[Federal Register Volume 84, Number 157 (Wednesday, August 14, 2019)]
[Proposed Rules]
[Pages 41510-41553]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-17018]



[[Page 41509]]

Vol. 84

Wednesday,

No. 157

August 14, 2019

Part IV





 Environmental Protection Agency





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40 CFR Part 82





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Protection of Stratospheric Ozone: Adjustments to the Allowance System 
for Controlling HCFC Production and Import, 2020-2029; and Other 
Updates; Proposed Rule

  Federal Register / Vol. 84 , No. 157 / Wednesday, August 14, 2019 / 
Proposed Rules  

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[EPA-HQ-OAR-2016-0271; FRL-9997-57-OAR]
RIN 2060-AU26


Protection of Stratospheric Ozone: Adjustments to the Allowance 
System for Controlling HCFC Production and Import, 2020-2029; and Other 
Updates

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA is proposing to allocate production and consumption 
allowances for specific hydrochlorofluorocarbons, a type of ozone-
depleting substance, for the years 2020 through 2029. These 
hydrochlorofluorocarbons may be used to service certain equipment 
manufactured before 2020. The EPA is also proposing to update other 
requirements under the program for controlling production and 
consumption of ozone-depleting substances, as well as proposing edits 
to the regulatory text for improved readability and clarity. These 
updates include revising the labeling requirements for containers of 
specific hydrochlorofluorocarbons; prohibiting the conversion of 
hydrochlorofluorocarbon allowances allocated through this rulemaking 
into allowances for hydrochlorofluorocarbons that have already been 
phased out; requiring the use of an electronic reporting system for 
producers, importers, exporters, transformers, and destroyers of class 
I and class II ozone-depleting substances; revising and removing 
recordkeeping and reporting requirements; improving the process for 
petitioning to import used substances for reuse; creating a 
certification process for importing used and virgin substances for 
destruction; and restricting the sale of known illegally imported 
substances. This notice further includes proposed clarifications to the 
certification requirements for methyl bromide quarantine and 
preshipment uses. The EPA is also proposing to add polyurethane foam 
systems containing ozone-depleting chlorofluorocarbons to the list of 
nonessential products. Lastly, the agency is proposing to update the 
definition of ``destruction'' as used in the context of the production 
and consumption phaseout and remove obsolete provisions.

DATES: Comments on this notice of proposed rulemaking must be received 
on or before September 30, 2019. Any party requesting a public hearing 
must notify the contact listed below under FOR FURTHER INFORMATION 
CONTACT by 5 p.m. Eastern Daylight Time on August 19, 2019. If a public 
hearing is requested, the hearing will be held on August 29, 2019. The 
hearing will be held in Washington, DC. More details concerning the 
hearing, including whether a hearing has been requested, will be 
available at https://www.epa.gov/ods-phaseout/phaseout-class-ii-ozone-depleting-substances.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2016-0271, to the Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting 
comments. Once submitted, comments cannot be edited or withdrawn. The 
EPA may publish any comment received to its public docket. Do not 
submit electronically any information you consider to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Multimedia submissions (audio, video, etc.) must 
be accompanied by a written comment. The written comment is considered 
the official comment and should include discussion of all points you 
wish to make. The EPA will generally not consider comments or comment 
contents located outside of the primary submission (e.g., on the web, 
cloud, or other file sharing system). For additional submission 
methods, the full EPA public comment policy, information about CBI or 
multimedia submissions, and general guidance on making effective 
comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Katherine Sleasman, Stratospheric 
Protection Division, Office of Atmospheric Programs, Mail Code 6205T, 
1200 Pennsylvania Avenue NW, Washington, DC 20460; telephone number 
(202) 564-7716; email address [email protected]. You may also 
visit the Ozone Protection website of the EPA's Stratospheric 
Protection Division at https://www.epa.gov/ods-phaseout for further 
information about reporting and recordkeeping, other Stratospheric 
Ozone Protection regulations, the science of ozone layer depletion, and 
related topics.

SUPPLEMENTARY INFORMATION:

    Acronyms and Abbreviations. The following acronyms and 
abbreviations are used in this document.

ACE/ITDS--Automated Commercial Environment/International Trade Data 
System
ARFF--Aircraft Rescue and Fire Fighting
CAA--Clean Air Act
CBP--Customs and Border Protection
CDC--Centers for Disease Control and Prevention
CDX--Central Data Exchange
CFC--Chlorofluorocarbon
CFR--Code of Federal Regulations
CROMERR--Cross-Media Electronic Reporting Regulation
DOT--Department of Transportation
EPA--Environmental Protection Agency
FAA--Federal Aviation Administration
FR--Federal Register
GPEA--Government Paperwork Elimination Act
HCFC--Hydrochlorofluorocarbon
HTSA--Harmonized Tariff Schedule of the United States Annotated
MMWR--Morbidity and Mortality Weekly Report
Montreal Protocol--Montreal Protocol on Substances that Deplete the 
Ozone Layer
MOP--Meeting of the Parties
MT--Metric Ton
NFPA--National Fire Protection Association
ODP--Ozone Depletion Potential
ODS--Ozone-Depleting Substance
Parties to the Montreal Protocol or Party--Nations and regional 
economic integration organizations that have consented to be bound 
by the Montreal Protocol on Substances that Deplete the Ozone Layer
RACA--Request for Additional Consumption Allowances
SNAP--Significant New Alternatives Policy
TEAP--Technology and Economic Assessment Panel
UNEP--United Nations Environment Programme

Table of Contents

I. General Information
    A. Does this Proposed Action apply to me?
    B. What action is the Agency proposing?
    C. What is the Agency's authority for this Proposed Action?
    D. What are the incremental costs and benefits of this Proposed 
Action?
II. Background
III. Allocation of HCFC Allowances for the Years 2020 Through 2029
    A. Allocation of HCFC-123 Production and Consumption Allowances
    B. De minimis Exemption
    C. Addition of Fire Suppression Servicing Uses to the HCFC 
Phaseout Schedule
    D. Revisions to Labeling Requirements
    E. Allocation of HCFC-124 Production and Consumption Allowances
    F. Changes to Transfer of Allowance Provisions in Sec.  82.23
IV. Updates to Other Provisions of the Production and Consumption 
Control Program
    A. Electronic Reporting
    B. Changes to Reporting Requirements in Sec. Sec.  82.13, 82.23, 
and 82.24
    C. Changes to Methyl Bromide Provisions in Sec. Sec.  82.4 and 
82.13
    D. Changes to Provisions for the Import of ODS in Sec.  82.3, 
82.4, 82.13, 82.15, and 82.24

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    E. Prohibiting the Sale of Illegally Imported Controlled 
Substances
V. Addition of Polyurethane Foam Systems Containing CFCs to the 
Nonessential Product Ban
VI. Updates to Sec. Sec.  82.3, 82.104, and 82.270 Related to 
Destruction
VII. Removing Obsolete Provisions in Sec. Sec.  82.3, 82.4, 82.9, 
82.10, 82.12, 82.13, 82.15, 82.16, and 82.24
VIII. Economic Analysis
IX. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act (PRA)
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act (UMRA)
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act (NTTAA)
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations

I. General Information

A. Does this Proposed Action apply to me?

    You may be potentially affected by any final action on this 
proposal if you manufacture, process, import, or distribute into 
commerce certain ozone-depleting substances (ODS) and mixtures. 
Potentially affected entities may include but are not limited to:

     Air-Conditioning and Warm Air Heating Equipment and 
Commercial and Industrial Refrigeration Equipment Manufacturing 
entities (NAICS 333415)
     Air-Conditioning Equipment and Supplies Merchant 
Wholesalers (NAICS 423620)
     Basic Chemical Manufacturing (NAICS 3251)
     Chlorofluorocarbon Gas Manufacturing and Import (NAICS 
325120)
     Farm Product Warehousing and Storage (NAICS 493130)
     Farm Supplies and Merchant Wholesalers (NAICS 424910)
     Flour Milling (NAICS 311211)
     Fire Extinguisher Chemical Preparations Manufacturing 
(NAICS 325998)
     Fruit and Nut Tree Farming (NAICS 1113)
     General Warehousing and Storage (NAICS 493130)
     Greenhouse, Nursery, and Floriculture Production (NAICS 
1114)
     Hazardous Waste Treatment and Disposal, Cement 
Manufacturing, Clinker (NAICS 327310)
     Hazardous Waste Treatment and Disposal, Incinerator, 
Hazardous Waste (NAICS 562211)
     Industrial Gas Manufacturing (NAICS 325120)
     Materials Recovery Facilities (NAICS 562920)
     Other Aircraft Parts and Auxiliary Equipment 
Manufacturing (NAICS 336413)
     Other Chemical and Allied Production Merchant 
Wholesalers (NAICS 424690)
     Other Crop Farming (NAICS 1119)
     Pesticide and Other Agricultural Chemical Manufacturing 
(NAICS 325320)
     Plumbing, Heating, and Air-Conditioning Contractors 
(NAICS 238220)
     Portable Fire Extinguishers Manufacturing (NAICS 
339999)
     Postharvest Crop Activities (except Cotton Ginning) 
(NAICS 115114)
     Research and Development in Physical, Engineering, and 
Life Sciences (NAICS 541710)
     Rice Milling (NAICS 311212)
     Soil Preparation, Planting, and Cultivating (NAICS 
115112)
     Vegetable and Melon Farming (NAICS 1112)

    This list is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be affected by this 
action. Other types of entities not listed in this section could also 
be affected. The North American Industrial Classification System 
(NAICS) codes have been provided to assist you and others in 
determining whether this action might apply to certain entities. If you 
have any questions regarding the applicability of this action to a 
particular entity, consult the person listed under FOR FURTHER 
INFORMATION CONTACT.

B. What action is the Agency proposing?

    The EPA is proposing a number of revisions to the production and 
consumption control program for ODS \1\ in 40 CFR part 82, subpart A, 
which are divided into ``class I'' and ``class II'' substances. Section 
602 of the Clean Air Act (CAA) contains initial lists of class I and 
class II substances and addresses additions to those lists. The current 
lists appear in appendices A and B in subpart A. The list of class I 
substances includes chlorofluorocarbons (CFCs), halons, carbon 
tetrachloride, methyl chloroform, and methyl bromide. The list of class 
II substances consists entirely of hydrochlorofluorocarbons (HCFCs). 
This action proposes specific revisions to the production and 
consumption control program including:
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    \1\ Generally speaking, when the EPA refers to ODS in this 
preamble, it is referring to class I and/or class II controlled 
substances. The terms ``controlled substance'' and ``ODS'' are used 
interchangeably, as are the terms ``HCFC'' and ``class II 
substance.''
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     The allocation of production and consumption allowances 
for HCFC-123 and HCFC-124 to service certain equipment manufactured 
before January 1, 2020;
     Requiring the use of an electronic reporting system for 
producers, importers, exporters, transformers, and destroyers of ODS;
     Revisions and removal of certain recordkeeping and 
reporting requirements;
     Clarifications to the certification requirements for 
methyl bromide quarantine and preshipment uses;
     Improvements to the process for petitioning to import used 
substances for reuse;
     Creation of a certification process for importing used and 
virgin substances for destruction; and
     Restrictions on the sale of known illegally imported ODS.
    In addition, this action proposes changes to other subparts 
supporting the ODS phaseout, specifically:
     Changes to the subpart E requirements for labeling of 
products containing HCFC-123 to clarify permitted uses;
     Adding to the subpart C ban on sale and distribution or 
offer for sale and distribution in interstate commerce of certain 
products that contain class I ODS; and
     Changes to subpart H for reducing halon emissions.
    As summarized below, the proposed changes outlined are grouped by 
relevance and thus may not be grouped by subparts as described above. 
The EPA is proposing to allocate annual production and consumption 
allowances for HCFC-123 and HCFC-124 for the years 2020 through 2029 to 
be used for servicing certain equipment manufactured before January 1, 
2020. Section 605 of the CAA addresses the production, consumption, 
use, and introduction into interstate commerce of class II substances 
(listed HCFCs) within the United States. Sections 605 and 606 taken 
together constitute the primary source of authority for the domestic 
implementation of United States' obligations to phase out HCFCs under 
the Montreal Protocol on Substances that Deplete the Ozone Layer 
(Montreal Protocol). The EPA regulations issued under sections 605 and 
606 appear at 40 CFR part 82, subpart A. Those regulations reflect the 
agreed Montreal Protocol HCFC phaseout schedule. An element of that 
schedule is to phase out HCFC production and consumption by January 1, 
2020, other than production and consumption for certain narrowly

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defined uses in an amount up to 0.5% of baseline annually. Under a 
previous adjustment to the Montreal Protocol in 1995, production and 
consumption during the years 2020 through 2029 was restricted to the 
servicing of refrigeration and air-conditioning equipment existing on 
January 1, 2020.\2\ In November 2018, the Parties to the Montreal 
Protocol adopted another adjustment that, among other things, added 
``the servicing of fire suppression and fire protection equipment'' 
existing on January 1, 2020 as a permissible use.\3\ Consistent with 
this adjustment and a continuing servicing demand in fire suppression 
equipment using HCFCs in the United States, the EPA is proposing to 
revise subpart A to add servicing of existing ``fire suppression 
equipment'' to the authorized uses of newly produced or imported 
quantities of HCFC-123 and HCFC-124 during the years 2020 through 2029. 
To facilitate compliance, the EPA is proposing to revise labeling 
requirements for containers of fire suppression agent containing HCFC-
123 that is imported during the years 2020 through 2029 in subpart E. 
To align with existing regulations that prohibit the production and 
import of phased out HCFCs, in particular HCFC-22, the agency is 
proposing to modify the inter-pollutant allowance transfer provisions 
authorized by CAA section 607 to prohibit transfers into ODS that are 
already phased out.
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    \2\ Section 605(a)(3) of the CAA refers to equipment 
``manufactured'' prior to January 1, 2020. The EPA interprets this 
to mean that an appliance ``existing on'' January 1, 2020 is one 
that is ``manufactured'' by that date. The definition of 
``manufactured'' can be found at 40 CFR 82.3. See also 74 FR 66439.
    \3\ Decision XXX/2 and Annex I of the ``Compilation of decisions 
adopted by the parties,'' adjust Article 2F of the Montreal 
Protocol.
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    In addition, the EPA is proposing to update the requirements under 
other provisions of 40 CFR part 82, subpart A. To increase the accuracy 
of reported data and to reduce burden associated with reporting ODS 
data, the EPA is proposing to require that certain reports, import 
petitions, and certifications of intent to import for destruction be 
submitted electronically through the agency's Central Data Exchange 
(CDX). Each entity must establish an account in CDX in order to 
prepare, transmit, certify, and submit reports and submissions. The EPA 
is also proposing to amend the recordkeeping and reporting requirements 
by harmonizing requirements for class I and class II substances and 
removing reporting elements that would be made unnecessary by moving to 
electronic reporting. Required electronic reporting and reducing the 
number of reporting elements reduce the reporting burden.
    The EPA is proposing two changes to provisions related to the sale 
of quarantine and preshipment (QPS) methyl bromide, a fumigant used to 
control pests in agriculture and shipping, in response to the 
misapplication of this ODS in Puerto Rico and the U.S. Virgin Islands. 
First, the EPA is proposing to extend to all distributors of QPS methyl 
bromide a certification requirement that currently applies only to 
certain distributors and end users. This proposed change would help 
ensure that all distributors and applicators are aware of the 
restrictions on the use and sale of QPS methyl bromide. Second, the EPA 
is proposing to explicitly prohibit the use of methyl bromide produced 
under the QPS exemption for any use other than a quarantine use or a 
preshipment use. Additionally, the EPA is proposing revisions in 
Sec. Sec.  82.4, 82.8, and 82.13 for readability, including changes to 
the naming convention for methyl bromide.
    The EPA is also proposing to revise provisions related to the 
import of ODS. The agency is proposing to modify the import petition 
process by clarifying that failure to provide additional information 
requested by the EPA during the process is grounds for objection, and 
by allowing for information from the government of the exporting 
country to be submitted in lieu of certain currently required 
information for petitions to import recovered class I ODS held in ODS 
banks. The agency would modify the petition process to import used 
class I substances for reuse and provide a new certification process 
for the import of ODS (used and virgin) for destruction in the United 
States. Additionally, the EPA is proposing to exempt halon 1211, a 
potent ODS used as a fire suppression streaming agent, in extinguishers 
used onboard aircraft from the import petition process to make it 
easier for companies to service fire suppression equipment, promoting 
proper maintenance of these bottles and preventing the emission of 
halon 1211.
    The EPA is also proposing two changes to reduce the likelihood that 
phased out ODS will be sold and distributed in the United States, and 
thus reduce the potential for emissions of those substances in this 
country. First, the agency is proposing to prohibit the sale or offer 
for sale or distribution of any ODS that the seller knows, or has 
reason to know, has been imported into the United States without 
consumption allowances or is otherwise not subject to an exemption. 
Second, the EPA is proposing to add polyurethane foam systems 
containing CFCs to the list of class I nonessential products under 40 
CFR part 82, subpart C to prohibit them from being sold or distributed 
in the United States.
    The agency is proposing to revise the definition of ``destruction'' 
to include additional technologies such as chemical conversion 
processes, all of which have been approved in decisions of the Parties 
to the Montreal Protocol which is found or otherwise discussed in 
subparts A, E, and H. Lastly, the EPA proposes to remove outdated 
provisions related to the allocation and transfer of class I ODS 
credits and allowances that are no longer in use in subpart A.

C. What is the Agency's authority for this Proposed Action?

    Several sections of the CAA \4\ provide authority for the actions 
proposed by the EPA in this notice of proposed rulemaking. Section 603 
provides authority to establish monitoring and reporting requirements 
for ODS. Sections 604 and 605 provide authority to phase out production 
and consumption of class I and class II substances, respectively, and 
to restrict the use of class II ODS. Section 606 provides the EPA 
authority to establish a more stringent phaseout schedule \5\ than that 
set out in sections 604 and 605 based on: (1) Current scientific 
information that a more stringent schedule may be necessary to protect 
human health and the environment, (2) the availability of substitutes, 
or (3) to conform to any acceleration under the Montreal Protocol. 
Section 607 provides the EPA with authority to issue production and 
consumption allowances and to authorize allowance transfers, including 
inter-pollutant and inter-company transfers. Section 610, in relevant 
part, directs the EPA to issue regulations that identify nonessential 
products that release class I substances into the environment 
(including any release during manufacture, use, storage, or disposal) 
and prohibit any person from selling or distributing any such product, 
or offering any such products for sale or distribution, in interstate 
commerce. Section 611 requires the EPA to establish and implement 
labeling requirements for containers of, and products containing or 
manufactured with, class I or class II ODS.
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    \4\ The Clean Air Act provisions addressing stratospheric ozone 
protection are codified at 42 U.S.C. 7671-7671q.
    \5\ The following documents are available in the docket: ``EPA. 
1999. The Benefits and Costs of the Clean Air Act: 1990 to 2010,'' 
and ``EPA. 2018. Overview of CFC and HCFC Phaseout.''

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    The EPA's authority for this rulemaking is supplemented by section 
114, which authorizes the EPA Administrator to require recordkeeping 
and reporting in carrying out any provision of the CAA (with certain 
exceptions that do not apply here). Section 301 further provides 
authority for the EPA to ``prescribe such regulations as are necessary 
to carry out [the EPA Administrator's] functions'' under the CAA. 
Additional authority for electronic reporting comes from the Government 
Paperwork Elimination Act (GPEA) (44 U.S.C. 3504), which provides ``(1) 
for the option of the electronic maintenance, submission, or disclosure 
of information, when practicable as a substitute for paper; and (2) for 
the use and acceptance of electronic signatures, when practicable.''
    Additional information on the EPA's authority to establish and 
manage an allocation system for the phaseout of class I and class II 
substances can be found at 58 FR 65018 (December 10, 1993) and 68 FR 
2820 (January 21, 2003) respectively.
D. What are the incremental costs and benefits of this Proposed Action?
    The EPA considered the incremental costs and benefits associated 
with this rulemaking which stem from proposed changes to reporting and 
recordkeeping requirements. The revisions proposed here would require 
electronic submissions through CDX, create a streamlined Certification 
of Intent to Import ODS for Destruction, exempt halon 1211 in aircraft 
bottles from the import petitions process, and add recordkeeping 
certification requirement for methyl bromide QPS. The agency has 
analyzed the impact on the regulated community associated with the 
proposed regulatory changes, and the EPA estimates changes to reporting 
and recordkeeping would result in a cost of approximately $5,000 per 
year. However, the EPA estimates the annual costs savings to reporters 
as a result of reductions in reporting elements, streamlining forms, 
and added efficiencies to be approximately $13,000 per year. The one-
time redesign labeling costs for containers of fire suppression agents 
are estimated to cost between $1,000 to $3,000. In addition, the EPA 
analyzed the impact on small businesses and found there would be no 
additional costs imposed on small business, see the docket for the 
screening analysis on small businesses. A description of the results of 
the analysis and the methods used can be found in Section VIII of this 
notice.

II. Background

    The United States was one of the original signatories to the 1987 
Montreal Protocol and ratified it on April 12, 1988. After 
ratification, Congress enacted, and President George H.W. Bush signed 
into law, the CAA Amendments of 1990, which included Title VI on 
Stratospheric Ozone Protection, codified as 42 U.S.C. Chapter 85, 
Subchapter VI, to ensure that the United States could satisfy its 
obligations under the Montreal Protocol, in addition to establishing 
complementary measures such as the national recycling and emission 
reduction programs under section 608 and the labeling requirements 
under section 611.
    The 1992 Copenhagen Amendment \6\ to the Montreal Protocol created 
the stepwise reduction schedule, subsequently revised, and the eventual 
phaseout of HCFC consumption.\7\ The next milestone is a commitment to 
reduce HCFC consumption by 99.5% below the baseline by January 1, 2020, 
with consumption for the years 2020 through 2029 restricted to the 
servicing of refrigeration, air-conditioning, and fire suppression 
equipment existing on January 1, 2020.\8\ This is referred to as the 
``servicing tail.'' In November 2018, the Parties to the Montreal 
Protocol agreed to add fire suppression equipment existing on January 
1, 2020 to the list of permissible servicing tail uses.
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    \6\ Further information on the Copenhagen Amendment is available 
at https://ozone.unep.org/en/handbook-montreal-protocol-substances-deplete-ozone-layer/2199.
    \7\ Consumption is defined in Sec.  82.3 as production plus 
imports minus exports of a controlled substance (other than 
transshipments or used controlled substances). Production is defined 
in Sec.  82.3 as the manufacture of a controlled substance from any 
raw material or feedstock chemical, but does not include: (1) The 
manufacture of a controlled substance that is subsequently 
transformed; (2) the reuse or recycling of a controlled substance; 
(3) amounts that are destroyed by the approved technologies; or (4) 
amounts that are spilled or vented unintentionally.
    \8\ See Montreal Protocol Article 2F, paragraph 6.
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    The United States has chosen to implement the Montreal Protocol 
phaseout schedule of HCFCs on a chemical-by-chemical basis that employs 
a ``worst-first'' approach focusing on the phaseout of certain 
chemicals with higher ozone depletion potential (ODP) earlier than 
others. In 1993, the EPA established a phaseout schedule to eliminate 
HCFC-141b first, to greatly restrict HCFC-142b and HCFC-22 next, and to 
subsequently place restrictions on all other HCFCs ultimately leading 
to a complete phaseout of all HCFCs by 2030 (58 FR 15014, March 18, 
1993; 58 FR 65018, December 10, 1993).
    The EPA designed the allowance program to implement the production 
and consumption controls of the CAA and to facilitate an orderly 
phaseout. To control production, the EPA allocated baseline production 
allowances to producers of specific ODS. To control consumption,\9\ the 
EPA allocated baseline consumption allowances to producers and 
importers of specific ODS. In the allowance program, the EPA allocates 
``calendar-year'' or ``annual'' allowances to companies who expend them 
when they produce or import ODS. The allowances can be traded among 
companies both domestically and internationally (between countries that 
are Parties to the Protocol), with certain restrictions. Allocation of 
production and consumption allowances for most class I substances 
(CFCs, methyl chloroform, carbon tetrachloride, and halons) ended in 
1996, and in 2005 for methyl bromide. Production and consumption 
allowances for class II substances (HCFCs) will be reduced to zero in 
2030.\10\
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    \9\ See CAA section 601(6), 42 U.S.C. 7671(6); 40 CFR 82.3.
    \10\ See CAA section 605 (b)(2), 42 U.S.C. 7671(d) and Montreal 
Protocol Article 2F, paragraph 6.
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    Since the EPA is implementing the HCFC phaseout on a chemical-by-
chemical basis, it allocates and tracks production and consumption 
allowances on an absolute kilogram basis for each chemical. An 
allowance is the unit of measure that controls production and 
consumption of ODS. The EPA allocates allowances for specific years; 
they are valid between January 1 and December 31 of a given control 
period (i.e., calendar year). In previous rulemakings, the EPA has 
allocated calendar-year allowances equal to a percentage of the 
baseline for specified control periods. A calendar-year allowance 
represents the privilege granted to a company to produce or import one 
kilogram (not ODP-weighted) of the specific substance. The EPA 
allocates two types of calendar-year allowances--production allowances 
and consumption allowances. To produce an HCFC, an allowance holder 
must expend both production and consumption allowances. To import an 
HCFC, an allowance holder must expend only consumption allowances. An 
allowance holder exporting HCFCs for which it has expended consumption 
allowances may obtain a refund of those consumption allowances upon 
submittal of proper documentation to the EPA. Production and import of

[[Page 41514]]

virgin HCFCs without allowances are prohibited except for 
transformation, destruction, transshipments, or heels (Sec.  82.15(a) 
and (b)).
    Under the chemical-by-chemical phaseout schedule for HCFCs, the EPA 
stopped allocating production and consumption allowances for HCFC-141b 
as of 2003; there will be no more production and consumption allowances 
for HCFC-22 and HCFC-142b as of 2020; and beginning in 2020 the use of 
newly produced or imported quantities of the remaining HCFCs will be 
limited to servicing refrigeration, air-conditioning, and fire 
suppression equipment existing at that date.
    The EPA notes that absent specific use restrictions, HCFCs can 
continue to be used after their production and import has ceased, for 
example, to service existing equipment such as refrigeration and air-
conditioning systems. The EPA's intent has always been to facilitate a 
smooth transition to alternatives, which means avoiding stranding 
equipment that has not yet reached the end of its useful life. For 
example, used HCFC-22 that is recovered and reclaimed, or virgin 
material produced before the 2020 phaseout may continue to be used for 
as long as it is available to service existing HCFC-22 systems.
    The allowance system for production and import that reduces the 
number of allowances over time is a central component of the ODS 
phaseout in the United States. The EPA limits how much ODS enters the 
market to meet the CAA and Montreal Protocol phaseout milestones. To 
smooth the phaseout steps, the EPA also takes complementary actions 
that reduce the demand for ODS, encourage recovery and recycling or 
reclamation of used ODS, allow for continued servicing to avoid 
stranding existing equipment, and encourage transition to alternatives 
that ``reduce overall risks to human health and the environment.'' \11\
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    \11\ CAA section 612, 42 U.S.C. 7671(k).
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    The EPA's most recent action related to the phaseout of HCFCs was a 
2014 rule that allocated production and consumption allowances for 
HCFC-22, HCFC-142b, HCFC-123, and HCFC-124 for 2015-2019 (79 FR 64254, 
October 28, 2014). In that action, the EPA also implemented the 
provisions in CAA section 605(a) that limit production and consumption 
to servicing refrigeration and air-conditioning appliances and for use 
in fire suppression applications. That notice provides additional 
discussion of the history of the phaseout of HCFCs.

III. Allocation of HCFC Allowances for the Years 2020 Through 2029

    This section presents the EPA's proposed approach for issuing HCFC 
allowances for the next regulatory period that extends from 2020 
through 2029, as well as complementary changes to implement a recent 
adjustment to the Montreal Protocol. The EPA is proposing to issue 
consumption allowances for HCFC-123 and consumption and production 
allowances for HCFC-124 consistent with the CAA, EPA regulations, and 
obligations of the United States under the Montreal Protocol. These are 
the two HCFCs not already slated for phaseout in the United States by 
2020 under existing regulations. These HCFCs are currently used in the 
refrigeration, air-conditioning, and fire suppression sectors. The EPA 
is also proposing to add servicing of fire suppression equipment to the 
authorized uses of newly produced or imported quantities of these HCFCs 
during the years 2020 through 2029. In addition, the EPA is proposing 
changes to the current labeling requirements for containers of fire 
suppression agent using HCFC-123.
    In this proposed action, the EPA is relying on its authority under 
CAA section 605(c) to promulgate regulations phasing out the production 
and restricting the use of class II substances in accordance with 
section 605, subject to previous accelerations under section 606 (See 
58 FR 65018, December 19, 1993 and 74 FR 66411, December 15, 2009). The 
EPA is proposing limited changes to the existing regulations on 
production, consumption, and use of class II ODS to provide flexibility 
for the years 2020 through 2029 consistent with the requirements of 
section 605 and obligations of the United States under the Montreal 
Protocol.
    In developing the proposed allocations for HCFC-123 and HCFC-124 
for the years 2020 through 2029, the EPA considered a number of 
factors, including existing company-specific consumption baselines 
listed in Sec.  82.19; the uses of HCFCs that are permissible for the 
years 2020 through 2029 under CAA section 605(a) and the availability 
of alternatives for those uses; the types of HCFCs that may be produced 
and consumed consistent with existing obligations and regulations; the 
quantity needed to meet the estimated demand for each permissible use; 
the estimated quantity of HCFCs that will be available from recycling 
and reclamation, as well as from the potential stockpiling of virgin 
HCFCs in advance of the 2020 phaseout step; \12\ and the transition 
that must occur by 2030 when HCFC production and consumption will be 
phased out completely. For each HCFC that will be allocated, the EPA 
identifies a total number of allowances to be allocated and then sets 
calendar-year allowances equal to a percentage of each company's 
baseline.\13\ The following discussion describes how the EPA considered 
each of these factors broadly in developing the proposed allocations.
---------------------------------------------------------------------------

    \12\ EPA. 2019. The U.S. Phaseout of HCFCs: Projected Servicing 
Demands in the U.S. Air Conditioning, Refrigeration, and Fire 
Suppression Sector (2020-2030).
    \13\ The percentage of baseline allowances to be allocated for 
each HCFC is determined as follows: First, all the company-specific 
consumption baselines (listed in the table at Sec.  82.19) are added 
to determine the aggregate amount of consumption baseline. The total 
number of allowances to be allocated in a given year are then 
divided by the aggregate amount of baseline allowances.
---------------------------------------------------------------------------

    The first factor the EPA considered when developing this proposal 
was the existing limitation on permissible uses of HCFCs and the 
availability of alternatives for those uses. Section 605(a) of the CAA 
limited the use of newly-produced (i.e., virgin) HCFCs beginning 
January 1, 2015. The statute provides that starting on that date, it 
shall be unlawful for any person to introduce into interstate commerce 
or use any class II substance unless such substance: (1) Has been used, 
recovered, and recycled; (2) is used and entirely consumed (except for 
trace quantities) in the production of other chemicals; (3) is used as 
a refrigerant in appliances manufactured before January 1, 2020; or (4) 
is listed as acceptable under the Significant New Alternatives Policy 
(SNAP) program for use as a fire suppression agent for nonresidential 
applications. As detailed in the draft report in the docket titled The 
U.S. Phaseout of HCFCs: Projected Servicing Demands in the U.S. Air 
Conditioning, Refrigeration, and Fire Suppression Sector (2020-2030), 
hereafter referred to as the Draft Servicing Tail Report, the EPA 
considered the availability of alternatives for the latter two uses, 
with the understanding that it is typically best to service equipment 
with the same refrigerant or fire suppression agent it was designed to 
use. The SNAP program continues to review and list alternatives for 
applications that use HCFCs, including refrigeration and air 
conditioning and fire suppression applications that use HCFC-123. 
Substitutes are listed under that regulatory program as acceptable, 
unacceptable, or acceptable subject to use restrictions for specific 
uses. Any future use of substitutes listed as acceptable subject to use 
restrictions

[[Page 41515]]

must comport with any conditions of the SNAP program, if applicable. 
Currently, the SNAP program lists a number of acceptable substitutes 
for HCFCs for use as a fire suppression agent for nonresidential 
applications, making a variety of allocation options practicable for 
the years 2020 through 2029.
    In addition to the statutory provisions in CAA section 605, the EPA 
established a ``worst-first approach'' in 1993 which addressed which 
HCFCs may be produced and consumed and prioritized the phaseout of 
HCFCs based on their ODPs (58 FR 15014 and 58 FR 65018). These 
regulations can be found in Sec.  82.16. HCFC-141b was phased out in 
2003, except for certain exempted uses. HCFC-22 and HCFC-142b will be 
fully phased out of production and consumption starting in 2020, with 
exceptions for destruction and transformation. Consistent with that 
approach, the EPA is proposing to issue allowances for production and 
consumption of only HCFC-123 and HCFC-124, as these are the remaining 
HCFCs that have not been phased out domestically.
    Under the Montreal Protocol, the United States has committed to 
phase out HCFC production and consumption by January 1, 2020, other 
than production and consumption for certain narrowly defined uses in an 
amount up to 0.5% of baseline annually. Under a previous Montreal 
Protocol adjustment in 1995, production and consumption during the 
years 2020 through 2029 were restricted to the servicing of 
refrigeration and air-conditioning equipment existing on January 1, 
2020. In the spring of 2018, the United States proposed adjusting the 
Montreal Protocol to allow for new production and import of HCFCs 
within the 0.5% cap for servicing fire suppression equipment existing 
on January 1, 2020. This proposal was based on extensive stakeholder 
consultation on HCFC needs during the years 2020 through 2029 and the 
EPA's analysis of available information, including the 2018 Draft 
Servicing Tail Report. In November 2018, the Parties to the Montreal 
Protocol decided to adopt an adjustment that, among other things,\14\ 
added to Article 2F ``the servicing of fire suppression and fire 
protection equipment'' existing on January 1, 2020 as a permissible use 
for newly produced or imported HCFCs.\15\ While the term ``fire 
protection'' can be understood in some contexts to refer broadly to all 
measures taken to protect persons or property from harm, the terms 
``fire protection'' and ``fire suppression'' have been used 
interchangeably in the Montreal Protocol context to refer to 
suppressing or putting out fires through the use of chemical 
substances. Section 605(a) of the Clean Air Act uses the term ``fire 
suppression.'' In addition, the EPA views this term as the more precise 
term in the context of regulating ozone-depleting substances. 
Therefore, the EPA is proposing to add servicing of ``fire suppression 
equipment'' to the authorized uses of newly produced or imported 
quantities of these HCFCs during the years 2020 through 2029. The 
adjustment adopted in November 2018 will enter into force on June 21, 
2019. The final meeting report from the 30th Meeting of the Parties and 
Decision XXX/2 adopting the adjustment are included in the docket for 
this rulemaking.
---------------------------------------------------------------------------

    \14\ The adjustment adopted at the Meeting of the Parties in 
November 2018 included an essential use provision as well as the 
addition of two niche applications under the 0.5% cap. In this 
proposed rule, the EPA is only proposing to address the addition of 
fire suppression. We are not proposing to take any action with 
regard to other elements of the adjustment at this time.
    \15\ Decision XXX/2 and Annex I of the ``Compilation of 
decisions adopted by the parties,'' adjust Article 2F of the 
Montreal Protocol.
---------------------------------------------------------------------------

    In developing the proposed allocations, the EPA considered the 
quantities needed to satisfy estimated demand for HCFC-123 and HCFC-124 
to service certain equipment manufactured before 2020. These estimates 
are discussed in more detail in an updated 2019 Draft Servicing Tail 
Report, which is available in the docket. This report and the proposed 
allocation are based on demand projections contained in the EPA's 
Vintaging Model,\16\ recent market research, discussions with industry 
on current HCFC uses and trends, and the expected availability of 
recovered, recycled/reclaimed, and reused material. The agency made the 
April 2018 draft report available on its website and in the docket 
along with a Notice of Data Availability published in the Federal 
Register on May 4, 2018 (83 FR 19757) and requested comment on the data 
and assumptions in the report. The EPA did not receive any substantive 
comments on the report but continues to welcome further input on all 
aspects of the revised report, including but not limited to the 
underlying assumptions and sensitivity analyses. As a result of the 
adjustment to Article 2F of the Montreal Protocol, the EPA has since 
revised the 2018 Draft Servicing Tail Report to reflect the demand for 
servicing fire suppression equipment manufactured before January 1, 
2020. The EPA seeks comment on the 2019 Draft Servicing Tail Report 
specifically related to the fire suppression sector. Since the EPA will 
use the report to support the final rule, the agency requests any 
relevant data and market information that would improve the accuracy of 
the agency's projections. These data may be used in determining the 
final allocation.
---------------------------------------------------------------------------

    \16\ The EPA's Vintaging Model estimates the annual chemical 
emissions from industry sectors that historically used ODS, 
including Ref/AC and fire suppression. The model uses information on 
the market size and growth for each end-use, as well as a history 
and projections of the market transition from ODS to alternatives. 
The model tracks emissions of annual ``vintages'' of new equipment 
that enter into operation by incorporating information on estimates 
of the quantity of equipment or products sold, serviced, and retired 
or converted each year, and the quantity of the compound required to 
manufacture, charge, and/or maintain the equipment.
---------------------------------------------------------------------------

    The last overarching factor the EPA considered is the 2030 phaseout 
date for HCFC production and import, with limited exceptions, under CAA 
section 605(b)(2) and (c). As for prior HCFC phaseout steps, the 
agency's intent is to accomplish the 2030 phaseout step in a manner 
that achieves a smooth transition to alternatives without stranding 
equipment. The goal is to allow equipment owners to continue servicing 
their HCFC-123 and HCFC-124 equipment that is still within its expected 
lifetime. Experience with prior HCFC-22 phaseout steps indicates that 
gradually decreasing allocation levels is better than an abrupt 
increase or decrease to foster recovery, recycling, and reclamation of 
HCFCs and an orderly transition to approved alternatives.

A. Allocation of HCFC-123 Production and Consumption Allowances

    This section presents the EPA's proposed approach for determining 
the amount of HCFC-123 production and consumption allowances to be 
issued and takes comment on two alternatives.
    The agency is proposing to not provide any HCFC-123 production 
allowances for the years 2020 through 2029. In 2009, the EPA issued 
zero production baseline allowances for HCFC-123 because no companies 
produced HCFC-123 production in the baseline years of 2005 through 
2007. As such, the EPA has not issued production allowances for HCFC-
123 in subsequent years (74 FR 66431). Under section 605(b)(1) of the 
CAA, it is unlawful for any person to produce any class II substance in 
an annual quantity greater than the quantity of such substance produced 
by such person during the baseline year. The EPA does not propose to 
issue any production allowances for HCFC-123 for the years 2020 through 
2029.

[[Page 41516]]

    In 2020, the consumption baseline of the United States for all 
HCFCs will be 0.5% which equates to 76.2 ODP-weighted metric tons that 
could be available for servicing.\17\ Under section 605(c) of the CAA, 
the consumption of HCFCs by any person is also to be limited to the 
quantity consumed by that person during the baseline year. The EPA has 
implemented this requirement by limiting the number of annual 
allowances allocated for each chemical in Sec.  82.16. Consumption of 
HCFC-123 during the baseline year equates to 2,014 MT (40 ODP-weighted 
MT).
---------------------------------------------------------------------------

    \17\ 76.2 ODP-weighted metric tons is the equivalent of 3,810 MT 
of HCFC-123.
---------------------------------------------------------------------------

    Table 1 shows the number of HCFC-123 consumption allowances that 
would be allocated each year from 2020 to 2030 under the EPA's proposed 
approach and under the two alternatives on which the EPA is also taking 
comment. The proposed and alternative approaches are discussed in 
greater detail below.

                                               Table 1--Comparison of HCFC-123 Consumption Allowance Allocation Approaches Between 2020-2030 (MT)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 2020       2021       2022       2023       2024       2025       2026       2027       2028       2029       2030      Total
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Proposal....................................................        650        650        650        570        490        410        330        250        170         90          0      4,260
Alternative 1...............................................        520        480        450        420        380        350        310        280        250        210          0      3,650
Alternative 2...............................................      2,014      2,014      2,014      2,014      2,014      2,014      2,014      2,014      2,014      2,014          0     20,140
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(1) Proposal
    The agency proposes to issue consumption allowances equal to the 
2020 estimated HCFC-123 demand for servicing existing refrigeration and 
air-conditioning and fire suppression equipment for years 2020 through 
2022 and to then decrease the number of allowances issued in each 
subsequent year by an equal amount each year such that there are zero 
allowances issued in 2030. In effect, this proposal would meet the 
estimated, full servicing demand in 2020 with newly imported HCFC-123 
and the estimated, full servicing demand in 2030 with reclaimed HCFC-
123. Under this proposal, the EPA would allocate 650 MT \18\ for the 
years 2020 through 2022 to ensure adequate supply for servicing both 
existing air-conditioning and fire suppression equipment. Currently the 
reclamation market primarily services the refrigeration and air 
conditioning sector. The EPA believes that initially providing three 
years of flat allocations would allow time for the reclamation market 
to enter the fire suppression sector. This is the maximum estimated 
HCFC-123 demand for servicing refrigeration, air-conditioning, and fire 
suppression equipment in 2020 as discussed in the 2019 Draft Servicing 
Tail Report.
---------------------------------------------------------------------------

    \18\ 13 ODP-weighted MT.
---------------------------------------------------------------------------

    The EPA could use an equal yearly decrease approach beginning in 
2023 but start at a higher or lower allocation. Specifically, the EPA 
could use a starting allocation in the years 2020 through 2022 of up to 
1,200 MT (24 ODP-weighted MT), which is the current average annual 
consumption of HCFC-123 in 2012 through 2017 (83 FR 19757). The agency 
could also use a lower starting allocation for years 2020 through 2022 
of between 650 MT (the proposed starting allocation) and 520 MT (the 
starting allocation in the first alternative discussed below). The 
agency requests comment on the full range of possible starting 
allocations for this option.
    The EPA proposes to reduce the allocation annually beginning in 
2023 by an equal amount each year to bring allocations down to zero by 
2030. This approach balances the various near and longer term needs by 
fostering a stable supply of HCFCs to be used for servicing throughout 
the allocation period and past the phaseout date. Gradually reducing 
HCFC allowances fosters transition and recycling/reclamation and is 
consistent with the EPA's approach in previous HCFC allocation rules 
(see 74 FR 66412, December 15, 2009; 76 FR 47451, August 5, 2011; 78 FR 
20004, April 3, 2013; and 79 FR 64254, October 28, 2014). During 
previous ODS phaseouts, decreasing the allocation has provided 
equipment owners with the proper market signal to foster transition to 
alternatives and to increase the incentive for recovery and 
reclamation.
    Consistent with our obligations as a party to the Montreal 
Protocol, and the use limitation in CAA section 605(a) regarding 
refrigeration and air-conditioning equipment, the EPA is not proposing 
to issue HCFC-123 allowances for use in fire suppression or 
refrigeration and air-conditioning equipment manufactured on or after 
January 1, 2020. The EPA notes that new fire suppression and 
refrigeration and air-conditioning equipment may be manufactured with 
recovered and recycled/reclaimed HCFCs in 2020 and beyond. Section 
605(a) of the CAA does not restrict the use of recycled/reclaimed HCFC-
123. For instance, as explained in the 2019 Draft Servicing Tail Report 
available in the docket, the fire suppression sector has a long history 
of using recovered and recycled/reclaimed ODS for both servicing and 
new equipment. For example, there has been continuing demand for halons 
in newly-manufactured fire suppression equipment since the 1994 halon 
phaseout in the United States. This demand for halons has been 
satisfied with recycled/reclaimed halons. Any demand for HCFC-123 for 
charging and servicing fire suppression equipment manufactured on or 
after January 1, 2020 must also be met by recycled/reclaimed HCFC-123 
or HCFC-123 that was stockpiled prior to 2020.
    Following the November 2018 Montreal Protocol adjustment, the EPA 
revised the 2018 Draft Servicing Tail Report to disaggregate estimated 
demand for fire suppression to show estimated demand for servicing 
compared to demand for new equipment. The EPA consulted with industry 
on the estimate of future market demand for HCFC-123 fire suppression 
applications. Over the past several years, total demand (the 
manufacture of new equipment and the servicing of existing equipment) 
has varied, but the average has been approximately 260 MT per year. The 
EPA expects the servicing demand for fire suppression servicing to be 
between 35 to 90 MT based on projections \19\ from the Vintaging Model 
and feedback from industry.
---------------------------------------------------------------------------

    \19\ EPA. 2019. The U.S. Phaseout of HCFCs: Projected Servicing 
Demands in the U.S. Air Conditioning, Refrigeration, and Fire 
Suppression Sector (2020-2030), Table 5.
---------------------------------------------------------------------------

    Starting the allocation levels below the estimated demand for 
servicing both fire suppression and refrigeration and air-conditioning 
equipment, even though the amount reclaimed is expected to be 
significant, could lead to insufficient quantities of recycled/

[[Page 41517]]

reclaimed HCFC-123 to meet fire suppression demand, as indicated in the 
2019 Draft Servicing Tail Report. As such, the EPA does not think it 
would be prudent to reduce the allocation further to account for the 
complete amount of expected reclamation in the early years. Conversely, 
if the EPA allocated a higher amount than demand, more virgin HCFC-123 
may be imported, reducing the need for recovered and reclaimed HCFC-
123. As a point of comparison, the EPA allocated 100% of the HCFC-123 
baseline (2,014 MT, Alternative 2 in Table 1) for the years 2015 
through 2019. In those years HCFC-123 could be used to manufacture new 
equipment as well as service existing equipment. Allowance holders did 
not use their full allocation for HCFC-123 during those years and often 
used the inter-pollutant transfer mechanism to convert their HCFC-123 
allowances into HCFC-22 allowances. After January 1, 2020, there is no 
other market for transfers.
    The EPA seeks comment on all aspects of this proposed allocation 
including the proposed number of allowances to be issued for 2020. The 
agency requests comment on the rationale explained above for its 
proposal to allocate 650 MT HCFC-123 consumption allowances for 2020 
through 2022; whether the starting allocation in 2020 should be higher 
or lower; the proposal to decrease this allocation by a constant amount 
each year after 2022; and whether this proposal would meet demand for 
HCFC-123 during the years 2020 through 2029. The EPA also requests 
comment on the expected servicing demand for fire suppression 
equipment, which is based on projections from the Vintaging Model and 
feedback from industry. The EPA is taking comment on whether the 
proposed allocation would strand any equipment in 2020 through 2029, 
and what the potential cost impacts may be for any stranded equipment. 
The agency also requests comment on whether there is a significant cost 
difference to users between reclaimed and virgin HCFC-123. Commenters 
should provide as much detail, with as much quantitative reasoning 
(e.g., benefits, market effects, etc.), as possible. When developing a 
final rule, the EPA will consider any comments received on the starting 
allocation number and the proposal to decrease the allocation by a 
constant amount each year.
(2) Alternatives
    The EPA is also seeking comment on two alternative approaches the 
EPA considered for determining how many HCFC-123 consumption allowances 
to issue. The first alternative approach would be to issue allowances 
equal to the total modeled demand each year from 2020 through 2029 
(which includes servicing of existing equipment and the manufacture of 
new equipment using reclaimed HCFC-123) minus the low end of the 
projection for reclamation each year from 2020 through 2029. This 
contrasts with the proposed approach which, as explained above, would 
neither consider demand for the manufacture of new equipment using 
reclaimed HCFC-123 nor directly decrease allocations based on 
projections for reclamation. The EPA's low-end estimate for reclamation 
is 300 MT in 2020, rising by 10 MT per year to 390 MT in 2029. See 
Table 8 of the 2019 Draft Servicing Tail Report for more discussion of 
estimated reclaim. In Table 1, above, the first alternative presents 
the allocations that would result from applying this approach.
    Setting the initial allocation at total estimated demand in 2020 
minus the low-end projections for reclamation would reflect current 
total HCFC-123 market conditions and allow companies to continue 
consuming HCFC-123 at a rate consistent with demand to ensure adequate 
supply. Decreasing the allocations gradually over time would 
potentially guard against consumption levels that are significantly 
higher than demand. This approach would also account for continued 
manufacture of fire suppression equipment using HCFC-based fire 
suppression agent to the extent recycled/reclaimed HCFC-123 is 
available. While this approach would start at a lower allocation in 
2020 than the proposed approach and would allocate less HCFC-123 
overall in 2020 through 2029, it would give more time for industry to 
transition given the slower decrease in the allocation level over time, 
it would also result in a larger drop between 2029 and 2030 compared to 
the proposed approach. This could result in a situation where HCFC-123 
equipment owners wait until the end of the regulatory period to 
transition or are unprepared for the 2030 phaseout.
    While the EPA estimates that the level of reclaimed HCFC-123, at 
300 MT per year, will be higher than the estimated demand for new fire 
suppression equipment, the agency expects that much of this reclaimed 
material will be sold into the refrigeration and air-conditioning 
market given current business relationships. Based on industry 
feedback, the EPA has tentatively concluded that reclaimed HCFC-123 is 
currently sold exclusively into the refrigeration and air-conditioning 
market. Thus, it might not be immediately available for fire 
suppression. More availability of virgin HCFC-123 would allow time for 
the market for recycled/reclaimed HCFC-123 to shift towards new fire 
suppression equipment, as consumption of HCFC-123 under the Montreal 
Protocol is only for servicing equipment.
    The EPA seeks comment on this first alternate approach. The EPA 
requests comment on accounting for the anticipated continued 
manufacture of fire suppression equipment using reclaimed HCFC-123. The 
EPA also requests comment on using the low end or the high end of the 
estimate for reclamation, or a point in between. Using the current high 
end of the expected reclamation estimate would equate to an allocation 
of approximately 470 MT in 2020, 220 MT in 2025, and 20 MT in 2029. The 
EPA also seeks comment on whether it should start at a higher amount in 
2020 (up to 1,200 MT) consistent with current average consumption of 
HCFC-123, or a lower amount consistent with the high end of the 
expected reclamation estimate provided in Table 9 of the 2019 Draft 
Servicing Tail Report. Commenters should provide as much detail, with 
as much quantitative reasoning (e.g., benefits, market effects, etc.), 
as possible.
    Lastly, the EPA is seeking comment on a second alternative approach 
under which, as shown in Table 1 above, the EPA would issue 2,014 MT of 
HCFC-123 consumption allowances for each year for the years 2020 
through 2029. This is equal to 100 percent of the aggregate consumption 
baseline allowances for HCFC-123 and is the maximum allocation allowed 
under section 605(c) of the CAA. This approach would allocate 
approximately half of the annual consumption cap allowed under the 
Montreal Protocol. Specifically, this allocation would equal 40.3 ODP-
weighted MT compared to 76.2 ODP-weighted MT allowed during each year 
between 2020 through 2029. This approach could be warranted given the 
relatively low ODP of HCFC-123 (0.02) and the long lifetime of 
equipment using HCFC-123.
    The agency believes this approach would provide significantly more 
allowances than are needed to meet demand for HCFC-123. The existing 
regulatory prohibition on producing or importing HCFC-123 for most 
uses, including in the manufacture of refrigeration and air-
conditioning and fire suppression equipment as of January 1, 2020 will 
significantly reduce the demand for HCFC-123. However, this approach 
would be consistent with

[[Page 41518]]

the EPA's past approach of issuing the maximum allocation for HCFC-123 
during the 2015-2019 control periods. This option does not account for 
recycling or reclamation and might lead to higher consumption than 
demand for HCFC-123. This situation risks decreased incentive to 
reclaim refrigerant at the end of life and during servicing, 
potentially resulting in higher emissions. It also would not 
incorporate specific reductions to foster reclamation and recycling or 
the transition to alternatives. The EPA anticipates it may also 
significantly curtail the existing market in the refrigeration and air-
conditioning sector, since the only remaining market for reclaimed 
HCFC-123 would be for the manufacture of new fire suppression 
equipment. This approach would also result in an abrupt decrease in 
allowances in 2030 when the allocation would decrease from 2,014 MT to 
zero, which is inconsistent with past practice of fostering a smooth 
transition to alternatives. The EPA welcomes comment on this 
alternative approach of issuing 2,014 MT in each year. Commenters 
should provide as much detail, with as much quantitative reasoning 
(e.g., benefits, market effects, etc.), as possible.

B. De Minimis Exemption

    The EPA is proposing to create a de minimis exemption from the use 
prohibition in CAA section 605(a) to allow virgin HCFC-123 to be used 
for the manufacture of chillers that meet specific criteria through 
December 31, 2020. This proposal aims to address a unique situation 
that has arisen because certain construction projects that ordered 
HCFC-123 chillers for installation in 2019 are behind schedule and the 
chillers may not be installed by the end of 2019. The EPA understands 
that many of the chillers and the virgin HCFC-123 to charge them are 
already on site at these construction projects and that companies 
purchased virgin HCFC-123 for charging these chillers given the 
expectation that they would be installed in 2019. However, due to 
construction delays, the final steps in the manufacture of these 
chillers (including charging with refrigerant) may not occur until 
after January 1, 2020. CAA section 605(a) prohibits the introduction 
into interstate commerce or use of any class II substance as a 
refrigerant unless such substance is used as a refrigerant in 
appliances manufactured before January 1, 2020. To address this unique 
circumstance, the EPA is proposing to create a de minimis exemption to 
allow virgin HCFC-123 to be used for the manufacture of chillers that 
meet specific criteria through December 31, 2020. This exemption would 
only apply if the HCFC-123 chiller unit and other components were ready 
for shipment to a construction location and the components were 
specified for installation under a building permit or contract dated on 
or before the date of signature of the proposed rule, the HCFC-123 was 
imported prior to 2020 and is in the possession of the entity that will 
complete the manufacture of the appliance, and all refrigerant added to 
that appliance after December 31, 2020 is used, recovered, or recycled/
reclaimed. This proposal is based on the information currently 
available to the agency. We will consider all comments on the merits of 
this proposal and its potential impacts before deciding whether to take 
final action to create such a de minimis exemption.
(1) Background
    As described in Section III of this notice, the CAA restricts 
introduction into interstate commerce and use of HCFCs over time with 
limited exceptions. The CAA prohibits the use of HCFCs to manufacture 
new appliances effective January 1, 2020, unless the HCFCs are used, 
recovered, and recycled. The CAA also phases out production and 
consumption of HCFCs, with an interim milestone in 2015 and the full 
phaseout in 2030. Additionally, the Montreal Protocol phases out the 
production and consumption of HCFCs as of January 1, 2020, while 
allowing a limited amount of new production and consumption for 
servicing existing refrigeration and air-conditioning appliances, as 
well as other uses described in Section III. The EPA codified the CAA 
use and interstate commerce restrictions related to refrigeration and 
air-conditioning appliances at 40 CFR part 82, subpart A in prior 
rulemakings.
    As defined in the regulations, the term manufactured \20\ ``for an 
appliance, means the date upon which the appliance's refrigerant 
circuit is complete, the appliance can function, the appliance holds a 
full refrigerant charge, and the appliance is ready for use for its 
intended purposes; . . .'' Appliances used in commercial refrigeration, 
such as large chillers, and industrial process refrigeration typically 
involve more complex installation processes, which may require custom-
built parts, and typically are manufactured on-site. Appliances, such 
as these, that are field charged or have the refrigerant circuit 
completed on-site, regardless of whether additional refrigerant is 
added or not, are manufactured at the point when installation of all 
the components and other parts are completed, and the appliance is 
fully charged with refrigerant and able to operate.
---------------------------------------------------------------------------

    \20\ The definition of ``manufactured'' can be found at Sec.  
82.3. See also 74 FR 66439.
---------------------------------------------------------------------------

    Recently, the EPA learned that a limited number of HCFC-123 
chillers specified for installation in 2019 may not be fully 
manufactured prior to January 1, 2020. The key uncharged components, in 
particular the chiller units themselves, were ready for shipment to the 
construction location in the first half of 2019. The agency understands 
that chiller manufacturers ceased factory operations for making new 
HCFC-123 chiller units at the end of April 2019. However, for some 
delayed projects, even though the units and refrigerant may already be 
on-site, the final steps to manufacture the appliance, in particular 
charging the chiller with refrigerant, may not occur until 2020. Thus, 
if no regulatory relief is provided, the virgin HCFC-123 could not be 
used to charge these chillers even if it has already been purchased and 
is on site.
(2) Proposed De Minimis Exemption
    To provide flexibility to complete the manufacture of HCFC-123 
chillers from components that are ready for shipment to a construction 
location, the EPA is proposing to create a de minimis exemption to the 
use prohibition in 605(a). This exemption would allow HCFC-123 to be 
used for the initial charging of certain chillers manufactured between 
January 1, 2020 and December 31, 2020 provided they meet specific 
conditions. The proposed exemption would only apply if the HCFC-123 
chiller unit and components are ready for shipment to a construction 
location and the components were specified for installation under a 
building permit or contract dated on or before the date of signature of 
the proposed rule, the HCFC-123 was imported prior to 2020 and is in 
the possession of an entity involved in the manufacture of the 
appliance, and all refrigerant added to that appliance after December 
31, 2020 is used, recovered, or recycled/reclaimed.
    The EPA has implied authority to propose a de minimis exemption 
from the section 605(a) use restriction. The United States Court of 
Appeals for the District of Columbia Circuit has recognized that 
``[u]nless Congress has been extraordinarily rigid, there is likely a 
basis for an implication of de minimis authority to provide exemption 
when the burdens of regulation yield a gain of trivial or no value.'' 
Alabama Power Co.

[[Page 41519]]

v. Costle, 636 F.2d 323, 360-61 (D.C. Cir. 1980).
    In Alabama Power, the Court held that ``[c]ategorical exemptions 
from statutory commands may . . . be permissible as an exercise of 
agency power, inherent in most statutory schemes, to overlook 
circumstances that in context may fairly be considered de minimis. It 
is commonplace, of course, that the law does not concern itself with 
trifling matters, and this principle has often found application in the 
administrative context. Courts should be reluctant to apply the literal 
terms of a statute to mandate pointless expenditures of effort.'' Id. 
(internal citations omitted). In an earlier case cited by the court in 
Alabama Power, the court described the doctrine as follows: ``The `de 
minimis' doctrine that was developed to prevent trivial items from 
draining the time of the courts has room for sound application to 
administration by the Government of its regulatory programs . . . The 
ability, which we describe here, to exempt de minimis situations from a 
statutory command is not an ability to depart from the statute, but 
rather a tool to be used in implementing the legislative design.'' 
District of Columbia v. Orleans, 406 F.2d 957, 959 (1968).
    In this respect, the Alabama Power opinion observed in a footnote 
that the de minimis principle ``is a cousin of the doctrine that, 
notwithstanding the `plain meaning' of a statute, a court must look 
beyond the words to the purpose of the act where its literal terms lead 
to `absurd or futile' results.'' Alabama Power at 360 n. 89 (citations 
omitted). To apply an exclusion based on the de minimis doctrine, ``the 
agency will bear the burden of making the required showing'' that a 
matter is truly de minimis which naturally will turn on the assessment 
of particular circumstances. Id. The Alabama Power opinion concluded 
that ``most regulatory statutes, including the CAA, permit such agency 
showings in appropriate cases.'' Id.
    A notable limitation on the de minimis doctrine is that it does not 
authorize the agency to exclude something based on a cost-benefit 
analysis. As the court explained, this ``implied authority is not 
available for a situation where the regulatory function does provide 
benefits, in the sense of furthering the regulatory objectives, but the 
agency concludes that the acknowledged benefits are exceeded by the 
costs.'' Id. The court held that any ``implied authority to make cost-
benefit decisions must be based not on a general doctrine but on a fair 
reading of the specific statute, its aims and legislative history.'' 
Id.
    Courts have continued to recognize that authority to create de 
minimis exemptions may be implied where ``the burdens of regulation 
yield a gain of trivial or no value.'' Envtl. Def. Fund Inc. v. EPA, 82 
F.3d 451, 455 (D.C. Cir. 1996) (internal quotation marks omitted) see 
also e.g., Ass'n of Admin Law Judges v. FLRA, 397 F.3d 957, 961-62 
(D.C. Cir. 2005).
    The EPA believes it has authority to provide flexibility by 
creating a de minimis exemption to the 605(a) use prohibition. Section 
605(a) is not extraordinarily rigid and is ambiguous as it does not 
speak directly to the circumstance presented here. In addition, 
providing flexibility is consistent with the statutory intent.
    The EPA does not view section 605(a) as ``extraordinarily rigid.'' 
Title VI of the CAA can generally be summarized into three principal 
areas: The phaseout of the production and import of ODS (section 602-
607); the reduction of emissions of ODS via various means such as 
required servicing practices, restrictions on sale and distribution of 
products, and consumer education (section 608-611); and the transition 
to alternatives that reduce overall risk to human health and the 
environment (section 612). Section 605 specifically addresses the 
phase-out of production and consumption of class II substances. For 
class II substances, section 605 established specific restrictions 
beginning in 2015 on use, introduction into interstate commerce and 
production, while establishing a complete phaseout of HCFCs in 2030. 
Congress' overall approach to the class II phaseout was generally less 
rigid than its approach to the class I phaseout, given the longer 
timeframes and the presence of only one intermediate reduction step 
(see section 605(b)). Given this context, the EPA does not view section 
605(a) as ``extraordinarily rigid.''
    The EPA finds that section 605(a) is ambiguous as it does not speak 
directly to the circumstance presented here. Section 605(a) does not 
explicitly address whether virgin HCFC-123 may be used in a chiller 
where all the chiller components were ready for shipment to a 
construction site before January 1, 2020 but where the initial charge 
is not completed until after January 1, 2020. Because the statute does 
not specify when manufacture is complete, it does not unambiguously 
prohibit the use of virgin HCFC-123 for the initial charge of chillers 
where all the chiller components were ready for shipment before January 
1. 2020. Thus, the EPA has authority to resolve the ambiguity through 
regulation and determine whether the use prohibition should apply in 
this circumstance.
    The EPA views the proposed de minimis exemption as consistent with 
statutory intent. The proposed flexibility would ensure the orderly 
phaseout of ODS and be consistent with the past practice of preventing 
the stranding of existing appliances without being counter to the three 
principle areas of Title VI described previously. First, it would not 
contribute to additional production and consumption of HCFCs and thus 
would not inhibit the United States from reaching the CAA phaseout date 
of 2030 or complying with the Montreal Protocol. Second, these chillers 
would continue to be subject to the servicing practices and labeling 
requirements applicable to all ODS appliances. Third, it would not slow 
the transition to alternatives. As discussed below, the components to 
assemble these chillers have already been made ready for shipment and 
they have been purchased for installation. While these chillers may one 
day be retrofitted to an alternative, such as R-514A, Title VI does not 
require the retrofitting of existing equipment.
    In addition, rigid application of CAA section 605(a) in the unique 
circumstances presented here would ``yield a gain of trivial or no 
value.'' Envtl. Def. Fund Inc. v. EPA, 82 F.3d 451, 455 (D.C. Cir. 
1996) (internal quotation marks omitted). The EPA believes that there 
would be no environmental benefit associated with rigidly applying 
605(a). First, because the HCFC-123 used to initially charge these 
chillers must have been imported prior to 2020, existing allowances 
would have to have been expended. There would therefore not be any 
increase in U.S. consumption compared to the current allowed level of 
consumption for 2019. Second, this exemption would not encourage the 
manufacture of additional HCFC-123 chiller units because factory 
operations for making them have already ceased and the exemption would 
not permit such operations for additional units.
    The number of chillers is also anticipated to be small. Based on 
consultations with industry, the EPA understands that the manufacture 
of up to five percent of the chillers expected to be installed in 2019 
could be delayed beyond January 1, 2020. The EPA expects the number of 
HCFC-123 chillers to be affected is 33. As detailed in the 2019 Draft 
Servicing Tail Report, the EPA assumes an average charge size for an 
HCFC-123 commercial chiller is approximately 445 kg. Thus, the EPA

[[Page 41520]]

estimates about 15 MT of HCFC-123 could be needed to complete the 
manufacture of chillers in 2020 if the proposed exemption is finalized. 
This would equate to about 0.4 percent of all HCFCs allocated in 2019.
    Because the EPA has implemented the HCFC phaseout under the CAA 
using a ``worst first'' approach, this final step in the phaseout means 
that the HCFCs that remain, like HCFC-123, have the lowest ozone-
depleting potential of all HCFCs. Specifically, the ODP of HCFC-123 is 
0.02. Thus, the 15 MT of HCFC-123 anticipated to be used to initially 
charge these chillers equates to only 0.3 ODP-weighted metric tons. 
Comparing again to the consumption allowances allocated for 2019, this 
time on an ODP-weighted basis, this use would be only 0.02 percent of 
what was allocated in 2019.
    Beyond the HCFC-123 needed for the initial charge, the EPA has also 
analyzed whether this proposed exemption could increase the servicing 
demand for HCFC-123 in the years 2020 through 2029 compared to not 
providing this proposed flexibility. As an initial matter, the modeled 
servicing demand described in the 2019 Draft Servicing Tail Report 
includes the demand from the appliances affected by this exemption. The 
report assumes that chillers expected to be manufactured in 2019 are 
manufactured in that year. Because the chillers that would be affected 
by this proposed exemption were anticipated to be manufactured in 2019, 
they would not increase expected demand. This exemption would not alter 
the requirement that used, recovered, or recycled/reclaimed HCFC-123 be 
used for all subsequent servicing events on these chillers. Further, 
HCFC-123 chillers have very low leak rates, and thus the amount of 
replacement refrigerant would be low. Therefore, the EPA does not 
anticipate that future servicing demand will affect the market for 
reclaimed HCFC-123 in a manner that the EPA has not already considered 
when proposing allowance allocation amounts for 2020-2029.
    The proposed exemption also contains numerous constraints that 
limit its potential impact. The proposed exemption from the 605(a) 
prohibition on use in appliances manufactured before January 1, 2020 
would apply only for one year and only in a limited set of 
circumstances. It would apply only if the refrigerant used to 
manufacture the appliance was in the possession of an entity involved 
in the manufacture of the appliance and imported prior to January 1, 
2020. In addition, any servicing of the equipment after December 31, 
2020 would need to be done with HCFC-123 that is used, recovered, or 
recycled/reclaimed. Further, the exemption would not allow for the 
manufacture of additional chillers beyond those for which the 
components had already been made ready for shipment to a construction 
location and the components were specified for installation under a 
building permit or contract dated on or before the date of signature of 
the proposed rule.
    The proposed de minimis exemption is also consistent with past EPA 
practice in this program. The EPA, on past occasions, has provided 
limited flexibility around use restrictions and phaseout dates. 
Existing regulations have typically prevented the stranding of 
appliances and past investments while phasing out controlled 
substances. For example, a concern similar to the one at issue here 
came to the EPA's attention in 2009 when commenters requested a limited 
waiver from a regulatory prohibition on manufacturing HCFC-22 
appliances that was to begin in 2010 (74 FR 66412, 66440-41, December 
15, 2009). Commenters identified scenarios in which HCFC-22 appliances 
had been scheduled for use in projects, such as construction projects, 
prior to January 1, 2010 but for a variety of reasons their manufacture 
could not be completed prior to January 1, 2010. The EPA agreed to 
grant flexibility by providing an exemption from the regulatory 
deadline to allow HCFC-22 to be used as refrigerant in appliances 
manufactured between January 1, 2010 and December 31, 2011 if their 
components were manufactured prior to January 1, 2010 and were 
specified in a building permit or contract dated before January 1, 2010 
for use on a project. The EPA explained that providing flexibility 
would not result in additional consumption of HCFCs, because companies 
had previously produced or imported the HCFCs for use in the 
manufacture of appliances, and it did not affect long-term projections 
on servicing needs because this equipment was already planned to be 
installed in the previous year (74 FR 66441).
    The EPA also previously created a de minimis exemption from the 
statutory prohibition on the use of previously-imported virgin HCFCs. 
In a 2014 rule, the EPA created an exemption from the 605(a) use 
prohibition to provide limited flexibility regarding the use of HCFCs 
for sectors other than refrigeration and air-conditioning and fire 
suppression. For example, the EPA allowed continued use of a small 
amount of material that was previously produced and/or imported using 
the appropriate allowances and in inventory prior to the CAA's 2015 use 
restriction for solvents. The EPA determined that the continued use of 
previously produced/imported material was consistent with past 
practices, that production and consumption would not be higher than 
that already allowed for and that the environmental effect would be 
limited. (79 FR 64254, October 28, 2014).
    The EPA also recognizes that in the circumstances presented here, 
there could be negative impacts if the agency did not provide 
flexibility. Without the proposed flexibility, chiller manufacturers 
would not be able to use virgin HCFC-123 to initially charge and 
install new equipment even though that virgin HCFC-123 may already be 
on-site. Granting flexibility would allow the installation to continue 
using the HCFC-123 available and prevent further delay of the 
installation.
    For the reasons described above, the EPA is proposing to create a 
de minimis exemption to the 605(a) use restriction and to revise 40 CFR 
82.15(g)(5)(iii) to allow virgin HCFC-123 to be used for the initial 
charging of certain chillers manufactured between January 1, 2020 and 
December 31, 2020 provided they meet specific conditions. The proposed 
exemption would only apply if the HCFC-123 chiller unit was ready for 
shipment to a construction location and the components were specified 
for installation under a building permit or contract dated on or before 
the date of signature of the proposed rule, the HCFC-123 was imported 
prior to 2020 and is in the possession of an entity that will complete 
the manufacture of the appliance, and any service on the appliance 
after December 31, 2020 is done using refrigerant that is used, 
recovered, or recycled/reclaimed. In sum, the proposed exemption would 
apply only in limited instances where projects have begun but due to 
delays have not yet been completed prior to January 1, 2020. The EPA 
believes this would address concerns that were expressed by 
stakeholders, would not result in an environmental effect, and is 
consistent with statutory intent.
    The EPA is taking comment on this proposal to establish an 
exemption to allow limited flexibility for the manufacture of chillers 
with HCFCs past January 1, 2020. Specifically, the EPA is requesting 
comment on several aspects of the proposal, including:
     Whether there is enough availability of reclaimed material 
for the initial charge of chillers whose manufacture is delayed until 
2020 and whether rushed installations would

[[Page 41521]]

result in unintended emissions of HCFCs;
     Whether the EPA has appropriately assessed the 
environmental effects of providing or not providing flexibility, such 
as whether up to five percent of chiller installations may be delayed;
     Whether factory operations for making uncharged HCFC-123 
chiller equipment have ceased in the United States as of May 1, 2019;
     Whether HCFC-123 chillers will in fact be stranded in the 
absence of this proposed exemption;
     Whether any additional conditions would be appropriate to 
further narrow the scope of the exemption; and
     Whether the agency has authority to establish a de minimis 
exemption in this situation.

C. Addition of Fire Suppression Servicing Uses to the HCFC Phaseout 
Schedule

    The EPA is proposing to modify the regulations in 40 CFR part 82 
consistent with CAA section 605 and the November 2018 adjustment to 
Article 2F of the Montreal Protocol that allows for the continued 
production and consumption of HCFCs for servicing fire suppression 
equipment manufactured before January 1, 2020. Specifically, the EPA is 
proposing to modify Sec. Sec.  82.16(e) and 82.15(g) to allow for HCFC-
123 to be produced and imported, as well as introduced into interstate 
commerce and used, during the years 2020 through 2029, to service fire 
suppression equipment existing on January 1, 2020,\21\ so long as it is 
being used as a streaming agent listed as acceptable for use or 
acceptable subject to narrowed use limits for nonresidential 
applications in accordance with the SNAP regulations.
---------------------------------------------------------------------------

    \21\ This proposal would expand the permitted uses under 
Sec. Sec.  82.15 and 82.16 which also allow for use and introduction 
into interstate commerce, as well as production and consumption, of 
HCFCs for use as a refrigerant in equipment manufactured before 
January 1, 2020.
---------------------------------------------------------------------------

    The EPA is proposing to modify Sec.  82.16(e)(2) to permit the 
production and import of HCFC-123 for servicing fire suppression 
equipment manufactured before January 1, 2020. While the agency is 
proposing to include the term ``production'' in this regulatory change, 
as stated above, this action does not propose to allocate production 
allowances for HCFC-123 given the lack of production in the United 
States. Section 82.16(e) establishes limits on the production and 
import of HCFC-123 starting on January 1, 2020. It provides that HCFC-
123 may not be produced or imported for any purposes other than the 
listed permissible uses. The proposed revision would add to the list of 
permissible uses the following: Use as a fire suppression streaming 
agent listed under the SNAP program as acceptable for use or acceptable 
subject to narrowed use limits for nonresidential applications. This 
revision would allow for this additional use in the years 2020 through 
2029.
    The EPA is also proposing to add a new paragraph after Sec.  
82.15(g)(4) to ensure consistency with the proposed change to Sec.  
82.16(e)(2). Section 82.15(g) establishes limits on the introduction 
into interstate commerce and use of certain HCFCs at certain dates in 
accordance with the worst-first approach discussed previously. Section 
82.15(g)(4)(i) establishes limits that apply to many HCFCs including 
HCFC-123 and HCFC-124, effective January 1, 2015.\22\ The EPA is 
proposing a new paragraph after Sec.  82.15(g)(4) that repeats the 
limits in Sec.  82.15(g)(4)(i) but may be helpful in clarifying the 
permissible uses of HCFC-123 and HCFC-124 produced or imported after 
January 1, 2020. Consistent with the restrictions on production and 
import in the Montreal Protocol (as modified through the adjustment 
adopted in 2018) and Sec.  82.16, with regard to fire suppression, 
HCFC-123 produced or imported after January 1, 2020, may only be used 
for servicing fire suppression equipment manufactured before January 1, 
2020. Existing inventories of HCFC-123 produced or imported prior to 
January 1, 2020, may continue to be used to manufacture and service new 
fire suppression equipment after January 1, 2020. This change would 
ensure that the regulations are clear and consistent between Sec. Sec.  
82.15 and 82.16, and, as a practical matter, would add no additional 
limitations to those in Sec.  82.16.
---------------------------------------------------------------------------

    \22\ Section 82.15(g)(4)(i) applies to all HCFCs not governed by 
paragraphs Sec.  82.15(g)(1) through (g)(3).
---------------------------------------------------------------------------

    These proposed revisions, if finalized, would provide flexibility 
consistent with the November 2018 adjustment to the phaseout schedule 
for HCFCs in the Montreal Protocol. The United States was a proponent 
of adjusting the phaseout schedule to allow for the continued 
production and consumption of HCFCs to service existing fire 
suppression equipment for years 2020 through 2029. The EPA's analysis 
indicates that in theory, the United States could meet its own domestic 
fire suppression needs with alternatives and recycled/reclaimed HCFC-
123, absent competing demands from other sectors. Past phase-outs, such 
as the halon phaseout, demonstrated that the availability of recycled/
reclaimed and stockpiled material provides flexibility for users of ODS 
long after the phaseout date. However, recycled/reclaimed HCFC-123, 
which is currently being sold predominately into the refrigeration and 
air-conditioning market,\23\ may not be immediately available to the 
fire suppression sector. The EPA is concerned that reclaimers and 
distributors would need to adjust current distribution and sales 
practices to ensure that reclaimed material is available for fire 
suppression. At least in the near term this could affect the 
availability and price of HCFC-123. Given that a lack of HCFC-123 based 
fire suppression agents could present a safety issue, especially for 
applications where there is not an approved alternative clean agent, 
such as for Aircraft Rescue and Fire Fighting (ARFF) vehicles, allowing 
continued consumption of HCFC-123 for the years 2020 through 2029 for 
servicing existing fire suppression equipment is prudent. This is also 
consistent with the EPA's long-standing policy of working to avoid the 
premature retirement of existing ODS-based equipment while fostering 
the transition to alternatives.
---------------------------------------------------------------------------

    \23\ Based on conversation with industry.
---------------------------------------------------------------------------

    The EPA notes that the November 2018 adjustment adopted by the 
Parties to the Montreal Protocol also contains an essential use 
provision and adds other uses under the Article 2F cap, namely solvent 
applications in rocket engine manufacturing and topical medical aerosol 
applications for the specialized treatment of burns. The EPA is only 
proposing regulatory changes that would allow production and 
consumption for the servicing of fire suppression equipment 
manufactured before 2020. The EPA does not currently have any 
information indicating a need in the United States for the additional 
flexibilities added to Article 2F; for that reason, the EPA has not 
assessed their practicality or its authority to implement them under 
the CAA, and we are not proposing any action on them at this time.

D. Revisions to Labeling Requirements

    This section presents the EPA's proposal to adjust the current 
labeling requirements to reflect the proposed change to 40 CFR part 82, 
subpart A, which would allow the use of newly-imported HCFC-123 for 
servicing fire suppression equipment manufactured before January 1, 
2020. The proposed changes to Sec. Sec.  82.15 and 82.16 in subpart A 
are discussed in Section III.B of this notice. Revising the existing 
labeling requirements in 40 CFR part 82, subpart

[[Page 41522]]

E to reflect the limited ability to use HCFC-123 for fire suppression 
servicing would increase awareness of individuals servicing fire 
suppression equipment about the restriction on HCFC-123 use and support 
compliance with the proposed revisions to subpart A. In proposing to 
revise the current labeling requirements, the EPA is relying on 
authority under section 605(c) to issue regulations phasing out the 
production and consumption and restricting the use of class II 
substances that may be needed for compliance. To further support 
awareness of these new requirements, the EPA intends to conduct 
outreach initiatives for technicians, distributors, and service 
providers.
    If the proposed change to subpart A is finalized, HCFC-123 imported 
on or after January 1, 2020 could be used to make Halotron[supreg] I, a 
fire suppression agent produced with HCFC-123, and could be used to 
service fire suppression equipment manufactured before January 1, 2020. 
It could not, however, be used in the manufacture of new equipment on 
or after January 1, 2020 or to service equipment manufactured after 
January 1, 2020. Only Halotron[supreg] I produced with HCFC-123 that is 
reclaimed or was imported prior to 2020 may be used for those purposes. 
Labeling of products manufactured with or containing HCFCs has been 
required under CAA Section 611 since 2015, and the EPA has not seen a 
movement away from these fire suppression agents due to current 
labeling requirements. Similarly, the EPA does not expect a proposed 
addition to the existing labeling requirement would cause a movement 
away from Halotron[supreg] I. The EPA identified this addition as the 
lowest cost option to ensure the United States meets its international 
obligation that newly-produced HCFC-123 only be used to service 
existing equipment, since this would only modify the text of the 
existing label to provide more information to technicians. Thus, in 
addition to adding a labeling requirement, users will need to be able 
to know the date of manufacture of fire suppression equipment. They 
will also need to be able to distinguish fire suppression agents that 
may be used only for servicing equipment manufactured before January 1, 
2020 from fire suppression agents that may be used for manufacturing 
new equipment or servicing equipment regardless of the date of 
manufacture.
    The EPA believes that users will be able to identify the date of 
equipment manufacture using existing methods as is the case with 
refrigeration and air-conditioning equipment. However, without 
additional labeling of containers of fire suppression agents that 
contain HCFC-123, namely Halotron[supreg] I, it may not be possible for 
users to distinguish containers that may only be used to service fire 
suppression equipment manufactured before January 1, 2020 from other 
containers. Therefore, the EPA is proposing to modify the current 
labeling requirements codified at 40 CFR part 82 subpart E for such 
containers. The EPA is proposing to conclude that such modified 
labeling is necessary to ensure that users will have enough information 
to determine which containers of fire suppression agent may be used in 
which equipment, in order to comply with the proposed revisions to the 
HCFC phaseout regulations. The existing CAA section 611 label is on 
reclaimed and virgin product. This proposal would modify only labels of 
product containing virgin HCFC. The EPA is also taking comment on 
whether to modify the current labeling requirements for containers of 
fire suppression agents that contain HCFC-123 that is either reclaimed 
or was imported before 2020, and if there are any other low-cost ways 
to distinguish containers for servicing fire suppression equipment.
    To the EPA's knowledge, the only HCFC used in a fire suppression 
agent is HCFC-123, and it is only used in an agent sold under the name 
Halotron[supreg] I. Clean agents like Halotron[supreg] I do not leave a 
residue, and are commonly used in applications such as data centers, 
clean rooms, and aircraft where high-value or life-saving equipment 
will not be damaged by its use, thereby minimizing economic damages 
from a fire (e.g., shorter equipment downtime or lower costs to 
repair). There are three main fire suppression streaming end uses where 
clean agents are used in the United States: (1) Hand-held portables; 
(2) 150-pound wheeled units; and (3) ARFF vehicles.
    As per the National Fire Protection Association (NFPA) and DOT 
regulations at 49 CFR 180.250, all portable fire extinguishers must be 
maintained in a fully charged operable condition and undergo 
hydrostatic testing. NFPA is a codes and standards organization 
accredited by the American National Standards Institute established to 
minimize the risk and effects of fire by establishing criteria for 
building, processing, design, service, and installation around the 
world. Fire extinguishers, which include portable hand-held devices and 
wheeled units, are recommended to undergo maintenance to ensure that an 
extinguisher will operate effectively and safely in the event of 
fire.\24\ Equipment should be recharged after being used to extinguish 
a fire for it to be usable again. Technicians who conduct hydrostatic 
testing, perform inspections, or recharge fire suppression equipment 
after a discharge may need additional information to aid in 
distinguishing between the permissible uses of specific containers of 
Halotron[supreg] I.
---------------------------------------------------------------------------

    \24\ National Fire Protection Association. (2018) ``Standards 
for Portable Fire Extinguishers'' available at: https://www.nfpa.org/codes-and-standards/all-codes-and-standards/list-of-codes-and-standards/detail?code=10.
---------------------------------------------------------------------------

    The EPA is proposing to modify the existing label required by 
section 611 of the CAA for certain containers of fire suppression 
agent. Section 611 requires containers of ODS to have a label and 
demonstrates that Congress recognized that labeling requirements may be 
needed to effectively implement the phaseout. In 1993, the EPA 
established the labeling requirements for both class I and class II 
substances in 40 CFR part 82, subpart E (58 FR 8136, February 1, 1993). 
Containers in which ODS are stored or transported must bear a clearly 
legible and conspicuous warning label that can be read by consumers 
before they can be introduced into interstate commerce. Section 611 
provides specific language for the label: ``Warning: Contains [insert 
name of substance], a substance that harms public health and 
environment by destroying ozone in the upper atmosphere.'' This is 
reflected in the implementing regulations at Sec.  82.106. According to 
CAA section 611, the label must be ``clearly legible and conspicuous.'' 
Labels generally should be within the principal display panel, the 
warning statement should be in sharp contrast to any background upon 
which it appears, and if there is any outer package for the container 
(e.g., cylinder, isotank, or other container), labels should be on the 
outside packaging. Specific requirements on the size, text, and 
location of the label are provided in Sec. Sec.  82.106-82.110.
    The EPA is proposing to modify the required labeling of all 
containers of fire suppression agent made with HCFCs imported on or 
after January 1, 2020. The EPA believes that Halotron[supreg] I is the 
only fire suppression agent that uses HCFCs that would be manufactured 
after 2020. Containers of Halotron[supreg] I must currently be labeled 
per Sec.  82.102(a) because they contain a class II substance. The EPA 
is proposing to modify the current required label for all containers of 
Halotron[supreg] I made with HCFC-123, imported on or after January 1, 
2020, by adding the following sentence: ``Do not use to service

[[Page 41523]]

equipment manufactured on or after January 1, 2020.'' The EPA believes 
that this information may be necessary for technicians to determine 
which containers of Halotron[supreg] I may or may not be used to 
service new fire suppression equipment after 2020, thereby aiding 
compliance with applicable regulations. Technicians would still need to 
locate the manufacture date on all fire extinguishers or ARFF vehicles 
to determine which container of Halotron[supreg] I may be used to 
service the equipment. The EPA is requesting comment on this proposal.
    The EPA is also requesting comment on whether it should also 
require a modified label for containers of Halotron[supreg] I made with 
recycled/reclaimed HCFC-123 or HCFC-123 imported before 2020. While 
there would be limited additional cost, this could help technicians 
distinguish between specific containers of Halotron[supreg] I. A second 
sentence could therefore be added to the existing label for containers 
of Halotron[supreg] I made with recycled/reclaimed HCFC-123 or HCFC-123 
imported before 2020 that reads ``Not restricted to use in servicing 
pre-2020 equipment.'' Additionally, the EPA is requesting comment on 
whether there is another low-cost way to distinguish containers for 
servicing fire suppression equipment, such as having all containers 
labeled ``Virgin material may not be used to service equipment 
manufactured on or after January 1, 2020,'' and then include additional 
labeling on containers that distinguish ``virgin'' vs. ``reclaimed'' 
material. This may result in a cost of about $3,000 to the industry.
    The agency intends to develop outreach materials in concert with 
the final rule and distribute them to appropriate stakeholders to 
ensure industry awareness of the servicing requirements. The EPA 
believes that there are existing methods to determine the date of 
manufacture of fire suppression equipment, as follows.
    DOT fire extinguisher regulations at 49 CFR 173.309 require that 
each fire extinguisher be tested before initial shipment and marked to 
indicate the year of the test. Technicians could use this date as a 
guide for determining servicing with Halotron[supreg] I. The agency 
recommends that technicians inspect the date on hand-held and wheeled 
fire extinguishers to determine if they were manufactured before or 
after January 1, 2020.
    For servicing ARFF vehicles, the EPA recommends that technicians 
inspect the manufactured date on the vehicle. For class I-III all-wheel 
drive commercial vehicles, vehicle identification numbers (VINs) are 
required by DOT per 49 CFR 565. VINs are located on the lower right-
hand corner of the windshield. For smaller class IV and V vehicles, a 
Vehicle Information Data Plate must be in the cab of the vehicle and 
contain all the information in the ``Aircraft Rescue and Fire-Fighting 
Vehicle Tilt Table Certification'' per NFPA 414, including the make and 
model year.\25\ Locating the year the vehicle was manufactured would 
aid the technician in determining whether a container of 
Halotron[supreg] I can be used for servicing.
---------------------------------------------------------------------------

    \25\ National Fire Protection Association. (2018) ``Standards 
for Aircraft Rescue and Fire-fighting Services at Airports'' 
available at: http://arco-hvac.ir/wp-content/uploads/2018/04/NFPA-403-Std-Aircrft-Rscu-Fire-Ftg-Srvs-at-Airprts-2018.pdf.
---------------------------------------------------------------------------

    The EPA requests comment on whether individuals servicing fire 
suppression equipment can readily identify the date the equipment was 
manufactured and whether the EPA's understanding of the location of 
this information is accurate. The EPA also takes comment on ways 
technicians can identify the manufacture date of fire suppression 
equipment and whether manufacturers and service technicians typically 
reuse Halotron[supreg] I cylinders to hold recovered fire suppression 
agent or imported HCFC-123. The EPA is taking comment on whether the 
manufacture of Halotron[supreg] I can designate cylinders for use in 
servicing existing equipment.

E. Allocation of HCFC-124 Production and Consumption Allowances

    This section presents the EPA's proposed approach for determining 
the amount of HCFC-124 production and consumption allowances to be 
issued for the years 2020 through 2029. HCFC-124 is minimally used as a 
refrigerant. It is a component in refrigerant blends such as R-401A, 
which is used in industrial process and transport refrigeration 
equipment. It is also used as a stand-alone refrigerant in some niche 
applications that reach high condensing temperatures. It is not 
currently used for fire suppression.
    As previously noted, under section 605(b)(1) and (c) of the CAA, it 
is unlawful for any person to produce or consume any class II substance 
in an annual quantity greater than the quantity of such substance 
produced or consumed by such person during the baseline year. This 
would equate to a maximum production amount of 4,029 MT (89 ODP-
weighted MT) and a maximum consumption amount of 2,396 MT (53 ODP-
weighted MT). Over the past five years, consumption has been 
approximately 250 MT per year and reclamation has been minimal. Based 
on recent sales data from the California Air Resources Board, the EPA 
estimates that annual demand for HCFC-124 is between 100 to 200 MT for 
servicing refrigeration and air-conditioning equipment nationally. More 
information on anticipated demand for HCFC-124 is in the 2018 Draft 
Servicing Tail Report.
    Given the small projected need for HCFC-124 beyond 2019 and the 
continued use of certain refrigerant blends containing HCFC-124, the 
agency is proposing to issue HCFC-124 production and consumption 
allowances in the years 2020 through 2029 consistent with the level of 
demand in the 2018 Draft Servicing Tail Report. Based on Vintaging 
Model estimates, along with industry feedback on anticipated demand, 
uses of HCFC-124, and the use of HCFC-124 allowances in recent years, 
the EPA is proposing to allocate 200 MT for the first three years and 
then gradually decrease over the next seven years by an equal amount 
each year, as shown in Table 2. The EPA's goal is to ensure that 
servicing needs can be met, while also encouraging recovery and reuse 
and transition to alternatives. The EPA believes providing consistent 
allocations for the first three years would assist in establishing an 
inventory of HCFC-124 to be used for servicing throughout the 
allocation period and past the phaseout date for the expected lifetimes 
of all existing equipment. The EPA does not want to strand existing 
equipment because of an inadequate supply of HCFC-124. This proposed 
allocation supports this goal because it accounts for allowed end uses 
of HCFC-124 that may not be captured by the Vintaging Model (e.g., use 
of niche refrigerant blends containing HCFC-124 to service equipment 
manufactured before 2020). The EPA is taking comment on this approach.
    The EPA is also taking comment on whether, to ensure adequate 
supply, the agency should issue 200 MT annually beginning in 2020 
without any decrease (Alternative in Table 2). Without significant 
reclamation of HCFC-124, it may be preferable to err toward a higher 
allocation. This is a small quantity in the broader context and would 
not have significant environmental effects given the low ODP (0.022) of 
HCFC-124.

[[Page 41524]]



                        Table 2--Comparison of HCFC-124 Production and Consumption Allowance Allocation Options Between 2020-2030
                                                                          [MT]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              2020   2021   2022   2023   2024   2025   2026   2027   2028   2029   2030    Cumulative
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposal...................................................    200    200    200    175    150    125    100     75     50     25      0           1,300
Alternative: No Annual Decrease............................    200    200    200    200    200    200    200    200    200    200      0           2,000
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The EPA is requesting comment on all aspects of this proposal, as 
well as whether to issue 200 MT or some other number of allowances per 
year without any decline or waiting until 2023 before starting to 
decrease allowances. Commenters should provide as much detail, with as 
much quantitative reasoning (e.g., benefits, market effects, etc.), as 
possible.

F. Changes To Transfer of Allowance Provisions in Section 82.23

    This section presents the EPA's proposal to prohibit the transfer 
of allowances for phased out HCFCs to allowances for HCFC-123 and HCFC-
124. The proposal would prohibit calendar-year inter-pollutant 
transfers into ODS that are already phased out of production and 
consumption. This proposal responds to stakeholder inquiries about 
inter-pollutant transfers to phased out HCFCs. HCFC-123 and HCFC-124 
are the only remaining HCFCs that can be produced or imported in the 
years 2020 through 2029, with limited exceptions. As such, the EPA is 
proposing to issue allowances for only these two substances. Production 
and import of HCFC-141b, HCFC-225ca, and HCFC-225cb have already been 
phased out and production and import of HCFC-22 and HCFC-142b are 
phased out starting in 2020. Demand for some of these HCFCs, 
particularly HCFC-22, will continue beyond 2020. This could create an 
incentive for HCFC-123 and HCFC-124 allowance holders to attempt to 
convert their allowances into allowances for phased out HCFCs, such as 
HCFC-22.
    Under CAA section 607, the EPA has issued regulations at Sec.  
82.23 which provide for both inter-pollutant and inter-company 
transfers of allowances for class II ODS under certain conditions. In 
an inter-pollutant transfer, an allowance holder converts allowances 
for one class II ODS into allowances for another class II ODS (Sec.  
82.23(b)). The EPA is concerned about the potential for allowance 
holders to attempt inter-pollutant transfers that would be inconsistent 
with the established chemical-by-chemical phaseout.
    The EPA views Sec.  82.16 as effectively prohibiting this practice 
by prohibiting production and import of HCFCs that have already been 
phased out. Section 82.16(b)-(e) prohibits individuals from producing 
or importing certain HCFCs that have been phased out, with limited 
exceptions. For example, production and import of HCFC-22 and HCFC-142b 
are prohibited in 2020, with limited exceptions that are not considered 
to be United States consumption under the CAA or Montreal Protocol. 
These provisions do not explicitly prohibit the transfer of HCFC-123 or 
HCFC-124 allowances into allowances for a phased out ODS even though 
the entity would be violating Sec.  82.16(e)(1) if it produced or 
imported that phased out ODS for any purpose other than the few listed 
exceptions, such as for use in a process resulting in its 
transformation.
    Given the EPA has already received several inquiries about whether 
inter-pollutant transfers from HCFC-123 or HCFC-124 to HCFC-22 will be 
allowed after the phaseout of HCFC-22, the EPA is proposing to 
explicitly prohibit calendar-year inter-pollutant transfers of HCFC-123 
and HCFC-124 to phased out HCFCs in Sec.  82.23(b) to ensure clarity 
for the regulated community. Section 82.23(d) already prohibits 
permanent inter-pollutant transfers of baseline allowances, so there is 
no additional change needed in that paragraph. The proposed change to 
Sec.  82.23(b) would not have a practical effect on the ability of 
allowance holders to legally produce or import phased out ODS given the 
prohibition in Sec.  82.16. However, the proposed change would minimize 
confusion and reduce the likelihood that an allowance holder attempts 
to request an inter-pollutant transfer of HCFC-123 or HCFC-124 
allowances to phased out HCFCs. Inter-pollutant transfers between HCFC-
123 and HCFC-124 may continue so long as the newly produced or imported 
HCFC-123 and HCFC-124 are for an allowed use, such as for servicing 
refrigeration and air-conditioning appliances manufactured before 
January 1, 2020.
    The EPA is soliciting comments on the proposed prohibition on 
calendar-year inter-pollutant transfers into ODS that are already 
phased out of production and consumption to improve the clarity of the 
regulations at Sec.  82.23.

IV. Updates to Other Provisions of the Production and Consumption 
Control Program

    This section presents the EPA's proposal to update several other 
provisions in 40 CFR part 82, subpart A--Production and Consumption 
Controls. To decrease the burden of ODS reporting and increase the 
accuracy of reports, the EPA is proposing to require that certain 
reports, import petitions, and certifications of intent to import ODS 
for destruction be submitted electronically through CDX. To reduce the 
reporting burden, the EPA is proposing to update the reporting 
regulations, consolidate reporting elements, and harmonize reporting 
requirements for class I and class II substances. The EPA is also 
proposing changes to the recordkeeping provisions for QPS uses of 
methyl bromide to increase awareness of the existing use restrictions 
and to amend the regulatory text for readability. In addition, to 
better monitor imports into the United States and to facilitate imports 
of ODS for destruction, the EPA is proposing changes to provisions 
related to imports of ODS.

A. Electronic Reporting

    The EPA began allowing electronic reporting as an option for most 
types of reported information under this program in 2008 (73 FR 15520). 
The EPA provided electronic reporting forms and instructions to assist 
entities in fulfilling reporting requirements in Sec. Sec.  82.13, 
82.20, and 82.24 but did not require their use and allowed the 
submission of hard-copy forms. Upon receipt of the reports, the EPA 
either enters the data manually or imports it electronically via CDX 
into the ODS Tracking System. Manual entry of data provided in hard 
copy is time consuming for the agency as well as a potential source of 
error. On July 1, 2018 the EPA launched a new electronic platform for 
the ODS Tracking System along with revised and streamlined electronic 
forms. The EPA is proposing to require the use of the agency's CDX to 
submit reports electronically and is proposing a compliance date for 
this

[[Page 41525]]

requirement that is 30 days after the effective date of the final rule, 
to ensure that stakeholders have adequate time to register in CDX. To 
achieve this, the EPA would update the definition of ``Administrator'' 
in Sec.  82.3, define ``Central Data Exchange'' in Sec.  82.3, add a 
new section at Sec.  82.14 with instructions on the process for 
electronic reporting, and revise provisions at Sec. Sec.  82.13(c) and 
82.24(a)(1) to indicate that reporters must comply with the requirement 
to report electronically through CDX 30 days after the effective date 
of the final rule.
    Currently, the definition of ``Administrator'' instructs submitters 
to mail all reports and petitions to import ODS. The EPA is proposing 
to amend the definition of ``Administrator'' to require electronic 
reporting for the reports and petitions that are available in CDX, 
which includes the majority of reports under subpart A, as well as the 
import petitions and the Certification of Intent to Import ODS for 
Destruction, a new process which the EPA is proposing to create, as 
discussed further in Section IV.D of this notice. The EPA is also 
proposing to revise Sec. Sec.  82.13, 82.23, and 82.24 to clarify that 
where a form is electronically available in CDX it must be submitted 
electronically through that tool. The EPA is also proposing to add the 
definition of ``Central Data Exchange'' and provide instructions on how 
to register in CDX and submit information electronically in a new 
section at Sec.  82.14. Each entity must establish an account in CDX in 
order to prepare, transmit, certify, and submit reports and 
submissions.
    CDX is the EPA's electronic system for environmental data exchange 
and serves as the EPA's main mechanism for receiving and exchanging 
electronic information reported via the internet. CDX provides the 
capability for submitters to access their data using web services. CDX 
enables the EPA to work with stakeholders to enable streamlined 
electronic submission of data via the internet. All information sent 
via CDX is transmitted securely to protect CBI. A reporting entity may 
register for a CDX account or gain access to an existing CDX account at 
https://cdx.epa.gov, as discussed further below.
    The ODS Tracking System is a secure database that serves as the 
primary vehicle for tracking the production and consumption of ODS in 
the United States. The ODS Tracking System allows producers, importers, 
and exporters of class I (excluding methyl bromide) and class II 
substances to submit quarterly and annual reports electronically. The 
ODS Tracking System maintains the data submitted to the EPA and helps 
the agency to: (1) Maintain oversight over total production and 
consumption of ODS in the United States; (2) monitor compliance of 
individual companies with domestic limits and restrictions on 
production, imports, and transfers and with specific exemptions from 
the phaseout; (3) enforce against entities illegally importing without 
allowances; and (4) assess and report on compliance with the United 
States production and consumption caps established under the Montreal 
Protocol, as implemented through the CAA.
    Providing a system to facilitate electronic reporting is consistent 
with the EPA's E-Enterprise initiative to reduce transaction costs and 
burdens for the regulated community by leveraging technologies. 
Eliminating paper-based submissions in favor of electronic reporting, 
including use of the revised Microsoft Excel reporting forms, and CDX, 
is part of broader government efforts to move to modern electronic 
methods of information gathering. One of the objectives of E-Enterprise 
is to reduce paperwork burden for the regulated community by offering 
electronic reporting, optimized operations, and advanced real-time 
monitoring tools. For more information on the EPA's E-Enterprise 
efforts please visit: https://www.epa.gov/e-enterprise.
    Section 603 of the CAA grants the EPA the authority to issue 
certain regulations on the monitoring and reporting of ODS. The EPA may 
also use the information gathering authority under CAA section 114(a) 
to carry out the provisions of Title VI, including the production and 
consumption controls, and may require anyone who is subject to Title 
VI, or who may have information necessary to carry out Title VI, to 
make such reports as may reasonably be required. It is reasonable to 
require electronic reporting for the reasons set forth in this notice. 
Using electronic reporting enables more efficient data transmittal and 
reduces errors through built-in validation procedures. It reduces the 
reporting burden for submitters by reducing the cost and time required 
to review, edit, and transmit data to the agency. It also promotes 
efficiency in communications and cost savings in submissions and 
correspondence. Additional support for electronic reporting comes from 
the Government Paperwork Elimination Act (GPEA) (44 U.S.C. 3504), which 
states that Executive agencies are to provide ``(1) for the option of 
the electronic maintenance, submission, or disclosure of information, 
when practicable as a substitute for paper; and (2) for the use and 
acceptance of electronic signatures, when practicable.'' The EPA's 
Cross-Media Electronic Reporting Regulation (CROMERR) (40 CFR part 3), 
published in the Federal Register on October 13, 2005 (70 FR 59848), 
provides that any requirement in title 40 of the CFR to submit a report 
directly to the EPA can be satisfied with an electronic submission that 
meets certain conditions once the agency has published a notice in the 
Federal Register announcing that the EPA is prepared to receive certain 
documents in electronic form. See 40 CFR 3.2(a). For more information 
about CROMERR, go to https://www.epa.gov/cromerr.
    The EPA designed the electronic reporting forms with input from 
stakeholders to reduce effort and allow submitters to paste 
transaction-level data into the form from other spreadsheets. They 
contain built-in validations, drop-down lists, and auto-populated cells 
to reduce errors from data entry. Once the form is complete, users 
generate a comma separated value (CSV) file and submit the Microsoft 
Excel report, CSV file, and any required supporting attachments via 
CDX. Refer to the EPA's website for additional information on 
electronic form submission: https://www.epa.gov/ods-phaseout/ods-recordkeeping-and-reporting. The web-based tool, as appropriate, also 
allows the user to choose ``Print,'' ``Save,'' or ``Transmit through 
CDX.'' The reporting tool encrypts the file and electronically submits 
it through CDX. The user can also check the status of their submissions 
at any time via CDX. Upon successful receipt of the submission by the 
EPA, the status of the submissions will be flagged as completed. The 
CDX inbox is currently used to notify the users of any correspondence 
related to user registration.
    Under this proposal, entities generally would be required to submit 
the first quarter reports for the 2020 reporting year, due April 1, 
2020, through CDX. Other reports that are available for submission 
through CDX, including import petitions and certifications of intent to 
import ODS for destruction, also would be required to be submitted 
electronically through CDX starting April 1, 2020. The EPA believes 
this would give the regulated community enough time to register in CDX 
and familiarize themselves with the revised electronic reporting forms 
and format. If this rule is finalized as proposed, reporting entities 
would be required to register and electronically submit most reports 
and petitions through CDX. Specifically, for production, import, 
export, destruction, transformation, transfers, and trades of ODS 
entities must use specified forms to allow for

[[Page 41526]]

submission through CDX. Some reports are not required to be submitted 
through CDX and would continue to be submitted to the EPA in hardcopy. 
These are low-volume reports for which the EPA has not released an 
electronic form, and include the laboratory use certifications and 
applications for critical use exemptions for methyl bromide. The OMB 
control number for this information collection request (ICR) and these 
forms is 2060-0170. The following electronic forms were released on 
July 1, 2018 and are available at https://www.epa.gov/ods-phaseout/ods-recordkeeping-and-reporting and through CDX:

--Class I Producer Quarterly Report (EPA Form 5900-151);
--Class I Importer Quarterly Report (EPA Form 5900-150);
--Class I Exporter Annual Report (EPA Form 5900-149);
--Class I Laboratory Supplier Quarterly Report (EPA Form 5900-153);
--Second-Party Transformation Annual Report (EPA Form 5900-147);
--Second-Party Destruction Annual Report (EPA Form 5900-148);
--Class II Producer Quarterly Report (EPA Form 5900-202);
--Class II Importer Quarterly Report (EPA Form 5900-200);
--Class II Exporter Quarterly Report (EPA Form 5900-199);
--Class II Trades (EPA Form 5900-205);
--Class II Request for Additional Consumption Allowances (EPA Form 
5900-201).
--Methyl Bromide Producer Quarterly Report (EPA Form 5900-141);
--Methyl Bromide Importer Quarterly Report (EPA Form 5900-144);
--Methyl Bromide Exporter Quarterly Report (EPA 5900-140);
--Distributor of QPS Methyl Bromide Quarterly Report (EPA Form 5900-
155); and
--Methyl Bromide Pre-2005 Stocks Annual Report (EPA Form 5900-142).

    Petitioners currently have the option of using CDX to submit 
petitions. The current CDX process guides users through a series of 
drop downs, fillable fields, and uploads of PDF attachments using an 
electronic webform. The EPA is proposing to require reporting entities 
importing ODS for reuse or destruction to submit their reports through 
CDX because it would enable more efficient data transmittal and would 
reduce errors, as it has built-in validation procedures. For instance, 
missing information in a required field would prevent the petitioner 
from submitting the petition until all fields are completed. Thus, the 
EPA and entities would expect to benefit from electronic reporting by 
receiving complete submissions in a system that allows for secure 
electronic communication.
    The EPA estimates that entities submitting ODS reports who have not 
yet registered in CDX would incur a one-time burden associated with 
registration. Most entities have already registered with CDX to 
voluntarily submit electronic ODS Tracking System forms or for other 
agency regulatory programs. The EPA estimates 20 respondents would need 
to incur the one-time CDX registration burden. Based on the EPA's 
CROMERR (ICR number 2002.07; OMB Control No. 2025-0003), the EPA 
assumes that entities would spend fifteen minutes per employee to 
register with CDX and complete LexisNexis identity proofing. 
Furthermore, the EPA assumes that an average of two technical staff 
members would need to register for each company, resulting in 20 
minutes of burden per entity.
    The EPA estimates that only those entities who have not yet 
registered in CDX would incur a one-time burden for this change. Based 
on the number of entities that are already reporting through CDX, the 
EPA expects more than 90% of reporting entities were reporting 
electronically at the start of 2019. Thus, the EPA estimates initial 
CDX registration and electronic signature costs incurred in the first 
year would be $2,000 because most entities have previously registered 
in CDX and are reporting electronically. The EPA estimates the annual 
costs savings to reporters to be $4,000 per year for electronic 
reporting.
    As discussed in the supporting statement for the accompanying ICR 
available in the docket to this rule, the EPA also expects to reduce 
its own burden as the result of receiving electronic submissions and 
communicating electronically with entities. The agency resources and 
time requirements to review and process data would decrease, and 
document storage and retrieval would require fewer resources. The 
electronic submission of data through CDX would allow for the direct 
import of data into the ODS Tracking System. This would reduce the time 
the agency spends manually entering data into the ODS Tracking System 
from paper forms as well as reduce the potential for human error that 
exists when data are entered by hand. Agency personnel would also be 
able to communicate more efficiently with entities electronically. The 
conversion to an electronic reporting system as well as the adoption of 
CDX to facilitate form submission and processing are expected to create 
long-term burden reductions and increased efficiencies for the EPA. 
Annual costs to the EPA would be associated with the operation and 
maintenance of CDX for the data flow.
    The EPA seeks comment on its proposal to require electronic 
reporting for ODS data under 40 CFR part 82, subpart A, with exceptions 
for a few low-volume forms. In addition, the EPA seeks input on 
experience to date with electronic reporting of ODS data and whether 
entities that have already transitioned to electronic reporting have 
been able to lower their reporting costs, and if so, by how much. The 
EPA also requests comment on the proposal that the requirement for 
electronic reporting would begin 30 days after the effective date of 
any final rule and on whether additional time would be needed to comply 
with the electronic reporting requirements.

B. Changes to Reporting Requirements in Sec. Sec.  82.13, 82.23, and 
82.24

    This section presents the EPA's proposal to consolidate and 
harmonize ODS reporting elements. The agency has provided the option of 
electronic reporting for most submissions since 2008 to assist 
stakeholders in the reporting process. The proposed regulatory changes 
would reflect current practices by entities that can be designed into 
electronic forms. The EPA monitors company compliance, in part, through 
the recordkeeping and reporting regulations at Sec. Sec.  82.13 and 
82.24. The EPA is proposing these updates under CAA sections 603 and 
114. Many of these proposed regulatory changes would ease the reporting 
burden. For example, the EPA is proposing to remove reporting elements 
in Sec. Sec.  82.23(a), 82.24(b), and 82.24(c) that require the 
reporter to calculate values from data already provided. Requiring this 
of the entity is unnecessary because if finalized as proposed, the 
requirement to report electronically through CDX means these values can 
automatically be calculated and populated. This would save reporting 
entities time in reporting and reduce errors in submissions. The EPA is 
also proposing to change Sec. Sec.  82.13(h) and 82.24(d) so that the 
quantity (rather than the percentage) of used, recycled, or reclaimed 
class I and class II substances, respectively, would be a required 
reporting element. This change would improve consistency with the 
importer reporting requirements and correspond with the way companies 
report their annual data. It would also streamline the exporter 
reporting forms by eliminating the need for an entity to calculate a 
percentage. The EPA is also proposing to remove references to expended 
and unexpended production and consumption allowances at Sec.  
82.13(f)(3)(iv) and (g)(4)(viii), which

[[Page 41527]]

likewise can be calculated automatically with the use of electronic 
reporting forms.
    Other proposed regulatory changes would harmonize the requirements 
for class I and class II substances. For example, the EPA is proposing 
that the timeframe submitters have to make revisions to forms for class 
I and class II substances be the same. Currently under Sec.  82.24 
class II reporters have 180 days from the end of the applicable 
reporting period to make revisions while the class I provisions in 
Sec.  82.13 are silent on the issue. The EPA is proposing to address 
this omission in the class I regulations by adding a provision that 
revisions to reports for class I substances under Sec.  82.13 be made 
within 180 days of the end of the applicable reporting period. This 
would conform to the current practices followed by entities that make 
revisions to class I reports and is consistent with the EPA's current 
practice of allowing such revisions to the reports for class I 
substances. These changes would also be consistent with the current 
regulations in Sec.  82.24 for revisions to reports for class II 
substances.
    The EPA is further proposing to amend Sec.  82.24(d)(1) to clarify 
that exporters who submit a Request for Additional Consumption 
Allowances (RACA) must still include that export on their quarterly 
exporter report. Under Sec.  82.20, companies may submit a request for 
additional consumption allowances if they export class II substances 
that were previously produced in or imported into the United States 
using consumption allowances. Currently, the regulatory text at Sec.  
82.24(d)(1) excludes from quarterly reporting those RACAs even though 
exporters do typically include those exports in their quarterly 
reporting. For ease of review by the EPA and for consistency of 
reporting by exporters, the agency is proposing that all exports be 
included in the quarterly export report, even if the EPA had issued 
additional consumption allowances to the exporter for that export. This 
proposed change matches current practice, so the agency does not 
anticipate an increase in burden for the exporter.
    The EPA is also proposing to amend the reporting requirements at 
Sec.  82.13(v) to add the contact information for the source company 
from which the material was purchased and the laboratories to whom the 
material is sold. This proposal would allow the EPA to better track the 
sale of ODS for laboratory purposes through the Class I Laboratory 
Supplier Report.
    Lastly, the EPA is proposing to correct class I reporting 
requirements for exporters by replacing the term ``Employee 
Identification Number'' with the correct term ``Employer Identification 
Number'' in Sec.  82.13(h).
    The EPA seeks comment on its proposed regulatory changes to the 
reporting requirements under 40 CFR part 82, subpart A. The EPA 
welcomes comment on any other changes that would ease burden on 
reporters.

C. Changes to Methyl Bromide Provisions in Sec. Sec.  82.4 and 82.13

    The EPA is proposing to amend the existing regulatory provisions 
related to the QPS exemption for methyl bromide under CAA section 
604(d)(5) and ensure that QPS methyl bromide is not used in a manner 
inconsistent with the exemption. The EPA's regulations implementing CAA 
section 604(h) set January 1, 2005 as the production and import 
phaseout date (Sec.  82.4(b), (d)). Certain exceptions apply, including 
an exemption for methyl bromide produced or imported for quarantine and 
preshipment applications. Quarantine applications and preshipment 
applications are both defined at Sec.  82.3. Briefly, quarantine 
applications are treatments to prevent the introduction, establishment, 
and/or spread of quarantine pests (including diseases), or to ensure 
their official control. These can include commodities entering or 
leaving the United States or any State (or political subdivision 
thereof). Preshipment applications are those non-quarantine 
applications applied within 21 days before export to meet the official 
requirements of the importing country or existing official requirements 
of the exporting country. The current recordkeeping and reporting 
regulations relating to QPS methyl bromide appear at Sec.  82.13 and 
establish specific requirements for producers, importers, distributors, 
and applicators, including in some instances requirements for written 
certifications that the methyl bromide will be used only for QPS 
applications in accordance with the definitions in Sec.  82.3.
    This section discusses three types of proposed changes to the QPS 
regulations. As a brief overview, first, the EPA is proposing to 
clarify that it is a violation to sell or use methyl bromide produced 
under the QPS exemption for any uses other than QPS applications. 
Second, the EPA is proposing to extend the existing certification 
requirements to all purchasers of QPS methyl bromide. Third, the EPA is 
proposing to make non-substantive changes to Sec. Sec.  82.4 and 82.13 
to improve readability, including changes to the naming convention for 
methyl bromide where appropriate and removal of unnecessary references 
to ``used'' material.
    These proposed changes are, in part, in response to the misuse of 
QPS methyl bromide by applicators and distributors in the U.S. Virgin 
Islands and Puerto Rico. As described in the Centers for Disease 
Control's (CDC) Morbidity and Mortality Weekly Report (MMWR), on March 
18, 2015,\26\ a U.S. Virgin Islands pest control company, Terminix 
International USVI LLC, fumigated a condominium complex in St. John 
with a product containing methyl bromide for the purpose of 
exterminating household pests. As a result, a family of four suffered 
acute methyl bromide poisoning resulting in three family members having 
life-altering illnesses. On March 25, 2015, the U.S. Virgin Islands 
Department of Planning and Natural Resources issued a stop-use order 
for methyl bromide to the company that performed the fumigation. A 
subsequent investigation by the Department of Planning and Natural 
Resources and the EPA revealed that a previous fumigation with methyl 
bromide had occurred on October 20, 2014, at the same condominium 
resort. In total, 37 persons may have been exposed to methyl bromide as 
a result of the October 2014 and March 2015 fumigations (Kulkarni et 
al., 2015). Terminix, LP and Terminix, USVI were sentenced to pay a 
total of $10 million in criminal fines and restitution for violating 
the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).\27\ 
The companies were also ordered to perform community service following 
an investigation and guilty pleas to their use and application of 
illegal fumigants in multiple residential locations in the U.S. Virgin 
Islands.
---------------------------------------------------------------------------

    \26\ 1. Kulkarni, P.A., Duncan, M.A, Watters, M.T., Graziano, 
L.T., Vaouli, E., Cseh, L.F., Risher, J.F., Orr, M.F., Hunte-Ceasar, 
T.C., Ellis, E.M. (2015) Severe Illness from Methyl Bromide Exposure 
at a Condominium Resort-U.S. Virgin Islands, March 2015 Morbidity 
Monthly and Weekly Report (MMWR) Center for Disease Control, 64(28); 
pg. 763-766. Available at: https://www.cdc.gov/mmwr/preview/mmwrhtml/mm6428a4.htm.
    \27\ EPA. (2017). ``Press Release: Terminix Companies Sentenced 
for Applying Restricted-Use Pesticide to Residences in the U.S. 
Virgin Islands.'' Available at: https://www.epa.gov/newsreleases/terminix-companies-sentenced-applying-restricted-use-pesticide-residences-us-virgin.
---------------------------------------------------------------------------

    As a result of the exposures in the U.S. Virgin Islands, as well as 
documented misuse of QPS methyl bromide in Puerto Rico, and the high 
health risk potential from mishandling or misuse of QPS methyl bromide, 
the EPA is proposing to add a regulatory provision at Sec.  82.4(r) to 
expressly prohibit the sale or use of QPS methyl

[[Page 41528]]

bromide for any uses other than QPS applications. The proposed 
provision would also explicitly state that it is a violation of subpart 
A to sell or use methyl bromide produced or imported under the QPS 
exemption for any uses other than QPS applications.
    The existing regulations at Sec.  82.13(y)(1) and (z)(2) require 
certification statements from distributors, applicators, commodity 
owners, shippers or their agent that methyl bromide ``will be used only 
for quarantine and preshipment applications.'' Similarly, Sec.  
82.13(f)(2)(xviii) and (xix) describe the exempted quantities of methyl 
bromide as ``produced solely for quarantine and preshipment 
applications.'' The EPA interprets this existing text as already 
prohibiting the use of methyl bromide produced or imported under the 
QPS exemption for any uses other than QPS applications. Although the 
EPA is proposing to add an express statement of the prohibition at 
Sec.  82.4(r) to add clarity and enforceability to this prohibition, 
the EPA does not view this as changing the existing requirements. The 
proposed prohibition that would appear at Sec.  82.4(r) for the QPS 
exemption is modelled on the language at Sec.  82.4(n), which contains 
an express prohibition on using controlled substances produced under 
the essential use exemption.
    Second, to help avoid future exposures stemming from misuse of QPS 
methyl bromide, the EPA is proposing to extend the existing 
certification requirements to all purchasers of QPS methyl bromide, 
including purchasers who purchase for further distribution. Under the 
existing recordkeeping and reporting requirements at Sec.  
82.13(f)(2)(xviii), producers of methyl bromide must maintain 
certifications that methyl bromide produced for QPS applications has 
been purchased by distributors or applicators to be used only for QPS 
applications. Under Sec.  82.13(y), distributors of QPS methyl bromide 
must certify when they purchase or receive QPS material from producers 
and importers that the controlled substances will be used only for QPS 
applications. Applicators of QPS methyl bromide must also certify to 
distributors that the controlled substance will only be used only for 
QPS applications under the existing regulation at Sec.  82.13(z).
    The EPA has identified a gap in this certification chain when the 
material is sold through multiple distributors before reaching the 
applicator. When one distributor sells to a second distributor, neither 
distributor is required to certify or maintain a certification that the 
material will be used only for a QPS application. The EPA is proposing 
to revise Sec.  82.13(y) to extend the certification requirement to 
purchasers who purchase or receive material for further distribution to 
address this gap.
    The proposed extension of the certification requirement would help 
to ensure that distributors are knowledgeable of the requirements for 
the sale of QPS methyl bromide. The sales and misapplications of QPS 
methyl bromide in Puerto Rico and the U.S. Virgin Islands demonstrate 
that distributors may not have been aware of, or may have ignored, the 
limitations on the use of this material. The purpose of the requirement 
when established was to ensure that anyone selling or purchasing QPS 
methyl bromide signed a certification verifying that they would comply 
with requirements under Title VI of the CAA (66 FR 37760). Distributors 
are more likely to make themselves aware of those requirements and be 
mindful of the fact that QPS methyl bromide can only be used for QPS 
applications if they are required to sign a certification addressing 
these requirements and provide it before each purchase. This proposal 
would fill the gap in the distribution chain and ensure the original 
intent of the regulation is implemented.
    The EPA is therefore proposing to extend the existing requirement 
that every distributor of QPS methyl bromide certify to the producer or 
importer from whom they purchased or received the material that 
quantities purchased or received would be sold only for quarantine 
applications or preshipment applications to also require such a 
certification when the material is purchased or received from a 
distributor. Likewise, the existing requirement that such distributors 
receive from any applicator, to whom they sold or delivered the methyl 
bromide a certification, prior to delivery of the quantity, stating 
that the quantity would be used or sold solely for QPS applications in 
accordance with definitions in subpart A would be extended to sales and 
deliveries to any exporter or distributor under the proposed changes. 
For exporters, the invoice or sales agreement currently required in 
Sec.  82.13(h)(2)(viii) is enough for this purpose. The EPA is 
proposing to make these changes to Sec.  82.13(y).
    The EPA is also proposing that the distributor certify that they 
are selling the material for a QPS application rather than certify that 
it will be used for a QPS application, as is required in the existing 
regulations. This would better align the rule text with the 
distributor's role. The proper sale of the material is within the 
distributor's control whereas the use may not be, given that the 
material may be resold by another distributor and applied by an end 
user or third-party applicator.
    The EPA seeks comment on its proposed addition of Sec.  82.4(r) 
relating to the prohibition against using QPS methyl bromide for 
anything other than QPS uses and its proposed changes to the 
certification requirements for QPS methyl bromide.
    The EPA is also proposing edits to Sec.  82.13(h)(2), which 
contains the recordkeeping requirements for exporters of certain 
``types'' of methyl bromide by companies that did not produce the 
material. The EPA is proposing edits to clarify what is meant by 
``type'' of methyl bromide. Specifically, the EPA is proposing to more 
clearly state that the provision requires reporting of the quantity of 
methyl bromide exported for transformation, destruction, critical use, 
and QPS uses. These are the only exempted uses of methyl bromide, and 
this would match the information requested in the existing reporting 
forms. The EPA is also proposing to remove the requirement in the 
existing provision that exporters state how much of the exports are of 
``used, recycled or reclaimed material.'' Unlike other ODS, methyl 
bromide is a product that is registered and controlled under FIFRA and 
thus is not sold ``used'' or ``recycled'' or ``reclaimed.'' Therefore, 
these adjectives are not applicable to methyl bromide and this phrase 
is not needed.
    Lastly, the EPA is proposing to replace references to ``class I, 
Group VI controlled substances'' with ``methyl bromide'' where 
appropriate for readability throughout Sec. Sec.  82.4 and 82.13. 
``Class I, Group VI controlled substances'' is how methyl bromide is 
classified under the EPA's regulations in appendix A to subpart A, but 
methyl bromide is the only compound within this category. Using the 
common name would improve the readability of the QPS regulations.
    The EPA seeks comment on these proposed changes to Sec. Sec.  82.4 
and 82.13 for readability and clarity of the regulations, as well as on 
the proposed changes to the recordkeeping requirements at Sec.  
82.13(h)(2) for exports of certain types of methyl bromide.

D. Changes to Provisions for the Import of Ozone-Depleting Substances 
in Sec. Sec.  82.3, 82.4, 82.13, 82.15, and 82.24

    Under CAA sections 604, 605, and 606, the EPA restricts the import 
of ODS consistent with both the CAA and the

[[Page 41529]]

Montreal Protocol. As discussed previously in Section II of this 
notice, importing virgin ODS requires the importer to expend 
consumption allowances. Controlling the number of allowances and 
knowing who holds those allowances allows the EPA to ensure that the 
phaseout obligations under the Montreal Protocol as implemented through 
the CAA are met. Used ODS \28\ can be imported without consumption 
allowances, and generally without use restrictions, if certain 
conditions are satisfied. Imports of used ODS are currently regulated 
under Sec.  82.13(g)(2)-(3) (for imports of used class I substances) 
and Sec.  82.24(c)(3)-(4) (for imports of used class II substances). 
The EPA has reviewed the import petition process and is proposing 
amendments to improve data collection. Such changes would require 
collection of additional information when additional verification is 
needed to determine whether the material has been previously used and 
remove data elements that are currently collected but that are no 
longer needed. The EPA is also proposing to create a procedure for 
imports of both used and virgin ODS when they are imported for 
destruction. This proposal may lead to more used ODS being imported for 
reuse or destruction because of the less burdensome reporting 
requirements, which is beneficial for fostering a smooth transition to 
alternatives and reducing emissions of ODS to the atmosphere. In a 
recent example, the EPA granted a petition for the import of virgin ODS 
for destruction. The agency anticipates additional petitions for 
imports of virgin material may be received by the agency as the global 
phaseout of HCFCs continues and because the United States has a greater 
capacity for destruction. Additionally, these proposals would reduce 
the chance that virgin ODS are imported under the false pretense that 
it is ``used.''
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    \28\ Used ODS have been recovered from their intended use 
systems (e.g., refrigeration and AC equipment) and may include 
controlled substances that have been, or may be subsequently, 
recycled or reclaimed. See 40 CFR 82.3
---------------------------------------------------------------------------

    Anyone wanting to import used ODS must currently submit a petition 
to the agency and receive a ``non-objection notice'' approving the 
import. The petition to import a used ODS must contain certain 
information, which the EPA considers in determining whether the ODS is 
in fact used. Required information includes: A description of the 
previous use of the substance; the identity of source facilities from 
which the material was recovered; a contact person at each source 
facility; the name, make, and model number of the equipment from which 
the material was recovered at each source facility; a best estimate of 
when the material was removed; and an export license from the 
appropriate government agency from the country of export. See 
Sec. Sec.  82.13(g)(2) and 82.24(c)(3). After review, the EPA responds 
to the petition by issuing either a ``non-objection notice,'' which 
allows the import to proceed, or an ``objection notice,'' which has the 
effect of prohibiting the import because a non-objection notice is 
required for the lawful import of such material.
    The EPA established the petition process to import used class I ODS 
(under CAA sections 603 and 604) in 1998 (63 FR 41626) and in 2003 (68 
FR 2819) for class II ODS (under CAA sections 603 and 605) out of 
concern that some importers were circumventing the production and 
import controls by importing virgin class I and class II substances 
that had been intentionally mislabeled as used. The petition process 
has been effective in addressing this potential problem because the 
information requirements and the review undertaken by the EPA make it 
difficult for importers to falsify documents. Sections 604, 605, and 
606 of the CAA provide statutory authority for controlling the import 
of ODS, including the petition process and the proposed changes to that 
process. Section 603 of the CAA requires reporting of the amount of ODS 
imported on a quarterly basis or on a basis determined by the 
Administrator. To the extent that these proposed changes involve 
recordkeeping and reporting of information, the EPA also relies upon 
its authority under CAA section 114, which authorizes the EPA to 
require recordkeeping and reporting in carrying out any provision of 
the CAA (with certain exceptions that do not apply here). Specifically, 
the EPA is proposing changes to the recordkeeping and reporting 
requirements to carry out the import provisions of sections 604, 605, 
and 606.
    Despite the effectiveness of the petition process at providing 
information that allows the EPA to verify that ODS are used before they 
are imported, the EPA has identified potential improvements to the 
process. For example, the current requirements are difficult to satisfy 
if the imported material comes from a halon bank or other ODS banks. 
The current regulations exempt only halon 1301 aircraft bottles from 
the petition process for hydrostatic testing, yet aircraft bottles 
containing halon 1211 are also imported for such testing. The current 
petition process also does not distinguish imports of used ODS that are 
intended to be destroyed from imports of all other used material that 
are intended to be reclaimed for continued use, though the agency 
recognizes that the verification requirements do not need to be as 
rigorous when the ODS are to be destroyed. The existing regulations 
also do not provide a mechanism to pre-approve the import of virgin 
material for destruction, resulting in delays at the port of entry 
while the shipment is verified by the EPA.
i. Changes to the Petition Process To Import Used ODS for Reuse in 
Sec. Sec.  82.13 and 82.24
    The EPA is proposing changes to the petition process that would 
generally ease the burden on importers, while still allowing the agency 
to verify that the material being imported is used. Specifically, the 
agency is proposing to: Allow, under certain circumstances, submission 
of an official letter from the appropriate government agency in that 
country where the material is stored attesting that a class I substance 
is ``used'' in lieu of detailed equipment-level source information; 
\29\ allow submission of an application for an export license in lieu 
of the license itself; require that petitions include email addresses 
in contact information (while removing the requirement to provide fax 
numbers) and commodity codes for the material; and specifically 
authorize the agency to request additional information when additional 
verification is needed before issuing a non-objection notice. In 
general, the EPA anticipates these changes would increase the 
availability of used class I substances in the United States and thus 
help to provide a greater supply of used material for servicing 
existing equipment, which might otherwise have to be retired before the 
end of its useful life.
---------------------------------------------------------------------------

    \29\ The EPA is not proposing similar changes for class II ODS 
given the production phaseout for these substances is still 
underway.
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    First, the EPA is proposing to amend Sec.  82.13(g)(2) in 
recognition that banks \30\ of halon and other class I ODS overseas are 
a potential source of used ODS. Since halons were phased out in the 
United States and other non-Article 5 countries in 1994, many countries 
and organizations established halon banks where they aggregate and 
store

[[Page 41530]]

previously used and recovered halon for reuse in fire suppression 
applications.\31\ In most cases the managers of such banks do not have 
the complete information required by the EPA's petition process 
especially since the material may have been recovered more than two 
decades ago. As detailed above, the import petition must currently 
contain information about the used ODS including the source facility 
and name, make, and model number of the equipment and from which the 
material was recovered. Petitioners sourcing class I substances from 
banks, therefore, rarely have enough records to provide all the 
information required in the petition process, and as a result the 
petitions are subject to denial.
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    \30\ The EPA uses the term ``bank'' here to refer to a company-
run or nationally government-run facility that collects and stores 
previously-recovered ODS (e.g., a halon bank) for reuse at a later 
date, not the ``bank'' of ODS installed in existing equipment and 
products.
    \31\ Halons were phased out in Article 5 countries in 2010.
---------------------------------------------------------------------------

    The EPA is proposing to waive the requirement for specific source 
information for halon and other class I substances stored in either a 
national government ODS bank or a privately-operated bank authorized by 
a national government to collect and manage ODS if the petitioners 
include an official letter from the appropriate national government 
agency of the exporting country attesting that the class I substance(s) 
proposed for export to the United States is used. The EPA would 
consider this official letter along with all the other evidence 
provided in determine whether the material is used. However, providing 
an official letter does not mean that the EPA would automatically 
approve the petition. The EPA is proposing to define ``bank'' for 
clarity in the regulatory text.
    Stakeholders have indicated to the agency that this type of change 
to the petition process would allow U.S. companies to potentially 
access large reserves of halon held overseas for which source 
information cannot be obtained. Halons are used for fire protection 
applications, such as in civil aviation, military, and oil and gas 
drilling and the continued availability of used halons remains 
important to many U.S. operations. Industry in the United States has 
successfully managed the recovery and use of halons since the domestic 
phaseout of production in 1994 and the EPA anticipates that they will 
continue to do so. However, as we get further from the phaseout, the 
available supply of halons decreases.
    The Montreal Protocol's Technology and Economic Assessment Panel 
(TEAP) has provided information on the availability and expected need 
for halons in the future. The TEAP issued a report in September 2018, 
noting continued demand for halons, in particular for servicing fire 
suppression equipment for civilian aviation.\32\ Civil aircraft will 
continue to need halon to meet fire protection requirements for 
lavatory bottles, handheld extinguishers, engine nacelles, auxiliary 
power units, and cargo compartments \33\ until there is a transition to 
alternatives for all applications on new aircraft as well as to service 
the civil aircraft fleet. This proposal would allow halon to be more 
easily sourced from overseas banks and thus should make more halon 
available to service aircraft in the United States. In addition, the 
military and oil and gas drillers continue to need halons for fire 
suppression applications.
---------------------------------------------------------------------------

    \32\ UNEP. (2018) Montreal Protocol on Substances on Substances 
that Deplete the Ozone Layer. Report of the Technology and Economic 
Assessment Panel. September 2018 Volume 2 Decision XXIX/8 on the 
Future Availability of Halons and their Alternatives; pg. 1-32. 
Available at: https://ozone.unep.org/index.php.
    \33\ FAA (2004). ``FAA Halon ARC Final Report Findings & 
Recommendations'' Halon Replacement Aviation Rulemaking Committee; 
pg. 1-49. Available at: https://www.faa.gov/regulations_policies/rulemaking/committees/documents/index.cfm/committee/browse/committeeID/397.
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    Second, the EPA is proposing to amend the criteria for when the EPA 
may issue an objection notice to a petition to import a used ODS. When 
enough information is not provided with the initial petition for a 
determination, the EPA requests additional information from the 
petitioner in order to verify that the material was used. The EPA is 
therefore proposing to clarify that not providing this requested 
information could be grounds for issuing an objection notice to the 
petition. As one example of information that may be requested, the EPA 
may request results of purity sampling of class I or class II 
substances. The EPA understands that if a halon is used, the purity 
will typically be much lower (on the order of 90 to 95 percent pure) 
than if the material is virgin. The EPA may request the results of 
purity tests in situations where having those results would give the 
EPA and the company receiving the used ODS information that could 
confirm, before the material is imported, that the ODS is in fact used. 
Under this proposal, if petitioners fail to respond to requests from 
the agency for addition information, the EPA could issue an objection 
notice.
    Other examples of information that the EPA has requested in 
reviewing petitions to verify the substances is used before issuing a 
non-objection notice include: A photo of each unit that contained the 
used ODS, with serial numbers visible; photos of a representative 
sample of the cylinders, with serial numbers visible; a description of 
the facility from which the used ODS originates, which includes what is 
produced at the facility, the location of the facility, and how long 
the facility has been in the location; a description of each unit from 
which the used ODS originates; links to websites showing brochures, 
photographs, and/or descriptions of each different unit from which the 
used ODS originates; copies of the original, signed work orders 
authorizing collecting of the used ODS; copies of the paperwork showing 
that the company completed the work; copies of payment to the company 
that collected the used ODS for their services, with redactions for 
confidential or sensitive information such as bank account numbers; 
copies of business licenses from the government authorizing collection 
companies to do this type of work; and information on how transport 
will occur within the exporting country and to the United States. For 
used ODS from Europe, the EPA has requested a screenshot of the 
European Commission export license; the name and contact information 
for the European Commission official who signed the Export License; and 
copies of all paperwork required for movement within the European 
Union, such as the ``Notification document for transboundary movement/
shipments of waste.'' The EPA is not proposing to collect all such 
information for each petition and thus is not proposing to revise the 
regulatory text to require that it be provided in every petition. 
However, the agency does wish to provide notice to petitioners that it 
may request additional information to confirm that the ODS is in fact 
used and is proposing to amend the regulations to make clear that 
failure to provide such information when requested would be a ground to 
issue an objection notice. The EPA specifically requests comment on 
this proposal for an additional ground for denying a petition to import 
used ODS and on whether the EPA should specifically list the types of 
information in the regulations that the agency may, on a case by case 
basis, request from the petitioner after reviewing the initial 
submission to confirm that the material is used. If the agency were to 
add a list of specific types of information that it might request on a 
case-by-case basis, that list could include some or all the information 
described in the prior paragraphs of this notice that the EPA has 
requested in reviewing petitions in the past.
    Third, the EPA is proposing multiple minor amendments to the 
petition

[[Page 41531]]

process to ensure accuracy, faster review, and facilitate the import of 
used ODS. In particular, the EPA is proposing to update the requested 
contact information by requiring email addresses and removing fax 
numbers. The EPA is also proposing to require that the petition for 
import include the amount of material authorized under the export 
license or export license application to ensure the petitioned amount 
is equal to or less than the amount that arrives at the United States 
port of entry. The EPA is also proposing to require that petitioners 
provide the commodity code associated with the ODS to be imported. The 
commodity codes are classifications for goods and services traded among 
countries. This proposal would match the agency's other import and 
export requirements in Sec. Sec.  82.13(g) and (h) and 82.24(c) and (d) 
and help to ensure that the data are correctly entered in Customs and 
Border Protection's Automated Commercial Environment and International 
Trade Data System (ACE/ITDS).
    The EPA is also proposing to update the commodity codes for HCFC-
123 and HCFC-124 in Appendix K. The U.S. International Trade Commission 
is responsible for publishing the Harmonized Tariff Schedule of the 
United States Annotated (HTSA). The HTSA provides the applicable tariff 
rates and statistical categories for all merchandise imported into the 
United States. It is based on the international Harmonized System, the 
global system of nomenclature that is used to describe most world trade 
in goods. This action updates the commodity codes for HCFC-123 and 
HCFC-124 in the appendix so that they coincide with those currently in 
effect and in use by the U.S. International Trade Commission.
    In addition, the EPA is proposing to amend Sec. Sec.  82.13(g)(2) 
and 82.24(c)(3) to allow importers of class I and class II substances, 
respectively, to provide an application for an export license in lieu 
of an actual export license, as is currently required. For example, 
Canada, the largest exporter of used ODS to the United States, requires 
the EPA to approve the export before they issue an export license. As 
such, petitioners are only able to provide the submitted application 
for an export license with their petition. Considering this, the agency 
has worked with Canada to accept the submitted application in lieu of 
the export license. However, there may be other countries that also 
require approval prior to export, and the EPA wants to ensure all 
countries receive equal treatment and that all petitioners are aware of 
this option. As such, the agency desires to formalize the option in the 
regulations. The EPA is also proposing to require an English 
translation of the export license application or export license to 
facilitate the agency's review.
    The existing regulations for petitions for imports of used material 
also require that if the imported substance is intended to be sold as a 
refrigerant, the petition must include contact information for the U.S. 
reclaimer who will bring the material to the standard required under 
CAA section 608 and Sec.  82.152(g), if it is not already reclaimed to 
those specifications. The EPA is proposing to add ``EPA-certified'' to 
the description of reclamation facilities in the provisions containing 
this requirement, Sec. Sec.  82.13(g)(2)(xiii) and 82.24(c)(3)(xiii). 
This proposal would highlight the existing expectation for petitions to 
import used material to be sold as a refrigerant that the reclamation 
facility that will receive the material in the United States must be 
EPA-certified. The EPA's reclamation program is described at https://www.epa.gov/section608/stationary-refrigeration-refrigerant-reclamation-requirements.
    Finally, the agency is proposing to allow flexibility for the 
timing of the import when the non-objection notices was issued towards 
the end of the year. The EPA currently requires the import to occur in 
the same control period (i.e., calendar year) that the non-objection 
notice was issued. However, this can result in petitioners postponing 
their requests until the start of the next year. To avoid that 
unnecessary delay, the EPA is proposing that importers have one year 
from the date stamped on the non-objection notice to import that 
shipment.
    The EPA is soliciting comments on these proposed changes to the 
petition process for importing used ODS. The agency is particularly 
interested in whether streamlining the petition process, including to 
facilitate imports of material from banks for class I ODS, would affect 
compliance with the prohibition on import of virgin ODS. The EPA 
welcomes suggestions from the regulated community on how the petition 
process may be further streamlined while ensuring compliance.
b. Exemption for Imports of Halon 1211 Aircraft Bottles in Sec.  82.3
    To facilitate the import and testing of more types of aircraft 
halon bottles for hydrostatic testing, the EPA is proposing to extend 
the definition of ``aircraft halon bottles'' in Sec.  82.3 to also 
include vessels containing halon 1211. The current regulations in Sec.  
82.13(g)(2) exempt aircraft halon bottles that are imported for 
hydrostatic testing from the import petition process. The EPA has 
defined ``aircraft halon bottle'' in Sec.  82.3 as a vessel used as a 
component of an aircraft fire suppression system containing halon 1301.
    FAA regulations at 14 CFR 25.851(a)(6) require the presence of 
halon bottles, or the equivalent, aboard transport category aircraft, 
and they must be tested under United States Department of 
Transportation (DOT) regulations in 49 CFR 180.205 and per National 
Fire Protection Association standards if damaged or discharged (NFPA, 
2018a). In particular, such bottles undergo hydrostatic testing, which 
detects leakage and determines whether the bottles are functioning 
properly. This testing is important both for safety as well as for 
detecting and averting emissions of halon, a highly potent ODS.
    In 2009, the EPA exempted aircraft fire extinguishing spherical 
pressure vessels containing halon 1301 (``aircraft halon bottles'') 
being imported for hydrostatic testing from the import petition 
requirements (74 FR 10182). The EPA sought comment in that rule on 
whether to include halon 1211 in the exemption for aircraft halon 
bottles, and the agency did not receive comment indicating these 
imports occur. Therefore, the EPA limited the exemption only to 
aircraft halon bottles containing halon 1301. The 2009 rule reduced the 
administrative burden on entities when they import aircraft halon 
bottles for the purpose of maintaining these bottles to commercial 
safety specifications and standards. More information on the history 
and the goals of the import petition process and an explanation of why 
an exemption was warranted for aircraft halon bottles containing halon 
1301 can be found in the 2009 rule.
    Since that time, the EPA has determined based on import petitions 
received for halon 1211 and discussions with stakeholders that aircraft 
halon bottles containing halon 1211 are imported for hydrostatic 
testing. Thus, the EPA is proposing to extend the exemption created for 
aircraft bottles containing halon 1301 to those containing halon 1211. 
This proposed change would be accomplished by adding aircraft bottles 
containing halon 1211 to the definition of ``aircraft halon bottles'' 
in Sec.  82.3. The reasons for exempting bottles containing halon 1211 
are the same as for bottles containing halon 1301, discussed at 74 FR 
10182. For example, this proposed exemption would facilitate proper 
maintenance of bottles containing halon 1211 and allow transit and 
testing to

[[Page 41532]]

occur more quickly for such bottles. Promoting proper maintenance of 
these additional fire suppression devices would help ensure the bottles 
operate correctly to extinguish fires on aircraft. Proper maintenance 
of the storage vessels also prevents the accidental emission of this 
high-ODP compound. Lastly, reducing the import petition requirements 
could also allow hydrostatically tested bottles to be available more 
readily for aircraft.
    The proposed exemption of imports of aircraft bottles containing 
halon 1211 for hydrostatic testing would only exempt them from the 
petition process. Recordkeeping and reporting are currently required, 
and would still be required, for the import and export of aircraft 
halon bottles. In particular, if the proposed exemption were finalized, 
importers of such bottles would still need to maintain import records, 
as set forth in Sec.  82.13(g)(1), submit quarterly reports within 30 
days of the end of the applicable quarter in accordance with Sec.  
82.13(g)(4), and submit an annual export report 30 days after the end 
of the calendar year, in accordance with Sec.  82.13(h).
    The EPA seeks comment on this proposal and is particularly 
interested in whether this would affect the ability of technicians, 
aircraft owners, and fire suppression equipment manufacturers to 
continue maintaining existing equipment.
c. Changes to Requirements for Imports of ODS for Destruction in 
Sec. Sec.  82.3, 82.4, 82.13, 82.15, and 82.24
    This portion of the notice discusses two sets of proposed changes 
to the import process for ODS specifically imported for 
destruction.\34\ First, the EPA is proposing to establish a streamlined 
approach for importing used ODS for destruction. Second, the EPA is 
proposing to extend that approach to virgin ODS, as there is currently 
no mechanism for the EPA to pre-approve import of virgin ODS for 
destruction.
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    \34\ The EPA refers to the import of ODS intended to be 
destroyed in the United States throughout this notice as ``imports 
for destruction.''
---------------------------------------------------------------------------

    ODS from decommissioned equipment, unwanted stockpiles, and 
mixtures that are contaminated and cannot be reclaimed are often 
imported to the United States for destruction. Facilitating the 
destruction of ODS is beneficial to the environment since it averts ODS 
emissions into the atmosphere and thus is consistent with the 
overarching goal of Title VI to protect stratospheric ozone. The 
Montreal Protocol's Scientific Assessment Panel estimated that capture 
and destruction of CFC, halon, and HCFC banks in 2015 could avoid 1.8 
million ODP-weighted metric tons of future emission through 2050.\35\ 
It also estimated that if all 2015 halon, CFC, and HCFC banks \36\ were 
destroyed in 2015, the stratospheric chlorine levels at mid-latitude 
would return to 1980 levels more than six years sooner than in the 
baseline scenario. The EPA recognizes that there is ongoing commercial 
demand for certain substances, as discussed earlier in this notice with 
respect to halons and other ODS. Some ODS may, however, be unwanted and 
thus susceptible to release; this risk may be higher when they are 
stored in countries that do not have adequate capability to properly 
reclaim or destroy them. Creating a process for the import of ODS for 
destruction would help facilitate the destruction of such ODS and thus 
reduce the risk of such releases. More information on the destruction 
facilities that destroy ODS and their technologies is available in the 
report entitled ``U.S. Destruction in the United States and Abroad.'' 
Destruction of unwanted ODS in the United States may also generate 
revenue for domestic destruction facilities.\37\
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    \35\ UNEP. (2014) Scientific Assessment of Ozone Depletion: 2014 
World Meteorological Organization Global Ozone Research and 
Monitoring Project--Report No. 55 pg. 1-416. Available at: https://www.esrl.noaa.gov/csd/assessments/ozone/2014/report.html.
    \36\ As used here, ``banks'' refers to the total ODS that have 
already been manufactured but not yet released to the atmosphere. 
This can include ODS contained within closed cell foams, installed 
in appliances, held in original containers, etc.
    \37\ EPA. (2018) ``U.S. Destruction in the United States and 
Abroad'' pg. 1-63. Available at: https://www.epa.gov/sites/production/files/2018-03/documents/ods-destruction-in-the-us-and-abroad_feb2018.pdf.
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    As discussed earlier in this notice, the EPA's petition processes 
for the import of used ODS is designed to allow the agency to verify 
prior use of the material so that virgin ODS are not entering the 
United States marketplace under the pretense of being ``used.'' Under 
the current regulations at Sec. Sec.  82.13(g)(2) and 82.24(c)(4), 
anyone wishing to import used class I or class II ODS, respectively, 
for destruction must submit a petition providing the same information 
as for any other petition to import used ODS. It is then the obligation 
of the second-party destruction facility to provide a verification 
report to the importer or producer that the material was destroyed 
(Sec. Sec.  82.13(k) and 82.24(e)). Importers are required to keep 
records on imports for destruction of ODS under Sec. Sec.  82.13(g)(1) 
and 82.24(c)(2) and to submit quarterly reports, in accordance with 
Sec. Sec.  82.13(g)(4) and 82.24(c)(1). The current regulations contain 
an exception to the prohibition on import of virgin ODS without 
consumption allowances in the case of imports for destruction but do 
not provide a specific process for such imports.
    The EPA is proposing to create a new petition process for the 
import of used and virgin ODS for destruction, called a Certification 
of Intent to Import ODS for Destruction (``certification''), in 
Sec. Sec.  82.13(g)(6) and 82.24(c)(7). Under this process, the 
importer would submit the certification at least 30 working days before 
the shipment's departure from the foreign port. After review, the EPA 
would send either a non-objection notice or an objection notice. The 
proposed period is shorter than the corresponding period for the import 
petition process, which is 40 working days from departure, because the 
certification would contain less information for the EPA to review and 
verify than in the current process for a petition for import of used 
ODS. The EPA believes 30 working days would be enough for the EPA to 
review the certification and that this timeframe would not impede the 
import. The agency would be authorized to issue an objection notice for 
any reason it could currently issue an objection notice to a petition 
to import, such as if the petition provides insufficient information or 
if it contains false or misleading information. The EPA is also 
proposing to require that the petitioner submit a destruction 
verification 30 days after destruction under Sec. Sec.  82.13(g)(6) and 
82.24(c)(7). The EPA is also proposing to require the certification and 
any supporting documents, including the destruction verification, to be 
submitted electronically through CDX, for the reasons discussed in 
Section IV.A of this notice. In particular, the EPA is proposing to add 
the requirement for electronic submission of these documents via CDX in 
Sec.  82.14.
    The information that would be required in the certification is 
modeled in large part on the petition to import used ODS. Specifically, 
the certification would include the following elements, which are 
similar those required in an import petition: Name, commodity code, and 
quantity in kilograms of each controlled substance to be imported; 
source country; intended date of import; shipment importer number; an 
English translation of the export license (or application for an export 
license) from the appropriate government agency in the country of 
export and, if recovered in a country other than the country of export; 
the quantity in kilograms authorized on the license(s); United

[[Page 41533]]

States port of entry for the import; name, address, contact person, 
phone, and email address of the person responsible for destruction at 
the facility.
    The EPA is proposing to omit the detailed source information that 
is required in import petitions, as that information is not necessary 
if the ODS is to be destroyed. The EPA is proposing to collect 
information from the petitioner about the destruction for the 
certification process. In particular, the certification would not 
include the following: Information about all previous source facilities 
from which the ODS was recovered; a detailed description of the 
previous use at each source facility and a best estimate or documents 
indicating when the specific controlled substance was put into the 
equipment at each source facility; a list of the name, make and model 
number of the equipment from which the material was recovered at each 
source facility; contact information of all persons to whom the 
material was transferred or sold after it was recovered from the source 
facility; or a description of the intended use of the ODS.
    The EPA is proposing to omit these information elements because 
they are collected for import petitions to verify that the material is 
used, and the agency believes it is not necessary to verify that ODS is 
used if it is being imported for destruction. Simplifying the 
information requirements would decrease the regulatory burden on 
existing importers who follow the current import petition process to 
import used ODS for destruction by providing a streamlined regulatory 
mechanism for such imports. In addition, the current information 
requirements for petitions to import used ODS has the potential to 
hinder imports for destruction because petitioners may be unable to 
provide all the necessary information. Certain elements, such as 
information about each piece of equipment or each source facility from 
which the controlled substance was removed, may be particularly 
difficult for petitioners to provide because used controlled substances 
intended for disposal are often part of a mixture of chemical waste 
recovered from a variety of systems and detailed information pertaining 
to each system may not be available. Although the certification process 
would in effect relax the information requirements for importing used 
ODS for destruction compared to the existing import petition process, 
the EPA believes that this relaxation would benefit the environment 
because companies wishing to import used ODS into the United States for 
destruction would be able to do so more easily, and therefore more used 
ODS would be destroyed. This would be consistent with the overarching 
goal of Title VI to protect stratospheric ozone.
    The EPA is proposing to add provisions Sec. Sec.  82.13(g)(9) and 
82.24(c)(10) to require importers to keep certain records, including 
records about the destruction of the ODS. In particular, the EPA is 
proposing that importers of ODS for destruction maintain: A copy of the 
certificate of intent to import for destruction; a copy of the non-
objection notice; a copy of the export license or export license 
application; Customs and Border Protection (CBP) entry documents for 
the import that must include the commodity codes; records of that date, 
amount, and type of controlled substance sent for destruction per 
shipment; an invoice from the destruction facility verifying shipment 
was received; and a copy of the destruction verification.
    In addition to proposing to create the Certification of Intent to 
Import ODS for Destruction, the EPA is also proposing to extend the 
certification to imports of virgin ODS for destruction. While the 
certification is modeled in large part on the petition to import used 
ODS, the EPA believes there are also benefits to facilitating the 
import of virgin ODS for destruction. Currently, virgin ODS that are to 
be destroyed may be imported without consumption allowances (see 
Sec. Sec.  82.4(d) and 82.15(b)). However, there is no regulatory 
mechanism for the EPA to review and pre-approve those imports. As such, 
shipments may be held at the border while the EPA determines whether 
the import is in fact bound for destruction. In some instances, 
proactive importers have petitioned the agency to import virgin ODS for 
destruction and the EPA has allowed these imports on a case-by-case 
basis. However, the absence of a regulatory mechanism for such 
approvals has created some uncertainty for these imports when they 
reach the border. Moreover, the EPA believes that establishing 
regulatory requirements for such imports would help ensure that imports 
of virgin ODS for destruction are destroyed.
    The EPA believes that providing a mechanism to import virgin ODS 
for destruction would be beneficial to importers and the EPA. Having a 
transparent process that allows approval occur before the shipment 
reaches the border would facilitate such imports and reduce potential 
delays and costs associated with the current approach to imports of 
virgin ODS for destruction, as well as providing more certainty as to 
which imports could proceed. In turn, this would encourage imports of 
unwanted virgin ODS for destruction, potentially avoiding the emission 
of such ODS. This would be consistent with the overarching goal of 
Title VI to protect stratospheric ozone. The proposed extension would 
also close a gap in regulatory provisions for the import of virgin 
material for destruction. As discussed previously in this notice, the 
EPA originally established the import petition process for used ODS to 
verify that virgin ODS was not being imported under the pretext of 
being used to circumvent the regulatory requirements for expending 
consumption allowances. In the same way, the EPA believes that a 
mechanism is needed to verify that virgin ODS imported for destruction 
will be destroyed and that claims of importing for destruction are not 
used to circumvent the requirement to expend consumption allowances. In 
addition, the EPA has historically used the petition process as a 
mechanism to approve imports for destruction of used material and has 
applied an analogous but simpler process to imports of virgin material 
on a case-by-case basis. Based on this experience and these common 
goals for imports of used and virgin ODS for destruction, the EPA 
believes that having the same process for imports for destruction of 
both used and virgin ODS is both feasible and appropriate. Furthermore, 
establishing a consistent process for used and virgin ODS would 
simplify the administration of this proposed approach because the same 
requirements would generally apply regardless of the type of ODS to be 
imported for destruction. Thus, the EPA is proposing to have the same 
requirements for both used and virgin ODS in this new proposed process.
    As part of this proposal, the EPA would also revise the definitions 
of ``individual shipment'' and ``non-objection notice'' at Sec.  82.3, 
both of which currently refer only to the import of used material. The 
EPA is proposing to amend these definitions by removing references to 
``used'' controlled substances, so that ``individual shipment'' and a 
``non-objection notice'' may apply to shipments of virgin ODS imported 
for destruction under a Certification of Intent to Import for 
Destruction, as well as to shipments of used ODS.
    Like the proposal in the import petitions process, the agency is 
also proposing to allow flexibility for the timing of imports for 
destruction. In the current petitions process, the EPA requires the 
import to occur in the same control period (i.e., calendar year) that

[[Page 41534]]

the non-objection notice was issued. The EPA is proposing that non-
objection notices issued for the Certification of Intent to Import for 
Destruction for both used and virgin material have a year to import the 
material. Therefore, once a non-objection notice is issued, the person 
receiving the non-objection notice would be required to import the 
individual shipment within a year of the date stamped on the non-
objection notice. For instance, a non-objection letter issued on 
October 1, would not need to be destroyed until September 30 of the 
following year. This would provide flexibility to imports for 
destruction that may be operate on a calendar year basis.
    The EPA is soliciting comments on its proposal to create the 
Certification of Intent to Import ODS for Destruction for both used and 
virgin ODS. The EPA is particularly interested in whether the reduced 
information elements encourage additional imports of ODS for 
destruction or reduce burden for importers. The EPA is also interested 
in the burden of applying the proposed certification process to the 
import of virgin ODS and providing a year to destroy used or virgin 
material. The EPA welcomes comment from entities that currently import 
ODS for destruction or that have considered importing ODS for 
destruction.

E. Prohibiting the Sale of Illegally Imported Controlled Substances

    Based on the EPA's experience with the CFC phaseout, the incentive 
to illegally import class II substances will increase as the allocation 
for HCFC-22 reaches zero in 2020. HCFC-22 is the most widely used HCFC 
in the United States and the EPA anticipates continued demand for HCFC-
22 beyond the phaseout in 2020. In addition, there continues to be risk 
of illegal imports of class I substances. The EPA works closely with 
CBP to ensure compliance with the phaseout of ODS under CAA sections 
604-606. However, recent illegal imports have demonstrated to the 
agency that additional tools are needed to address the potential for 
domestic distribution of illegally imported material, as such material 
would generally be considered consumption. Thus, the EPA is proposing 
to add to Sec. Sec.  82.4(s) and 82.15(g)(8) an express prohibition 
against the sale or distribution, or offer for sale or distribution, of 
any class I or class II substance, respectively, that the seller knows, 
or has reason to know, was illegally imported into the United 
States.\38\
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    \38\ The EPA has previously issued restrictions on sale as a 
means for implementing restrictions on consumption. See, e.g., Sec.  
82.3(h) (``No person may sell in the U.S. any Class I controlled 
substance produced explicitly for export to an Article 5 country''); 
Sec.  82.3(n)(2) (``Any person selling unused class I controlled 
substances produced or imported under authority of essential-use 
allowances or the essential-use exemption for uses other than an 
essential-use is in violation of this subpart.'').
---------------------------------------------------------------------------

    For this proposal, the EPA is relying primarily on its authority 
under CAA sections 604(c) and 605(c). Section 604(c) directs the 
Administrator to promulgate regulations to ``insure that the 
consumption of class I substances in the United States is phased out 
and terminated'' in accordance with the applicable schedules for the 
phaseout and termination of production of class I substances under the 
CAA. Similarly, section 605(c) directs the Administrator to promulgate 
regulations to ``insure that the consumption of class II substances in 
the United States is phased out and terminated'' in accordance with the 
applicable schedules for the phaseout and termination of production of 
class II substances under the CAA. ``Consumption'' is defined in CAA 
section 601 as the amount of a substance produced in the United States, 
plus the amount of that substance imported, minus the amount exported.
    As noted above, the EPA remains concerned about the illegal import 
of ODS. This concern is based largely on the risk that such illegal 
imports would interfere with the already-completed phaseout of 
consumption of class I substances and the ongoing phaseout of 
consumption of class II substances. For example, HCFC-22 that is 
imported without allowances would generally count toward the United 
States' consumption cap unless additional action is taken to remove the 
ODS from the U.S. market (e.g., the illegally imported ODS is destroyed 
or re-exported in the same year). While there is sufficient space under 
the HCFC cap currently such that the illegal import would not result in 
an exceedance of the cap set forth under the Montreal Protocol and CAA, 
there is be a greater risk that illegal imports not destroyed or re-
exported could cause an exceedance following the 2020 stepdown, and 
more importantly the 2030 phaseout of HCFCs. This is of even greater 
concern for illegally imported CFCs and other class I ODS, given that 
the consumption cap for class I ODS is zero.
    To address this concern, the EPA is proposing to strengthen its 
ability to enforce the phaseout of ODS by adding at Sec. Sec.  82.4(s) 
and 82.15(g)(8) an express prohibition against the sale or 
distribution, or offer for sale or distribution, of any class I or 
class II substance, respectively, that the seller knows, or had reason 
to know, had been imported into the United States in violation of the 
import regulations. It would therefore be illegal to sell or distribute 
any material that the seller knows or had reason to know was imported 
into the United States without expending the appropriate consumption 
allowances or otherwise qualifying for an exemption provided for in the 
regulations (e.g., for transformation or destruction, or for used ODS). 
The proposed revisions would also explicitly state that every kilogram 
of illegally imported material sold or distributed, or offered for sale 
or distribution, constitutes a separate violation.
    This proposal would strengthen the EPA's ability to enforce against 
illegal trade, which in turn helps ensure that consumption remains 
under the Montreal Protocol and CAA caps. It would increase the EPA's 
compliance and enforcement options where the agency is not able to 
identify the importer. For example, this proposal could allow the EPA 
to pursue investigations where distributors or other sellers of CFCs 
attempt to sell virgin CFCs in the domestic market knowing that they 
were imported into the United States after the phaseout of CFCs, which 
occurred in 1996, without qualifying for any exemption from the 
consumption phaseout. Actions taken against such distributors would not 
only address their violations but could also allow the agency to gather 
the necessary information to identify the smuggler who illegally 
imported the material in the first place and to pursue compliance and 
enforcement action against them under existing authorities in 
Sec. Sec.  82.4 and 82.15, which could help deter illegal imports. 
Avoiding illegal imports helps to maintain the complete phaseout of 
class I ODS and achieve the phaseout of class II ODS, which is 
consistent with CAA sections 604(c) and 605(c), as well as with the 
overarching goals of Title VI of the CAA.
    Finally, this proposed change would encourage distributors to be 
more cautious when purchasing ODS that seems suspiciously priced or 
packaged. Since the phaseout of class I ODS, the EPA has warned 
distributors of the risk of purchasing black market ODS and provided 
information on ways to identify illegally-imported material. 
Distributors and other resellers have numerous ways to identify 
illegally-imported material. They can look at where the ODS was 
produced, the brand

[[Page 41535]]

name the material is being sold under, and the name of the 
manufacturer. They can also make sure the material meets industry 
purity standards, ask the seller for documents of prior ownership of 
the product and a laboratory analysis of the quality, and inspect the 
packaging for the material since illegally imported refrigerant is 
sometimes packaged in wrong-size containers or fixed with improper 
valves. While the incentive to circumvent the import controls will 
always exist, the EPA hopes that this proposal would help to reduce the 
market for smuggled ODS, which should also reduce illegal imports.
    The agency welcomes comments on these proposed prohibitions against 
the sale or distribution or offer for sale or distribution of illegally 
imported controlled substances.

V. Addition of Polyurethane Foam Systems Containing CFCs to the 
Nonessential Product Ban

    The EPA is proposing to add polyurethane foam systems containing 
CFCs to the existing list of nonessential products under 40 CFR part 
82, subpart C. This proposal would prohibit the sale or distribution, 
or offer for sale or distribution, of any polyurethane foam system 
containing CFCs in interstate commerce. Historically, CFC-11, CFC-12, 
and CFC-114 were used as foam blowing agents, but CFC production has 
been globally phased out since 2010. Nevertheless, recent reports show 
that the rate of decline in CFC-11 concentrations in the atmosphere, 
which had been steady, slowed dramatically starting in 2013, and this 
proposal is in response to those reports. After reviewing the EPA's 
import restrictions and the nonessential product ban, the agency has 
identified the potential for sale or distribution, or offer for sale or 
distribution, of imported polyurethane foam systems \39\ containing 
illegally-produced CFCs. The EPA is not aware that this is currently 
occurring in the United States but believes that this is a potential 
gap that can be addressed by amending the list of nonessential products 
in Sec.  82.66.
---------------------------------------------------------------------------

    \39\ These systems are also referred to as polyols, which are 
defined in Montreal Protocol reports as pre-blended foam chemicals.
---------------------------------------------------------------------------

    Researchers recently discovered that starting in 2013 the 
concentration of CFC-11 in the atmosphere was not declining as rapidly 
as it had been in the prior decade.\40\ This slowdown is contrary to 
the modeled decline based on reported global production. In Montzka et 
al., the modeled concentration was expected to decrease rapidly 
beginning in 2002, without continued CFC-11 production. However, CFC-11 
concentrations did not decline more rapidly each year. Global CFC-11 
atmospheric concentrations declined at a constant rate in the decade 
after 2002. CFC-11 concentrations declined about half as quickly over 
the past three years compared with the rate measured from 2002-2012. 
The scale of observations suggests that there may have been unreported 
production of CFC-11 despite the global phaseout of CFC production in 
2010 under the Montreal Protocol. The researchers determined that 
emissions of CFC-11 began increasing in 2012 and that in the period 
between 2014 to 2016 emissions were higher than average annual 
emissions from previous decades. Monitoring data indicate that areas in 
eastern Asia may be the sources of these elevated emissions. The 
researchers concluded that damage to the ozone layer could be minor if 
the source of these emissions can be identified and mitigated, but if 
not, there would be delays in stratospheric ozone recovery. A 
subsequent investigation by the Environmental Investigation Agency, a 
non-governmental environmental organization, indicates that CFC-11 may, 
in part, be used in foam systems.\41\ Additional monitoring data 
identifies China as the source for much of the CFC-11 emissions.\42\
---------------------------------------------------------------------------

    \40\ Montzka, S.A., Geoff S. Dutton, G.S., Yu, P., Ray, E., 
Portmann, R.W., Daniel, J.S., Kuijpers, L., Hall1, B.D., Mondeel, 
D., Siso, C., Nance, J.D., Rigby, M., Manning, A.J., Hu, L., Moore, 
F., Miller, B.R., and Elkins, J.W. ``An unexpected and persistent 
increase in global emissions of ozone-depleting CFC-11'' Nature 557; 
(2018): 413-429.
    \41\ Environmental Investigation Agency (EIA). (2018) Blowing 
It: Illegal Production and Use of Banned CFC-11 in China's Foam 
Blowing Industry. Available at: https://eia-global.org/reports/20180709-blowing-it-illegal-production-and-use-of-banned-cfc-11-in-chinas-foam-blowing-industry.
    \42\ Rigby, M. et al. ``Increase in CFC-11 emissions from 
eastern China based on atmospheric observations.'' Nature 569.7757 
(2019): 546-550.
---------------------------------------------------------------------------

    In response to this finding, the EPA evaluated potential uses of 
CFCs and whether domestic controls were enough. The EPA wants to ensure 
that the United States is not inadvertently contributing to demand for 
CFC production. Except for feedstock applications, production and 
import of CFCs has been prohibited \43\ in the United States since 
1996. The nonessential products ban already prohibits sale or 
distribution, and the offer for sale or distribution, of certain 
products manufactured with or containing CFCs, including most plastic 
foam products. The EPA is not aware of any U.S. manufacturer currently 
using CFC-11 or any other class I substance for polyurethane foam 
systems. Nonetheless, to ensure that the United States is not 
inadvertently contributing to demand for CFCs and to avoid potential 
CFC emissions in the United States, the EPA is proposing to add 
polyurethane foam systems containing CFCs to the list of nonessential 
products at Sec.  82.66.
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    \43\ Historically, limited amounts of CFC production and 
consumption were authorized domestically for essential uses.
---------------------------------------------------------------------------

    The EPA is also proposing to define ``polyurethane foam systems'' 
in Sec.  82.62, which is used for thermal insulation. A polyurethane 
foam system typically consists of two transfer pumps that deliver 
ingredients (polyisocyanate or isocyanate from one side and a mixture 
including the blowing agent, catalysts, flame retardants, and 
stabilizers from the other side) to a metering/mixing device which 
allows the components to be delivered in the appropriate proportions. 
The components are then sent to a mixing gun and dispensed as foam 
directly to a surface such as a roof or tank. These polyurethane foam 
systems are packaged and sold as complete systems, containing all the 
ingredients including the polyisocyanate and the blowing agent.
    A polyurethane foam system is different from bulk ODS because it is 
contained in a system and packaged as a product. Under the existing 
regulations in subpart A, bulk CFCs are included in the definition of a 
``controlled substance'' and thus are subject to import controls such 
as the consumption allowance regime under Sec.  82.4. However, the 
definition of ``controlled substance'' in Sec.  82.3 excludes ``any 
such substance or mixture that is in a manufactured product other than 
a container used for the transportation or storage of the substance or 
mixture.'' Because the CFCs in polyurethane foam system are contained 
in a system that is sold as a product, they are not subject to the same 
import controls as bulk CFCs. If polyurethane foam systems are imported 
and sold through distribution chains in the United States, they could 
result in emissions of CFCs during their use. These foam systems are 
also distinct from a plastic foam product in that the foam product has 
already been blown. Plastic foam products manufactured with or 
containing a CFC are currently listed at Sec.  82.66(c) and thus are 
banned from sale or distribution, or the offer for sale or 
distribution, in interstate commerce.
    The EPA is concerned about the potential sale or distribution, or 
offer for sale or distribution, of polyurethane foam systems even with 
the current nonessential product ban on plastic foam products. The 
proposed addition

[[Page 41536]]

of polyurethane foam systems to the list of nonessential products would 
result in the prohibitions of the sale or distribution of such products 
in interstate commerce, and thus would prevent emissions of CFCs in the 
United States from domestic use of these foam systems.
    Section 610 of the CAA, titled ``Nonessential products containing 
chlorofluorocarbons,'' directs the EPA to issue regulations identifying 
nonessential products that ``release class I substances into the 
environment (including any release occurring during manufacture, use, 
storage, or disposal)'' and ``prohibit[ing] any person from selling or 
distributing any such product, or offering any such product for sale or 
distribution, in interstate commerce.'' Section 610(b)(1) and (2) 
specify that ``[a]t a minimum'' this prohibition shall apply to 
``chlorofluorocarbon-propelled plastic party streamers and noise 
horns'' and ``chlorofluorocarbon-containing cleaning fluids for 
noncommercial electronic and photographic equipment.'' Section 
610(b)(3) provides that the prohibition shall apply to other consumer 
products determined by the EPA to release class I substances into the 
environment (including releases during manufacture, use, storage, and 
disposal) and to be nonessential.
    Section 610 further states that in determining whether a product is 
nonessential, the EPA shall consider the following criteria: ``the 
purpose or intended use of the product, the technological availability 
of substitutes for such product and for such class I substance, safety, 
health, and other relevant factors.'' The CAA requires the EPA to 
consider each criterion listed in section 610 but does not establish 
either a ranking or a methodology for comparing their relative 
importance, nor does it require that any minimum standard within each 
criterion be met. Thus, section 610 provides the EPA discretion in 
determining how to consider the listed criteria and the relative weight 
to give to each. In addition, section 610 gives the EPA latitude to 
consider ``other relevant factors'' beyond the specific criteria set 
forth in the statute.
    As indicated above, polyurethane foam systems are products that 
release blowing agent to the environment during use. If CFCs are used 
as the blowing agent, they would be emitted during the use of such 
systems. In proposing to list polyurethane foam systems containing CFCs 
as a nonessential product, the EPA has considered the purpose or 
intended use of these systems, the technological availability of 
substitutes, and safety and health considerations. The first criterion, 
the purpose or intended use, relates to the importance of the product, 
in terms of benefits to society, specifically whether the product is 
sufficiently important that the benefits of its continued production 
outweigh the associated danger from the continued use of a class I 
ozone-depleting substance in it, or alternatively, whether the product 
has little benefit, such that even a lack of available substitutes 
might not prevent the product from being considered nonessential. While 
foam products, particularly closed-cell rigid polyurethane foams, 
provide benefits to society, for more than two decades U.S. 
manufacturers have replaced the use of CFCs in foam production without 
compromising these benefits.
    The intended use of polyurethane foam systems is often for 
insulation in buildings and residences. While insulation has benefits, 
such as reducing energy use and costs associated with heating and 
cooling, in previous rulemakings the EPA's consideration of this 
criterion has also been informed by consideration of whether use of the 
class I substance in the product is nonessential (see 58 FR 4474, 66 FR 
57514). For example, use of a class I substance in a product may be 
considered nonessential where substitutes are readily available, even 
if the product itself is important (see 58 FR 4474, 66 FR 57514). This 
is reasonable because if the social benefits from a product can be 
provided by a similar product without use of the class I substance, 
that tends to support the conclusion that the product using the class I 
substance is nonessential. U.S. manufacturers successfully transitioned 
from using class I substances for foam products more than two decades 
ago meaning that they were able to also replace the use of class I 
substances in foam blowing systems. Moreover, the same U.S. industry 
also replaced the use of class II substances in these plastic foam 
products. There are alternative foam blowing agents that can be used in 
foam systems as well as alternative methods and products for insulating 
buildings and residences that do not use class I substances. For 
instance, there are a variety of insulation types that can be applied 
throughout the building envelope to save energy and reduce leaks in 
buildings and homes with a similar R-value as a polyurethane foam 
system intended for use in insulation. The R-value refers to an 
insulating material's resistance to conductive heat flow and is 
measured or rated in terms of its thermal resistance. Alternative non-
polyurethane foam insulation products with similar R-values include: 
Fiberglass, cellulose, and rigid foam boards.
    For the criterion of technological availability of substitutes, the 
EPA considers the existence and accessibility of alternative products 
or alternative chemicals for use in, or in place of, products releasing 
class I substances. The EPA has interpreted this criterion to include 
both currently available substitutes and potentially available 
substitutes (see 58 FR 4474). There are numerous substitutes for CFCs 
in polyurethane foam systems that are listed as acceptable under the 
SNAP program and have been widely used by the foam industry since the 
mid-1990s. The current list of SNAP approved substitutes is available 
here: https://www.epa.gov/snap/substitutes-foam-blowing-agents. In the 
initial class I nonessential products rule, the EPA stated that in 
sectors where the great majority of manufacturers have already shifted 
to substitutes, the use of a class I substance in that product may very 
well be nonessential (58 FR 4774). As in previous considerations of 
this criterion, in this proposal the EPA is examining sectors where the 
market has previously switched to substitutes. Given the class I 
nonessential products ban that included plastic foam products was 
promulgated more than two decades ago and there were also subsequent 
restrictions on the use of class II substances promulgated under 40 CFR 
part 82, for polyurethane foam systems, the EPA believes that all U.S. 
manufacturers have switched from CFCs to non-ODS alternatives such as 
hydrofluorocarbons, hydrofluoroolefins, hydrocarbons, carbon dioxide, 
water, and other compounds listed as acceptable substitutes under SNAP 
in foam blowing.
    For the criteria of safety and health, as in prior rules related to 
the nonessential product ban (see e.g., 66 FR 57514), the EPA 
interprets these criteria to mean the effects on human health and the 
environment of products releasing CFCs or their substitutes. As in past 
rules, in evaluating these criteria, the EPA considers the direct and 
indirect effects of product use, and the direct and indirect effects of 
alternatives, such as ozone depletion potential, flammability, 
toxicity, corrosiveness, energy efficiency, ground-level air hazards, 
and other environmental factors (see, e.g., 66 FR 57514). The ODPs of 
CFC-11, CFC-12, and CFC-114 are 1. For the purposes of evaluating other 
direct and indirect effects for foam systems, the agency does not 
believe there is a substantive

[[Page 41537]]

difference between foam systems and plastic foam products given the 
former is a precursor for the latter. In developing the class I 
nonessential products ban, the agency provided information in the 
docket concerning the known alternatives at that time. Subsequently, 
alternatives that were already in use as well as additional 
alternatives for foam-blowing have been evaluated and listed as 
acceptable under the SNAP program, such as hydrofluorocarbons, 
hydrofluoroolefins, hydrocarbons, carbon dioxide, and water. The 
current SNAP list of acceptable substitutes is more expansive than what 
was in considered in the initial class I nonessential products ban. The 
range of alternatives includes those that have ODPs ranging from zero 
to between 0.00024 and 0.00034, significantly lower than the ODP of 
CFC-11 which is 1, and considers many of the factors identified in the 
initial class I nonessential products ban. The Montreal Protocol's TEAP 
also provides a quadrennial global assessment of alternatives for foam 
blowing including information concerning many of the direct and 
indirect factors identified above (UNEP, 2014). The EPA considered all 
these sources of information when deciding whether to propose to add to 
the list of banned products foam systems that contain phased out CFCs 
and considered that U.S. industry has already successfully transitioned 
away from using CFCs.
    Considering all three factors together, the EPA proposes to 
conclude that polyurethane foam systems containing CFCs meet the 
criteria in section 610 for listing as a nonessential product.
    The EPA is requesting comment on its proposal to amend Sec.  
82.66(f) to add polyurethane foam systems containing CFCs to the 
nonessential class I product ban and to add a definition of a 
``polyurethane foam system'' to Sec.  82.62. Additionally, the EPA is 
interested in comments on whether anyone in the United States is using 
CFCs for foam blowing or is importing foam systems containing CFCs as a 
blowing agent. While the EPA is not aware of any other CFC-containing 
products that warrant addition to the list of nonessential products, 
the EPA seeks comment on whether there are other products using CFCs 
that could also create demand for imports of illegally-produced CFCs.

VI. Updates to Sec. Sec.  82.3, 82.104, and 82.270 Related to 
Destruction

    The EPA is proposing to amend certain provisions in 40 CFR part 82, 
subparts A, E, and H related to the concept of destruction of ODS. 
Title VI does not state how to treat destruction of ODS in calculating 
production or consumption; however, the EPA's longstanding regulations 
address this issue. The regulatory definition of ``production'' at 
Sec.  82.3 excludes amounts that are destroyed by technologies approved 
by the Parties to the Montreal Protocol. In addition, amounts imported 
for destruction are excluded from the import prohibitions at Sec. Sec.  
82.4 and 82.15.
    The EPA added a definition of the term ``destruction'' to Sec.  
82.3 in 1993. (58 FR 65047-65048). The existing regulatory definition 
of ``destruction'' includes a limited list of technologies that may be 
used for destruction. When the EPA established the initial list of 
destruction technologies the agency also noted that it intended to 
propose authorizing use of additional destruction technologies through 
future rulemakings, as such technologies are approved by the Parties 
(58 FR 65049).
    The agency is proposing to update the definition of ``destruction'' 
in Sec.  82.3 to add destruction technologies that have been approved 
by the Parties to the Montreal Protocol since the issuance of the 1993 
rule. The agency is proposing to add these destruction technologies so 
that industry in the United States has a greater variety of 
technological options for the destruction of ODS. All of these 
technologies are capable of destroying ODS or converting them into 
byproducts and can be grouped into three broad categories: 
Incineration, plasma, and other non-incineration technologies. The EPA 
is proposing to add nitrogen plasma arc, portable plasma arc, argon 
plasma arc, microwave plasma, and inductively coupled radio frequency 
plasma to allow for additional plasma technologies to allow for greater 
industry flexibility for using plasma destruction technologies. Plasma 
arc technologies are generally designed to be relatively small, 
compact, and transportable. They consume a large amount of energy in 
order to generate the plasma but tend to have very high destruction 
efficiencies and low emissions. The EPA is also proposing to add an 
additional incineration technology--porous thermal reactor. Porous 
reactors are high-temperature systems with a porous layer that 
facilitates the decomposition of ODS and other industrial waste gases. 
Destruction takes place in an oxidizing atmosphere with a continuous 
supply of an auxiliary gas. The EPA is also proposing to add four non-
incineration technologies, including chemical reaction with hydrogen 
(H2) and carbon dioxide (CO2). Revising the 
definition of destruction to include these technologies would not 
affect the applicability of other regulatory requirements relating to 
use of these technologies. Because one of the non-incineration 
technologies that the EPA is proposing to add, chemical reaction with 
H2 and CO2, is a conversion technology that 
converts the ODS into non-ozone depleting constituents that are capable 
of being reused, the EPA is also proposing to amend the definition of 
``destruction'' to modify the statement that that the process must not 
result in a commercially useful end product. The EPA is also proposing 
edits to provisions in Sec.  82.104 (Subpart E ``The Labeling of 
Products Using Ozone-Depleting Substances'') and Sec.  82.270 (Subpart 
H ``Halon Emissions Reduction'') to conform with the proposed changes 
in this definition.
    The existing regulations define the term ``destruction'' at Sec.  
82.3 and Sec.  82.104. The two existing definitions are intended to 
convey the same meaning but are slightly different. For instance, the 
definition in Sec.  82.104 refers to a code of good housekeeping 
contained in a United Nations Environment Programme report while the 
definition in Sec.  82.3 does not. In addition, both provide a list of 
destruction technologies approved under decisions of the Parties to the 
Montreal Protocol. The list at Sec.  82.3 contains seven technologies 
while the list at Sec.  82.104 contains five.\44\ Both lists are out of 
date in that they fail to include certain technologies that can destroy 
ODS or converting them into byproducts and have been approved under 
more recent decisions of the Parties. Similarly, the existing 
prohibition on disposing of halons in Sec.  82.270 includes an 
exception for destruction that also provides an outdated list of 
destruction technologies. The EPA is therefore proposing to harmonize 
these three definitions of destruction and update the list of 
destruction technologies to allow the use of more destruction 
technologies in the United States.
---------------------------------------------------------------------------

    \44\ Similarly, the definition of ``completely destroy'' at 
Sec.  82.104 refers to using ``one of the five'' destruction 
processes approved by the Parties. The EPA is also proposing to 
remove that outdated language.
---------------------------------------------------------------------------

    The Parties to the Montreal Protocol have at times requested that 
the TEAP report to the Parties information on technologies for 
destroying surplus stocks of ODS based on an assessment of their 
technical capability to permanently decompose all or a significant 
portion of the ODS.\45\ The

[[Page 41538]]

Parties to the Montreal Protocol have approved the use of destruction 
technologies through various decisions, including Decisions V/26, VII/
35, XIV/6, XXII/10, XXIII/12, and at the recent 30th MOP Decision XXX/
6. With the proposed revisions to the list of technologies in the 
definition of ``destruction'' at Sec.  82.3, the EPA's regulations 
would reflect all technologies approved for ODS destruction under 
decisions of the Parties. Specifically, the EPA is proposing to add the 
following destruction technologies to the existing list: Nitrogen 
plasma arc, portable plasma arc, argon plasma arc, chemical reaction 
with H2 and CO2, inductively coupled radio 
frequency plasma, microwave plasma, porous thermal reactor, gas phase 
catalytic de-halogenation, superheated steam reactor, and thermal 
reaction with methane. An explanation of these technologies appears in 
the EPA's report on destruction ``ODS Destruction in the United States 
and Abroad,'' which is available in the docket.
---------------------------------------------------------------------------

    \45\ UNEP. (2018) Montreal Protocol on Substances on Substances 
that Deplete the Ozone Layer. Report of the Technology and Economic 
Assessment Panel. April 2018 Volume 2 Decisions XXIX/4 TEAP Task 
Force Report on Destruction Technologies for Controlled Substances; 
pg. 1-67. Available at: http://conf.montreal-protocol.org/meeting/oewg/oewg-40/presession/Background-Documents/TEAP-DecXXIX4-TF-Report-April2018.pdf.
---------------------------------------------------------------------------

    The EPA is also proposing to revise the definition of 
``destruction'' in Sec.  82.104 and the prohibition in Sec.  82.270 by 
removing the outdated lists found in those provisions and adding a 
cross reference to the list of destruction technologies in Sec.  82.3. 
This would conform the list of destruction technologies that can be 
used across subparts A, E, and H. The destruction technologies that 
would be included the list in Sec.  82.3 under the proposal discussed 
above in this section are also applicable to these other subparts, 
although the EPA notes that the listing of municipal waste incinerators 
in the existing regulations at Sec.  82.3 is limited to the destruction 
of foams, and thus the added cross reference to Sec.  82.3 in Sec.  
82.270 would not make that technology available for the exception for 
the destruction of halons at Sec.  82.270. The addition of the cross 
reference to Sec.  82.3 would also simplify updating Sec.  82.104 and 
Sec.  82.270 in the future. If additional destruction technologies are 
demonstrated in future to be capable of destroying ODS or converting 
them into byproducts, the EPA may consider proposing to add those 
technologies to the definition of ``destruction'' in Sec.  82.3 to 
further increase the options for ODS destruction in the United States, 
to the extent consistent with approvals by the Parties and as 
appropriate. The added cross references would mean that the EPA would 
only need to revise the list in Sec.  82.3 for the technologies to be 
approved for destruction under all three provisions.
    The EPA is also proposing to amend the definitions of 
``destruction'' at Sec. Sec.  82.3 and 82.104 to modify language 
regarding commercially useful end products. The current definition 
contains a restriction that a destruction technology cannot result in a 
commercially useful product. The EPA is proposing to revise that 
restriction in part because one of the destruction technologies 
proposed to be added to the definition of destruction breaks down ODS 
into substances that have commercial viability. The process ``Chemical 
Reaction with H2 and CO2'' converts fluorinated 
compounds to hydrofluoric acid, hydrochloric acid, carbon dioxide, 
chlorine, and water. The reaction technology separates and collects the 
byproducts at a high purity allowing for them to be sold, potentially 
improving the economics of using this technology. The EPA does not 
believe that a process that would otherwise qualify as ``destruction'' 
should fail to qualify simply because one of the outputs is a 
commercially useful end product. The EPA is therefore proposing to 
revise the definition of ``destruction'' so that the mere existence of 
such an end product does not bar the technology from being included in 
the definition. The proposed revisions further clarify that the 
commercial usefulness of the end product is secondary to the act of the 
ODS destruction. Thus, the EPA's proposed changes to the definition of 
destruction recognize that while production of a commercially useful 
end product is not the primary purpose of a destruction process, the 
destruction process may nevertheless result in a commercially useful 
product.
    The proposed clarification that the usefulness of an end product 
should be secondary to ODS destruction is intended to maintain a 
distinction between the terms ``destruction'' and ``transformation.'' 
The EPA established the definitions of ``destruction,'' ``production,'' 
and ``transformation'' in the 1993 rule (58 FR 65048-65049). Among 
other things, the agency excluded from the definition of 
``production'': (1) Amounts of controlled substances that are destroyed 
using approved destruction technologies and (2) the manufacture of a 
controlled substance that is subsequently transformed. Similarly, the 
regulatory import prohibitions excluded both amounts destroyed, and 
amounts transformed. The definition of ``destruction'' noted that it 
does not result in a commercially useful end product whereas the 
definition of ``transformation'' noted that it occurs in a process 
specifically for the manufacture of other chemicals for commercial 
purposes. Thus, the original distinction in the definitions of these 
two terms related to whether the process was undertaken to 
intentionally result in a commercially useful end product or not. The 
distinction mattered (and is still relevant) because as explained in 
the 1993 rule, if a portion of the ODS remained after destruction, the 
destroyed portion could be excluded from production, but the material 
had to be entirely consumed in the process (except for trace 
quantities) to qualify for the transformation exclusion (58 FR 65048). 
The EPA is proposing to remove one aspect of the distinction between 
these two processes in the original definitions (whether the processes 
result in a commercially useful end product). The proposed changes to 
the text would clarify that the usefulness of the product is secondary 
to the act of destruction. Conversely, transformation is the use of ODS 
as a feedstock with the goal of manufacturing other chemicals.
    Intent has been an important aspect of the distinction between 
``destruction'' and ``transformation'' since these definitions were 
first promulgated. For example, in the 1993 rule establishing the 
definition of ``destruction,'' in a discussion of whether heat or 
energy are commercially useful end products, the agency said ``[t]he 
intent of the destruction process is to destroy the substance, for 
which a byproduct in the way of heat or energy may be produced, rather 
than production of an end product being the goal of the destruction 
activity.'' (58 FR 65049). This discussion recognizes that something 
useful may incidentally result from destruction. Similarly, the 1993 
rule recognized the possibility of a destruction technology converting 
ODS into other useful substances. In explaining the inclusion of 
reactor cracking as a destruction technology, the EPA stated ``[s]ince 
1983, this process has treated waste gases resulting from the 
production of CFCs. The gases are converted to hydrofluoric acid, 
hydrochloric acid, carbon dioxide, chlorine, and water. The two acids 
are usable in-house and/or marketable, and the chlorine is scrubbed, 
leaving only water vapor, oxygen, and carbon dioxide as waste gases.'' 
(58 FR 65047, emphasis added).
    Consistent with that recognition and with the proposed inclusion of 
a new destruction technology with commercially useful end products, the 
EPA believes that the creation of a

[[Page 41539]]

commercially useful end product should not in itself preclude a 
technology from being listed in the definition of ``destruction.'' The 
creation of such an end product does not change whether chemical 
decomposition occurs. Many destruction processes incinerate the 
chemicals, but other technologies break down the controlled substance. 
In breaking down the chemical, it is possible that the result includes 
a commercially valuable end product that is not a controlled substance. 
``Transformation,'' on the other hand, means to use and entirely 
consume a controlled substance in the manufacture of other chemicals 
for commercial purposes. The purpose is to create new compounds using 
the ODS as a feedstock rather than the decomposition of ODS as a waste.
    The EPA welcomes comment on the proposal to update and harmonize 
definitions related to ODS destruction in Sec. Sec.  82.3, 82.104, and 
82.270, including the proposal to add to the list of destruction 
technologies and amend the definition of ``destruction'' to allow 
inclusion of destruction technologies that incidentally result in 
commercially useful end products. The EPA specifically invites comments 
from entities that destroy ODS or send ODS to facilities for 
destruction.

VII. Removing Obsolete Provisions in Sec. Sec.  82.3, 82.4, 82.9, 
82.10, 82.12, 82.13, 82.15, 82.16, and 82.24

    The EPA is proposing to remove certain provisions that have been 
made obsolete due to the phaseout of class I ODS or certain class II 
ODS. Specifically, this notice proposes to remove outdated provisions 
for class I ODS related to Article 5 allowances, transformation and 
destruction credits, and transfers of allowances issued prior to the 
phaseout. The EPA is also proposing to remove definitions and reporting 
provisions for HCFC-141b exemption allowances and export production 
allowances.
    These changes increase readability and reduce confusion. Removing 
obsolete provisions would assist the regulated community by making it 
easier to locate the currently applicable requirements and reduce 
potential confusion from presentation of requirements that no longer 
apply. The EPA is not proposing to remove outdated provisions that 
provide historical context which could assist the reader or that would 
affect the level of environmental protection provided under subpart A.
    The EPA welcomes comments on the proposed removal of these 
provisions. The agency is particularly interested in any comments 
indicating these proposed changes may affect current obligations or may 
be important to the existing requirements.

A. Class I Article 5 Allowances

    Before the worldwide phaseout of CFCs and other class I ODS, the 
EPA historically had provided additional production allowances, known 
as ``Article 5 allowances,'' for production of certain class I ODS for 
export to and use by Article 5 countries consistent with the Montreal 
Protocol.\46\ These are countries that were subject to a later 
production and consumption phaseout schedule than non-Article 5 
countries such as the United States. Section 82.9(a) of the existing 
regulations granted Article 5 allowances until 2010, when the phaseout 
of these substances was completed in Article 5 countries. Because these 
provisions no longer have any purpose or effect, the EPA is proposing 
to remove the schedule for issuing Article 5 allowances found at Sec.  
82.9(a) and the corresponding recordkeeping and reporting requirements 
in Sec.  82.13(f)(2)(v) and (f)(3)(ix). Section 82.9(b) of the existing 
regulations provides that holders of Article 5 allowances may produce 
class I controlled substances for export to Article 5 countries and 
transfer Article 5 allowances. Because there are no more holders of 
Article 5 allowances, the EPA is proposing to remove these provisions 
as well.
---------------------------------------------------------------------------

    \46\ For the purposes of the Montreal Protocol, this is called 
production for basic domestic need.
---------------------------------------------------------------------------

B. Class I Allowances and Credits Related to Transformation and 
Destruction

    Before the domestic phaseout of class I ODS, the EPA historically 
had provided additional production allowances in cases where class I 
ODS were destroyed or transformed. Because these provisions no longer 
have any purpose or effect, the EPA is proposing to remove these 
provisions and to remove references to these obsolete allowances in 
certain other provisions.
    Section 82.9(e) of the existing rules contains the provisions 
related to such allowances, including detailing the information needed 
in a request for allowances based on having destroyed or transformed a 
specified quantity of class I ODS. The EPA stopped issuing such 
allowances in 1996 for all class I controlled substances (except methyl 
bromide) and in 2005 for methyl bromide. The EPA is proposing to remove 
Sec.  82.9(e) and related obsolete reporting and recordkeeping 
requirements in Sec.  82.13(f)(2)(iv), (g)(1)(xv), (g)(4)(xi), and 
(h)(4)(xi).
    Section 82.9(f) authorized persons who were nominated for an 
essential use exemption to obtain destruction and transformation 
credits between 1996 and 2000. The EPA established these provisions 
because of the difference between the phaseout date for class I 
substances under the CAA and the phaseout date for the same substances 
under the Montreal Protocol. These provisions include a description of 
the information needed and the grounds for which the EPA can disallow 
the request. Section Sec.  82.4(f) addresses production and import with 
destruction and information credits. The EPA stopped issuing such 
credits in 2000. Because these provisions no longer have any purpose or 
effect, the EPA is proposing to remove Sec. Sec.  82.4(f) and 82.9(f).

C. Class I Consumption Allowances

    Before the phaseout of class I ODS, the EPA historically had 
provided additional consumption allowances where class I ODS were 
exported, transformed or destroyed, or where an amount of production 
was transferred from another Party to the Montreal Protocol. Section 
82.10 contains provisions related to these additional consumption 
allowances, including detailing the information needed in a request for 
them. The EPA stopped issuing those allowances in 1996 for all class I 
controlled substances (except methyl bromide) and in 2005 for methyl 
bromide. Because these provisions no longer have any purpose or effect, 
the EPA is proposing to remove them and reserve Sec.  82.10 in its 
entirety. The EPA is also proposing to remove references to Sec.  82.10 
from the definition of ``consumption allowance'' in Sec.  82.3; Sec.  
82.9(c), (e) and (f); Sec.  82.13(h)(1) and (2); and Sec.  82.13(i) as 
those references are no longer applicable.

D. Transfers of Class I Allowances

    The EPA historically had allowed for the transfer of production and 
consumption allowances for class I substances in various ways. Under 
section 607 of the CAA, the EPA was required to issue regulations 
providing for inter-pollutant allowance transfers and allowance 
transfers between companies. For class I substances, those regulations 
appear at Sec.  82.12. Due to the class I phaseout, the EPA no longer 
allocates production or consumption allowances for class I substances. 
Because these provisions no longer have any purpose or effect, the EPA 
is proposing to remove provisions related to pre-1996 allowance 
transfers for class I ODS (and pre-2005 for methyl

[[Page 41540]]

bromide) found at Sec.  82.12(a)(1) and (b)(1), as any such transfers 
occurred years ago and these provisions no longer have any purpose or 
effect.
    As discussed in earlier in this section, the EPA is proposing to 
remove certain provisions governing Article 5 allowances and 
destruction and transformation credits. The EPA is therefore also 
proposing to remove provisions allowing for the transfer of Article 5 
allowances and destruction and transformation credits found at Sec.  
82.12(a)(2), (b)(2)-(5), and (c) as those provisions are longer needed.

E. HCFC-141b Allowances

    In 2003, the EPA issued regulations (68 FR 2820, January 21, 2003) 
to ensure compliance with the first reduction milestone in the HCFC 
phaseout. In that rule, the EPA established chemical-specific 
consumption and production baselines for HCFC-141b, HCFC-22, and HCFC-
142b for the initial regulatory period ending December 31, 2009. The 
rule phased out the production and import of HCFC-141b effective 
January 1, 2003 (see Sec.  82.16(b)). The EPA created a petition 
process at Sec.  82.16(h) to allow applicants to request ``HCFC-141b 
exemption allowances'' to produce or import small amounts of HCFC-141b 
beyond the phaseout. The agency removed Sec.  82.16(h) from the 
regulations and terminated the HCFC-141b exemption allowance program, 
effective January 1, 2015 (79 FR 64267, October 28, 2014). At that 
time, the EPA did not remove definitions and reporting and 
recordkeeping requirements that pertain only to HCFC-141b exemption 
allowances.
    The EPA is now proposing to remove the definitions in Sec.  82.3 
specific to HCFC-141b production or import after the 2003 phaseout, 
including the definitions of ``Formulator,'' ``HCFC-141b exemption 
allowances,'' and ``Unexpended HCFC-141b exemption allowances.'' The 
definitions for HCFC-141b exemption allowances are no longer relevant 
since the EPA has removed the substantive regulations that these 
definitions support. For the same reasons, the EPA is proposing to 
remove references to HCFC-141b in the definition of ``Confer,'' but 
would retain the remainder of that definition. The EPA is also 
proposing to remove references and recordkeeping and reporting 
requirements specifically relating to HCFC-141b exemption allowances. 
These edits would be made in Sec.  82.24(b)(1)(ix) and (xi); Sec.  
82.24(b)(2)(xiv); Sec.  82.24(c)(1)(xi); Sec.  82.24(c)(2)(xvi); and 
Sec.  82.24(g).
    The EPA also created provisions at Sec.  82.18(b) to allow 
producers to use ``export production allowances'' to produce HCFC-141b 
for export beyond the phaseout. These allowances ended in 2010 and 
therefore these provisions have no further purpose or effect. The EPA 
is proposing to retain the definition of export production allowances 
and certain references where appropriate to provide context to the 
reader but remove the recordkeeping and reporting provisions. These 
edits would be made in Sec.  82.16(e)(1) and (2); Sec.  82.24(b)(1)(iv) 
and (ix); Sec.  82.24(b)(2)(iv), and (xii); and Sec.  82.24(d)(2).

VIII. Economic Analysis

    In total, the EPA estimates that the quantified costs and benefits 
of this proposal would result in a net savings of $13,000 per year. The 
agency analyzed the quantitative benefits associated with the overall 
burden reduction from transitioning to electronic reporting, the 
streamlined petition process for used ODS, the certification to import 
ODS for destruction, and costs associated with proposed labeling 
requirements. For this action, the EPA has provided in the docket 
technical support documents that consider the costs and the benefits 
commensurate with changes to ODS phaseout regulations, such as the 
requirement to use electronic reporting. Further, many of the proposed 
changes to the ODS phaseout regulations, such as the removal of 
obsolete requirements, would not result in any new costs or benefits. 
The quantifiable costs and benefits of this rule primarily result from 
the proposed revisions to the reporting and recordkeeping requirements 
and the requirement to use electronic reporting. For the phaseout of 
ODS, the EPA previously considered the domestic costs and benefits of 
the United States' phaseout.\47\
---------------------------------------------------------------------------

    \47\ The following documents are available in the docket: ``EPA. 
1999. The Benefits and Costs of the Clean Air Act: 1990 to 2010;'' 
``EPA. 1992. Regulatory Impact Analysis: Compliance with Section 604 
of the Clean Air Act for the Phaseout of Ozone Depleting 
Chemicals;'' and ``EPA. 1993. Addendum to the 1992 Phaseout 
Regulatory Impact Analysis: Accelerating the Phaseout of CFCs, 
Halons, Methyl Chloroform, Carbon Tetrachloride, and HCFCs.''
---------------------------------------------------------------------------

    The EPA anticipates that electronic reporting would allow for 
faster review and transmission of submissions to the EPA. Additionally, 
all information submitted electronically would be linked in an improved 
tracking system, which would facilitate document management efforts. 
The intent is that this would allow companies to manage past and future 
submissions easier. The EPA expects that the estimated burden hours and 
labor costs would decrease as a result of the complete transition from 
paper to electronic reporting. Even accounting for the one-time burden 
for entities that have not yet registered in CDX of $2,000, the 
electronic reporting would result in an overall burden reduction for 
respondents of approximately $4,000. Similarly, the estimated agency 
burden hours and labor costs would also decrease. For example, by 
requiring electronic reporting the agency would no longer have to 
manually enter data into the ODS Tracking System.
    The streamlined petitions process and new certification to import 
ODS for destruction would decrease the total estimated respondent 
burden. There would be a reduction in reporting requirements for 
imports for destruction relative to the current petition process. 
Specifically, the number of reporting elements for importers for 
destruction would be reduced from 13 to 8 and reduce burden hours per 
response by four hours. The EPA also estimates that exempting halon 
1211 used in aircraft bottles from the petition process would reduce 
the number of responses per respondent by one, as detailed in 
descriptions of the recordkeeping and reporting burden, including cost 
savings to the agency, which can be found in the supporting statement 
for the Information Collection Request available in the docket to this 
rule.
    The EPA estimates that the proposed requirements to redesign the 
existing labels on containers of Halotron[supreg] I would result in a 
one-time cost between $1,000 to $3,000. Administrative and graphic 
design labor costs are estimated based on the total amount of hours 
required to redesign existing labels as well as hourly labor costs. 
These hourly costs include wages, overhead rates, and fringe rates. 
Additional information on this analysis is available in the docket.
    There are also effects of this rule that the agency has not or 
cannot quantify. The EPA did not conduct a specific analysis of the 
benefits and costs associated with prohibiting the sales of QPS methyl 
bromide for non-QPS purposes, prohibiting sales of polyurethane foam 
systems, other elements of the proposal, and allocating allowances of 
HCFC-123 and HCFC-124. Prohibiting both the sales of QPS methyl bromide 
for non-QPS purposes and the sales of illegally imported ODS is 
designed to improve compliance with the existing provisions. Costs are 
unquantifiable as the scale of these sales are unknown but anticipated 
to be small. The proposed prohibition on sales and distribution of 
polyurethane foam systems containing CFCs should have no cost. Updating 
the definition of destruction would allow for the use of

[[Page 41541]]

new destruction technologies that are currently not in use, but the 
agency is unable to estimate the market for the use of those new 
technologies if they are adopted. The proposed removal of obsolete 
provisions is not anticipated to have any material cost or benefit.
    For the allocation of HCFC-123 and 124, previous analyses provide 
information on the costs and benefits of the United States' ODS 
phaseout, and specifically the phaseout of all HCFCs through 2030, but 
do not quantify the costs and benefits of each individual phaseout step 
for each individual chemical. A memorandum summarizing these analyses, 
including the original regulatory impact analysis for the full phaseout 
of ODS, is available in the docket.\48\ Finalizing this proposed rule 
would allow for the production and consumption of HCFC-123 and HCFC-124 
that would otherwise not be allowed in the absence of this rulemaking 
under existing regulations. The benefit of issuing allowances 
consistent with this proposal outweighs the disbenefit associated with 
no action.
---------------------------------------------------------------------------

    \48\ EPA. 2008. ``HCFC Cost Analysis.'' and EPA. 2018. 
``Overview of CFC and HCFC Phaseout.''
---------------------------------------------------------------------------

    Since the allocation for HCFC-123 is the largest component of this 
rule, the following discusses the potential costs and benefits of the 
proposed and alternative allocation levels for HCFC-123. As discussed 
in the allocation section of this notice, the consumption baseline of 
the United States under the Montreal Protocol in 2020 for all HCFCs, on 
an ODP-weighted basis, will be 0.5% of the historic HCFC baseline. This 
equates to 3,810 MT of HCFC-123. Under section 605(c) of the CAA, the 
consumption of HCFCs by any person is limited to the quantity consumed 
by that person during the baseline year. The baseline \49\ for HCFC-123 
is the aggregated quantity consumed in the baseline years and equates 
to 2,014 MT. In developing the proposed allocations, the EPA considered 
the quantities needed to satisfy estimated demand for HCFC-123 to 
service equipment manufactured before 2020. Lastly, the EPA estimated a 
range for the amount HCFC-123 that will likely be reclaimed annually, 
and thus be available to meet part of the servicing demand for HCFC-
123. These are summarized in Table 3.
---------------------------------------------------------------------------

    \49\ Baseline from 40 CFR 82.19.

                                            Table 3--HCFC-123 Servicing Demand and Estimated Reclamation (MT)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         2020     2021     2022     2023     2024     2025     2026     2027     2028     2029    Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Estimated Demand...............................      820      790      770      750      720      700      670      650      630      600    7,100
Estimated Reclamation Low............................      300      310      320      330      340      350      360      370      380      390    3,450
Estimated Reclamation High...........................      350      378      407      436      465      494      523      552      581      610    4,796
Total Need for New Production with Low Reclaim.......      520      480      450      420      380      350      310      280      250      210    3,650
Total Need for New Production with High Reclaim......      470      412      363      314      255      206      147       98       49        0    2,314
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The agency's intent is to accomplish the complete phaseout in 2030 
in a manner that achieves a smooth transition to alternatives without 
stranding equipment. This is important because the EPA estimates that 
36,000 appliances using HCFC-123 will still be in operation in 
2030.\50\ At that time, no more HCFC-123 may be produced or imported 
into the United States.
---------------------------------------------------------------------------

    \50\ EPA. 2019. The U.S. Phaseout of HCFCs: Projected Servicing 
Demands in the U.S. Air Conditioning, Refrigeration, and Fire 
Suppression Sector (2020-2030). See Table 3.

                                      Table 4--Projected Number of HCFC-123 AC and Refrigeration Units in Operation
                                                                    [1000s of Units]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                    Equipment type                       2020     2021     2022     2023     2024     2025     2026     2027     2028     2029     2030
--------------------------------------------------------------------------------------------------------------------------------------------------------
Chillers (AC)........................................       47       45       43       41       39       37       35       33       31       29       27
IPR..................................................       14       13       13       12       12       11       11       10       10        9        9
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The EPA does not want to strand existing equipment because of an 
inadequate supply of HCFCs, but also must achieve a complete phaseout 
of production and consumption by 2030. A viable reclamation market is 
important to support the continued availability of HCFCs after the 2030 
phaseout, and during 2020 through 2029 can support the fire suppression 
market and decrease the need for new production and import. As noted 
previously, the EPA is requesting comment on the HCFC demand estimates 
included in the 2019 Draft Servicing Tail Report, which is included in 
the docket for this rulemaking.
    Table 5 presents the three allocation amounts for HCFC-123 raised 
for comment in this proposed rule. The agency proposes to issue 
consumption allowances equal to the 2020 estimated HCFC-123 demand for 
servicing existing refrigeration and air-conditioning and fire 
suppression equipment for years 2020 through 2022 and to then decrease 
the number of allowances issued in each subsequent year by an equal 
amount each year such that there are zero allowances issued in 2030. 
Alternative 1 is equal to the estimated demand minus the low end of 
estimated reclaim. Alternative 2 is 100% of the domestic HCFC-123 
consumption baseline, which as discussed previously is the full amount 
that can be allocated under the CAA.

                                         Table 5--Comparison of HCFC-123 Consumption Allowance Allocations (MT)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         2020     2021     2022     2023     2024     2025     2026     2027     2028     2029    Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposal.............................................      650      650      650      570      490      410      330      250      170       90    4,260

[[Page 41542]]

 
Alternative 1........................................      520      480      450      420      380      350      310      280      250      210    3,650
Alternative 2........................................    2,014    2,014    2,014    2,014    2,014    2,014    2,014    2,014    2,014    2,014   20,140
0.5% of HCFC Consumption Baseline....................    3,810    3,810    3,810    3,810    3,810    3,810    3,810    3,810    3,810    3,810   38,100
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The EPA expects more disbenefits in allocating significantly above 
projected demand. Because of the limited numbers of allowance holders, 
the EPA does not expect the price of HCFC-123 to appreciably decrease 
if the agency allocates 100% of the HCFC-123 baseline (Alternative 2 in 
Table 5). The disbenefits the EPA is concerned about include near and 
longer term available supply of reclaimed and recycled HCFC-123, as 
well as emissions of ODS, given the agency's assumption that all 
refrigerant produced is eventually emitted into the atmosphere. More 
allocated allowances would likely suppress the recovery and reclamation 
market and cause more HCFC material to be vented at the end of the 
equipments' lifetime. In the near term, this would also have an adverse 
effect on the availability of reclaimed HCFC-123 for the fire 
suppression sector because reclamation is the only source of HCFC-123 
for the manufacture of new fire suppression equipment; it is projected 
that the fire suppression sector would need between 170 to 225 MT for 
the manufacture of new equipment. Thus, if the reclaim market is 
suppressed from 2020 through 2029, there will be less supply and higher 
costs for HCFC-123, especially from 2030 onwards when the only supply 
of HCFC-123 will be from the reclaim market. Based on the 2019 Draft 
Servicing Tail Report, HCFC-124 consumption has been approximately 250 
MT per year and reclamation has been minimal. Recent sales data from 
the California Air Resources Board as well as other information 
indicate that demand for HCFC-124 should be between 100 and 200 MT in 
2020. Like HCFC-123, providing HCFC-124 allowances significantly in 
excess of demand may not foster transition. Thus, the EPA is proposing 
to allocate 200 MT for the first three years and then gradually 
decrease over the next seven years by an equal amount each year. The 
EPA is taking comment on the assumptions and projections in this 
section.
    Regardless of allocation level, for the purposes of analyzing the 
impact of this proposal on small business, the EPA finds there is no 
significant impact on a substantial number of small entities (SISNOSE). 
The EPA performed a sales test to assess the economic impact of a 
regulatory option on small businesses and compared the results of the 
sales test. Based on the screening analysis of allowance holders of 
HCFC-123 and HCFC-124, this proposed rulemaking could be presumed to 
have no SISNOSE because it is expected to result in a net benefit to 
small business through the ability to continue producing, importing 
and/or selling HCFC-123 and HCFC-124. The EPA notes that there are only 
eight companies total that hold consumption allowances for HCFC-123 and 
HCFC-124, only two of which are small businesses.
    Table 6 summarizes the environmental effect, in ODP-weighted metric 
tons, of the various HCFC-123 allocation levels over the length of the 
2020-2029 regulatory period. For comparison, the EPA estimates total 
demand for HCFC-123 over the next decade to equal 7,100 MT, or 142 ODP-
weighted metric tons. About 70% to 75% of this amount is for servicing 
existing equipment and can be met with newly-imported HCFCs, and the 
remainder must be met with reclaimed or recycled HCFCs. Not all 
allowances may be expended so this does not reflect the actual impact 
to the stratospheric ozone layer of these three options. However, the 
EPA does assume that all refrigerant produced is eventually emitted 
into the atmosphere. Alternative 1 followed by the proposed allocation 
amounts would have the least impact on the stratospheric ozone layer. 
For HCFC-124, the EPA estimates total demand over the next decade equal 
to 1,000 to 2,000 MT, or 22 to 44 ODP-weighted metric tons.

 Table 6--Environmental Effects of the HCFC-123 and HCFC-124 Allocation
                                 Amounts
                          [Total of 2020-2029]
------------------------------------------------------------------------
                                                           ODP-weighted
                                                MT          metric tons
------------------------------------------------------------------------
Proposed HCFC-123 Allocation Amount.....           4,260              85
HCFC-123 Alternative 1..................           3,650              73
HCFC-123 Alternative 2..................          20,140             403
Proposed HCFC-124 Allocation Amount.....           1,300            28.6
HCFC-124 Alternative....................           2,000              44
------------------------------------------------------------------------

IX. Statutory and Executive Order Reviews

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

    This action is a significant regulatory action that was submitted 
to the Office of Management and Budget (OMB) for review. Any changes 
made in response to OMB recommendations have been documented in the 
docket.

B. Executive Order 13771: Reducing Regulations and Controlling 
Regulatory Costs

    This action is expected to be an Executive Order 13771 regulatory 
action. Details on the estimated costs of this proposed rule can be 
found in the EPA's ICR associated with this rulemaking.

C. Paperwork Reduction Act (PRA)

    The information collection activities in this proposed rule have 
been submitted for approval to the Office of Management and Budget 
(OMB) under the PRA. The ICR document that the

[[Page 41543]]

EPA prepared has been assigned EPA ICR number 1432.34. You can find a 
copy of the ICR in the docket for this rule, and it is briefly 
summarized here.
    This ICR covers provisions under the Montreal Protocol and Title VI 
of the CAA that establish limits on total U.S. production, import, and 
export of ODS. The EPA monitors compliance with the CAA and commitments 
under the Montreal Protocol through the recordkeeping and reporting 
requirements established in the regulations at 40 CFR part 82, subpart 
A. The EPA informs the respondents that they may assert claims of 
business confidentiality for any of the information they submit. 
Information claimed as confidential will be treated in accordance with 
the procedures for handling information claimed as confidential under 
40 CFR part 2, subpart B, and will be disclosed to the extent, and by 
means of procedures, set forth in Subpart B. If no claim of 
confidentiality is asserted when the information is received by the 
EPA, it may be made available to the public without further notice to 
the respondents (40 CFR 2.203).
    Respondents/affected entities: Producers, importers, exporters, and 
certain users of ozone depleting substances; methyl bromide 
applicators, distributors, and end users including commodity storage 
and quarantine users.
    Respondent's obligation to respond: Mandatory--sections 603(b) and 
114 of the CAA.
    Estimated number of respondents: 93.
    Frequency of response: Quarterly, annually, and as needed.
    Total estimated burden: 2,940 hours (per year). Burden is defined 
at 5 CFR 1320.3(b).
    Total estimated cost: $354,068, includes $346,693 annualized 
capital and operation & maintenance costs of $7,375.
    The ICR addresses the incremental changes to the existing reporting 
and recordkeeping programs that are approved under OMB control number 
2060-0170.
    An agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for the 
EPA's regulations in 40 CFR are listed in 40 CFR part 9.
    Submit your comments on the agency's need for this information, the 
accuracy of the provided burden estimates and any suggested methods for 
minimizing respondent burden to the EPA using the docket identified at 
the beginning of this rule. You may also send your ICR-related comments 
to OMB's Office of Information and Regulatory Affairs via email to 
[email protected], Attention: Desk Officer for the EPA. 
Since OMB is required to decide concerning the ICR between 30 and 60 
days after receipt, OMB must receive comments no later than September 
13, 2019. The EPA will respond to any ICR-related comments in the final 
rule.

D. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic 
impact on a substantial number of small entities under the RFA. The 
small entities potentially subject to increased costs from this action 
include allowance holders, distributors, applicators, and end users of 
methyl bromide and importers of ODS. The EPA estimates that the total 
incremental savings associated with this proposed rule is $13,000 per 
year in 2018 dollars. Details of this analysis are presented in Section 
VIII of this notice.

E. Unfunded Mandates Reform Act (UMRA)

    This action does not contain an unfunded mandate of $100 million or 
more as described in UMRA, 2 U.S.C. 1531-1538, and does not 
significantly or uniquely affect small governments.

F. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government.

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

    This action does not have tribal implications as specified in 
Executive Order 13175. It will not have substantial direct effects on 
tribal governments, on the relationship between the federal government 
and Indian tribes, or on the distribution of power and responsibilities 
between the federal government and Indian tribes, as specified in 
Executive Order 13175. Thus, Executive Order 13175 does not apply to 
this action.

H. Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks

    This action is not subject to E.O. 13045 (62 FR 19885, April 23, 
1997) because it is not economically significant as defined in E.O. 
12866. The agency nonetheless has reason to believe that the 
environmental health or safety risk addressed by this action may have a 
disproportionate effect on children. Depletion of stratospheric ozone 
results in greater transmission of the sun's ultraviolet (UV) radiation 
to the earth's surface. The following studies describe the effects of 
excessive exposure to UV radiation on children: (1) Westerdahl J, 
Olsson H, Ingvar C. ``At what age do sunburn episodes play a crucial 
role for the development of malignant melanoma,'' Eur J Cancer 1994: 
30A: 1647-54; (2) Elwood JM Japson J. ``Melanoma and sun exposure: an 
overview of published studies,'' Int J Cancer 1997; 73:198-203; (3) 
Armstrong BK, ``Melanoma: childhood or lifelong sun exposure,'' In: 
Grobb JJ, Stern RS, Mackie RM, Weinstock WA, eds. ``Epidemiology, 
causes and prevention of skin diseases,'' 1st ed. London, England: 
Blackwell Science, 1997: 63-6; (4) Whiteman D., Green A. ``Melanoma and 
Sunburn,'' Cancer Causes Control, 1994: 5:564-72; (5) Heenan, PJ. 
``Does intermittent sun exposure cause basal cell carcinoma? A case 
control study in Western Australia,'' Int J Cancer 1995; 60: 489-94; 
(6) Gallagher, RP, Hill, GB, Bajdik, CD, et. al. ``Sunlight exposure, 
pigmentary factors, and risk of nonmelanocytic skin cancer I, Basal 
cell carcinoma,'' Arch Dermatol 1995; 131: 157-63; (7) Armstrong, DK. 
``How sun exposure causes skin cancer: an epidemiological 
perspective,'' Prevention of Skin Cancer. 2004. 89-116.

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

    This action is not a ``significant energy action'' because it is 
not likely to have a significant adverse effect on the supply, 
distribution, or use of energy.

J. National Technology Transfer and Advancement Act (NTTAA)

    This rulemaking does not involve technical standards.

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

    The EPA believes that this action does not have disproportionately 
high and adverse human health or environmental effects on minority 
populations, low-income populations and/or indigenous peoples, as 
specified in Executive Order 12898 (59 FR 7629, February 16, 1994).

[[Page 41544]]

List of Subjects in 40 CFR Part 82

    Environmental protection, Air pollution control, Chemicals, 
Reporting and recordkeeping requirements.

    Dated: July 24, 2019.
Andrew R. Wheeler,
Administrator.

    For the reasons set forth in the preamble, the EPA proposes to 
amend 40 CFR part 82 as follows:

PART 82--PROTECTION OF STRATOSPHERIC OZONE

0
1. The authority citation for part 82 continues to read as follows:

    Authority:  42 U.S.C. 7414, 7601, 7671-767q.

0
2. Amend Sec.  82.3 by:
0
a. Adding. In alphabetical order, definitions for ``bank'' and 
``Central Data Exchange;''
0
b. Revising the definitions for ``Administrator,'' ``Aircraft halon 
bottle,'' ``Confer,'' ``Consumption allowances,'' ``Destruction,'' 
``Individual shipment,'' ``Non-Objection notice,'' and ``Production''; 
and
0
c. Removing definitions for ``Formulator,'' ``HCFC-141b exemption 
allowances,'' and ``Unexpended HCFC-141b exemption allowances.''
    The revisions and additions read as follows:


Sec.  82.3  Definitions.

* * * * *
    Administrator means the Administrator of the United States 
Environmental Protection Agency or his or her authorized 
representative. Reports and petitions that are available to be 
submitted through the Central Data Exchange must be submitted through 
that tool. Any other reports and communications shall be submitted to 
Stratospheric Protection Manager, 1200 Pennsylvania Ave. NW, Mail Code: 
6205T, Washington, DC 20460.
    Aircraft halon bottle means a vessel used as a component of an 
aircraft fire suppression system containing halon-1301 or halon-1211 
approved under FAA rules for installation in a certificated aircraft.
* * * * *
    Bank means a facility run by a national government or privately run 
and authorized by a national government that collects and stores 
previously-recovered ozone-depleting substances for reuse at a later 
date.
* * * * *
    Central Data Exchange means EPA's centralized electronic document 
receiving system, or its successors.
* * * * *
    Confer means to shift the essential-use allowances obtained under 
Sec.  82.8 from the holder of the unexpended essential-use allowances 
to a person for the production of a specified controlled substance.
* * * * *
    Consumption allowances means the privileges granted by this subpart 
to produce and import controlled substances; however, consumption 
allowances may be used to produce controlled substances only in 
conjunction with production allowances. A person's consumption 
allowances for class I substances are the total of the allowances 
obtained under Sec. Sec.  82.6 and 82.7 as may be modified under Sec.  
82.12 (transfer of allowances). A person's consumption allowances for 
class II controlled substances are the total of the allowances obtained 
under Sec. Sec.  82.19 and 82.20, as may be modified under Sec.  82.23.
* * * * *
    Destruction means the expiration of a controlled substance to the 
destruction and removal efficiency actually achieved, unless considered 
completely destroyed as defined in this section. Such destruction might 
result in a commercially useful end product, but such usefulness would 
be secondary to the act of destruction. Destruction must be achieved 
using one of the following controlled processes approved by the Parties 
to the Protocol:
    (1) Liquid injection incineration;
    (2) Reactor cracking;
    (3) Gaseous/fume oxidation;
    (4) Rotary kiln incineration;
    (5) Cement kiln;
    (6) Radio frequency plasma;
    (7) Municipal waste incinerators (only for the destruction of 
foams);
    (8) Nitrogen plasma arc;
    (9) Portable plasma arc;
    (10) Argon plasma arc;
    (11) Chemical reaction with H2 and CO2;
    (12) Inductively coupled radio frequency plasma;
    (13) Microwave plasma;
    (14) Porous thermal reactor;
    (15) Gas phase catalytic de-halogenation;
    (16) Superheated steam reactor; or
    (17) Thermal reaction with methane.
* * * * *
    Individual shipment means the kilograms of a controlled substance 
for which a person may make one (1) U.S. Customs entry, as identified 
in the non-objection letter from the Administrator under Sec. Sec.  
82.13(g)(2), (3), and (5) and 82.24(c)(4) and (6).
* * * * *
    Non-Objection notice means the privilege granted by the 
Administrator to import a specific individual shipment of a controlled 
substance in accordance with Sec. Sec.  82.13(g)(2), (3), and (5) and 
82.24(c)(3), (4), and (6).
* * * * *
    Production means the manufacture of a controlled substance from any 
raw material or feedstock chemical, but does not include:
    (1) The manufacture of a controlled substance that is subsequently 
transformed;
    (2) The reuse or recycling of a controlled substance;
    (3) Amounts that are destroyed by the approved technologies in 
Sec.  82.3; or
    (4) Amounts that are spilled or vented unintentionally.
0
3. Amend Sec.  82.4 by:
0
a. Removing and reserving paragraph (f);
0
b. Revising paragraph (j); and
0
c. Adding paragraphs (r) and (s).
    Revisions read as follows:


Sec.  82.4  Prohibitions for class I controlled substances.

* * * * *
    (j)(1) Effective January 1, 1995, no person may import, at any time 
in any control period, a used class I controlled substance, except for 
Group II used controlled substances shipped in aircraft halon bottles 
for hydrostatic testing, without having received a non-objection notice 
from the Administrator in accordance with Sec.  82.13(g)(2) and (3). A 
person who receives a non-objection notice for the import of an 
individual shipment of used controlled substances may not transfer or 
confer the right to import, and may not import any more than the exact 
quantity, in kilograms, of the used controlled substance cited in the 
non-objection notice. Every kilogram of importation of used controlled 
substance in excess of the quantity cited in the non-objection notice 
issued by the Administrator in accordance with Sec.  82.13(g)(2) and 
(3) constitutes a separate violation.
    (2) Effective September 13, 2019, no person may import for purposes 
of destruction, at any time in any control period, a class I controlled 
substance for which EPA has apportioned baseline production and 
consumption allowances, without having submitted a certification of 
intent to import for destruction to the Administrator and received a 
non-objection notice in accordance with Sec.  82.13(g)(5). A person 
issued a non-objection notice for the import of an individual shipment 
of class I controlled substances for destruction may not transfer or 
confer the right to import, and may not import any more than the exact 
quantity (in kilograms) of the class I controlled

[[Page 41545]]

substance stated in the non-objection notice. For imports intended to 
be destroyed in the U.S., a person issued a non-objection notice must 
destroy the controlled substance in the year cited in the non-objection 
letter, may not transfer or confer the right to import, and may not 
import any more than the exact quantity (in kilograms) of the class I 
controlled substance stated in the non-objection notice. Every kilogram 
of import of class I controlled substance in excess of the quantity 
stated in the non-objection notice issued by the Administrator in 
accordance with Sec.  82.13(g)(5) constitutes a separate violation of 
this subpart.
* * * * *
    (r) Quarantine and preshipment exemption. No person may sell or use 
methyl bromide produced or imported under the quarantine and 
preshipment exemption for any purpose other than for quarantine 
applications or preshipment applications as defined in Sec.  82.3. Each 
kilogram of methyl bromide produced or imported under the authority of 
the quarantine and preshipment exemption and sold or used for a use 
other than quarantine or preshipment is a separate violation of this 
subpart.
    (s) Effective September 13, 2019, no person may sell or distribute, 
or offer for sale or distribution, any class I substance that they 
know, or have reason to know, was imported in violation of this 
section, except for such actions needed to re-export the controlled 
substance. Every kilogram of a controlled substance imported in 
contravention of this paragraph that is sold or distributed, or offered 
for sale or distribution, constitutes a separate violation of this 
subpart.
0
4. Amend Sec.  82.9 by:
0
a. Removing and reserving paragraphs (a), (b), (e), and (f); and
0
b. Revising paragraph (c) introductory text.
    The revision reads as follows:


Sec.  82.9  Availability of production allowances in addition to 
baseline production allowances for class I controlled substances.

* * * * *
    (c) A company may increase or decrease its production allowances, 
including its Article 5 allowances, by trading with another Party to 
the Protocol according to the provision under this paragraph (c). A 
company may increase or decrease its essential-use allowances for CFCs 
for use in essential MDIs according to the provisions under this 
paragraph (c). A nation listed in appendix C to this subpart (Parties 
to the Montreal Protocol) must agree either to transfer to the person 
for the current control period some amount of production or import that 
the nation is permitted under the Montreal Protocol or to receive from 
the person for the current control period some amount of production or 
import that the person is permitted under this subpart. If the 
controlled substance is produced under the authority of production 
allowances and is to be sold in the United States or to another Party 
(not the Party from whom the allowances are received), the U.S. company 
must expend its consumption allowances allocated under Sec.  82.6 and 
Sec.  82.7 in order to produce with the additional production 
allowances.
* * * * *


Sec.  82.10  [Removed and reserved]

0
5. Remove and reserve Sec.  82.10.
0
6. Amend Sec.  82.12 by:
0
a. Revising paragraph (a)(1) introductory text; and
0
b. Removing and reserving paragraphs (a)(2), (b) and (c).
    The revision reads as follows:


Sec.  82.12  Transfers of allowances for class I controlled substances.

    (a) * * *
    (1) After January 1, 2002, any essential-use allowance holder 
(including those persons that hold essential-use allowances issued by a 
Party other than the United States) (``transferor'') may transfer 
essential-use allowances for CFCs to a metered dose inhaler company 
solely for the manufacture of essential MDIs. After January 1, 2005, 
any critical use allowance holder (``transferor'') may transfer 
critical use allowances to any other person (``transferee'').
* * * * *
0
7. Amend Sec.  82.13 by:
0
a. Revising paragraphs (a), (c), (f)(2)(xvii)-(xxii), (f)(3)(xiii)-
(xvii), (g)(1)(xi), (xv), (xvii)-(xxi), (g)(2)(i)-(iv), (vi), (viii)-
(xiii), (g)(3)(i)(A), (g)(3)(vii), (g)(4)(xv)-(xviii), (h)(1) 
introductory text, (h)(1)(ii)-(iii), (h)(2) introductory text, 
(h)(2)(ii)-(v), (viii), (v), (w)(2), (y), (z), (aa);
0
b. Removing and reserving paragraphs (f)(2)(iv), (v), and (xvi), 
(f)(3)(iv), (ix), (g)(2)(xiv), (g)(4)(vii), (xi), (i); and
0
c. Adding paragraphs (g)(2)(xv) and (g)(5)-(9).
    The revisions and additions read as follows:


Sec.  82.13  Recordkeeping and reporting requirements for class I 
controlled substances.

    (a) Unless otherwise specified, the recordkeeping and reporting 
requirements set forth in this section take effect on January 1, 1995. 
For class I, Group VIII controlled substances, the recordkeeping and 
reporting requirements set forth in this section take effect on August 
18, 2003. For critical use methyl bromide, the recordkeeping and 
reporting requirements set forth in this section take effect January 1, 
2005.
* * * * *
    (c) Unless otherwise specified, reports required by this section 
must be submitted to the Administrator within 45 days of the end of the 
applicable reporting period. Starting [DATE 30 DAYS AFTER EFFECTIVE 
DATE OF FINAL RULE], reports that are available for submission through 
the Central Data Exchange must be submitted electronically through that 
tool. Revisions of reports that are required by this section must be 
submitted to the Administrator within 180 days of the end of the 
applicable reporting period, unless otherwise specified.
* * * * *
    (f) * * *
    (2) * * *
    (xvii) For methyl bromide, dated records of the quantity of 
controlled substances produced for quarantine and preshipment 
applications and quantity sold for quarantine and preshipment 
applications;
    (xviii) Written certifications that quantities of methyl bromide 
produced solely for quarantine and preshipment applications were 
purchased by distributors or applicators to be used only for quarantine 
applications and preshipment applications in accordance with the 
definitions in this subpart; and
    (xix) Written verifications from a U.S. purchaser that methyl 
bromide produced solely for quarantine and preshipment applications, if 
exported, will be exported solely for quarantine applications and 
preshipment applications upon receipt of a certification in accordance 
with the definitions of this subpart and requirements in paragraph (h) 
of this section.
    (xx) For methyl bromide, dated records such as invoices and order 
forms, and a log of the quantity of controlled substances produced for 
critical use, specifying quantities dedicated for pre-plant use and 
quantities dedicated for post-harvest use, and the quantity sold for 
critical use, specifying quantities dedicated for pre-plant use and 
quantities dedicated for post-harvest use;
    (xxi) Written certifications that quantities of methyl bromide 
produced for critical use were purchased by distributors, applicators, 
or approved

[[Page 41546]]

critical users to be used or sold only for critical use in accordance 
with the definitions and prohibitions in this subpart. Certifications 
must be maintained by the producer for a minimum of three years and;
    (xxii) For methyl bromide, dated records such as invoices and order 
forms, and a log of the quantity of controlled substances produced 
solely for export to satisfy critical uses authorized by the Parties 
for that control period, and the quantity sold solely for export to 
satisfy critical uses authorized by the Parties for that control 
period.
    (3) * * *
    (xiii) The amount of methyl bromide sold or transferred during the 
quarter to a person other than the producer solely for quarantine and 
preshipment applications;
    (xiv) A list of the quantities of methyl bromide produced by the 
producer and exported by the producer and/or by other U.S. companies, 
to a Party to the Protocol that will be used solely for quarantine and 
preshipment applications and therefore were not produced expending 
production or consumption allowances; and
    (xv) For quarantine and preshipment applications of methyl bromide 
in the United States or by a person of another Party, one copy of a 
certification that the material will be used only for quarantine and 
preshipment applications in accordance with the definitions in this 
subpart from each recipient of the material and a list of additional 
quantities shipped to that same person for the quarter.
    (xvi) For critical uses of methyl bromide, producers shall report 
annually the amount of critical use methyl bromide owned by the 
reporting entity, specifying quantities dedicated for pre-plant use and 
quantities dedicated for post-harvest use, as well as quantities held 
by the reporting entity on behalf of another entity, specifying 
quantities dedicated for pre-plant use and quantities dedicated for 
post-harvest use along with the name of the entity on whose behalf the 
material is held; and
    (xvii) A list of the quantities of methyl bromide produced by the 
producer and exported by the producer and/or by other U.S. companies in 
that control period, solely to satisfy the critical uses authorized by 
the Parties for that control period; and
* * * * *
    (g) * * *
    (1) * * *
    (xi) The quantity of imports of used, recycled or reclaimed class I 
controlled substances;
* * * * *
    (xv) Dated records of the quantity of controlled substances 
imported for an essential use;
* * * * *
    (xvii) Dated records of the quantity of methyl bromide imported for 
quarantine and preshipment applications and quantity sold for 
quarantine and preshipment applications;
    (xviii) Written certifications that quantities of methyl bromide 
imported solely for quarantine and preshipment applications were 
purchased by distributors or applicators to be used only for quarantine 
and preshipment applications in accordance with the definitions in this 
subpart; and
    (xix) Written verifications from a U.S. purchaser that methyl 
bromide imported solely for quarantine and preshipment applications, if 
exported, will be exported solely for quarantine and preshipment 
applications upon receipt of a certification in accordance with the 
definitions of this Subpart and requirements in paragraph (h) of this 
section.
    (xx) For methyl bromide, dated records such as invoices and order 
forms, of the quantity of controlled substances imported for critical 
use, specifying quantities dedicated for pre-plant use and quantities 
dedicated for post-harvest use, and the quantity sold for critical use, 
specifying quantities dedicated for pre-plant use and quantities 
dedicated for post-harvest use, and;
    (xxi) Written certifications that quantities of methyl bromide 
imported for critical use were purchased by distributors, applicators, 
or approved critical users to be used or sold only for critical use in 
accordance with the definitions and prohibitions in this subpart. 
Certifications must be maintained by an importer for a minimum of three 
years.
    (2) Petitioning--Importers of Used, Recycled or Reclaimed 
Controlled Substances. For each individual shipment over 5 pounds of a 
used controlled substance as defined in Sec.  82.3, except for imports 
intended for destruction and Group II used controlled substances 
shipped in aircraft halon bottles for hydrostatic testing and imports 
intended for destruction, an importer must submit directly to the 
Administrator, at least 40 working days before the shipment is to leave 
the foreign port of export, the following information in a petition:
    (i) Name, commodity code, and quantity in kilograms of the used 
controlled substance to be imported;
    (ii) Name and address of the importer, the importer ID number, and 
the contact person's name, email address, and phone number;
    (iii) Name, address, contact person, email address, and phone 
number of all previous source facilities from which the used controlled 
substance was recovered or the government agency storing the controlled 
substance;
    (iv) A detailed description of the previous use of the controlled 
substance at each source facility and a best estimate of when the 
specific controlled substance was put into the equipment at each source 
facility, and, when possible, documents indicating the date the 
material was put into the equipment; or an official letter from the 
exporting country that the controlled substance is used;
* * * * *
    (vi) Name, address, contact person, email address, and phone number 
of the exporter and of all persons to whom the material was transferred 
or sold after it was recovered from the source facility;
* * * * *
    (viii) A description of the intended use of the used controlled 
substance, and, when possible, the name, address, contact person, email 
address, and phone number of the ultimate purchaser in the United 
States;
    (ix) Name, address, contact person, email address, and phone number 
of the U.S. reclamation facility, where applicable;
    (x) If someone at the source facility recovered the controlled 
substance from the equipment, the name, email address, and phone number 
of that person;
    (xi) If the imported controlled substance was reclaimed in a 
foreign Party, the name, address, contact person, email address, and 
phone number of any or all foreign reclamation facility(ies) 
responsible for reclaiming the cited shipment;
    (xii) An English translation of the export license, or application 
for an export license, from the appropriate government agency in the 
country of export and, if recovered in another country, the export 
license from the appropriate government agency in that country, and 
quantity authorized for export in kilograms on the export license(s);
    (xiii) If the imported used controlled substance is intended to be 
sold as a refrigerant in the U.S., the name, address, and email address 
of the EPA-certified U.S. reclaimer who will bring the material to the 
standard required under section 608 (Sec.  82.152(g)) of the CAA, if 
not already reclaimed to those specifications.
* * * * *
    (xv) If the used controlled substance is stored by a foreign 
national

[[Page 41547]]

government in a bank of used class I controlled substances, or by a 
privately-operated bank authorized by the foreign national government 
to collect and store class I controlled substances, an official letter 
from the appropriate government agency in that country where the 
material is stored may be provided in lieu of the information required 
in subparagraphs (iii) through (vi) of this paragraph.
    (3) * * *
    (i) * * *
    (A) If the Administrator determines that the information is 
insufficient, that is, if the petition lacks or appears to lack any of 
the information required under Sec.  82.13(g)(2) or other information 
that may be requested during the review of the petition necessary to 
verify that the controlled substance is used;
* * * * *
    (vii) A person receiving the non-objection notice is permitted to 
import the individual shipment only within one year of the date stamped 
on the non-objection notice.
* * * * *
    (4) * * *
    (xv) The amount of methyl bromide sold or transferred during the 
quarter to a person other than the importer solely for quarantine and 
preshipment applications;
    (xvi) A list of the quantities of methyl bromide exported by the 
importer and or by other U.S. companies, to a Party to the Protocol 
that will be used solely for quarantine and preshipment applications 
and therefore were not imported expending consumption allowances; and
    (xvii) For quarantine and preshipment applications of methyl 
bromide in the United States or by a person of another Party, one copy 
of a certification that the material will be used only for quarantine 
and preshipment applications in accordance with the definitions in this 
subpart from each recipient of the material and a list of additional 
quantities shipped to that same person for the quarter.
    (xviii) For critical uses of methyl bromide, importers shall report 
annually the amount of critical use methyl bromide owned by the 
reporting entity, specifying quantities dedicated for pre-plant use and 
quantities dedicated for post-harvest use, as well as quantities held 
by the reporting entity on behalf of another entity, specifying 
quantities dedicated for pre-plant use and quantities dedicated for 
post-harvest use along with the name of the entity on whose behalf the 
material is held.
* * * * *
    (5) Certification of Intent to Import for Destruction. For each 
individual shipment of a class I controlled substance imported with the 
intent to destroy that substance, an importer must submit 
electronically to the Administrator, at least 30 working days before 
the shipment is to leave the foreign port of export, the following 
information:
    (i) Name, commodity code, and quantity in kilograms of each 
controlled substance to be imported,
    (ii) Name and address of the importer, the importer ID number, and 
the contact person's name, email address, and phone number;
    (iii) The U.S. port of entry for the import, the expected date of 
shipment and the vessel transporting the chemical. If at the time of 
submitting the certification of intent to import for destruction the 
importer does not know the U.S. port of entry, the expected date of 
shipment and the vessel transporting the chemical, and the importer 
receives a non-objection notice for the individual shipment in the 
petition, the importer is required to notify the Administrator of this 
information prior to the U.S. entry of the individual shipment;
    (iv) Name, address, contact person, email address, and phone number 
of the responsible party at the destruction facility;
    (v) An English translation of an export license, or application for 
an export license, from the appropriate government agency in the 
country of export, and quantity authorized for export in kilograms on 
the export license(s);
    (vi) A certification of accuracy of the information submitted in 
the certification.
    (6) For each individual shipment of a class I controlled substance 
imported with the intent to destroy that substance, an importer must 
submit to the Administrator a copy of the destruction verification 
within 30 days after destruction of the controlled substance(s).
    (7)(i) Starting on the first working day following receipt by the 
Administrator of a certification of intent to import a class II 
controlled substance for destruction, the Administrator will initiate a 
review of the information submitted under paragraph (c)(6) of this 
section and take action within 30 working days to issue either an 
objection-notice or a non-objection notice for the individual shipment 
to the person who submitted the certification of intent to import the 
class II controlled substance for destruction.
    (ii) The Administrator may issue an objection notice if the 
petition lacks or appears to lack any of the information required under 
this subparagraph or for the reasons listed in Sec.  82.24(c)(4)(i)(B)-
(E).
    (iii) In cases where the Administrator does not object to the 
petition, the Administrator will issue a non-objection notice.
    (iv) To pass the approved class II controlled substances through 
U.S. Customs, the non-objection notice issued by EPA must accompany the 
shipment through U.S. Customs.
    (v) If for some reason, following EPA's issuance of a non-objection 
notice, new information is brought to EPA's attention which shows that 
the non-objection notice was issued based on false information, then 
EPA has the right to:
    (A) Revoke the non-objection notice;
    (B) Pursue all means to ensure that the class II controlled 
substance is not imported into the U.S.; and
    (C) Take appropriate enforcement actions.
    (8) A person receiving the non-objection notice is permitted to 
import the individual shipment only within one year of the date stamped 
on the non-objection notice.
    (9) A person receiving a non-objection notice from the 
Administrator for a certification of intent to import class I 
controlled substances for destruction must maintain the following 
records:
    (i) A copy of the certificate of intent to import for destruction;
    (ii) The EPA non-objection notice;
    (iii) A copy of the export license or export license application;
    (iv) U.S. Customs entry documents for the import that must include 
one of the commodity codes from Appendix K to this subpart;
    (v) The date, amount, and type of controlled substance sent for 
destruction, per shipment;
    (vi) An invoice from the destruction facility verifying the 
shipment was received; and
    (vii) A copy of the destruction verification from the destruction 
facility.
    (h) * * *
    (1) For any exports of class I controlled substances (except methyl 
bromide) not reported under paragraph (f)(3) of this section (reporting 
for producers of controlled substances), the exporter who exported a 
class I controlled substance (except methyl bromide) must submit to the 
Administrator the following information within 45 days after the end of 
the control period in which the unreported exports left the United 
States:
    (i) * * *
    (ii) The exporter's Employer Identification Number;

[[Page 41548]]

    (iii) The type and quantity of each controlled substance exported 
including the quantity of controlled substance that is used, recycled 
or reclaimed.
* * * * *
    (2) For any exports of methyl bromide not reported under paragraph 
(f)(3) of this section (reporting for producers of controlled 
substances), the exporter who exported methyl bromide must submit to 
the Administrator the following information within 45 days after the 
end of each quarter in which the unreported exports left the United 
States:
    (i) * * *
    (ii) The exporter's Employer Identification Number;
    (iii) The quantity of methyl bromide exported by use 
(transformation, destruction, critical use, or quarantine and 
preshipment);
    (iv) The date on which, and the port from which, the methyl bromide 
was exported from the United States or its territories;
    (v) The country to which the methyl bromide was exported;
* * * * *
    (viii) The invoice or sales agreement containing language similar 
to the Internal Revenue Service Certificate that the purchaser or 
recipient of imported methyl bromide intends to transform those 
substances, the destruction verifications (as in paragraph (k) of this 
section) showing that the purchaser or recipient intends to destroy the 
controlled substances, or the certification that the purchaser or 
recipient and the eventual applicator will only use the material for 
quarantine and preshipment applications in accordance with the 
definitions in this subpart.
* * * * *
    (v) Any distributor of laboratory supplies who purchased controlled 
substances under the global essential laboratory and analytical use 
exemption must submit quarterly the quantity of each controlled 
substance purchased by each laboratory customer or distributor whose 
certification was previously provided to the distributor pursuant to 
paragraphs (w) of this section, the contact information for the source 
company from which material was purchased, and the laboratories to whom 
the material is sold.
    (w) * * *
    (2) The name, email address, and phone number of a contact person 
for the laboratory customer;
* * * * *
    (y) Every distributor of methyl bromide who purchases or receives a 
quantity produced or imported for quarantine or preshipment 
applications under the exemptions in this subpart must comply with the 
following recordkeeping and reporting requirements:
    (1) Every distributor of quarantine and preshipment methyl bromide 
must certify to the producer, importer, or distributor from whom they 
purchased or received the controlled substance that quantities 
purchased or received will be sold only for quarantine applications or 
preshipment applications in accordance with the definitions in this 
subpart.
    (2) Every distributor of quarantine and preshipment methyl bromide 
must receive from an applicator, exporter, or distributor to whom they 
sell or deliver the controlled substance a certification, prior to 
delivery, stating that the quantity will be used or sold solely for 
quarantine applications or preshipment applications in accordance with 
definitions in this subpart.
    (3) Every distributor of quarantine and preshipment methyl bromide 
must maintain the certifications as records for 3 years.
    (4) Every distributor of quarantine and preshipment methyl bromide 
must report to the Administrator within 45 days after the end of each 
quarter, the total quantity delivered to applicators or end users for 
quarantine applications and preshipment applications in accordance with 
definitions in this Subpart.
    (z) Every applicator of methyl bromide who purchases or receives a 
quantity produced or imported solely for quarantine or preshipment 
applications under the exemptions in this subpart must comply with the 
following recordkeeping and reporting requirements:
    (1) Recordkeeping--Applicators. Every applicator of methyl bromide 
produced or imported for quarantine and preshipment applications under 
the exemptions of this subpart must maintain, for every application, a 
document from the commodity owner, shipper or their agent requesting 
the use of methyl bromide citing the requirement that justifies its use 
in accordance with definitions in this subpart. These documents shall 
be retained for 3 years.
    (2) Reporting--Applicators. Every applicator who purchases or 
receives methyl bromide that was produced or imported for quarantine 
and preshipment applications under the exemptions in this subpart shall 
provide the distributor of the methyl bromide, prior to shipment, with 
a certification that the methyl bromide will be used only for 
quarantine applications or preshipment applications as defined in this 
subpart.
    (aa) Every commodity owner, shipper or their agent requesting an 
applicator to use methyl bromide that was produced or imported solely 
for quarantine and preshipment applications under the exemptions of 
this subpart must maintain a record for 3 years, for each request, 
certifying knowledge of the requirements associated with the exemption 
for quarantine and preshipment applications in this subpart and citing 
the requirement that justifies its use. The record must include the 
following statement: ``I certify knowledge of the requirements 
associated with the exempted quarantine and preshipment applications 
published in 40 CFR part 82, including the requirement that this letter 
cite the treatments or official controls for quarantine applications or 
the official requirements for preshipment requirements.''
* * * * *
0
8. Add Sec.  82.14 to read as follows:


Sec.  82.14  Process for electronic reporting.

    (a) Submissions of reports that are available to be submitted 
through the Central Data Exchange, import petitions, and certifications 
of intent to import ODS for destruction and any related supporting 
documents must be submitted electronically to EPA via the Central Data 
Exchange.
    (b) You can register and access the Central Data Exchange as 
follows:
    (1) Go to EPA's Central Data Exchange website at https://cdx.epa.gov and follow the links for the submission of ozone-depleting 
substances.
    (2) Call EPA's Central Data Exchange Help Desk at 1-888-890-1995.
    (3) Email the EPA's Central Data Exchange Help Desk at 
[email protected].
0
9. Amend Sec.  82.15 by:
0
a. Redesignating paragraphs (g)(5) and (g)(6) as (g)(6) and (g)(7), 
respectively; and
0
b. Adding paragraphs (b)(3), (g)(5) and (g)(8).
    The additions read as follows:


Sec.  82.15  Prohibitions for class II controlled substances.

* * * * *
    (b) * * *
    (3) Effective [date 30 days after effective date of final rule], no 
person may import for purposes of destruction, at any time in any 
control period, a class II controlled substance for which EPA has 
apportioned baseline production and consumption allowances, without 
having submitted a certification of intent to import for destruction to 
the Administrator and received a non-objection notice in accordance 
with

[[Page 41549]]

Sec.  82.24(c)(6). A person issued a non-objection notice for the 
import of an individual shipment of class II controlled substances for 
destruction may not transfer or confer the right to import, and may not 
import any more than the exact quantity (in kilograms) of the class II 
controlled substance stated in the non-objection notice. For imports 
intended to be destroyed in the U.S., a person issued a non-objection 
notice must destroy the controlled substance in the year cited in the 
non-objection letter, may not transfer or confer the right to import, 
and may not import any more than the exact quantity (in kilograms) of 
the class II controlled substance stated in the non-objection notice. 
Every kilogram of import of class II controlled substance in excess of 
the quantity stated in the non-objection notice issued by the 
Administrator in accordance with Sec.  82.24(c)(6) constitutes a 
separate violation of this subpart.
* * * * *
    (g) * * *
    (5) (i) Effective January 1, 2020, no person may introduce into 
interstate commerce or use HCFC-123 or HCFC-124 (unless used, recovered 
and recycled) for any purpose other than for use in a process resulting 
in its transformation or its destruction; for use as a refrigerant in 
equipment manufactured before January 1, 2020; for use as a fire 
suppression streaming agent listed as acceptable for use or acceptable 
subject to narrowed use limits for nonresidential applications in 
accordance with the regulations at subpart G of this part to the extent 
permitted under paragraph (ii) of this subsection; for export to 
Article 5 Parties under Sec.  82.18(a); as a transshipment or heel; or 
for exemptions permitted under paragraph (f) of this section.
    (ii) HCFC-123 that was produced or imported after January 1, 2020 
may be used as a fire suppression streaming agent only to service 
equipment manufactured before January 1, 2020. HCFC-123 that was 
produced or imported prior to January 1, 2020 (or used, recovered and 
recycled) may be used as a fire suppression streaming agent in 
equipment manufactured before or after January 1, 2020.
    (iii) Notwithstanding the prohibition on use in paragraph (g)(5)(i) 
of this section, the use of HCFC-123 as a refrigerant in equipment 
manufactured between January 1, 2020 and December 31, 2020 is permitted 
if the conditions of this paragraph are met. The HCFC-123 must be in 
the possession of an entity that will complete the manufacture of the 
appliance and imported prior to January 1, 2020. The appliance 
components must be ready for shipment to a construction location prior 
to July 24, 2019 and be specified in a building permit or a contract 
dated before July 24, 2019 for use on a particular project. All HCFC-
123 used to service such appliances on or after January 1, 2021 must be 
used, recovered, or recycled/reclaimed.
* * * * *
    (8) Effective [DATE 30 DAYS AFTER EFFECTIVE DATE OF FINAL RULE], no 
person may sell or distribute, or offer for sale or distribution, any 
class II substance that they know, or have reason to know, was imported 
in violation of this section, except for such actions needed to re-
export the controlled substance. Every kilogram of a controlled 
substance imported in contravention of this paragraph that is sold or 
distributed, or offered for sale or distribution, constitutes a 
separate violation of this subpart.
    10. Amend Sec.  82.16 by revising the tables in paragraph (a) and 
revising paragraph (e).


Sec.  82.16  Phaseout schedule of class II controlled substances.

    (a) Calendar-year Allowances. (1) In each control period as 
indicated in the following tables, each person is granted the specified 
percentage of baseline production allowances and baseline consumption 
allowances for the specified class II controlled substances apportioned 
under Sec.  82.17 and Sec.  82.19:

                                            Table 1 to Paragraph (a) Calendar-Year HCFC Production Allowances
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Percent of      Percent of      Percent of      Percent of      Percent of      Percent of      Percent of
             Control period                  HCFC-141b        HCFC-22        HCFC-142b       HCFC-123        HCFC-124       HCFC-225ca      HCFC-225cb
--------------------------------------------------------------------------------------------------------------------------------------------------------
2003....................................               0             100             100  ..............  ..............  ..............  ..............
2004....................................               0             100             100  ..............  ..............  ..............  ..............
2005....................................               0             100             100  ..............  ..............  ..............  ..............
2006....................................               0             100             100  ..............  ..............  ..............  ..............
2007....................................               0             100             100  ..............  ..............  ..............  ..............
2008....................................               0             100             100  ..............  ..............  ..............  ..............
2009....................................               0             100             100  ..............  ..............  ..............  ..............
2010....................................               0            41.9            0.47               0             125             125             125
2011....................................               0              32             4.9               0             125             125             125
2012....................................               0            17.7             4.9               0             125             125             125
2013....................................               0            30.1             4.9               0             125             125             125
2014....................................               0            26.1             4.9               0             125             125             125
2015....................................               0            21.7            0.37               0               5               0               0
2016....................................               0            21.7            0.32               0               5               0               0
2017....................................               0            21.7            0.26               0               5               0               0
2018....................................               0            21.7            0.21               0               5               0               0
2019....................................               0            21.7            0.16               0               5               0               0
2020....................................               0               0               0               0               8               0               0
2021....................................               0               0               0               0               8               0               0
2022....................................               0               0               0               0               8               0               0
2023....................................               0               0               0               0               7               0               0
2024....................................               0               0               0               0               6               0               0
2025....................................               0               0               0               0               5               0               0
2026....................................               0               0               0               0               4               0               0
2027....................................               0               0               0               0               3               0               0
2028....................................               0               0               0               0               2               0               0
2029....................................               0               0               0               0               1               0               0
2030....................................               0               0               0               0               0               0               0
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 41550]]


                                           Table 2 to Paragraph (a) Calendar-Year HCFC Consumption Allowances
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Percent of      Percent of      Percent of      Percent of      Percent of      Percent of      Percent of
             Control period                  HCFC-141b        HCFC-22        HCFC-142b       HCFC-123        HCFC-124       HCFC-225ca      HCFC-225cb
--------------------------------------------------------------------------------------------------------------------------------------------------------
2003....................................               0             100             100  ..............  ..............  ..............  ..............
2004....................................               0             100             100  ..............  ..............  ..............  ..............
2005....................................               0             100             100  ..............  ..............  ..............  ..............
2006....................................               0             100             100  ..............  ..............  ..............  ..............
2007....................................               0             100             100  ..............  ..............  ..............  ..............
2008....................................               0             100             100  ..............  ..............  ..............  ..............
2009....................................               0             100             100  ..............  ..............  ..............  ..............
2010....................................               0            41.9            0.47             125             125             125             125
2011....................................               0              32             4.9             125             125             125             125
2012....................................               0            17.7             4.9             125             125             125             125
2013....................................               0              18             4.9             125             125             125             125
2014....................................               0            14.2             4.9             125             125             125             125
2015....................................               0               7             1.7             100             8.3               0               0
2016....................................               0             5.6             1.5             100             8.3               0               0
2017....................................               0             4.2             1.2             100             8.3               0               0
2018....................................               0             2.8               1             100             8.3               0               0
2019....................................               0             1.4             0.7             100             8.3               0               0
2020....................................               0               0               0            32.3               8               0               0
2021....................................               0               0               0            32.3               8               0               0
2022....................................               0               0               0            32.3               8               0               0
2023....................................               0               0               0              28               7               0               0
2024....................................               0               0               0              24               6               0               0
2025....................................               0               0               0              20               5               0               0
2026....................................               0               0               0              16               4               0               0
2027....................................               0               0               0              12               3               0               0
2028....................................               0               0               0               8               2               0               0
2029....................................               0               0               0               4               1               0               0
2030....................................               0               0               0               0               0               0               0
--------------------------------------------------------------------------------------------------------------------------------------------------------

* * * * *
    (e)(1) Effective January 1, 2020, no person may produce HCFC-22 or 
HCFC-142b for any purpose other than for use in a process resulting in 
their transformation or their destruction, for export under Sec.  
82.18(a) using unexpended Article 5 allowances, or for exemptions 
permitted in Sec.  82.15(f). Effective January 1, 2020, no person may 
import HCFC-22 or HCFC-142b for any purpose other than for use in a 
process resulting in their transformation or their destruction, or for 
exemptions permitted in Sec.  82.15(f).
    (2) Effective January 1, 2020, no person may produce HCFC-123 for 
any purpose other than for use in a process resulting in its 
transformation or its destruction, for use as a refrigerant in 
equipment manufactured before January 1, 2020, for export under Sec.  
82.18(a) using unexpended Article 5 allowances, or for exemptions 
permitted in Sec.  82.15(f). Effective January 1, 2020, no person may 
import HCFC-123 for any purpose other than for use in a process 
resulting in its transformation or its destruction, for use as a 
refrigerant in equipment manufactured before January 1, 2020, for use 
as a fire suppression streaming agent in equipment manufactured before 
January 1, 2020 listed as acceptable for use or acceptable subject to 
narrowed use limits for nonresidential applications, or for exemptions 
permitted in Sec.  82.15(f).
* * * * *
0
11. Amend Sec.  82.23 by
0
a. Removing and reserving paragraph (a)(i)(F); and
0
b. Adding paragraphs (b)(1)(i) and (ii).
    The addition reads as follows:


Sec.  82.23  Transfers of allowances of class II controlled substances.

* * * * *
    (b) * * *
    (1) * * *
    (i) Effective January 1, 2020, a person (transferor) may only 
convert allowances for one class II controlled substance for which EPA 
has issued allowances under Sec.  82.16 to another class II controlled 
substance for which EPA has issued allowances under Sec.  82.16.
    (ii) [Reserved].
* * * * *
0
12. Amend Sec.  82.24 by:
0
a. Revising paragraphs (a)(1), (b)(2)(iv), (c)(3)(i)-(iii), (vi), 
(viii)-(xiii), (c)(4)(i)(A), (c)(4)(vii), and (d)(1) introductory text;
0
b. Removing and reserving paragraphs (b)(1)(iv), (ix), and (xi), 
(b)(2)(xii) and (xiv), (c)(1)(vi) and (xi), (c)(2)(xvi), (d)(2), and 
(g); and
0
c. Adding paragraphs (c)(6)-(10).
    The revisions and addition read as follows:


Sec.  82.24  Recordkeeping and reporting requirements for class II 
controlled substances.

    (a) * * *
    (1) Reports required by this section must be submitted to the 
Administrator within 45 days of the end of the applicable reporting 
period, unless otherwise specified. Starting [date 30 days after 
effective date of final rule], reports that are available for 
submission through the Central Data Exchange must be submitted 
electronically through that tool.
* * * * *
    (b) * * *
    (2) * * *
    (iv) Dated records of the quantity (in kilograms) of class II 
controlled substances produced with Article 5 allowances;
* * * * *
    (c) * * *
    (3) * * *
    (i) The name, commodity code and quantity (in kilograms) of the 
used class II controlled substance to be imported;
    (ii) The name and address of the importer, the importer ID number, 
the contact person, email address, and phone number;
    (iii) Name, address, contact person, email address, and phone 
number of all previous source facilities from which

[[Page 41551]]

the used class II controlled substance was recovered;
* * * * *
    (vi) Name, address, contact person, email address, and phone number 
of the exporter and of all persons to whom the material was transferred 
or sold after it was recovered from the source facility;
* * * * *
    (viii) A description of the intended use of the used class II 
controlled substance, and, when possible, the name, address, contact 
person, email address, and phone number of the ultimate purchaser in 
the United States;
    (ix) The name, address, contact person, email address, and phone 
number of the U.S. reclamation facility, where applicable;
    (x) If someone at the source facility recovered the class II 
controlled substance from the equipment, the name, email address, and 
phone number of that person;
    (xi) If the imported class II controlled substance was reclaimed in 
a foreign Party, the name, address, contact person, email address, and 
phone number of any or all foreign reclamation facility(ies) 
responsible for reclaiming the cited shipment;
    (xii) An English translation of an export license, or application 
for an export license, from the appropriate government agency in the 
country of export and, if recovered in another country, the export 
license from the appropriate government agency in that country, and 
quantity authorized for export in kilograms on the export license(s);
    (xiii) If the imported used class II controlled substance is 
intended to be sold as a refrigerant in the U.S., the name, address, 
and email address of the EPA-certified U.S. reclaimer who will bring 
the material to the standard required under subpart F of this part, if 
not already reclaimed to those specifications.
    (4) * * *
    (i) * * *
    (A) If the Administrator determines that the information is 
insufficient, that is, if the petition lacks or appears to lack any of 
the information required under paragraph (c)(3) of this section or 
other information that may be requested during the review of the 
petition necessary to verify that the controlled substance is used;
* * * * *
    (vii) A person receiving the non-objection notice is permitted to 
import the individual shipment only within one year of the date stamped 
on the non-objection notice.
* * * * *
    (6) Certification of Intent to Import for Destruction. For each 
individual shipment of a class II controlled substance imported with 
the intent to destroy that substance, an importer must submit 
electronically to the Administrator, at least 30 working days before 
the shipment is to leave the foreign port of export, the following 
information:
    (i) Name, commodity code, and quantity in kilograms of each 
controlled substance to be imported,
    (ii) Name and address of the importer, the importer ID number, and 
the contact person's name, email address, and phone number;
    (iii) The U.S. port of entry for the import, the expected date of 
shipment and the vessel transporting the chemical. If at the time of 
submitting the certification of intent to import for destruction the 
importer does not know the U.S. port of entry, the expected date of 
shipment and the vessel transporting the chemical, and the importer 
receives a non-objection notice for the individual shipment in the 
petition, the importer is required to notify the Administrator of this 
information prior to the U.S. entry of the individual shipment;
    (iv) Name, address, contact person, email address, and phone number 
of the responsible party at the destruction facility;
    (v) An English translation of an export license, or application for 
an export license, from the appropriate government agency in the 
country of export, and quantity authorized for export in kilograms on 
the export license(s);
    (vi) A certification of accuracy of the information submitted in 
the certification.
    (7) For each individual shipment of a class II controlled substance 
imported with the intent to destroy that substance, an importer must 
submit to the Administrator a copy of the destruction verification 
within 30 days after destruction of the controlled substance(s).
    (8) (i) Starting on the first working day following receipt by the 
Administrator of a certification of intent to import a class II 
controlled substance for destruction, the Administrator will initiate a 
review of the information submitted under paragraph (c)(6) of this 
section and take action within 30 working days to issue either an 
objection-notice or a non-objection notice for the individual shipment 
to the person who submitted the certification of intent to import the 
class II controlled substance for destruction.
    (ii) The Administrator may issue an objection notice if the 
petition lacks or appears to lack any of the information required under 
this subparagraph or for the reasons listed in Sec.  82.24(c)(4)(i)(B)-
(E).
    (iii) In cases where the Administrator does not object to the 
petition, the Administrator will issue a non-objection notice.
    (iv) To pass the approved class II controlled substances through 
U.S. Customs, the non-objection notice issued by EPA must accompany the 
shipment through U.S. Customs.
    (v) If for some reason, following EPA's issuance of a non-objection 
notice, new information is brought to EPA's attention which shows that 
the non-objection notice was issued based on false information, then 
EPA has the right to:
    (A) Revoke the non-objection notice;
    (B) Pursue all means to ensure that the class II controlled 
substance is not imported into the U.S.; and
    (C) Take appropriate enforcement actions.
    (9) A person receiving the non-objection notice is permitted to 
import the individual shipment only within one year of the date stamped 
on the non-objection notice.
    (10) A person receiving a non-objection notice from the 
Administrator for a certification of intent to import class II 
controlled substances for destruction must maintain the following 
records:
    (i) A copy of the certificate of intent to import for destruction;
    (ii) The EPA non-objection notice;
    (iii) A copy of the export license or export license application;
    (iv) U.S. Customs entry documents for the import that must include 
one of the commodity codes from Appendix K to this subpart;
    (v) The date, amount, and type of controlled substance sent for 
destruction, per shipment;
    (vi) An invoice from the destruction facility verifying the 
shipment was received; and
    (vii) A copy of the destruction verification from the destruction 
facility.
    (d) * * *
    (1) Reporting--Exporters. For any exports of class II controlled 
substances not reported under paragraph (b)(2) of this section 
(reporting for producers of class II controlled substances), each 
exporter who exported a class II controlled substance must submit to 
the Administrator the following information within 30 days after the 
end of each quarter in which the unreported exports left the U.S.:
* * * * *

[[Page 41552]]

0
13. Revise Appendix K to read as follows:

Appendix K to Subpart A of Part 82--Commodity Codes From the Harmonized 
Tariff Schedule for Controlled Substances and Used Controlled 
Substances

------------------------------------------------------------------------
                                                        Commodity code
        Description of commodity or chemical            from harmonized
                                                        tariff schedule
------------------------------------------------------------------------
Class II:
    HCFC-22 (Chlorodifluoromethane).................        2903.71.0000
    HCFC-123 (Dichlorotrifluoroethane)..............        2903.72.0020
    HCFC-124 (Monochlorotetrafluoroethane)..........        2903.79.1000
    HCFC-141b (Dichlorofluoroethane)................        2903.73.0000
    HCFC-142b (Chlorodifluoroethane)................        2903.74.0000
    HCFC-225ca, HCFC-225cb                                  2903.75.0000
     (Dichloropentafluoropropanes)..................
    HCFC-21, HCFC-31, HCFC-133, and other HCFCs.....        2903.79.9070
    HCFC Mixtures (R-401A, R-402A, etc.)............        3824.74.0000
Class I:
    CFC-11 (Trichlorofluoromethane).................        2903.77.0010
    CFC-12 (Dichlorodifluoromethane)................        2903.77.0050
    CFC-113 (Trichlorotrifluoroethane)..............        2903.77.0020
    CFC-114 (Dichlorotetrafluoroethane).............        2903.77.0030
    CFC-115 (Monochloropentafluoroethane)...........        2903.77.0040
    CFC-13, CFC-111, CFC-112, CFC-211, CFC-212, CFC-        2903.77.0080
     213, CFC-214, CFC-215, CFC-216, CFC-217, and
     other CFCs.....................................
    CFC Mixtures (R-500, R-502, etc.)...............        3824.71.0100
    Carbon Tetrachloride............................        2903.14.0000
    Halon 1301 (Bromotrifluoromethane)..............        2903.76.0010
    Halon, other....................................        2903.76.0050
    Methyl Bromide..................................        2903.39.1520
    Methyl Chloroform...............................        2903.19.6010
------------------------------------------------------------------------

0
14. Amend Sec.  82.62 by adding, in alphabetical order, the definition 
for ``polyurethane foam systems'' to read as follows:


Sec.  82.62  Definitions.

* * * * *
    Polyurethane Foam System means an item consisting of two transfer 
pumps that deliver ingredients (polyisocyanate or isocyanate from one 
side and a mixture including the blowing agent, catalysts, flame 
retardants, and/or stabilizers from the other side) to a metering/
mixing device which allows the components to be delivered in the 
appropriate proportions.
* * * * *
0
15. Amend Sec.  82.66 by:
0
a. Revising paragraphs (d)(2)(vi) and (e); and
0
b. Adding paragraph (f).
    The revisions and addition read as follows:


Sec.  82.66  Nonessential Class I products and exceptions.

* * * * *
    (d) * * *
    (2) * * *
    (vi) Document preservation sprays which contain CFC-113 as a 
solvent, but which contain no other CFCs, and/or document preservation 
sprays which contain CFC-12 as a propellant, but which contain no other 
CFCs, and which are used solely on thick books, books with coated or 
dense paper and tightly bound documents;
    (e) Any air-conditioning or refrigeration appliance as defined in 
CAA 601(l) that contains a Class I substance used as a refrigerant; and
    (f) Any polyurethane foam system that contains any CFC.
0
16. Amend Sec.  82.104 by revising paragraphs (c) and (h) introductory 
text to read as follows:


Sec.  82.104  Definitions.

* * * * *
    (c) Completely destroy means to cause the destruction of a 
controlled substance by one of the destruction processes approved by 
the Parties and listed in Sec.  82.3 of subpart A at a demonstrable 
destruction efficiency of 98 percent or more or a greater destruction 
efficiency if required under other applicable federal regulations.
* * * * *
    (h) Destruction means the expiration of a controlled substance to 
the destruction efficiency actually achieved, unless considered 
completely destroyed as defined in this section. Such destruction might 
result in a commercially useful end product but such usefulness would 
be secondary to the act of destruction. Destruction must be achieved 
using one of the controlled processes approved by the Parties and 
listed in the definition of destruction in Sec.  82.3 of subpart A.
* * * * *
0
17. Amend Sec.  82.106 by revising paragraph (a) to read as follows:

[[Page 41553]]

Sec.  82.106  Warning statement requirements.

    (a) Effective January 1, 2020, each container of fire suppression 
agent containing HCFC-123 produced or imported after that date shall 
bear the following warning statement, meeting the requirements of this 
subpart for placement and form:
    WARNING: Contains [insert name of substance], a substance which 
harms public health and environment by destroying ozone in the upper 
atmosphere. Do not use to service equipment manufactured on or after 
January 1, 2020.
* * * * *
0
18. Amend Sec.  82.270 by revising paragraph (e) introductory text to 
read as follows:


Sec.  82.270  Prohibitions.

* * * * *
    (e) Effective April 6, 1998, no person shall dispose of halon 
except by sending it for recycling to a recycler operating in 
accordance with NFPA 10 and NFPA 12A standards, or by arranging for its 
destruction using one of the controlled processes approved by the 
Parties and listed in the definition of destruction in Sec.  82.3 of 
subpart A.
* * * * *
[FR Doc. 2019-17018 Filed 8-13-19; 8:45 am]
BILLING CODE 6560-50-P