available'' than was estimated under 
EPA's prior approach.
    EPA believes problems with the existing formula may also become 
worse due to a recent change in the geographic distribution of critical 
users. In the past, EPA has considered all pre-phaseout inventory to be 
available to all users, regardless of location. This assumption, as 
discussed in the 2009 CUE rule (74 FR 19887, April 30, 2009), was based 
on the fact that inventory is held in California and the Southeast, as 
well as other locations around the country. While the geographic 
distribution of inventory generally remains the same, the authorized 
critical uses have shifted to California over the last two years. In 
the 2011 control period, 49% of the total authorization was for pre-
plant uses in California and 38% was for pre-plant uses in the 
Southeast. In 2013, this ratio will be 91% and 4% respectively.\1\
---------------------------------------------------------------------------

    \1\ EPA treats company-specific methyl bromide inventory 
information as confidential and believes that disaggregating the 
inventory data by geographic area could potentially reveal CBI. EPA 
solicits comment on this issue but is not proposing at this time to 
release data showing how much inventory is located in or near 
California. However, even in the absence of specific inventory data 
broken down by region, EPA believes that the fact that over 90% of 
critical use is in California is relevant to judging the 
availability of existing stocks.
---------------------------------------------------------------------------

    EPA believes that inventory held in the Southeast may not be 
equally available to critical users in California. Stakeholders have 
told EPA that distributors do not ship pre-phaseout inventory to buyers 
across the country. Unlike newly produced or imported material which 
enters nationwide distribution networks, inventory is mostly held by 
regional distributors. In addition, those distributors typically sell 
both the gas and the application services together. Distributors would 
therefore incur additional expense to ship material without being able 
to charge for performing the application. EPA specifically encourages 
comment on the question of whether inventory held in one part of the 
country has been, or can be, transported to critical uses in another 
part of the country.
    Another reason EPA is proposing to allocate critical stock 
allowances equal to a percentage of the existing inventory is that EPA 
believes this method will be easier to calculate and will help 
streamline the issuance of the CUE allocation rule. EPA has received 
comment in the past few CUE Rules that the agency should find ways to 
issue the allocation rulemakings before the start of the control 
period. In the 2012 CUE final rule, EPA stated that the agency ``will 
consider means of streamlining the Critical Use Exemption rulemaking in 
the future so that the rule can be issued prior to the start of the 
control period.'' Absent that, EPA will seek to issue a final rule as 
soon into the control period as possible. EPA is concerned that efforts 
to correct estimates and incorporate the most recent data into the 
calculation of the supply chain factor and the rest of the formula will 
further delay future CUE rules. EPA recognized in the 2012 Rule that 
``the time-sensitive need for a CUE authorization for the current 
calendar year and concluded that re-opening the allocation for comment 
is not warranted.'' EPA believes that its prior formula may have 
attempted to achieve greater precision than was possible or needed, 
especially in light of the continued reduction in both inventory and 
annual authorizations for critical uses. Thus, EPA is considering an 
alternate approach, which provides a greater likelihood of expediting 
the rulemaking process. EPA will continue to consider other possible 
means of streamlining the CUE rulemaking process in the future.
    As part of this approach, EPA would end its use of the supply chain 
factor (SCF).\2\ Because this approach does not use the available 
stocks calculation developed in the 2008 CUE Rule to determine the 
amount of available stocks for use by critical users in 2013, 
calculation of the SCF is unnecessary. EPA notes that the entire 
critical use exemption authorized by the Parties for 2013 is 562 MT, 
which is substantially less than the existing inventory. EPA believes 
that, although portions of the existing inventory may not practically 
be available under usual circumstances (e.g., because it may be located 
in the Southeast and not California), users may be able to access 
greater amounts of inventory in the event of extraordinary 
circumstances such as a catastrophic domestic production failure.
---------------------------------------------------------------------------

    \2\ The purpose, and calculation, of the supply chain factor is 
discussed in greater detail below, and in prior CUE notices.
---------------------------------------------------------------------------

    In addition to soliciting comment on this approach to calculating 
CSAs, EPA is also soliciting comment on the specific amount of 
inventory to be allocated. EPA is proposing to allocate CSAs equal to 
5% of the January 1, 2012, reported inventory. Alternatively, EPA is 
also taking comment on not allocating any CSAs for 2013 under this 
approach in light of the effect that the withdrawal of iodomethane may 
have on the demand for inventory. The two options are discussed below.
    EPA is proposing to allocate CSAs equal to 5% of the January 1, 
2012, reported inventory. The inventory at that date was 1,248,876 kg. 
Therefore, under this approach, EPA would allocate 62,444 kg of 
critical stock allowances for 2013. Since 2006, the amount of prior 
year inventory used through the expenditure of CSAs has ranged from 8% 
to 26%. EPA believes that it would be appropriate to select a 
percentage that is below the historic range for several reasons. First, 
EPA wishes to ensure that the amount allocated for 2013 will be 
available to critical users in that year. As discussed above, the 
availability of existing inventory is becoming increasingly difficult 
to estimate as the amount

[[Page 74442]]

declines. Although EPA is proposing to consider historic patterns of 
availability in considering how many CSAs to allocate, the fact that 
stocks in the Southeast may be unavailable as a practical matter for 
growers in California, while critical uses have recently become highly 
concentrated in California, suggests that, even under this approach, a 
conservative approach to estimating availability of inventory is 
warranted. As noted above, this issue is particularly important for 
2013 because the unexpected withdrawal of iodomethane.
    EPA believes it is reasonable to assume that 5% of existing 
inventory on January 1, 2012, could be available for critical users in 
2013. Historically, the drawdown of inventory for all uses has never 
exceeded 42% of the prior year's inventory. Drawdown would have to be 
over twice that rate in 2012 for there to be less inventory in 2013 
than the amount of the proposed CSA. Rather, EPA anticipates that the 
constraints on drawdown discussed in prior rules (e.g., critical uses 
capped by allocation amounts, revised labeling removing uses, increased 
value of the material as supply decreases) will continue to limit the 
drawdown in 2012. At the same time, expenditure of CSAs have never 
amounted to less than 8% of inventory, and even if inventory was 
purchased for critical uses at only half that rate, it would still 
amount to 4% of the existing inventory, so EPA anticipates that at 
least that much inventory could be available for critical uses during 
2013.
    EPA is also seeking comment on using the above approach but 
allocating 0% from existing stocks for 2013 in light of the withdrawal 
of iodomethane from the market. In March 2012, Arysta LifeScience, the 
manufacturer of iodomethane, suspended the sale of iodomethane across 
the United States. This alternative was registered for use in 48 states 
on strawberries, tomatoes, peppers, ornamentals, turf, orchard replant, 
forest nursery seedlings, and strawberry nurseries. Many users had been 
transitioning to this alternative since 2008, when the product was 
federally registered.
    EPA believes that the unanticipated loss of this alternative could 
have increased demand for methyl bromide in 2012 from critical users. 
In comments to EPA's 2010 CUE Rule, Arysta provided data that 97,341 kg 
of iodomethane was used in 2008 and 177,991 kg was used in 2009. They 
calculated this to be equivalent to approximately 5,000 and 10,000 
acres respectively. They also anticipated sales of 250,000 kg in 2010, 
which would be equivalent to 650 MT of methyl bromide on 13,500 acres.
    In 2012, critical users may seek additional methyl bromide from 
pre-phaseout inventory than in previous years. The 2012 critical uses 
include all of the registered uses of iodomethane except for turf. 
Growers in Florida and the Southeastern United States were using 
iodomethane on tomatoes, peppers, strawberries, and ornamentals. While 
many of these sectors could use alternatives other than iodomethane, 
such as the UGA 3-way, the unexpected loss of iodomethane could lead to 
growers using inventory methyl bromide for this season. The historical 
trend described below, in which no more than 70% of the CSAs allocated 
in one year had ever been expended, may not hold true for 2012. 
However, under the framework, the use of inventory for critical uses 
cannot exceed the total CSA allocation of 263 MT in 2012.
    EPA also does not believe that the withdrawal of iodomethane will 
increase demand for pre-phaseout inventory from non-critical uses in 
2012. Under the reregistration decision for methyl bromide, seven non-
critical uses remain on the pre-plant methyl bromide labels. These non-
critical uses can continue to use methyl bromide but are restricted to 
pre-phaseout inventory. The uses are caneberries, fresh market tomatoes 
grown in California, fresh market peppers grown in California, Vidalia 
onions grown in Georgia, ginger grown in Hawaii, soils on golf courses 
and athletic/recreational fields for resurfacing/replanting of turf, 
and tobacco seedling trays. See 76 FR 7200 (February 9, 2011). 
Collectively they are referred to as ``Group II uses.'' Of the Group II 
uses, iodomethane was only registered for use on fresh market tomatoes 
grown in California, fresh market peppers grown in California, and 
turf. Iodomethane was not used in California and EPA suspects it was 
not widely used on turf since that sector did not submit an application 
for a critical use exemption for 2015. EPA is seeking comment and 
additional data on whether the loss of iodomethane will limit the 
availability of inventory in 2013.
    EPA understands that changes in the status of methyl bromide 
alternatives can occur, and that these changes may expand or contract 
the list of existing options. We also understand that the sudden change 
in the availability of iodomethane has created near-term difficulties 
for growers in transition. As noted above, EPA has taken this change in 
circumstance into account in proposing to allocate the full amount of 
CUE authorized by the Parties in 2013. EPA is also requesting comment 
on a range of potential amounts for the CSA allocation, recognizing 
that past CUE rules may have overestimated the amount of stocks that 
are available to critical users. Finally, EPA requests comment on and 
relevant data to support consideration of other potential mechanisms 
within the Clean Air Act or other statutory authorities that the EPA 
could use to respond to unforeseen or emergency situations.
    Therefore, under this proposed approach, the agency is proposing to 
allocate 5% of existing inventory, or 62,444 kg of critical stock 
allowances for 2013. EPA solicits comment on whether 5% is the 
appropriate amount, or whether a higher or lower figure would be 
appropriate. EPA specifically seeks comment on allocating 0 kg from 
stocks under this approach. In considering the possibility of an 
allocation for CSAs set at 0 kg, EPA is particularly interested in 
comments from critical stock allowance holders who would be barred 
under the existing framework from selling inventory to critical users 
in 2013. EPA is interested in learning whether an allocation at or 
close to 0 kg would prevent the drawdown of stocks or prevent the 
fulfillment of contracts or commitments to sell pre-phaseout inventory 
in 2013. EPA is interested in learning whether critical users who in 
the past have accessed allocations of CSAs would still be able to 
access methyl bromide, either through the conversion of CUAs to CSAs, 
or from other sources. Finally, EPA is interested in comment on the 
restriction in the framework rule that limits the sale of inventory to 
critical uses through the CSA allocation, see 40 CFR 82.4(p), whether 
that restriction should be lifted, and to what extent reporting and 
recordkeeping requirements should be adjusted were the restriction 
lifted.
Option 2: Framework Approach
    EPA also solicits comment on whether it should retain for 2013 its 
recent approach to calculating ``available stocks'' using the formula 
ASCP = ESPP - DPP - SCFCP. 
EPA calculates through this formula that there will be 221,495 kg of 
``available stocks'' on January 1, 2013. Under this approach, EPA would 
allocate 221,495 kg of CSAs for 2013.
    The first step in the formula is to estimate the drawdown of stocks 
during 2012. To do so, EPA adds the estimated amount of CSAs that will 
be expended in 2012 plus the estimated amount of methyl bromide that 
will be used in 2012 for non-critical uses. EPA believes that this is a 
better practice than using a simple linear fit estimation, which

[[Page 74443]]

was the approach EPA used in the first few years it conducted this 
analysis. A linear estimate would have projected that no methyl bromide 
would remain in inventory at the beginning of 2013. Furthermore, this 
estimate does not consider that the use of inventory on critical uses 
is limited by the allocation of CSAs.
    The first element of the drawdown estimate is the amount of 
inventory used in 2012 on critical uses. This can be no more than the 
number of CSAs EPA allocated in the 2012 CUE Rule, which is 263,082 kg. 
As discussed in the Technical Support Document, on average only 59% of 
the CSAs allocated for a control period are reported as sold in that 
control period. To estimate the number of expended CSAs in 2012, EPA 
conservatively assumes that 70% of the CSAs allocated for 2012 will be 
sold. This amount is greater than any year's use of CSA allocations, 
however EPA notes below that the loss of iodomethane may result in 
greater demand for inventory in 2012 than past years. Thus, EPA 
estimates that 184,157 kg of inventory will be sold for critical uses 
in 2012.
    The second element of the drawdown estimate is the amount of 
inventory used in 2012 on Group II and non-critical uses. Group II uses 
are seven non-critical uses that remain on the pre-plant methyl bromide 
labels. Post-harvest labels have not been revised yet to implement the 
terms of the reregistration decision concerning use of methyl bromide 
for commodity fumigation and thus the universe of labeled post-harvest 
uses remains broader.
    There is no clear trend in the pattern of usage for non-critical 
uses. EPA therefore is estimating the amount of sales for non-critical 
uses in 2012 by analyzing the percent of the total inventory used each 
year for this purpose. For example, in 2010, 36% of the total start of 
year inventory was sold for non-critical uses. On a weight basis, this 
was equal to 647 MT. In 2006, much more inventory (on a weight basis) 
was sold for non-critical uses, 1,249 MT, but this comprised only 16% 
of the total start of year inventory that year. EPA does not believe 
that an average of the amounts sold (on a weight basis) in 2006-2011 
for all non-critical uses is accurate because the inventory has 
declined. For example, the 1,249 MT of inventory was sold in 2006 for 
non-critical uses is unlikely to provide an accurate description of the 
drawdown in 2012, even when averaged with other years' data, because 
there was only 1,249 MT of inventory at the beginning of 2012. EPA 
therefore is analyzing the drawdown on a proportional basis rather than 
a strictly weight basis. While the average proportion is 17%, EPA is 
conservatively using the highest proportion. Therefore, EPA estimates 
that 36% of the total start of year inventory would be used for non-
critical uses in 2012. Thus, EPA estimates that 449,595 kg of inventory 
will be sold for Group II uses in 2012. EPA believes that this estimate 
is conservative because the analysis encompasses years where the use of 
inventory included all non-critical uses, and was not restricted to 
Group II uses. These data are contained in EPA's annual Accounting 
Frameworks submitted to UNEP and summarized in the technical support 
document in the docket.
    In summary, EPA estimates the drawdown of inventory in 2012 as the 
sum of (1) the use of CSAs in 2012 and (2) the estimate for non-
critical uses in 2012. Using this method, EPA conservatively projects 
that the pre-phaseout methyl bromide inventory will be drawn down by 
633,759 kg (184,157 + 449,595) during 2012. This would result in a pre-
phaseout inventory declining from 1,248,876 kg on January 1, 2012, to 
615,124 kg on January 1, 2013. EPA welcomes comment on this proposed 
method of calculating inventory drawdown. If EPA utilizes this approach 
in the final rule and receives actual end-of-year reported data on 
inventory levels before this rule is finalized, EPA may substitute that 
data for this estimate.
    The next element in the calculation of available stocks is the 
supply chain factor (SCF). The SCF represents EPA's technical estimate 
of the amount of pre-phaseout inventory that would be adequate to meet 
a need for critical use methyl bromide after an unforeseen domestic 
production failure. As described in the 2008 CUE Rule, and the 
Technical Support Document contained in the docket to this rule, EPA 
estimates that it would take 15 weeks for significant imports of methyl 
bromide to reach the U.S in the event of a major supply disruption. 
Consistent with the regulatory framework used in previous CUE 
allocation rules, the SCF for 2013 conservatively reflects the effect 
of a supply disruption occurring in the peak period of critical use 
methyl bromide production, which is the first quarter of the year. 
While this 15-week disruption is based on shipping capacity and does 
not change year to year, other inputs to EPA's analysis do change each 
year including the total U.S. and global authorizations for methyl 
bromide and the average seasonal production of critical use methyl 
bromide in the United States. Using updated numbers, EPA estimates that 
critical use production in the first 15 weeks of each year (the peak 
supply period) currently accounts for approximately 70% of annual 
critical use methyl bromide demand. EPA, therefore, estimates that the 
peak 15-week shortfall in 2013 could be 394 MT.
    As EPA stated in previous CUE Rules, the SCF is not a ``reserve'' 
of methyl bromide but is merely an analytical tool used to provide 
greater transparency regarding how the Agency determines CSA amounts. 
Further general discussion of the SCF is in the final 2008 CUE rule (72 
FR 74118, December 28, 2007) and further detail about the analysis used 
to derive the value for the 2013 supply chain factor is provided in the 
Technical Support Document available on the public docket for this 
rulemaking.
    Using the formula AS2013 = ES2012-
D2012-SCF2013, EPA estimates under the framework 
approach that there will be 221,495 kg of pre-phaseout stocks of methyl 
bromide ``available'' to be allocated in 2013. (221,495 = 1,248,876 - 
633,759 - 393,628). EPA welcomes comment on this approach to 
determining the level of available stocks and the critical stock 
allowance allocation for 2013.
    In summary, EPA is proposing for 2013 a new approach for allocating 
amounts authorized for critical uses between CSAs and CUAs, by 
allocating CSAs as a percentage of the existing inventory. In 
particular, EPA is proposing to allocate CSAs in an amount equal to 5% 
of the 2012 reported inventory, or 62,444 kg. EPA seeks comment on a 
range of values for the allocation of CSAs, given the loss of 
iodomethane. EPA particularly solicits comment on allocating 0 kg of 
CSAs. EPA is also seeking comment on using the existing framework to 
calculate the amount of ``available stocks'' in 2013. EPA estimates the 
CSA allocation would be 221,495 kg under this approach.
    As in past years, EPA would allocate CSAs based on each company's 
proportionate share of the aggregate inventory. In 2006, the United 
States District Court for the District of Columbia upheld EPA's 
treatment of company-specific methyl bromide inventory information as 
confidential. NRDC v. Leavitt, 2006 WL 667327 (D.D.C. March 14, 2006). 
Therefore, the documentation regarding company-specific allocation of 
CSAs is in the confidential portion of the rulemaking docket and the 
individual CSA allocations are not listed in the table in 40 CFR 
82.8(c)(2). EPA will inform listed companies of their CSA

[[Page 74444]]

allocations in a letter following publication of the final rule.
2. Approach for Determining New Production and Import Allowances
    For 2013, EPA is proposing to generally apply the existing 
framework established in the Framework Rule. Under this approach, the 
amount of new production would equal the total amount authorized by the 
Parties to the Montreal Protocol in Decision XXIII/4, minus the CSA 
amount detailed above, minus any reductions for carryover and the 
uptake of alternatives. As explained above, EPA has considered a number 
of factors in determining the total allocation, including the loss of 
the alternative iodomethane, and is not proposing to reduce the total 
allocation below the amount approved in Decision XXIII/4. Applying this 
established approach, EPA is proposing to exempt limited amounts of new 
production and import of methyl bromide for critical uses in 2013 such 
that the total authorization equals 562,326 kg. Because EPA is taking 
comment on a range of values for the critical stock allocation, there 
would be a corresponding range of values for the new production/import 
amount from to 340,831 kg to 562,326 kg. EPA is proposing an approach 
that would result in an allocation of 499,882 kg. EPA is taking comment 
on this approach.
    Carryover Material The Parties in paragraph 6 of Decision XXIII/4 
``urge parties operating under critical-use exemptions to put in place 
effective systems to discourage the accumulation of methyl bromide 
produced under the exemption.'' As discussed in the Framework Rule, EPA 
regulations prohibit methyl bromide produced or imported after January 
1, 2005, under the critical use exemption being added to the existing 
pre-2005 inventory. Quantities of methyl bromide produced, imported, 
exported, or sold to end-users under the critical use exemption in a 
control period must be reported to EPA the following year. EPA uses 
these reports to calculate the amount of methyl bromide produced or 
imported under the critical use exemption, but not exported or sold to 
end-users in that year. EPA deducts an amount equivalent to this 
``carryover'' from the total level of allowable new production and 
import in the year following the year of the data report. Carryover 
material (which is produced using critical use allowances) is not 
included in EPA's definition of existing inventory (which applies to 
pre-2005 material) because this would lead to a double-counting of 
carryover amounts, and a double reduction of critical use allowances 
(CUAs).
    All critical use methyl bromide that companies reported to be 
produced or imported in 2011 was sold to end users. The information 
reported to EPA is that 1,499 MT of critical use methyl bromide was 
produced or imported in 2011. Slightly more than the amount produced or 
imported was actually sold to end-users. This additional amount was 
from distributors selling material that was carried over from the prior 
control period. Using the existing framework, EPA is proposing to apply 
the carryover deduction of 0 kg to the new production amount. EPA's 
calculation of the amount of carryover at the end of 2011 is consistent 
with the method used in previous CUE rules, and with the method agreed 
to by the Parties in Decision XVI/6 for calculating column L of the 
U.S. Accounting Framework. Past U.S. Accounting Frameworks, including 
the one for 2011, are available in the public docket for this 
rulemaking.
    Uptake of Alternatives Under the existing framework, EPA considers 
data on the availability of alternatives that it receives following 
submission of each nomination to UNEP. In previous rules EPA has 
reduced the total CUE amount when a new alternative has been 
registered. Because EPA determines the CSA allocation separately, any 
reduction in the total amount has been reflected in a corresponding 
reduction in the allocation for new production/import. However, where 
an alternative is withdrawn, EPA cannot propose to increase the total 
CUE amount above the amount authorized by the Parties.
    A development since the USG submitted the 2013 CUN is that Dimethyl 
Disulfide (DMDS) has been registered in additional states. In July 
2010, EPA registered DMDS to control nematodes, weeds, and pathogens in 
tomatoes, peppers, eggplants, curcurbits, strawberries, ornamentals and 
forest nursery seedlings, and onions. The CUN considered only a limited 
uptake in 2013. At that time only a few states had registered DMDS and 
it was not registered in either California or Florida. Twenty-four 
states have now registered DMDS, including Georgia and Florida.
    EPA is proposing not to make a reduction to the new production/
import allocation based on these additional state registrations. As 
discussed above, over 90% of the amount authorized is for critical uses 
in California, which has not yet registered DMDS. EPA anticipates that 
the uptake of DMDS in the Southeast will therefore not significantly 
affect total demand for critical use methyl bromide.
    EPA is not proposing to make any other modifications for 
alternatives. Transition rates for other alternatives have already been 
applied for authorized 2013 critical use amounts through the nomination 
and authorization process. EPA will consider new data received during 
the comment period and continues to gather information about methyl 
bromide alternatives through the CUE application process, and by other 
means. EPA also continues to support research and adoption of methyl 
bromide alternatives, and to request information about the economic and 
technical feasibility of all existing and potential alternatives.
    Allocation Amounts EPA is proposing to allocate 2013 critical use 
allowances for new production or import of methyl bromide equivalent to 
499,882 kg. Because EPA is proposing a range of approaches for the 
critical stock allocation, EPA is taking comment on the corresponding 
range of values for the new production/import amount from to 340,831 kg 
to 562,326 kg.
    EPA is proposing to allocate allowances to the four companies that 
hold baseline allowances. The proposed allocation, as in previous 
years, is in proportion to those baseline amounts, as shown in the 
proposed changes to the table in 40 CFR 82.8(c)(1). Paragraph 3 of 
Decision XXIII/4 states ``that parties shall endeavor to license, 
permit, authorize or allocate quantities of methyl bromide for critical 
uses as listed in table A of the annex to the present decision.'' This 
is similar to language in prior Decisions authorizing critical uses. 
These Decisions call on Parties to endeavor to allocate critical use 
methyl bromide on a sector basis. The Framework Rule proposed several 
options for allocating critical use allowances, including a sector-by-
sector approach. The agency evaluated various options based on their 
economic, environmental, and practical effects. After receiving 
comments, EPA determined that a lump-sum, or universal, allocation, 
modified to include distinct caps for pre-plant and post-harvest uses, 
was the most efficient and least burdensome approach that would achieve 
the desired environmental results, and that a sector-by-sector approach 
would pose significant administrative and practical difficulties. For 
the reasons discussed in the preamble to the 2009 CUE rule (74 FR 
19894), the agency believes that under the approach adopted in the 
Framework Rule, the actual critical use

[[Page 74445]]

will closely follow the sector breakout listed in the Parties' 
decisions.

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

    Paragraphs 1 and 4 of Decision XXIII/4 request Parties to ensure 
that the conditions or criteria listed in Decisions Ex. I/4 and IX/6, 
paragraph 1, are applied to exempted critical uses for the 2013 control 
period. A discussion of the agency's application of the criteria in 
paragraph 1 of Decision IX/6 appears in sections V.A., V.D., and V.E. 
of this preamble. In section V.D. the agency solicits comments on the 
technical and economic basis for determining that the uses listed in 
this proposed rule meet the criteria of the critical use exemption. The 
CUNs detail how each proposed critical use meets the criteria listed in 
paragraph 1 of Decision IX/6, apart from the criterion located at 
(b)(ii), as well as the criteria in paragraphs 5 and 6 of Decision Ex. 
I/4.
    The criterion in Decision IX/6(1)(b)(ii), which refers to the use 
of available stocks of methyl bromide, is addressed in section V.E. of 
this preamble. The agency has previously provided its interpretation of 
the criterion in Decision IX/6(1)(a)(i) regarding the presence of 
significant market disruption in the absence of an exemption, and EPA 
refers readers to the 2006 CUE final rule (71 FR 5989, February 6, 
2006) as well as to the memo on the docket ``Development of 2003 
Nomination for a Critical Use Exemption for Methyl Bromide for the 
United States of America'' for further elaboration.
    The remaining considerations, including the lack of available 
technically and economically feasible alternatives under the 
circumstance of the nomination; efforts to minimize use and emissions 
of methyl bromide where technically and economically feasible; the 
development of research and transition plans; and the requests in 
Decision Ex. I/4(5) and (6) that Parties consider and implement MBTOC 
recommendations, where feasible, on reductions in the critical use of 
methyl bromide and include information on the methodology they use to 
determine economic feasibility, are addressed in the nomination 
documents.
    Some of these criteria are evaluated in other documents as well. 
For example, the United States has further considered matters regarding 
the adoption of alternatives and research into methyl bromide 
alternatives, criterion (1)(b)(iii) in Decision IX/6, in the 
development of the National Management Strategy submitted to the Ozone 
Secretariat in December 2005, updated in October 2009, as well as in 
ongoing consultations with industry. The National Management Strategy 
addresses all of the aims specified in Decision Ex.I/4(3) to the extent 
feasible and is available in the docket for this rulemaking.
    There continues to be a need for methyl bromide in order to conduct 
the research required by Decision IX/6. A common example is an outdoor 
field experiment that requires methyl bromide as a standard control 
treatment with which to compare the trial alternatives' results. As 
discussed in the preamble to the 2010 CUE rule (75 FR 23179, May 3, 
2010), research is a key element of the critical use process. Research 
on the crops shown in the table in Appendix L to subpart A remains a 
critical use of methyl bromide. While researchers may continue to use 
newly produced material for field, post-harvest, and emission 
minimization studies requiring the use of methyl bromide, EPA 
encourages researchers to use pre-phaseout inventory purchased through 
the expenditure of CSAs. EPA also encourages distributors to make 
inventory available to researchers, to promote the continuing effort to 
assist growers to transition critical use crops to alternatives.

G. Emissions Minimization

    Previous decisions have stated that critical users shall employ 
emission minimization techniques such as virtually impermeable films, 
barrier film technologies, deep shank injection and/or other techniques 
that promote environmental protection, whenever technically and 
economically feasible. EPA developed a comprehensive strategy for risk 
mitigation through the 2006 Reregistration Eligibility Decision (RED) 
for methyl bromide, which is implemented through restrictions on how 
methyl bromide products can be used. This approach requires that methyl 
bromide labels include directions that treated sites be tarped except 
for California orchard replant where EPA instead requires deep (18 
inches or greater) shank applications. The RED also incorporated 
incentives for applicators to use high-barrier tarps, such as virtually 
impermeable film (VIF), by allowing smaller buffer zones around those 
sites. In addition to minimizing emissions, use of high-barrier tarps 
has the benefit of providing pest control at lower application rates. 
The amount of methyl bromide nominated by the United States reflects 
the lower application rates necessary when using high-barrier tarps, 
where such tarps are allowed.
    EPA will continue to work with the U.S. Department of Agriculture--
Agricultural Research Service (USDA-ARS) and the National Institute for 
Food and Agriculture (USDA-NIFA) to promote emission reduction 
techniques. The federal government has invested substantial resources 
into best practices for methyl bromide use, including emission 
reduction practices. The Cooperative Extension System, which receives 
some support from USDA-NIFA provides locally appropriate and project 
focused outreach education regarding methyl bromide transition best 
practices. Additional information on USDA research on alternatives and 
emissions reduction can be found at: http://www.ars.usda.gov/research/programs/programs.htm?NP_CODE=308 and http://www.csrees.usda.gov/fo/methylbromideicgp.cfm.
    Users of methyl bromide should continue to make every effort to 
minimize overall emissions of methyl bromide to the extent consistent 
with State and local laws and regulations. EPA also encourages 
researchers and users who are using such techniques to inform EPA of 
their experiences and to provide such information with their critical 
use applications.

VI. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 13563: Improving Regulation and Regulatory Review

    Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), 
this proposal is a ``significant regulatory action.'' This action is 
likely to result in a rule that may raise novel legal or policy issues. 
Accordingly, EPA submitted this action to the Office of Management and 
Budget (OMB) for review under Executive Orders 12866 and 13563 (76 FR 
3821, January 21, 2011) and any changes made in response to interagency 
recommendations have been documented in the docket for this action.

B. Paperwork Reduction Act

    This action does not impose any new information collection burden. 
The application, recordkeeping, and reporting requirements have already 
been established under previous critical use exemption rulemakings and 
this action does not propose to change any of those existing 
requirements. The Office of Management and Budget (OMB) has previously 
approved the information collection requirements contained in the 
existing regulations at

[[Page 74446]]

40 CFR part 82 under the provisions of the Paperwork Reduction Act, 44 
U.S.C. 3501 et seq. and has assigned OMB control number 2060-0482. The 
OMB control numbers for EPA's regulations in 40 CFR are listed in 40 
CFR part 9.

C. Regulatory Flexibility Act

    The RFA generally requires an agency to prepare a regulatory 
flexibility analysis of any rule subject to notice-and-comment 
rulemaking requirements under the Administrative Procedure Act or any 
other statute unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
Small entities include small businesses, small organizations, and small 
governmental jurisdictions. For purposes of assessing the impacts of 
this rule on small entities, small entity is defined as: (1) A small 
business as defined by the Small Business Administration's regulations 
at 13 CFR 121.201 (see Table below); (2) a small governmental 
jurisdiction that is a government of a city, county, town, school 
district or special district with a population of less than 50,000; and 
(3) a small organization that is any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.

----------------------------------------------------------------------------------------------------------------
                                                                              NAICS Small business size standard
           Category                   NAICS code              SIC code            (in number of  employees or
                                                                                     millions of  dollars)
----------------------------------------------------------------------------------------------------------------
Agricultural production.......  1112--Vegetable and    0171--Berry Crops....  $0.75 million.
                                 Melon farming.
                                1113--Fruit and Nut    0172--Grapes.........
                                 Tree Farming.
                                1114--Greenhouse,      0173--Tree Nuts......
                                 Nursery, and
                                 Floriculture
                                 Production.
                                                       0175--Deciduous Tree
                                                        Fruits (except apple
                                                        orchards and farms).
                                                       0179--Fruit and Tree
                                                        Nuts, NEC.
                                                       0181--Ornamental
                                                        Floriculture and
                                                        Nursery Products.
                                                       0831--Forest
                                                        Nurseries and
                                                        Gathering of Forest
                                                        Products.
Storage Uses..................  115114--Postharvest    .....................  $7 million.
                                 Crop activities
                                 (except Cotton
                                 Ginning).
                                311211--Flour Milling  2041--Flour and Other  500 employees.
                                                        Grain Mill Products.
                                311212--Rice Milling.  2044--Rice Milling...  500 employees.
                                493110--General        4225--General          $25.5 million.
                                 Warehousing and        Warehousing and
                                 Storage.               Storage.
                                493130--Farm Product   4221--Farm Product     $25.5 million.
                                 Warehousing and        Warehousing and
                                 Storage.               Storage.
Distributors and Applicators..  115112--Soil           0721--Crop Planting,   $7 million.
                                 Preparation,           Cultivation, and
                                 Planting and           Protection.
                                 Cultivating.
Producers and Importers.......  325320--Pesticide and  2879--Pesticides and   500 employees.
                                 Other Agricultural     Agricultural
                                 Chemical               Chemicals, NEC.
                                 Manufacturing.
----------------------------------------------------------------------------------------------------------------

    Agricultural producers of minor crops and entities that store 
agricultural commodities are categories of affected entities that 
contain small entities. This proposed rule would only affect entities 
that applied to EPA for an exemption to the phaseout of methyl bromide. 
In most cases, EPA received aggregated requests for exemptions from 
industry consortia. On the exemption application, EPA asked consortia 
to describe the number and size distribution of entities their 
application covered. EPA estimated that 3,218 entities petitioned EPA 
for an exemption for the 2005 control period. EPA revised this estimate 
in 2011 down to 1,800 end users of critical use methyl bromide. EPA 
believes that the number continues to decline as growers cease applying 
for critical uses. Since many applicants did not provide information on 
the distribution of sizes of entities covered in their applications, 
EPA estimated that, based on the above definition, between one-fourth 
and one-third of the entities may be small businesses. In addition, 
other categories of affected entities do not contain small businesses 
based on the above description.
    After considering the economic impacts of this proposed rule on 
small entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. In 
determining whether a rule has a significant economic impact on a 
substantial number of small entities, the impact of concern is any 
significant adverse economic impact on small entities, since the 
primary purpose of the regulatory flexibility analyses is to identify 
and address regulatory alternatives ``which minimize any significant 
economic impact of the proposed rule on small entities.'' (5 U.S.C. 
603-604). Thus, an agency may certify that a rule will not have a 
significant economic impact on a substantial number of small entities 
if the rule relieves a regulatory burden, or otherwise has a positive 
economic effect on all of the small entities subject to the rule. Since 
this rule would allow the use of methyl bromide for approved critical 
uses after the phaseout date of January 1, 2005, this action would 
confer a benefit to users of methyl bromide. EPA estimates in the 
Regulatory Impact Assessment found in the docket to this rule that the 
reduced costs resulting from the de-regulatory creation of the 
exemption are approximately $22 million to $31 million on an annual 
basis (using a 3% or 7% discount rate respectively). We have therefore 
concluded that this proposed rule would relieve regulatory burden for 
all small entities.

D. Unfunded Mandates Reform Act

    This action contains no Federal mandates under the provisions of 
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 
1531-1538 for State, local, or tribal governments or the private 
sector. The action imposes no enforceable duty on any State, local or 
tribal governments or the private sector. Instead, this action would 
provide an exemption for the manufacture and use of a phased out 
compound and would not impose any new requirements on any entities.

[[Page 74447]]

Therefore, this action is not subject to the requirements of sections 
202 or 205 of the UMRA. This action is also not subject to the 
requirements of section 203 of UMRA because it contains no regulatory 
requirements that might significantly or uniquely affect small 
governments.

E. 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, as 
specified in Executive Order 13132. This proposed rule is expected to 
primarily affect producers, suppliers, importers, and exporters and 
users of methyl bromide. Thus, Executive Order 13132 does not apply to 
this proposed rule. In the spirit of Executive Order 13132, and 
consistent with EPA policy to promote communications between EPA and 
State and local governments, EPA specifically solicits comment on this 
proposed action from State and local officials.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This action does not have tribal implications, as specified in 
Executive Order 13175 (65 FR 67249, November 9, 2000). This rule does 
not significantly or uniquely affect the communities of Indian tribal 
governments nor does it impose any enforceable duties on communities of 
Indian tribal governments. Thus, Executive Order 13175 does not apply 
to this action. EPA specifically solicits additional comment on this 
proposed action from tribal officials.

G. Executive Order No. 13045: Protection of Children From Environmental 
Health and Safety Risks

    EPA interprets EO 13045 (62 FR 19885, April 23, 1997) as applying 
only to those regulatory actions that concern health or safety risks, 
such that the analysis required under section 5-501 of the EO has the 
potential to influence the regulation. This action is not subject to EO 
13045 because it does not establish an environmental standard intended 
to mitigate health or safety risks.

H. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This proposed rule is not a ``significant energy action'' as 
defined in Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355 
(May 22, 2001)) because it is not likely to have a significant adverse 
effect on the supply, distribution, or use of energy. This proposed 
rule does not pertain to any segment of the energy production economy 
nor does it regulate any manner of energy use. Therefore, we have 
concluded that this proposed rule is not likely to have any adverse 
energy effects.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, 12(d) (15 U.S.C. 272 note) 
directs EPA to use voluntary consensus standards in its regulatory 
activities unless to do so would be inconsistent with applicable law or 
otherwise impractical. Voluntary consensus standards are technical 
standards (e.g., materials specifications, test methods, sampling 
procedures, and business practices) that are developed or adopted by 
voluntary consensus standards bodies. NTTAA directs EPA to provide 
Congress, through OMB, explanations when the agency decides not to use 
available and applicable voluntary consensus standards. This proposed 
rulemaking does not involve technical standards. Therefore, EPA is not 
considering the use of any voluntary consensus standards.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes 
federal executive policy on environmental justice. Its main provision 
directs federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health or environmental effects of their programs, 
policies, and activities on minority populations and low-income 
populations in the United States.
    EPA has determined that this proposed rule will not have 
disproportionately high and adverse human health or environmental 
effects on minority or low-income populations, because it affects the 
level of environmental protection equally for all affected populations 
without having any disproportionately high and adverse human health or 
environmental effects on any population, including any minority or low-
income population. Any ozone depletion that results from this proposed 
rule will impact all affected populations equally because ozone 
depletion is a global environmental problem with environmental and 
human effects that are, in general, equally distributed across 
geographical regions in the United States.

List of Subjects in 40 CFR Part 82

    Environmental protection, Chemicals, Exports, Imports, Ozone 
depletion.

    Dated: December 7, 2012.
Lisa P. Jackson,
Administrator.
    For the reasons stated in the preamble, 40 CFR Part 82 is proposed 
to be amended 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, 7671-7671q.

    2. Amend Sec.  82.8 by revising the table in paragraph (c)(1) and 
by revising paragraph (c)(2).


Sec.  82.8  Grant of essential use allowances and critical use 
allowances.

* * * * *
    (c) * * *
    (1) * * *

------------------------------------------------------------------------
                                                       2013 Critical use
                                    2013 Critical use    allowances for
              Company                 allowances for      post-harvest
                                     pre-plant uses*         uses*
                                       (kilograms)        (kilograms)
------------------------------------------------------------------------
Great Lakes Chemical Corp. A                  287,633             16,145
 Chemtura Company.................
Albemarle Corp....................            118,281              6,639
ICL-IP America....................             65,365              3,669
TriCal, Inc.......................              2,035                114
                                   -------------------------------------

[[Page 74448]]

 
    Total**.......................            473,315             26,567
------------------------------------------------------------------------
* For production or import of Class I, Group VI controlled substance
  exclusively for the Pre-Plant or Post-Harvest uses specified in
  appendix L to this subpart.
** Due to rounding, numbers do not add exactly.

    (2) Allocated critical stock allowances granted for specified 
control period. The following companies are allocated critical stock 
allowances for 2013 on a pro-rata basis in relation to the inventory 
held by each.

----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Company
----------------------------------------------------------------------------------------------------------------
Albemarle                             Degesch America, Inc.                 Prosource One
Bill Clark Pest Control, Inc.         Helena Chemical Co.                   Trical Inc.
Burnside Services, Inc.               ICL-IP America                        Trident Agricultural Products
Cardinal Professional Products        Industrial Fumigant Company           TriEst Ag Group, Inc.
Chemtura Corp.                        Pacific Ag Supplies Inc.              Univar
Crop Production Services              Pest Fog Sales Corp.                  Western Fumigation
----------------------------------------------------------------------------------------------------------------
TOTAL-62,444 kilograms
----------------------------------------------------------------------------------------------------------------

    3. Appendix L to Subpart A is revised to read as follows:

Appendix L to Subpart A of Part 82--Approved Critical Uses and Limiting 
Critical Conditions for Those Uses for the 2013 Control Period

--------------------------------------------------------------------------------------------------------------------------------------------------------
              Column A                          Column B                                                  Column C
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                       Approved critical user and        Limiting critical conditions that exist, or that the approved critical user
       Approved critical uses                location of use                  reasonably expects could rise without methyl bromide  fumigation:
--------------------------------------------------------------------------------------------------------------------------------------------------------
PRE-PLANT USES
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cucurbits...........................  Georgia growers on fewer      Moderate to severe yellow or purple nutsedge infestation.
                                       than 10 acres.               Moderate to severe soilborne disease infestation.
                                                                    Moderate to severe root knot nematode infestation.
Eggplant............................  (a) Florida growers.........  Moderate to severe yellow or purple nutsedge infestation.
                                                                    Moderate to severe soilborne disease infestation.
                                                                    Restrictions on alternatives due to karst topographical.
                                                                    features and soils not supporting seepage irrigation.
                                      (b) Georgia growers on fewer  Moderate to severe yellow or purple nutsedge infestation.
                                       than 10 acres.               Moderate to severe nematode infestation.
                                                                    Moderate to severe pythium collar, crown and root rot.
                                                                    Moderate to severe southern blight infestation.
                                                                    Restrictions on alternatives due to karst topographical features.
Nursery Stock (Fruit, Nut, Flower)..  Members of the California     Moderate to severe nematode infestation.
                                       Association of Nursery and   Medium to heavy clay soils.
                                       Garden Centers representing  Local township limits prohibiting 1,3-dichloropropene.
                                       Deciduous Tree Fruit
                                       Growers.
Orchard Replant.....................  California stone fruit,       Moderate to severe nematode infestation.
                                       table and raisin grape,      Moderate to severe soilborne disease infestation.
                                       wine grape, walnut, and      Replanted orchard soils to prevent orchard replant disease.
                                       almond growers.              Medium to heavy soils.
                                                                    Local township limits prohibiting 1,3-dichloropropene.
Ornamentals.........................  (a) California growers......  Moderate to severe soilborne disease infestation.
                                                                    Moderate to severe nematode infestation.
                                                                    Local township limits prohibiting 1,3-dichloropropene.
                                      (b) Florida growers.........  Moderate to severe weed infestation.
                                                                    Moderate to severe soilborne disease infestation.
                                                                    Moderate to severe nematode infestation.
                                                                    Restrictions on alternatives due to karst topographical.
                                                                    features and soils not supporting seepage irrigation.
Peppers.............................  (a) Florida growers.........  Moderate to severe yellow or purple nutsedge infestation.
                                                                    Moderate to severe soilborne disease infestation.
                                                                    Moderate to severe nematode infestation.
                                                                    Restrictions on alternatives due to karst topographical.
                                                                    features and soils not supporting seepage irrigation.

[[Page 74449]]

 
                                      (b) Georgia growers on fewer  Moderate to severe yellow or purple nutsedge infestation.
                                       than 10 acres.               Moderate to severe nematode infestation, or moderate to severe pythium root and
                                                                     collar rots.
                                                                    Moderate to severe southern blight infestation, crown or root rot.
                                                                    Restrictions on alternatives due to karst topographical features.
Strawberry Fruit....................  California growers..........  Moderate to severe black root rot or crown rot.
                                                                    Moderate to severe yellow or purple nutsedge infestation.
                                                                    Moderate to severe nematode infestation.
                                                                    Local township limits prohibiting 1,3-dichloropropene.
                                                                    Time to transition to an alternative.
Strawberry Nurseries................  California growers..........  Moderate to severe soilborne disease infestation.
                                                                    Moderate to severe yellow or purple nutsedge infestation.
                                                                    Moderate to severe nematode infestation.
Tomatoes............................  (a) Florida growers.........  Moderate to severe yellow or purple nutsedge infestation.
                                                                    Moderate to severe soilborne disease infestation.
                                                                    Moderate to severe nematode infestation.
                                                                    Restrictions on alternatives due to karst topographical.
                                                                    features and soils not supporting seepage irrigation.
                                      (b) Georgia growers on fewer  Moderate to severe yellow or purple nutsedge infestation.
                                       than 10 acres.               Moderate to severe soilborne disease infestation.
                                                                    Moderate to severe nematode infestation.
                                                                    Restrictions on alternatives due to karst topographical features.
--------------------------------------------------------------------------------------------------------------------------------------------------------
POST-HARVEST USES
--------------------------------------------------------------------------------------------------------------------------------------------------------
Food Processing.....................  (a) Rice millers in the U.S.  Moderate to severe beetle, weevil, or moth infestation.
                                       who are members of the USA   Presence of sensitive electronic equipment subject to corrosion.
                                       Rice Millers Association.    Time to transition to an alternative.
                                      (b) Pet food manufacturing    Moderate to severe beetle, moth, or cockroach infestation.
                                       facilities in the U.S. who   Presence of sensitive electronic equipment subject to corrosion.
                                       are members of the Pet Food  Time to transition to an alternative.
                                       Institute.
                                      (c) Members of the North      Moderate to severe beetle infestation.
                                       American Millers'            Presence of sensitive electronic equipment subject to corrosion.
                                       Association in the U.S..     Time to transition to an alternative.
Commodities.........................  California entities storing   Rapid fumigation required to meet a critical market window, such as during the
                                       walnuts, dried plums, figs,   holiday season.
                                       raisins, and dates (in
                                       Riverside county only) in
                                       California.
Dry Cured Pork Products.............  Members of the National       Red legged ham beetle infestation.
                                       Country Ham Association and  Cheese/ham skipper infestation.
                                       the Association of Meat      Dermested beetle infestation.
                                       Processors, Nahunta Pork     Ham mite infestation.
                                       Center (North Carolina),
                                       and Gwaltney and Smithfield
                                       Inc.
--------------------------------------------------------------------------------------------------------------------------------------------------------

[FR Doc. 2012-30225 Filed 12-13-12; 8:45 am]
BILLING CODE 6560-50-P