[Federal Register Volume 85, Number 52 (Tuesday, March 17, 2020)]
[Rules and Regulations]
[Pages 15258-15301]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-28020]
[[Page 15257]]
Vol. 85
Tuesday,
No. 52
March 17, 2020
Part II
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; Final Rule
Federal Register / Vol. 85 , No. 52 / Tuesday, March 17, 2020 / Rules
and Regulations
[[Page 15258]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 82
[EPA-HQ-OAR-2016-0271; FRL-10003-80-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: Final rule.
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SUMMARY: The U.S. Environmental Protection Agency is allocating
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
updating other requirements under the program for controlling
production and consumption of ozone-depleting substances, as well as
making edits to the regulatory text for improved readability and
clarity. These updates include revising the labeling requirements for
containers of specific hydrochlorofluorocarbons; prohibiting the
transfer 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 controlled ozone-depleting substances; revising and
removing recordkeeping and reporting requirements; improving the
process for petitioning to import used ozone-depleting substances for
reuse, including by creating more flexibility for imports of used halon
from certain halon banks and exempting imports of aircraft bottles
containing halon 1211 for hydrostatic testing from the petition
process; creating a certification process for importing both used and
virgin ozone-depleting substances for destruction; and restricting the
sale of known illegally imported substances. This rule includes
clarifications to the certification requirements for methyl bromide
quarantine and preshipment uses. The EPA is also adding polyurethane
foam systems containing ozone-depleting chlorofluorocarbons to the list
of nonessential products. Lastly, the Agency is updating the definition
of ``destruction'' as used in the context of the production and
consumption phaseout and removing obsolete provisions.
DATES:
Effective Dates: Amendatory instructions 9 and 11 are effective on
March 17, 2020. Amendatory instructions 2 through 8, 10 and 12 through
20 are effective April 16, 2020.
Operational Dates: For operational purposes under the Clean Air
Act, the amendments to 40 CFR 82.15(g)(5) through (7) and 82.16 are
effective as of December 19, 2019 and the amendments to 40 CFR 82.3,
82.4, 82.9, 82.10, 82.12, 82.13, 82.14, 82.15(b), 82.15(g)(8), 82.23,
82.24, appendix K to subpart A of part 82, 82.62, 82.64, 82.66, 82.104,
82.106, and 82.270 are effective as of April 16, 2020.
ADDRESSES: The EPA has established a docket for this action under
Docket ID No. EPA-HQ-OAR-2016-0271. All documents in the docket are
listed on the www.regulations.gov website. Although listed in the
index, some information is not publicly available, e.g., confidential
business information or other information whose disclosure is
restricted by statute. Certain other material, such as copyrighted
material, is not placed on the internet and will be publicly available
only in hard copy form. All other publicly available docket materials
are available electronically through www.regulations.gov.
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:
Effective Dates. Portions of this rule are effective less than 30
days from publication in the Federal Register. Section 553(d) of the
Administrative Procedure Act (APA), 5 U.S.C. chapter 5, generally
provides that rules may not take effect earlier than 30 days after they
are published in the Federal Register. This rule constitutes ``the
promulgation or revision of regulations under subchapter VI of [the
CAA] (relating to stratosphere and ozone protection)'' and as such it
is covered by the rulemaking procedures in section 307(d) of the Clean
Air Act (CAA). See CAA section 307(d)(1)(I). Section 307(d)(1) of the
CAA states that: ``The provisions of section 553 through 557 . . . of
Title 5 shall not, except as expressly provided in this section, apply
to actions to which this subsection applies.'' Thus, section 553(d) of
the APA does not apply to this rule. The EPA is nevertheless acting
consistently with the policies underlying APA section 553(d) in making
a portion of the revisions finalized in this rule effective
immediately, while the remainder of the rule will be effective 30 days
after publication. APA section 553(d) allows an effective date less
than 30 days after publication for any rule that ``grants or recognizes
an exemption or relieves a restriction'' (see 5 U.S.C. 553(d)(1)). The
purpose of the general rule in Section 553(d) of the CAA that 30 days
must be provided between publication and the effective date is to
``give affected parties a reasonable time to adjust their behavior
before the final rule takes effect.'' Omnipoint Corp. v. Fed. Commc'n
Comm'n, 78 F.3d 620, 630 (D.C. Cir. 1996); see also United States v.
Gavrilovic, 551 F.2d 1099, 1104 (8th Cir. 1977) (quoting legislative
history). However, when the Agency grants or recognizes an exemption or
relieves a restriction, affected parties do not need a reasonable time
to adjust because the effect is not adverse.
The EPA has determined that portions of this rule that are
effective fewer than 30 days from publication in the Federal Register
relieve a restriction because those revisions allocate allowances for
the production and consumption of HCFC-123 and HCFC-124 for the years
2020 through 2029, giving affected entities greater flexibility to
produce and consume these HCFCs, and, because the allowances being
allocated include allowances for calendar year 2020, ensure the
allowances will be available to producers and consumers of these HCFCs
to allow for continued production and import of these HCFCs in 2020.
The EPA has also determined that certain other portions of this
rule that are effective fewer than 30 days from publication in the
Federal Register grant or recognize an exemption or relieve a
restriction because these revisions would allow for the import and use
of HCFC-123 for servicing fire suppression equipment manufactured
before January 1, 2020, as well as allow the use of HCFC-123 as a
refrigerant in equipment manufactured on or after January 1, 2020 but
before January 1, 2021 under certain conditions. These revisions also
remove an obsolete requirement and thus relieve the
[[Page 15259]]
restrictions associated with that requirement.
Accordingly, it is in keeping with the policy underlying the APA
for the regulatory amendments to 40 CFR 82.15(g)(5) through (7) and
82.16 to take effect immediately. Finally, this CAA section 307(d) rule
is promulgated upon signature and widespread dissemination. For
operational purposes under the CAA, the EPA is making the amendments to
40 CFR 82.15(g)(5) through (7) and 82.16 and the corresponding portions
of the preamble effective as of December 19, 2019 which is the date of
signature.
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
EIA--Environmental Investigation Agency
EPA--Environmental Protection Agency
FAA--Federal Aviation Administration
FR--Federal Register
GPEA--Government Paperwork Elimination Act
HARC--Halon Alternatives Research Corporation
HCFC--Hydrochlorofluorocarbon
HRC--Halon Recycling Corporation
HTSA--Harmonized Tariff Schedule of the United States Annotated
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
QPS--Quarantine and Preshipment
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 action apply to me?
B. What action is the Agency finalizing?
C. What is the Agency's authority for this action?
D. What are the incremental costs and benefits of this action?
II. Background
III. Final Rule and Response to Comments
A. Allocation of HCFC Allowances for the Years 2020 Through 2029
B. Allocation of HCFC-123 Consumption Allowances
C. De minimis Exemption for the Use of HCFC-123 in Chillers
D. Addition of Fire Suppression Servicing Uses to the HCFC
Phaseout Schedule
E. Revisions to Labeling Requirements
F. Allocation of HCFC-124 Production and Consumption Allowances
G. Changes To Transfer of Allowance Provisions in 40 CFR 82.23
H. Changes To Import Requirements
I. Electronic Reporting and Updates to Other Provisions of the
Production and Consumption Control Program
J. Addition of Polyurethane Foam Systems Containing CFCs to the
Nonessential Products Ban
K. Updates to 40 CFR 82.3, 82.104, and 82.270 Related to
Destruction
L. Removal of Obsolete Provisions in 40 CFR 82.3, 82.4, 82.9,
82.10, 82.12, 82.13, 82.16, and 82.24
M. Other Comments Not Related to the Proposal
IV. Economic Analysis
V. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
B. Executive Order 13771: Reducing Regulations and Controlling
Regulatory Costs
C. Paperwork Reduction Act (PRA)
D. Regulatory Flexibility Act (RFA)
E. Unfunded Mandates Reform Act (UMRA)
F. Executive Order 13132: Federalism
G. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
H. Executive Order 13045: Protection of Children From
Environmental Health and Safety Risks
I. Executive Order 13211: Actions That Significantly Affect
Energy Supply, Distribution, or Use
J. National Technology Transfer and Advancement Act (NTTAA)
K. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
L. Congressional Review Act
I. General Information
A. Does this action apply to me?
You may be potentially affected by this final action if you
manufacture, process, import, or distribute into commerce certain
ozone-depleting substances (ODS) and mixtures. 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. Potentially affected entities may include but are not
limited to:
Air-Conditioning and Warm Air Heating Equipment and
Commercial and Industrial Refrigeration Equipment Manufacturing
(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. 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 finalizing?
The EPA is finalizing a number of revisions to the production and
consumption control program for ODS \1\
[[Page 15260]]
in 40 CFR part 82, subpart A, which are divided into ``class I'' and
``class II'' substances. The EPA is finalizing, as proposed (see 84 FR
41510, August 14, 2019), the allocations of annual allowances for
hydrochlorofluorocarbon (HCFC)-123 and HCFC-124 for the years 2020
through 2029 to be used for servicing certain equipment manufactured
before January 1, 2020.
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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.'' Section 602 of the 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 EPA
did not propose, nor is it finalizing, any changes to these lists in
this rulemaking. 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 HCFCs.
Table 1--Final HCFC-123 and HCFC-124 Allowance Allocation, 2020 through 2030
[MT]
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2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
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HCFC-123.................. Consumption.............. 650 650 650 570 490 410 330 250 170 90 0
Production............... 0 0 0 0 0 0 0 0 0 0 0
HCFC-124.................. Consumption.............. 200 200 200 175 150 125 100 75 50 25 0
Production............... 200 200 200 175 150 125 100 75 50 25 0
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For HCFC-123 and HCFC-124 allowances, the EPA identified a total
number of allowances to be allocated and then determined calendar-year
allowances equal to a percentage of each company's baseline.\2\
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\2\ The percentage of baseline allowances to be allocated for
each HCFC is determined as follows: All the company-specific
consumption baselines (listed in the table at 40 CFR 82.19) are
added to determine the aggregate amount of consumption baseline. The
total number of consumption allowances to be allocated in a given
year are then divided by the aggregate amount of baseline
consumption allowances. The same process is followed to determine
the percentage for production allowances using the company-specific
baselines listed in the table at 40 CFR 82.17.
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The EPA is revising subpart A, as proposed, to add servicing of
existing ``fire suppression equipment'' to the authorized uses of newly
produced or imported (i.e., virgin) quantities of HCFC-123 and HCFC-124
during the years 2020 through 2029. To facilitate compliance, the EPA
is finalizing, with minor modifications from the proposal, the labeling
requirements for containers of fire suppression agent containing HCFC-
123 in subpart E. To align with existing regulations \3\ that prohibit
the production and import of phased-out HCFCs, in particular HCFC-22,
the Agency is finalizing its proposal to modify the inter-pollutant
allowance transfer provisions authorized by section 607 of the CAA to
prohibit transfers into ODS that are already phased out. The Agency is
also finalizing as proposed the de minimis exemption from the use
prohibition in section 605(a) of the CAA to allow virgin HCFC-123 to be
used for the manufacture, through December 31, 2020, of chillers that
meet specific criteria.
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\3\ The EPA is using the term ``existing regulations'' to
describe those regulations that were in place prior to this final
rule.
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For changes to the import of ODS, the EPA is finalizing changes to
the process for petitions to import used ODS for reuse that will meet
the Agency's goals of reducing the burden on importers while ensuring
the Agency has adequate information to verify that the material being
imported is used, as well as making other modifications to this process
as proposed. Such changes require collection of additional information
when the EPA needs additional verification to make a determination
whether the material has been previously used in considering petitions
to import used ODS for reuse. Other changes remove data elements that
are no longer necessary. Of particular note, the Agency is: (1)
Reducing the information requirements when importing halon from a
``halon bank'' so long as the EPA receives an official letter from the
appropriate government agency in the country where the material is
stored that indicates that the halon is used and that the halon bank is
authorized to collect used halon; (2) allowing submission of an
application for an export license or an official government
communication from the appropriate government agency in the country of
export in lieu of the license itself; (3) clarifying that the Agency
will request additional information when additional verification is
needed before issuing a non-objection notice, and (4) providing
flexibility for the timing of import.
The Agency is also finalizing changes, with limited modification
from the proposal, to establish a new certification process for the
import of ODS (used and virgin) for destruction in the United States.
This new process requires importers of ODS to provide less information
on the source of the material than when petitioning to import for
reuse, but requires more information on the chain of custody and
submission of verification that the imported material is destroyed
after destruction has occurred.
The EPA is exempting imports of aircraft bottles containing halon
1211, a potent ODS used as a fire suppression streaming agent, for
hydrostatic testing from the import petition process to make it easier
for companies to service fire suppression equipment, which promotes
proper maintenance of these bottles and prevents the emission of halon
1211.
The Agency is prohibiting 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.
The EPA is also finalizing as proposed other updates to the
production and consumption control program, including requiring the use
of an electronic reporting system for producers, importers, exporters,
transformers, and destroyers of ODS in 40 CFR 82.3, 82.13, 82.14,
82.23, and 82.24 and clarifying the certification requirements for
methyl bromide quarantine and Preshipment (QPS) uses in 40 CFR 82.4 and
82.13. The EPA is also finalizing the addition of polyurethane foam
systems containing chlorofluorocarbons (CFCs) to the list of
nonessential products. This rule also updates provisions in 40 CFR
82.3, 82.104, and 82.270 related to destruction technologies and the
definition of ``destruction'' as used in the context of the production
and consumption phaseout. Lastly, the EPA is removing outdated and
obsolete provisions related to the allocation and transfer of class I
ODS credits and allowances, and the associated recordkeeping and
reporting requirements, that are no longer in use in subpart A.
[[Page 15261]]
C. What is the Agency's authority for this action?
Several sections of the CAA \4\ provide authority for the actions
finalized by the EPA in this 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 on Substances that
Deplete the Ozone Layer (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 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 is provided in prior EPA actions (see 58 FR 65018, December
10, 1993 and 68 FR 2820, January 21, 2003).
D. What are the incremental costs and benefits of this action?
The EPA considered the incremental costs and benefits associated
with this rulemaking, which primarily stem from changes to reporting
and recordkeeping requirements. This action requires electronic
submissions through the Agency's Central Data Exchange (CDX), creates a
streamlined Certification of Intent to Import ODS for Destruction,
exempts halon 1211 in aircraft bottles from the import petitions
process, and adds a recordkeeping requirement for certain distributors
of methyl bromide for QPS applications. The EPA estimates the overall
annual cost savings to reporters as a result of reductions in reporting
elements, streamlining forms, and added efficiencies to be
approximately $13,000 per year. The EPA also estimates a one-time cost
of approximately $4,000 to redesign labels on containers of fire
suppression agents. In addition, the EPA performed a screening analysis
of the impact on small businesses and found that there will be no
additional costs imposed on them. See the docket for the screening
analysis on small business. A more detailed discussion is included in
Section IV.
II. Background
The United States was one of the original signatories to the
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, among others.
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 percent 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/treaties/montreal-protocol/amendments/copenhagen-amendment-1992-amendment-montreal-protocol-agreed.
\7\ Consumption is defined in 40 CFR 82.3 as production plus
imports minus exports of a controlled substance (other than
transshipments or used controlled substances). Production is defined
in 40 CFR 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 earlier phaseout of certain
chemicals with higher ozone depletion potential (ODP). 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 (see 58 FR 15014, March 18, 1993 and 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 production
allowances to producers of specific ODS. To control consumption,\9\ the
EPA allocated 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
[[Page 15262]]
I substances (CFCs, methyl chloroform, carbon tetrachloride, and
halons) ended by 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)(b)(2), 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 the controlled substance for a given control period. A
calendar-year allowance represents the privilege granted to a company
to produce or import one kilogram (not ODP-weighted) of the specific
controlled 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 virgin HCFCs without allowances are
prohibited except for transformation, destruction, transshipments, or
heels (40 CFR 82.15(a) and (b)).
Under the chemical-by-chemical phaseout schedule for HCFCs
established by EPA regulations, as discussed above, the EPA stopped
allocating production and consumption allowances for HCFC-141b as of
2003; for HCFC-225ca/cb as of 2015; and for HCFC-22 and HCFC-142b as of
2020. The Montreal Protocol, the CAA, and the EPA regulations under 40
CFR part 82, subpart A, limit the permissible uses of newly produced or
imported quantities of the remaining HCFCs (HCFC-123 and HCFC-124).
Section 605(a) of the CAA makes it unlawful, starting January 1, 2015
to introduce into interstate commerce or use any virgin HCFCs unless
they are used as a refrigerant in appliances manufactured prior to
January 1, 2020, or are listed as acceptable for use as a fire
suppression agent for nonresidential applications in accordance with
section 612 of the CAA. In addition, prior to November 2018, Article 2F
of the Montreal Protocol provided that the only permissible uses of
HCFCs after January 1, 2020 were for the servicing of refrigeration and
air-conditioning equipment existing on January 1, 2020. In a November
2018 adjustment to Article 2F, servicing of fire suppression and fire
protection equipment existing on January 1, 2020 was added as an
additional permissible use. Section 614(b) of the CAA also provides
that in the case of a conflict between any provision of the CAA and any
provision of the Montreal Protocol, the more stringent provision shall
govern. In sum, the combination of the CAA and the Montreal Protocol
establish that the permissible uses of HCFCs after January 1, 2020 will
be limited to servicing refrigeration, air-conditioning, and fire
suppression equipment existing on January 1, 2020.
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 Title VI phaseout regulations that reduce the number of
allowances allocated over time is a central component of the United
States' approach for protecting stratospheric ozone. 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 (see 79 FR
64254, October 28, 2014). In that action, the EPA further implemented
the provisions in section 605(a) of the CAA that limit production and
consumption to servicing refrigeration and air-conditioning appliances
and for use in fire suppression applications. That document provides
additional discussion of the history of the phaseout of HCFCs.
III. Final Rule and Response to Comments
This section describes the rationale for the final actions taken in
this rulemaking, summarizes and responds to the comments received on
the proposal, and explains differences between the proposed rule and
this final action.
A. Allocation of HCFC Allowances for the Years 2020 Through 2029
This section describes the factors that the EPA considered in
developing its approach for issuing HCFC allowances for the next
regulatory period that extends from 2020 through 2029. Additional
relevant discussion is included in other portions of section III.
Specifically, section III.B. provides more information on allowance
allocations for HCFC-123 and section III.C. provides more information
on allowance allocations for HCFC-124. As explained below, the EPA's
allocation methodologies are consistent with the CAA, EPA regulations,
and the obligations of the United States under the Montreal Protocol,
and were supported by most commenters.
HCFC-123 and HCFC-124 are the two HCFCs not already slated for
phaseout in the United States by 2020 under the ``worst-first
approach'' described in the previous section. These HCFCs are currently
used in the refrigeration, air-conditioning, and fire suppression
sectors. The use of newly produced or imported quantities of these
HCFCs is limited under the Montreal Protocol, the CAA, and the EPA's
regulations. The EPA is relying on its authority under section 605(c)
of the CAA to promulgate regulations phasing out the production and
restricting the use of class II substances, subject to previous
accelerations under section 606 (see 58 FR 65018, December 19, 1993 and
74 FR 66411, December 15, 2009). The EPA is making limited changes to
the provisions 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 of the CAA and
[[Page 15263]]
obligations of the United States under the Montreal Protocol.
As stated in the proposal, the EPA considered a number of factors
when developing an approach to allocating allowances for HCFC-123 and
HCFC-124 for the years 2020 through 2029 including existing company-
specific production and consumption baselines listed in 40 CFR 82.17
and 82.19; the Agency's worst-first approach; the remaining permissible
uses of HCFCs under section 605(a) of the CAA and the availability of
alternatives for those uses; the quantity needed to meet the estimated
servicing demand for each permissible use; the estimated quantity of
HCFCs that will be available from recycling, reclamation, and potential
stockpiling 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. Further, the Agency has considered
public comments on prior drafts of the report in the docket titled The
U.S. Phaseout of HCFCs: Projected Servicing Demand in the U.S. Air
Conditioning, Refrigeration, and Fire Suppression Sectors (2020-2030),
December 2019, hereafter referred to as the 2019 Final Servicing Tail
Report, and on the proposed allocation amounts and approaches, as
discussed below and in other parts of section III.
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\12\ EPA. 2019. The U.S. Phaseout of HCFCs: Projected Servicing
Demand in the U.S. Air Conditioning, Refrigeration, and Fire
Suppression Sectors (2020-2030).
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For HCFC-123 and HCFC-124 allowances, the EPA identified a total
number of allowances to be allocated. These amounts are presented in
Table 1 in Section I.B. above and match the proposed allowance
allocations. Each company's calendar-year allowances are then
calculated as a percentage of each company's baseline. Tables
identifying the percentage of baseline production and consumption
allowances allocated appear in 40 CFR 82.16(a). As noted, the EPA
considered several factors when developing an approach to allocating
allowances for HCFC-123 and HCFC-124. The first factor the EPA
considered 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 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 2019 Final Servicing Tail Report, the
EPA considered the estimated quantity of HCFC-123 and HCFC-124 that
will be available from recycling, reclamation, and potential
stockpiling in advance of the 2020 phaseout step. The EPA also
considered the availability of alternatives 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 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 as well as in the refrigeration and air-
conditioning sector, making a variety of allocation options practicable
for the years 2020 through 2029.
As noted previously, in addition to the statutory provisions in
section 605 of the CAA, 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. These
regulations can be found in 40 CFR 82.16. Consistent with that
approach, the EPA is issuing 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.
In 2020, the consumption cap of the United States for all HCFCs is
0.5 percent of the U.S. baseline, which equates to 76.2 ODP-weighted
metric tons that could be available for servicing.\13\ 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 40 CFR 82.16. The
consumption baseline is 2,014 MT (40 ODP-weighted MT) of HCFC-123 and
2,396 MT (53 ODP-weighted MT) of HCFC-124. Section 605(c) of the CAA
thus prohibits the EPA from allocating allowances above that amount for
each chemical. Consumption allowances are allocated to the entities
listed in 40 CFR 82.19.
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\13\ 76.2 ODP-weighted metric tons is the equivalent of 3,810 MT
of HCFC-123, if completely allocated to HCFC-123, and 3,464 MT of
HCFC-124, if completely allocated to HCFC-124.
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In finalizing this action, the EPA considered the quantities of
HCFC-123 and HCFC-124 needed to service equipment manufactured before
2020. These estimates are discussed in the 2019 Final Servicing Tail
Report, which is available in the docket. The final report and
allocations are based on demand projections contained in the EPA's
Vintaging Model,\14\ recent market research, discussions with industry
on current HCFC uses and trends, the expected availability of
recovered, recycled/reclaimed, and reused material, and consideration
of comments offered on the report during the public comment period on
this rulemaking, as described below. The Agency made the April 2018
draft report available on its website and in the docket along with a
Notice of Data Availability (see 83 FR 19757, May 4, 2018) and
requested comment on the data and assumptions in the report. The EPA
did not receive any comments on the draft report. As a result of the
adjustment to Article 2F of the Montreal Protocol, the EPA revised the
2018 Draft Servicing Tail Report to reflect the demand for servicing
fire suppression equipment manufactured before January 1, 2020 and
disaggregated 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[hyphen]123 fire suppression applications. At the time the 2019
Draft Servicing Tail Report was published in August 2019, total demand
(the manufacture of new equipment and the servicing of existing
equipment)
[[Page 15264]]
over the past several years had varied, but the average was
approximately 260 MT per year. The EPA expected the demand for fire
suppression servicing to be 35 to 90 MT per year based on projections
\15\ from the Vintaging Model and feedback from industry.
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\14\ The EPA's Vintaging Model estimates the annual chemical
emissions from industry sectors that historically used ODS,
including refrigeration and air-conditioning 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.
\15\ EPA. 2019. The U.S. Phaseout of HCFCs: Projected Servicing
Demand in the U.S. Air Conditioning, Refrigeration, and Fire
Suppression Sectors (2020-2030), Table 5.
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In the notice of proposed rulemaking for this action, the EPA
sought comment on all aspects of the 2019 Draft Servicing Tail Report,
including the projections for the fire suppression sector. The Agency
received comments on the total demand for fire suppression during the
comment period and has updated the report accordingly. The Agency also
updated the reclamation and consumption values in the report to reflect
the data reported for 2018.
The last factor the EPA considered is the statutory 2030 phaseout
date for production and import of HCFCs, with limited exceptions, under
section 605(b)(2) and (c) of the CAA. In 2030, HCFC-123 and HCFC-124
must be phased out completely. As in prior phaseout steps for other
HCFCs, the Agency's intent is to accomplish the statutory 2030 phaseout
in a manner that achieves a safe and smooth transition to alternatives
without stranding equipment. The EPA's goal is to allow equipment
owners to continue servicing their HCFC-123 and HCFC-124 equipment
throughout its expected lifetime. Experience with the HCFC-22 phaseout
indicates that gradually decreasing allocation levels is a better
approach than an abrupt cessation of allowances at the phaseout date,
as it provides time and the right market signals for equipment owners
to plan investments and transition to alternatives while also fostering
recovery, recycling, and reclamation of HCFCs.
B. Allocation of HCFC-123 Consumption Allowances
This section describes the EPA's proposal for annual HCFC-123
allocations, comments received on the proposal, the Agency's responses
to those comments, and the final allocations for HCFC-123 in 2020
through 2029.
The Agency proposed to issue consumption allowances for HCFC-123
for years 2020 through 2022 equal to the estimated 2020 demand for
servicing existing refrigeration and air-conditioning and fire
suppression equipment. The EPA proposed to then decrease the number of
allowances issued in each subsequent year by an equal amount such that
there would be zero allowances in 2030. The EPA explained that this
allocation approach would meet the full estimated servicing demand in
2020 with newly imported HCFC-123 and the full estimated servicing
demand in 2030 with reclaimed HCFC-123. The EPA also explained that
allocating at the full estimated level of servicing demand in 2020 (650
MT \16\) for the years 2020 through 2022 would allow time for the
reclamation market to increase sales to the fire suppression sector.
Currently, the reclamation market primarily services the refrigeration
and air conditioning sector. Allocating above estimated demand for the
years 2021 and 2022 (see the demand estimates in the 2019 Final
Servicing Tail Report) will ensure supply for servicing existing
refrigeration and air-conditioning, and fire suppression equipment
while that transition occurs.
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\16\ Equivalent to 13 ODP-weighted MT.
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The EPA also sought comment on two alternative approaches for
determining how many HCFC-123 consumption allowances to issue. The
first alternative approach would have issued 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 allocation amounts which, as explained above, were not
directly based on demand for the manufacture of new equipment using
reclaimed HCFC-123 or the availability of reclaimed HCFC-123 and did
not subtract allocations based on projections for reclamation as was
proposed in Alternative 1. The Agency determined that reclaimed HCFC-
123 could meet the demand for new fire suppression equipment, while
also eventually providing HCFC-123 for servicing existing equipment.
See Table 8 of the 2019 Draft Servicing Tail Report for more discussion
of estimated reclamation.
The EPA also sought comment on a second alternative approach under
which the EPA would issue 2,014 MT of HCFC-123 consumption allowances
for each of the years 2020 through 2029. This is equal to 100 percent
of the aggregate consumption baseline 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 U.S. consumption cap allowed
under the Montreal Protocol for HCFC-123 (40.3 ODP-weighted MT per year
compared to 76.2 ODP-weighted MT).
The EPA also proposed to issue zero production allowances for the
years 2020 through 2029 because no companies produced HCFC-123
production in the baseline years of 2005 through 2007 (see 74 FR 66431,
December 15, 2009). 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.
(1) Summary of and Response to Comments on the HCFC-123 Allocation
The EPA received supportive comments on the proposed allocation
amount from Ingersoll Rand, a stationary air-conditioning manufacturer;
National Refrigerants, a refrigerant distributor; Halon Alternatives
Research Corporation (HARC), a non-profit trade association; and an
anonymous commenter. Several commenters state that the proposal
accurately reflects the amount of HCFC-123 needed for servicing
refrigeration and air-conditioning and fire suppression equipment, the
availability of reclaimed HCFC-123, and the amount of market demand.
Hudson suggests that the Agency should reduce the allocation below the
amounts in Alternative 1 and decrease each year as opposed to staying
static in the first three years. The Environmental Investigation Agency
(EIA), an environmental non-profit, also supports an allocation below
Alternative 1, and another comment from a private citizen does not
support an allocation for any HCFC production or consumption. American
Pacific, the manufacturer of Halotron[supreg] I, a fire suppression
agent blend containing HCFC-123, is supportive of allocating the
maximum amount allowable under the CAA, consistent with Alternative 2
in the proposal. These comments and the Agency's responses are
described in detail below.
(2) Comments in Support of a Lower Allocation
The EPA received comments that were supportive of a lower
allocation. Hudson and EIA note that allocation levels could be lower
considering the supply of reclaimed material. Hudson specifically notes
that based on the 2019 Draft Servicing Tail Report, total demand for
HCFC-123 could be met with Alternative 1. These commenters suggest the
EPA should adopt a schedule that is more aggressive than
[[Page 15265]]
Alternative 1 because the reclamation industry can provide 300 MT of
HCFC-123 annually. They note that the reclamation industry has supplied
nearly 85 percent of the estimated 300 MT volume over the past two
years. Furthermore, Hudson states that the reclamation industry does
not need any transition time to enter the fire suppression market
because the industry is already servicing that market, and an
accelerated schedule will spur the growth of reclamation and ensure
more than adequate supply of HCFC-123 for both the refrigeration and
air-conditioning and fire suppression markets. EIA also supports a
lower allocation, noting that the supply of reclaimed HCFC-123 ranging
from 180 to 270 MT annually over the past several years could allow the
EPA to reduce allocations by 200 MT below expected demand to 450 MT,
and then reduce by 45 MT annually until reaching zero in 2030. Both
commenters note an allocation at or below Alternative 1 would be
beneficial to the reclamation industry and the environment.
The EPA disagrees with commenters that the Agency should finalize a
lower allocation than proposed. Starting the allocation levels below
the estimated level of demand for servicing both fire suppression and
refrigeration and air-conditioning equipment could strand serviceable
fire suppression equipment or hinder the manufacture of new fire
suppression equipment in the near term. Even though reclaimed and
stockpiled HCFC-123 will be available in 2020, the primary concern is
whether there is enough HCFC-123 for both near and longer term fire
suppression and refrigeration and air-conditioning needs. Historically,
the refrigeration and air-conditioning sector utilized the majority of
that material as the historic practice of reclaimers and importers is
to sell the ODS to refrigerant distributors. Based on their comment, we
understand that Hudson may sell some reclaimed material to the fire
suppression sector. However, that does not appear to be the norm among
reclaimers. The Agency is concerned that decreasing the allocation too
soon might not provide time for a broader fire suppression sector
transition to reclaimed material for new systems as well as servicing.
This could lead to shortages of HCFC-123 for fire suppression uses
because, as discussed above, after January 1, 2020, recovered and
recycled or reclaimed HCFC-123, as well as material stockpiled prior to
2020, is the only material that can be used to meet demand for new fire
suppression equipment. Starting with allocation levels at the estimated
level of demand for servicing both fire suppression and refrigeration
and air-conditioning equipment means that imported HCFC-123 can be used
to satisfy the servicing needs for existing equipment, making it more
likely that reclaimed and stockpiled HCFC-123 will be available for the
manufacture of new fire suppression equipment.
The EPA anticipates that the market for reclaimers and others
involved in recovering used ODS for fire suppression purposes will
change in the near future and may resemble the market for used halons
to some extent given both halons and the blend of HCFC-123 are used in
the fire suppression sector. While halon production and consumption
were phased out in the United States in 1994 and globally in 2010,
halon is still available for new equipment (e.g., for new aircraft and
Aircraft Rescue and Fire Fighting (ARFF) vehicles). Eventually,
domestic recovery and reclamation of HCFC-123 combined with imports of
used and/or recycled HCFC-123 should meet demand potentially similar to
how the demand for halon in the United States is met through transition
to alternatives, successful management of halon banks, and imports
under the petition process for used ODS (see 40 CFR 82.13(g)(2) and
82.24(c)(3)). Ultimately, the EPA anticipates that like other ODS
sectors, alternatives will be available for all applications that
currently use halons and HCFCs. However, the fire suppression sector
will benefit from the proposed level of allocation which recognizes the
near-term changes to the market will be underway in 2020-2022.
Therefore, it would not be prudent to base the allocation on the
maximum amount of estimated reclamation in the early years or to
decrease the allocation to zero too quickly. The fact the 2018 reclaim
amount (240 MT) was lower than the 2017 reclaim amount (270 MT) further
supports the Agency's determination that it is appropriate to provide
the proposed level of allocation which is higher than Alternative 1 for
the years 2020 through 2022. The EPA recognizes the necessity of
reclaimed HCFCs to meet demand entirely after 2030 and therefore the
final allocation level for HCFC-123 is less than the estimated level of
servicing demand starting in 2023. In the longer term, this allocation
sends appropriate market signals for a smooth and orderly transition by
reducing the allocation after 2022 and completely phasing out the
import of virgin HCFC-123 in 2030.
(3) Comments in Support of a Higher Allocation and Other Comments on
the Proposed Allocation
American Pacific supports a higher initial allocation of allowances
and no decrease in allocation level. The commenter asks that the Agency
consider the total demand for Halotron[supreg] I and notes their
concern that the proposed allocation is too low and could strand
existing equipment. American Pacific suggests that the EPA allocate the
maximum allowable number of consumption allowances for HCFC-123--an
approach presented as Alternative 2 in the proposal. American Pacific
asserts that the allocation of 2,014 MT per year during the period 2020
through 2029 is warranted because Halotron[supreg] I has gained more
acceptance as a lower ODP replacement to halon 1211 in fire suppression
equipment, particularly in wheeled units. American Pacific states that
it will continue to manufacture new fire suppression equipment with
reclaimed and stockpiled material, and asserts that the estimated total
demand for fire suppression as represented in the 2019 Draft Servicing
Tail Report, at 260 MT is an underestimate. The commenter states that
the total demand was over 300 MT in 2018 and that they expect demand in
2019 to be an additional 10 percent higher. American Pacific also
asserts that the EPA's estimate of 90 MT of fire suppression servicing
demand is low. For these reasons, they argue that annual allocation
levels should start at 2,014 MT and be kept constant from 2020 through
2029.
The EPA disagrees with the comment that an allocation higher than
what the Agency proposed is warranted. First, the EPA responds that the
increase in demand in 2018 and 2019 does not merit allocating at the
level the commenter requests. Read together, CAA sections 605 and 614
and Article 2F of the Montreal Protocol limit the permissible uses of
newly-produced and newly-imported HCFCs to servicing of refrigeration
and air-conditioning equipment existing on January 1, 2020, and to
servicing of fire suppression and fire protection equipment existing on
January 1, 2020, and listed as acceptable for use as a fire suppression
agent for nonresidential applications in accordance with section 612 of
the CAA. Thus, when determining allocations for HCFC-123 and HCFC-124,
the EPA focused on the amount of demand for these specific uses. Since
virgin material cannot be used to manufacture new fire suppression
equipment, it would not be reasonable for the EPA to base allocation
amounts
[[Page 15266]]
on demand for new equipment even if, as the commenter asserts, demand
for their product is higher than historic levels. Nonetheless, based on
the new information provided for 2018 sales, the EPA is revising the
total demand estimate in the 2019 Final Servicing Tail Report issued
with this rule. With 2018 demand being 300 MT, the five-year average
reflected in the 2019 Final Servicing Tail Report increases to about
270 MT. A further 10 percent increase in demand in 2019 would result in
a five-year average of approximately 280 MT. Furthermore, even if the
EPA did consider demand for manufacturing new fire suppression
equipment in addition to servicing demand, these figures, when added to
servicing demand for refrigeration and air-conditioning equipment (560
MT in 2020), would remain below an allocation of 2,014 MT per year.
Moreover, and as noted elsewhere in this section, consistently
allocating allowances above total servicing demand would not support a
smooth and orderly transition to alternatives, nor would it foster
recovery, recycling and reclamation, which is needed as of January 1,
2020 for manufacturing new fire suppression equipment and in the longer
term as HCFC-123 is phased out.
The EPA also disagrees with the commenter's assertion that the
Agency's servicing demand estimates are too low. As part of the
development of the Servicing Tail Report, the Agency sought and
received input from a variety of key industry stakeholders. The EPA has
estimated total demand for HCFC-123 for fire suppression at 260 MT per
year in the two previous drafts of the Servicing Tail Report based on
average reported consumption of HCFC-123 for this use over the last
several years. In the last version of the report issued in August 2019,
the Agency included a servicing demand of 35 to 90 MT per year for fire
suppression. These estimates were based on the best available
information and during public review of those drafts, interested
stakeholders did not provide any evidence to contradict the Agency's
estimates of servicing demand. Recognizing the needs for fire
suppression servicing and American Pacific's comment, the Agency's
allocation for HCFC-123 is based on the high end of the range for
servicing demand for Halotron[supreg] I fire extinguishers manufactured
prior to 2020. The Agency's review of the data supported a number
within the 35 to 90 MT range, but generally closer to the bottom half
of that range. The commenter, however, provided no additional data to
support increasing the estimate for servicing demand. For all of these
reasons, the Agency concludes that it is appropriate to base the final
allocation on the servicing demand estimate from the Servicing Tail
Report as proposed.
The commenter states that, based on their observations of the fire
suppression industry, if EPA issues allowances at 2,014 MT, it is not
likely that fire suppression equipment manufacturers and distributors
would wait until 2029 to transition or be unprepared for the 2030
phaseout. Similarly, the commenter states that it is not necessary to
provide a gradual decrease over time to guard against consumption
levels that are higher than demand. They assert that consumption will
always closely track demand given the sourcing of this material outside
of the United States and that there is no reason to create excess
inventory. American Pacific also comments that while there are multiple
unknowns, in discussion with the industry, the use of newly-imported
HCFC-123 should be less expensive than reclaimed HCFC-123. The EPA
responds that one of the Agency's goals when setting the allocation
level is to reach the 2030 phaseout step in a manner that achieves a
safe and smooth transition to alternatives while allowing equipment
owners to continue servicing their equipment within its expected
lifetime. Issuing allowances significantly above demand would likely
suppress the reclamation market and thus increase the likelihood of
stranding equipment in 2030 and beyond. In the near term, this would
adversely affect the availability of reclaimed HCFC-123 for the fire
suppression sector because reclamation will be the only source of HCFC-
123 for the manufacture of new fire suppression equipment once
stockpiles of material imported prior to 2020 are exhausted. In the
longer term, if the reclaim market is suppressed through 2029, there
will be less ability to respond to the 2030 phaseout when the primary
supply of HCFC-123 will be from the reclaim market. Ultimately this
could result in stranded equipment after 2029. Experience with prior
HCFC 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 alternatives. Gradually reducing HCFC allowances fosters a safe and
smooth 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).
Additionally, the commenter focuses on the fire suppression market
exclusively and does not take into account the broader market for HCFC-
123, including needs for servicing refrigeration and air-conditioning
equipment, which will have servicing needs well beyond 2029. While the
commenter asserts that it is not likely that the fire suppression
industry would be unprepared for the 2030 phaseout if the EPA issues
allowances at 2,014 MT, the commenter does not address the broader
servicing market for HCFC-123, where refrigeration and air-conditioning
account for significantly more demand. Based on other comments, the
refrigeration and air-conditioning industry is supportive of a gradual
reduction in allowances starting from 2020 estimated servicing demand
for all allowed uses.
In response to the comment about costs, the Agency has found that
the price of HCFCs is not directly correlated to the amount of
allowances allocated. For example, experience with the phaseout of
HCFC-22 indicates that there can be temporary price changes but the
wholesale price has fallen as the allocation gradually decreased over
the past five years. The phaseout of HCFC-22 may not be identical to
the remaining phaseout step for HCFC-123 given the addition of the fire
suppression sector. The price to import and/or produce material does
not necessarily match the wholesale price for various HCFCs, so there
is no guarantee of a lower price from imported product versus reclaimed
product. Supporting this point, the EPA understands from its
interactions with reclaimers that they tend to sell their reclaimed
product at or near the market price for virgin HCFCs. The Agency cannot
conclude, based on the comments received, whether there is a difference
in the price of HCFC-123 when sold for fire suppression compared to
when it is sold as a refrigerant. The EPA agrees with the commenter
that if the Agency allocated allowances well below estimated servicing
demand, it is possible that prices would increase in the near term.
However, that is not what the Agency is finalizing in this rule.
Instead, this rule issues allowances above estimated demand for three
years specifically to allow reclaimers time to shift their market to
the fire suppression sector before reducing the number of allowances.
The commenter further states that the proposed allocation would
strand existing fire extinguishers including
[[Page 15267]]
wheeled units costing between $125 to $4,000 for the telecommunications
industry and for military applications. The EPA responds that the
proposed allocation being finalized in this action accounts for the
servicing of existing fire extinguishers. As discussed earlier in this
section, the Agency estimated the demand for servicing Halotron[supreg]
I fire extinguishers manufactured prior to 2020 to be between 35 to 90
MT per year. This estimate is based on industry feedback on the two
draft Servicing Tail Reports that the Agency made available for public
comment. The final allocation includes 90 MT based on the servicing
demand for servicing fire suppression equipment and the commenter
provided no data to support increasing the Agency's estimate for
servicing demand or that the proposed allocation amount would strand
existing inventory. As described in the 2019 Final Servicing Tail
Report accompanying this action, the Agency estimates that the
allocation finalized in this rule combined with reclaimed and recycled
HCFC-123 will provide sufficient HCFC-123 to allow for servicing of
refrigeration, air-conditioning, and fire suppression equipment, as
well as the manufacture of new fire suppression equipment. The EPA
finds no support for the assertion that the proposed allocation would
strand any existing fire extinguishers.
The EPA further notes that the fire suppression sector has a long
history of using recovered and recycled/reclaimed ODS for both
servicing and new equipment. There has been continuing demand for
halons in newly-manufactured fire suppression equipment since halons
were phased out in the United States in 1994. This demand for halons
has been satisfied with recycled/reclaimed halons, ensuring equipment
can be serviced and investments are not stranded.
Lastly, American Pacific asks the EPA to consider an updated ODP of
0.0098 for the purposes of analysis of environmental impact and
comparison with alternatives to HCFC-123 in the fire suppression sector
such as halon 1211, hydrofluorocarbons (HFCs), and fluoroketone based
agents. The EPA responds that the Agency did not propose and is not
finalizing any changes to the listed ODP for HCFC-123. The ODP for
HCFC-123 as listed in Annex C to the Montreal Protocol and in appendix
A to 40 CFR part 82, subpart A is 0.02.
C. De Minimis Exemption for the Use of HCFC-123 in Chillers
The EPA proposed to create a de minimis exemption from the use
prohibition in section 605(a) of the CAA to allow virgin HCFC-123 to be
used for the manufacture of chillers that meet specific criteria
through December 31, 2020. The EPA received two comments on this
proposal, from Ingersoll Rand and The Alliance, an industry coalition
of fluorocarbon producers and users, both in support of the de minimis
exemption. For the reasons cited in the proposal and reiterated in this
document, the Agency is finalizing the de minimis exemption from the
use prohibition in section 605(a). This exemption 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 with
the expectation that they would be installed in 2019. 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. Section 605(a) prohibits the introduction into
interstate commerce or use of any class II substance with limited
exemptions. Use of a virgin class II substance ``as a refrigerant'' is
allowed only ``in appliances manufactured prior to January 1, 2020.''
The EPA is creating a de minimis exemption from this prohibition to
allow virgin HCFC-123 to be used for the manufacture of chillers that
meet specific criteria through December 31, 2020. This exemption will
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 (July 24, 2019),
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.
(1) Background
As described in Section II of this document, 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,
servicing existing fire suppression and fire protection equipment, and
other uses not relevant for the U.S. market. 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 \17\ ``for an
appliance, means the date upon which the appliance's refrigerant
circuit is complete, the appliance can function, the appliance holds a
full refrigerant charge, and the appliance is ready for use for its
intended purposes[.]'' Appliances used in commercial refrigeration,
such as large chillers, and industrial process refrigeration typically
involve more complex installation processes, which may require custom-
built parts, and typically are manufactured on-site. Appliances, such
as these, that are field charged or have the refrigerant circuit
completed on-site, regardless of whether additional refrigerant is
added or not, are manufactured at the point when installation of all
the components and other parts are completed, and the appliance is
fully charged with refrigerant and able to operate.
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\17\ The definition of ``manufactured'' can be found at 40 CFR
82.3. See also 74 FR 66439.
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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. 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) 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 creating a limited de minimis exemption
[[Page 15268]]
to the use prohibition in 605(a). This exemption allows 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 exemption will 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 (July 24, 2019), 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 establish 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. v. Costle, 636 F.2d 323, 360-61 (D.C. Cir. 1980).
Further discussion of this authority can be found in the preamble to
the proposed rule.
The EPA concludes that 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 (sections 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 (sections 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 for the situation described
above. 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 de minimis exemption as consistent with statutory
intent. The flexibility from the exemption will ensure the orderly
phaseout of ODS and will be consistent with the past practice of
preventing the stranding of existing appliances without being counter
to the three principal areas of Title VI described previously. First,
it will not contribute to additional production and consumption of
HCFCs and thus will not inhibit the United States from reaching the CAA
phaseout date of 2030 or complying with the Montreal Protocol. Second,
these chillers will continue to be subject to the servicing practices
and labeling requirements applicable to all ODS appliances. Third, it
will 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 section 605(a) of the CAA 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 concludes that there
will 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
will not be expended. There will therefore not be any increase in U.S.
consumption compared with the current allowed level of consumption for
2019. Second, this exemption will not encourage the manufacture of
additional HCFC-123 chiller units because factory operations for making
them have already ceased and the exemption will not permit such
operations for additional units.
The number of chillers eligible for this exemption 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 Final Servicing Tail Report, the EPA
assumes an average charge size for an HCFC-123 commercial chiller is
approximately 445 kg. Thus, the EPA estimates about 15 MT of HCFC-123
could be needed to complete the manufacture of chillers in 2020. This
will equate to about 0.4 percent of all HCFCs allocated in 2019.
Beyond the HCFC-123 needed for the initial charge, the EPA has
analyzed whether the exemption could increase the servicing demand for
HCFC-123 in the years 2020 through 2029 compared with not providing
this flexibility. As an initial matter, the modeled servicing demand
described in the 2019 Final 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 will be affected by this exemption were
anticipated to be manufactured in 2019, they will not increase expected
demand. This exemption will 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
will 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 issuing allowance
allocation amounts for 2020 through 2029.
The exemption also contains numerous constraints that limit its
potential impact. The exemption from the prohibition in section 605(a)
of the CAA on use in appliances manufactured before January 1, 2020
will apply only for one year and only in a limited set of
circumstances. It will apply only if the refrigerant used to
manufacture the
[[Page 15269]]
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 will
need to be done with HCFC-123 that is used, recovered, or recycled/
reclaimed. Further, the exemption will 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 July 24, 2019, the date of signature of the
proposed rule.
The de minimis exemption is consistent with past EPA practice in
this program. The EPA, on past occasions, has provided limited
flexibility in applying use restrictions and phaseout dates. The Agency
has typically aimed to prevent 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 (see 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 in which, 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 that providing flexibility did not affect long-term
projections of servicing needs because this equipment was already
planned to be installed in the previous year (see 74 FR 66441, December
15, 2009).
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 use prohibition
in section 605(a) of the CAA 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 (see 79 FR 64254, October 28,
2014).
The EPA also recognizes that for these specific circumstances,
there could be negative impacts if the Agency does not provide
flexibility. Without the 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 is already on-site. Granting
flexibility allows the installation to continue using the HCFC-123
available and prevents further delay of the installation.
For the reasons described above, the EPA is finalizing the proposal
to establish a de minimis exemption to the use restriction in section
605(a) of the CAA 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 the conditions specified previously.
D. Addition of Fire Suppression Servicing Uses to the HCFC Phaseout
Schedule
The EPA is finalizing the proposal to allow for the continued
production, consumption, introduction into interstate commerce, and use
of HCFCs for servicing fire suppression equipment manufactured before
January 1, 2020 consistent with section 605 of the CAA and the November
2018 adjustment to Article 2F of the Montreal Protocol. Specifically,
the EPA is modifying 40 CFR 82.15(g) and 82.16(e) 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,\18\ 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 section 612 SNAP regulations. The
EPA received four comments from American Pacific, HARC, Hudson, and The
Alliance, which were all supportive of this proposal.
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\18\ This will expand the permitted uses under 40 CFR 82.15 and
82.16, which also allow for use and introduction into interstate
commerce, as well as production and consumption, of HCFCs for use as
a refrigerant in equipment manufactured before January 1, 2020.
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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 percent of baseline annually.\19\ Servicing
refrigeration and air-conditioning equipment existing on January 1,
2020 had been the only recognized use under the Montreal Protocol. In
2018, the United States proposed adjusting the Montreal Protocol to add
servicing of fire suppression equipment existing on January 1, 2020, as
another allowed use. That 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,\20\
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.\21\ 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 CAA uses the term ``fire
suppression.'' In addition, the EPA views ``fire suppression'' as the
more precise term in the context of regulating ODS. The adjustment
adopted in
[[Page 15270]]
November 2018 entered into force on June 21, 2019.\22\
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\19\ As noted previously, the term production does not include
the manufacture of a controlled substance that is subsequently
transformed (i.e., feedstock material) and as such the production
phaseout is not applicable to ODS manufactured for that purpose.
\20\ 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 percent cap. In
this action, the EPA is making revisions to its regulations to
address the addition of fire suppression. This rule does not take
any action with regard to the other elements of the adjustment.
\21\ Decision XXX/2 and Annex I of the ``Compilation of
decisions adopted by the parties,'' adjust Article 2F of the
Montreal Protocol.
\22\ The final meeting report from the 30th Meeting of the
Parties and Decision XXX/2 adopting the adjustment are included in
the docket for this rulemaking.
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The EPA is modifying 40 CFR 82.16(e)(2) to permit the import of
HCFC-123 for servicing fire suppression equipment manufactured before
January 1, 2020. While the modified 40 CFR 82.16(e)(2) identifies the
permissible uses for which HCFC-123 may be imported, this regulatory
provision does not govern the allocation of production allowances for
HCFC-123. Section 82.16(e), which establishes limits on the production
and import of HCFC-123 starting on January 1, 2020, provides that HCFC-
123 may not be produced or imported for any purposes other than the
listed permissible uses. The revision adds ``use as a fire suppression
streaming agent in equipment manufactured before January 1, 2020 and
listed as acceptable for use or acceptable subject to narrowed use
limits for nonresidential applications'' to the list of permissible
uses. This revision allows for this additional use in the years 2020
through 2029.
The EPA is also adding a new paragraph after 40 CFR 82.15(g)(4) to
ensure consistency with the change to 40 CFR 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.\23\ The EPA is adding a new
paragraph after 40 CFR 82.15(g)(4) that repeats the limits in 40 CFR
82.15(g)(4)(i) to clarify 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 40 CFR 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 ensures that the regulations are clear and
consistent between 40 CFR 82.15 and 82.16, and, as a practical matter,
adds no additional limitations to those in 40 CFR 82.16.
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\23\ Section 82.15(g)(4)(i) applies to all HCFCs not governed by
40 CFR 82.15(g)(1) through (3).
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For the reasons described above, the Agency is taking final action
to allow HCFC-123 to be used during the years 2020 through 2029 for
servicing existing fire suppression equipment.
E. Revisions to Labeling Requirements
To support compliance with the finalized regulations at 40 CFR
82.16(e)(2), the EPA is revising the existing labeling requirements in
40 CFR part 82, subpart E, to reflect the limited ability to use virgin
HCFC-123 for fire suppression servicing. Labeling containers of fire
suppression agent containing HCFC-123 should increase awareness among
individuals servicing fire suppression equipment about the restriction
on the use of virgin HCFC-123 use and support compliance. The EPA is
finalizing two different labels--one for fire suppression agent
composed of newly-imported HCFC-123, and one for fire suppression agent
composed of reclaimed material or material imported prior to 2020.
Together, these labels will ensure that users have enough information
to determine which containers of fire suppression agent may be used in
which equipment in order to comply with the revisions to the HCFC
phaseout regulations. In response to comments from American Pacific,
HARC, and The Alliance, the EPA is making minor modifications to the
proposed labels.
(1) Background
As discussed previously in this section, starting January 1, 2020,
virgin HCFCs may be used only for limited purposes. With respect to
fire suppression equipment, HCFCs imported or produced on or after
January 1, 2020, can be used only to service fire suppression equipment
manufactured before January 1, 2020. HCFCs imported on or after January
1, 2020, cannot be used to manufacture new equipment or to service
equipment manufactured after January 1, 2020. Only HCFCs that are
reclaimed or were imported prior to 2020 may be used for those
purposes.
The only HCFC used in a fire suppression agent is HCFC-123, sold as
part of a blend under the name Halotron[supreg] I. Clean agents like
Halotron[supreg] I do not leave a residue, and are used in applications
such as data centers, clean rooms, and aircraft where it will not
damage high-value or life-saving equipment, 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 for
which clean agents are used in the United States: (1) Hand-held
portables; (2) 150-pound wheeled units; and (3) Aircraft Rescue and
Fire Fighting (ARFF) vehicles.
As per the National Fire Protection Association (NFPA) and
Department of Transportation (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, that was established to minimize the risk and effects of
fire by establishing criteria for building, processing, design,
service, and installation around the world. According to NFPA criteria,
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, so that it may be usable again. Technicians who conduct
hydrostatic testing, perform inspections, or recharge fire suppression
equipment after a discharge may need additional information to aid in
distinguishing between the permissible uses of specific containers of
Halotron[supreg] I.
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\24\ National Fire Protection Association. (2018) ``Standards
for Portable Fire Extinguishers'' available at: https://www.nfpa.org/codes-and-standards/all-codes-and-standards/list-of-codes-and-standards/detail?code=10.
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Given that section 611 of the CAA already requires the labeling of
containers of ODS, including Halotron[supreg] I, the Agency proposed
modifying the label to support compliance with the section 605
requirement. Congress recognized that labeling requirements may be
needed to effectively implement the phaseout of ODS. In 1993, the EPA
established the labeling requirements for both class I and class II
substances in 40 CFR part 82, subpart E (see 58 FR 8136, February 11,
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 of the CAA 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 40
CFR 82.106. According to section 611, the label must be ``clearly
legible and conspicuous.'' Labels generally should
[[Page 15271]]
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, ISO tank, or
other container), labels should be on the outside packaging. Specific
requirements on the size, text, and location of the label are provided
in 40 CFR 82.106 through 82.110. Labeling of products manufactured with
or containing HCFCs has been required under section 611 since 2015, and
the EPA has not seen a movement away from these fire suppression agents
due to that labeling requirements. Based on this experience, the EPA
does not expect additional text being added to the label to cause a
movement away from HCFC-123 based fire suppression agents.
In revising the labeling requirements, the EPA is relying on
authority under section 605(c) of the CAA to issue regulations phasing
out the production and consumption and restricting the use of class II
substances that may be needed for compliance. Since HCFC-123 may be
used both to manufacture new fire suppression equipment, which can only
be done with HCFC-123 imported prior to January 1, 2020 or reclaimed/
recycled material, and to service existing equipment, the EPA
identified modified labeling as the lowest cost option to ensure that
newly-produced HCFC-123 only be used to service existing equipment.
Specifically, the EPA proposed to require the following text be
added to the label for containers of fire suppression agent containing
HCFC-123 imported on or after January 1, 2020: ``Do not use to service
equipment manufactured on or after January 1, 2020.'' The Agency also
took comment on whether to modify the label on material containing
HCFC-123 imported prior to January 1, 2020, or that is recycled/
reclaimed to clarify for individuals servicing fire suppression
equipment that all uses are allowed. Specifically, the EPA proposed the
following second sentence could 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.''
In addition to knowing whether containers contain recycled/
reclaimed HCFC-123 or HCFC-123 imported before 2020 versus virgin HCFC-
123, users will need to be able to know the date of manufacture of fire
suppression equipment. They will 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 Agency sought comment on
these points and others.
(2) Summary of and Response to Comments
American Pacific, HARC, and The Alliance support labels on all
containers of Halotron[supreg] I. Both American Pacific and HARC
suggest the language on the label for virgin or newly imported HCFC-123
containers should be more positive than the proposed language. American
Pacific suggests the label read ``Use only for recharge of equipment
manufactured before January 1, 2020.'' American Pacific and HARC are
also supportive of an additional label for reclaimed products and
American Pacific suggests the additional label should read ``Can be
used for all Halotron[supreg] I new production and all recharge
activities.'' Commenters confirmed that users should 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, 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.
In response to the comments received, the EPA concludes that
modifications to the existing label language are necessary to ensure
that users have enough information to determine which containers of
fire suppression agent may be used in which equipment, in order to
comply with the regulatory revisions described in this rule. Therefore,
the EPA is finalizing labeling requirements for containers of fire
suppression agent containing HCFC-123 with modifications to the
language proposed. For containers with virgin HCFC-123 imported on or
after January 1, 2020, the Agency is requiring the following label:
``WARNING: Contains [insert name of substance], a substance which harms
public health and environment by destroying ozone in the upper
atmosphere. Use only for recharge of equipment manufactured before
January 1, 2020.''
For fire suppression agents that are recycled/reclaimed or imported
prior to January 1, 2020, the Agency is finalizing the following label:
``WARNING: Contains [insert name of substance], a substance which harms
public health and environment by destroying ozone in the upper
atmosphere. For use in any equipment.'' The statement, ``For use in any
equipment'' conveys the same meaning as the text provided by American
Pacific (``Can be used for all Halotron[supreg] I new production and
all recharge activities'') but is simpler, avoids mentioning a patented
product, and is analogous to the label for newly-imported material. It
clarifies for the user that HCFC-123 that was imported prior to January
1, 2020, or that is recycled/reclaimed can be used for either the
manufacture of new equipment or for servicing existing and new
equipment. The Agency is modifying the required label at 40 CFR 82.106
accordingly.
The EPA also took comment on whether the manufacturer of
Halotron[supreg] I can designate specific containers for servicing
existing equipment, whether multiple containers would create a burden
for industry, and whether technicians would be able to locate
manufacture dates on fire suppression equipment. American Pacific
states it will establish a second product identification for the
Halotron[supreg] I that is manufactured with newly-imported HCFC-123
imported after January 1, 2020. The name of this product will be
``Halotron[supreg] I Recharge Only for Equipment Made Before 1-1-20.''
American Pacific states that the Halotron[supreg] I container will be
labeled prominently with multiple distinctive large yellow or
equivalent striping that is in contrast to the current standard
Halotron[supreg] I container, which has two green stripes. American
Pacific notes the standard bulk container will continue to be
manufactured using newly-imported HCFC-123 imported before January 1,
2020, or with recycled/reclaimed HCFC-123. Both American Pacific and
HARC assert that the maintenance of two differently labeled containers
will not result in a burden on the industry. The EPA appreciates the
steps American Pacific intends to take to ensure the proper use of
HCFC-123.
American Pacific and HARC provided comments on the EPA's intended
approach to assist technicians with identifying which container to use
for servicing fire suppression equipment and outreach. For servicing
ARFF vehicles, the EPA explained how to identify that information in
the proposal for this rulemaking and recommends that technicians
inspect the manufactured date on the vehicle. American Pacific states
that the methods for identifying the year of manufacture of ARFF
vehicles is accurate and notes that manufacturers report the year of
manufacture as a ten-
[[Page 15272]]
digit VIN on the Information Data plates, which are typically located
on the floor, dashboard, or door jamb on the driver's side in ARFF
vehicles. American Pacific states that they plan to highlight the
distinction between the two products in updated filling/maintenance
guidance manuals that provide sales materials for ARFF Vehicle original
equipment manufacturers and airports users.
For fire extinguishers, American Pacific states the EPA accurately
described the method for identifying the date of manufacture in the
proposal for this rulemaking. American Pacific notes that historically,
however, some of the UL listed fire extinguishers were not approved by
the DOT, which was referred to as ``309 exempt,'' but all extinguisher
labels as per the UL follow-up listing requirements will show a year of
manufacture. HARC also supports the EPA's intention to develop outreach
material with the final rule and is interested in working with the EPA
to help develop and distribute such material. The EPA is appreciative
of the outreach efforts American Pacific intends to pursue and is
appreciative of the clarification for ARFF vehicles and fire
extinguisher date of manufacture. The EPA intends to work with
stakeholders to develop educational materials and conduct outreach to
technicians, distributors, and service providers.
F. Allocation of HCFC-124 Production and Consumption Allowances
The Agency received two supportive comments and one comment opposed
to allocations for HCFCs generally. Based on comments received on the
proposed allocation amount for HCFC-124 and the Agency's analysis, the
EPA is finalizing HCFC-124 production and consumption allowances in the
years 2020 through 2029 as proposed.
As noted in the 2019 Final Servicing Tail Report, HCFC-124
consumption was approximately 250 MT per year between 2012 and 2017 and
reclamation was minimal. More recent sales data from the California Air
Resources Board, discussions with industry, and annual consumption and
production data indicate that demand for HCFC-124 is between 100 and
200 MT. As explained in the previous discussion about HCFC-123
allowance allocations, providing HCFC-124 allowances significantly in
excess of demand would not foster a smooth and orderly transition.
Thus, the EPA proposed to allocate 200 MT for the first three years and
then gradually decrease the allocation over the next seven years by an
equal amount each year.
National Refrigerants and an anonymous commenter support the
proposed allocation of HCFC-124. The anonymous commenter states that
Alternative 2 in the proposal is inconsistent with the gradual decrease
in volume over the phase out period and may prevent the establishment
of sufficient volume of reclaimed material to serve remaining servicing
needs post-2030, as described in the 2019 Draft Servicing Tail Report.
The EPA responds that it agrees that reducing the allocation
gradually is the appropriate choice so that equipment owners have time
to transition to alternatives and/or develop relationships to rely on
recycled and/or reclaimed HCFC-124.The EPA is finalizing the allocation
for consumption and production of HCFC-124 at 40 CFR 82.16(a) as
proposed. As stated previously, the Agency's goal is to ensure that
servicing needs can be met, while also encouraging recovery and reuse
and transition to alternatives. Providing consistent allocations for
the first three years will 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 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).
Regarding the comment that allowances are not needed, the Agency
references the previous discussion in this section under the HCFC-123
allocation, as similar considerations apply for HCFC-124. In addition,
an HCFC-124 allocation is necessary because there is minimal
reclamation of HCFC-124. This allocation level is within the limit
established by the CAA and Montreal Protocol and will decrease over
time to foster transition to alternatives prior to the January 1, 2030
phaseout date.
G. Changes to Transfers of Allowance Provisions in 40 CFR 82.23
The EPA is explicitly prohibiting calendar-year inter-pollutant
transfers of HCFC-123 and HCFC-124 to phased-out HCFCs. The Alliance
comment is supportive of limiting inter-pollutant transfers, and the
EPA is finalizing the provision as proposed.
Under section 607 of the CAA, the EPA has issued regulations at 40
CFR 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 (40 CFR
82.23(b)). The EPA is finalizing changes in 40 CFR 82.23(b) to ensure
clarity for the regulated community. The change is intended to minimize
confusion and reduce the likelihood that an allowance holder will
mistakenly seek an inter-pollutant transfer of HCFC-123 or HCFC-124
allowances to phased-out HCFCs such as HCFC-22. This change does not
have a practical effect on the ability of allowance holders to legally
produce or import phased-out ODS given the prohibition in 40 CFR 82.16.
Inter-pollutant transfers between HCFC-123 and HCFC-124 also 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 Alliance commented that they support the EPA's proposal to
explicitly prohibit transfers into ODS that are already phased out.
Given the comment and the fact that the EPA received several inquiries
prior to this rulemaking 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 finalizing the proposed change to make clear that
calendar-year inter-pollutant transfers of HCFC-123 and HCFC-124 to
phased-out HCFCs are prohibited.
H. Changes to Import Requirements
Under sections 604, 605, and 606 of the CAA, the EPA restricts the
import of ODS consistent with both the CAA and the Montreal Protocol.
As discussed previously in Section II of this document, importing
virgin ODS requires the importer to expend consumption allowances. By
controlling the number of allowances and knowing who holds those
allowances, the EPA ensures that the United States meets its phaseout
obligations. Used ODS \25\ can be imported without consumption
allowances, and generally without use restrictions, if certain
conditions are satisfied. Imports of used ODS are regulated under 40
CFR 82.13(g)(2) and (3) (for imports of used class I substances) and 40
CFR 82.24(c)(3) and
[[Page 15273]]
(4) (for imports of used class II substances).
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\25\ Used ODS have been recovered from their intended use
systems (e.g., refrigeration and AC equipment) and may include
controlled substances that have been, or may be subsequently,
recycled or reclaimed. See 40 CFR 82.3.
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The EPA proposed and is finalizing a number of changes to update
the data collection requirements related to the import of ODS, as
described in further detail below. Such changes require collection of
additional information when the EPA considers petitions to import used
ODS to verify whether the material has been previously used. Other
changes remove data elements that the EPA no longer needs. The EPA is
also finalizing a procedure for imports of both used and virgin ODS
when they are imported for destruction, exempting aircraft bottles
containing halon 1211 imported for hydrostatic testing from the
petition process, and finalizing as proposed the prohibition on the
sale of illegally imported ODS.
Because some of these regulatory revisions relate to the petitions
process for imports of used ODS, some background on the petitions
process under the regulations that were in place prior to this
rulemaking may provide useful context. Under that process, anyone
wanting to import used ODS must submit a petition to the Agency, and
the EPA must provide a ``non-objection notice'' approving the import
for it to proceed. The petition to import a used ODS must contain
certain information, which the EPA uses to verify whether the ODS is
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 40 CFR 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 sections 603 and 604 of the CAA) in 1998 (see 63 FR 41626,
August 4, 1998) and in 2003 (see 68 FR 2819, January 21, 2003) for
class II ODS (under sections 603 and 605 of the CAA) given 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. Sections 604, 605, and 606 of the CAA
provide statutory authority for controlling the import of ODS,
including the petition 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
regulatory revisions finalized in this action involve recordkeeping and
reporting of information, the EPA also relies upon its authority under
section 114 of the CAA, 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).
The petition process has generally been effective at providing
information that allows the EPA to verify that ODS are used before they
are imported, and accordingly, for many aspects of the existing
process, the Agency did not propose and is not finalizing any changes
in this rulemaking. However, over years of implementation, the EPA has
identified potential areas for improvement. These include the fact that
the existing requirements for detailed source information are often
difficult to satisfy if the imported material comes from a halon bank,
i.e., a physical facility where halon recovered from different sources
is aggregated. Much of this halon was sent to the banks with limited or
no records of its origins or use. Additionally, current regulations
exempted only halon 1301 aircraft bottles from the petition process for
hydrostatic testing, yet aircraft bottles containing halon 1211 are
also imported for such testing and importers must petition the Agency
and receive a non-objection notice for those bottles under the existing
process. The petition process also did not distinguish imports of used
ODS that are intended to be destroyed from imports that are intended to
be reclaimed for continued use, even though the Agency recognizes that
the verification requirements do not need to be as rigorous when the
ODS are to be destroyed. Further, the existing regulations did not
provide a specific mechanism to pre-approve the import of virgin
material for destruction, resulting in delays at the port of entry
while the EPA verified the shipment. In addition, the EPA remains
concerned about the potential for illegal import of ODS and wanted to
take steps to strengthen the Agency's ability to enforce the phaseout
of ODS. To address these and other issues, the EPA proposed and is now
finalizing revisions to the regulations for imports, as described in
the following sections.
i. Changes to the Petition Process To Import Used ODS for Reuse in 40
CFR 82.13 and 82.24
The EPA proposed changes to the petition process that would
generally reduce burden on importers while still allowing the Agency to
verify that only used material is being imported. Of particular note,
the Agency proposed to: (1) Reduce the information requirements when
importing class I ODS \26\ from a ``bank'' so long as an official
letter is provided from the appropriate government agency in that
country where the material is stored that attests that a class I
substance is ``used''; (2) allow submission of an application for an
export license in lieu of the license itself; (3) authorize the Agency
to request additional information when additional verification is
needed before issuing a non-objection notice, and (4) provide
flexibility for the timing of import.
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\26\ The EPA did not propose similar changes for class II ODS
given the production phaseout for these substances is still
underway.
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In soliciting comments on the proposal, the Agency was particularly
interested in whether streamlining the petition process, including to
facilitate imports of material from banks for class I ODS, in
particular halon, would affect compliance with the prohibition on
import of virgin ODS. The EPA welcomed suggestions from stakeholders on
how the petition process could be streamlined while ensuring
compliance. The Agency received comments on the definition of ``banks''
and whether the proposed flexibilities should be restricted to halon,
the requirement to provide an export license, extending the reduced
information requirements to class II substances, the possibility that
the EPA might request purity information in considering a petition, the
import of used HFCs containing trace quantities of ODS, and the timing
of imports after a non-objection notice has been issued.
Taking into account the comments received, the EPA is finalizing
changes to the petition process that will meet the Agency's goals of
reducing the burden on importers while continuing to provide mechanisms
to verify that the material being imported is used. As described in
greater detail below and based on the comments received, the EPA is
finalizing two changes to what it proposed. First, the Agency is
narrowing the definition of ``bank'' which as proposed encompassed all
ODS, though only used in reference to class I ODS, to ``halon bank.''
Second, the Agency is allowing not only an application for an export
license in lieu
[[Page 15274]]
of the license itself, as was proposed, but also an official
communication from the appropriate government agency in the country of
export. For the following changes, the EPA received no adverse comments
and is finalizing the proposed revisions because the Agency concludes
that the revisions are warranted based on the rationale articulated in
the proposal and in this document: (1) Requiring that petitions include
email addresses in contact information (while removing the requirement
to provide fax numbers) and commodity codes for the material, and (2)
providing one year from the date stamped on a non-objection notice for
import to occur. In general, the EPA anticipates these changes will
increase the availability of used ODS in the United States and thus
help to provide a greater supply of used material for servicing
existing equipment, which might otherwise be retired before the end of
its useful life.
With respect to the proposal to remove the requirement for some
source information for class I substances stored in either a national
government bank or a privately-operated bank authorized by a national
government with the submission of an official letter from the
appropriate government agency verifying that the class I substances are
in fact used, the EPA received comments from Hudson and National
Refrigerants in support of the proposal. In contrast, the Halon
Recovery Corporation (HRC), a non-profit trade association for halon
users, and an anonymous commenter suggest narrowing the exemption to
only halon banks rather than all class I ODS. HRC notes that the import
petition process has been structured around the refrigeration and air-
conditioning sector, and as such, these requirements have been
difficult for halon recyclers to meet. Banks do not typically have the
complete information required by the EPA's petition process, especially
since the material may have been recovered decades ago, when records of
source and use were not kept. HRC states that, unlike CFCs, there is a
large installed base of fire suppression equipment that requires future
servicing and retrofitting that equipment to use alternatives may not
always be feasible. HRC also notes that it is aware of only a few
enforcement actions taken by the Agency for the illegal importation of
halons. The anonymous commenter states their concern for reducing
information requirements in a petition to import used class I
substances is due to the potential for misuse, which would be contrary
to the Agency's effort to prohibit sale of illegally imported
controlled substances. The commenter suggests a change may be needed
for halon, as there is a large installed base that may require future
servicing, and since retrofitting that equipment for the use of
alternative substances may not be feasible, but there is not the same
need or demand for other class I substances. The commenter advises that
changes should be specific to halon, and the Agency should maintain the
existing requirements for other class I substances.
While a couple of commenters were supportive of finalizing the
revisions as proposed, due to concerns other commenters raised about
the potential for illegal imports of class I ODS, the EPA is finalizing
provisions that are more limited than those proposed by finalizing the
definition of ``halon bank'' in 40 CFR 82.3 (rather than ``bank'') and
restricting the provisions in 40 CFR 82.13(g)(2)(iii) and (xv) to
material from a ``halon bank.'' In light of the recently discovered
unexpected emissions of CFC-11 measured in the atmosphere \27\ and
concern from commenters regarding potential for misuse of the petition
process, the Agency is finalizing revisions that are narrower than the
proposal and is only providing this flexibility for halon banks.
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\27\ For more information, see the discussion in section III.J.
---------------------------------------------------------------------------
The EPA's decision is based in part on the need for used halons
exceeding the need for other used class I ODS. The Montreal Protocol's
Technology and Economic Assessment Panel (TEAP) issued a report in
September 2018, available in the docket, noting continued demand for
halons, in particular for servicing fire suppression equipment for
civilian aviation.\28\ 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 \29\ until there is a transition to alternatives for all
applications on new aircraft as well as to service the civil aircraft
fleet. The EPA agrees with the comment that there is a large installed
base of fire suppression equipment that requires future servicing and
retrofitting that equipment to use alternatives may not always be
feasible, and this point supports its decision.
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\28\ 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.
\29\ 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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Since production and consumption of halons were phased out in the
United States and other non-Article 5 countries in 1994, many
countries, organizations, and private sector companies established
halon banks, which are physical locations where previously-used and
recovered halons are aggregated from different sources and stored.\30\
The EPA agrees with the comment that banks do not typically have the
complete information required by the EPA's petition process. When a
used ODS is imported for reuse under the existing process, the import
petition must contain information about the used ODS including contact
information from each source facility from which the material was
recovered and the name, make, and model number of the equipment from
which the material was recovered. Petitioners sourcing used ODS 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. In considering these comments, the
Agency recognizes that providing increased flexibility for halons,
while still allowing the Agency to verify that only used material is
being imported, allows for halon to be more easily sourced from
overseas banks, increasing halon available to service aircraft, oil and
gas facilities, and other fire suppression applications.
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\30\ Halons were phased out in Article 5 countries in 2010.
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To provide further response to the comment expressing concern that
reducing the requirements for import petitions for used ODS could lead
to potential misuse of the petition process, the Agency notes that it
will continue to be able to request additional information from
petitioners sourcing halon from banks. For instance, the Agency may
request additional information on whether the country where the halon
bank is located has production of halon for feedstock use or stockpiles
of virgin halon. If petitioners fail to respond to requests from the
Agency for additional information, the EPA may issue an objection
notice on that basis, as clarified in revisions to 40 CFR
82.13(g)(3)(i)(A) finalized in this rulemaking.
HRC also commented that restricting this relief to government banks
or banks authorized by a national government unnecessarily limits its
effectiveness. HRC states that national government ODS banks are not
usually a source for
[[Page 15275]]
halons for civilian uses because they are designated for military use,
and many national governments do not ``authorize'' privately-operated
banks or reclamation facilities. HRC suggests the EPA define bank as
``a facility run by a national government or privately run that
collects and stores previously-recovered ozone-depleting substances for
reuse at a later date.''
The EPA disagrees with the comment that the Agency amend the
definition of ``halon bank'' to include privately-run banks regardless
of whether they are government authorized. While the EPA supports the
notion of providing more flexibility for imports of used halon to meet
ongoing demand for halon, the Agency does not have sufficient
information about the nature of such banks to determine whether or not
such an expansion is appropriate at this time. In particular, the
Agency would need to further consider whether it is possible to provide
such flexibility while ensuring that doing so does not create an avenue
for illegal imports of virgin halon into the United States. This is
particularly important given the existence of stockpiles of virgin
halon, for example halon 1211,\31\ and the ongoing production of halon
for use as a feedstock.\32\ The Agency may consider if there are ways
to establish such flexibility while ensuring compliance with the CAA
and Montreal Protocol and may decide that it is appropriate to propose
additional changes in a future rulemaking.
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\31\ UNEP (2014). TEAP Report of the Halons Technical Options
Committee Vol. 3 2014 Supplementary Report #2 Global Halon 1211,
1301, and 2402 Banking. Available at https://ozone.unep.org/sites/default/files/2019-05/HTOC%202014%20Supplementary%20Report2%20-%20Global%20Halon%201211%201301%20and%202402%20Banking.pdf.
\32\ UNEP (2018). TEAP 2018 Assessment Report. Available at
http://conf.montreal-protocol.org/meeting/oewg/oewg-41/presession/Background-Documents/TEAP_2018_Assessment_Report.pdf.
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The EPA is thus revising the regulations at 40 CFR 82.3 to add a
definition for ``halon bank'' to mean a facility run by a national
government or privately run and authorized by a national government
that collects and stores previously-recovered halon for reuse at a
later date. As described in 40 CFR 82.13(g)(2)(iii) and (xv), if used
halon is stored in a halon bank, the petitioner need not provide
certain source information, though the petitioner should provide it if
available so as to better allow the EPA to verify that the halon is
used. The petitioner must indicate that the halon is from a halon bank
by providing an official letter from the appropriate government agency
in the country where the material is stored indicating that the halon
is used and that the halon bank is authorized to collect used halon.
The letter may also provide any additional information available to
help demonstrate that the halon is used. Providing this official
letter, does not mean that the EPA will automatically approve the
petition as the EPA retains the right to request additional information
and/or issue an objection notice if the information is insufficient.
With regards to the petition process for used ODS more generally
(including petitions for used halons from halon banks), the EPA is
finalizing as proposed a provision stating that the Agency may request
other information to verify substances are used before issuing a non-
objection notice. This information could include, but is not limited
to: Photos 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, including information regarding 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 could request 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 collecting all such information for each petition
and thus is not revising 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 used and, as proposed, is amending the
regulations in this rulemaking at 40 CFR 82.13(g)(3)(i)(A) to make
clear that failure to provide such information when requested would be
grounds for issuing an objection notice.
In response to a statement in the proposal that purity sampling
might be among the information the Agency might request in considering
a petition to import used ODS, the Agency received comments from HRC
requesting that the EPA not request purity sampling of used ODS for
import as a method of determining whether an ODS is new or used. The
commenter states that requesting this information for halons would be
ineffective and in the case of used system cylinders possibly
dangerous. HRC describes how used halons are often imported in the
original system cylinders (some of which can be 20 to 40 years old).
These cylinders may have actuation methods that are explosive in nature
as they are intended to release the contents of the cylinder in ten
seconds or less. They also have pressures as high as 600 pounds per
square inch and if actuated accidentally can be extremely dangerous.
HRC states that there is no safe way to sample these cylinders for
purity testing without completely emptying the contents of the
cylinder. HRC acknowledges that halon stored in bulk tanks can be
sampled and purity information could be provided but asserts that this
would not be an effective method to distinguish between new and used
halons because in some cases used halons are imported in bulk after
being reclaimed to industry specifications, and purity sampling could
result in these halons being deemed to be new when they are actually
used.
The Agency has considered the comments from HRC and agrees that
requiring halon purity testing in some cases could unintentionally
cause the inadvertent release of halons. As a result of the comments,
the Agency now understands that purity sampling of halon held in bulk
containers is almost always available and could be useful in limited
situations in combination with other information to help verify the
material is used. Therefore, the EPA intends to limit any purity
testing requests to halon that is in bulk containers or in other
situations where the purity testing should not result in unintended
releases of halons.
HRC also commented on the Agency's proposal to allow for an
application for an export license in lieu of an actual
[[Page 15276]]
export license. The commenter states that some national governments do
not provide such licenses and requests that the EPA remove the
provision in 40 CFR 82.13(g)(2)(xii). For example, as noted in the
proposal 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, as noted in the proposal, the Agency has worked with Canada to
accept the submitted application in lieu of the export license.
However, as HRC notes, there may be other countries that also require
approval prior to export from the importing country such as a non-
objection notice.
The EPA recognizes that some countries, including the United
States, do not require or provide export licenses. However, most
governments do provide some form of acknowledgement, such as a letter
from a national ozone unit noting the ability to export or even an
email acknowledgement. The Agency does not find it appropriate to
remove all forms of acknowledgement from the exporting government in
the petition process and disagrees with the suggestion to remove 40 CFR
82.13(g)(2)(xii). An official communication from the government
acknowledging the export helps ensure the petitioned amount is equal to
or less than the amount that arrives at the United States port of
entry. This process also allows for the government of the exporting
country to evaluate the effects of the export on their own fire
suppression sector and hold consultations ahead of concurring with the
export. Therefore, the Agency is amending 40 CFR 82.13(g)(2) and
82.24(c)(3) to allow importers of used class I and class II substances,
respectively, to provide in lieu of an export license, as is required
under the existing regulations, either an application for an export
license or an official communication from the appropriate government
agency. The option of providing an official communication is a change
from the proposal, resulting from the information provided by the
commenter highlighting for the EPA that some governments do not require
or provide export licenses. As proposed, the EPA is also finalizing a
requirement for an English translation of the export license
application, export license, or official communication to facilitate
the Agency's review.
The Agency also received a comment from American Pacific, which
states they could better meet the servicing demand for the HCFC-123-
based fire suppression agent Halotron[supreg] I if the Agency
establishes a streamlined petition process for importing recycled HCFC-
123. American Pacific asserts that source requirements for class II
substances in 40 CFR 82.24(c)(3)(iv) are disproportionally burdensome
and hinder any recycled HCFC-123 import opportunity. Based on American
Pacific's consultations with major recyclers and reclaimers of HCFC-
123, the commenter states that many reclaimers find the source
information requirements to be extremely burdensome. In response to
comments supporting waiving source information for class II substances,
the EPA notes that it did not propose to relax the import petition
requirements for class II ODS. The Agency concludes that it would not
be appropriate to extend this exemption to class II substances at this
time because of continued global production of these substances and
thus the greater likelihood that virgin material may be illegally
imported into the United States under the guise of being used. Source
information requirements help to ensure that the imported substance is
used by documenting for example the name, make, and model numbers of
refrigeration and air-conditioning equipment from which the class II
substance was removed. The Agency has consistently taken measures to
avoid illegal imports of virgin ODS and has typically only considered
relaxing any import requirements for used material after production and
consumption phaseouts. The EPA may consider proposing to extend
exemptions for source requirements in 40 CFR 82.24(c)(3)(iii) through
(vi) for class II substances or otherwise providing flexibility for
these requirements to make the process less burdensome in a subsequent
rulemaking potentially closer to the global production and consumption
phaseout for HCFCs.
National Refrigerants suggests that the EPA include a provision to
facilitate the import and reclamation of used HFCs that contain a trace
amount of class I ODS. The EPA responds that establishing a process for
importing used HFCs for reclamation is not necessary as no allowances
are needed to import HFCs.\33\ In this circumstance, the importer would
need to petition for the used ODS portion of the mixture. The EPA did
not propose to establish a separate process for importing mixed gases
that contain ODS.
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\33\ Reporting of HFC imports is required under other EPA
regulatory requirements, see https://www.epa.gov/ghgreporting.
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For other aspects of the proposed changes to the import petition
process for used ODS, the EPA did not receive adverse comment. The EPA
is finalizing those proposed changes to the petition process to ensure
accuracy, speed review, and facilitate the import of used ODS, while
maintaining requirements that help assure that the material being
imported is used. In particular, the EPA is updating the requested
contact information by requiring email addresses and removing fax
numbers. The EPA is also requiring 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 will match the Agency's other import and export
requirements in 40 CFR 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).
As proposed, the EPA is also updating the commodity codes for HCFC-
123 and HCFC-124 in appendix K. The U.S. International Trade Commission
is responsible for periodically updating 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 conforms the commodity codes for
HCFC-123 and HCFC-124 in the appendix with those currently in effect
and in use by the U.S. International Trade Commission.
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
section 608 of the CAA and 40 CFR part 82, subpart F,\34\ if it is not
already reclaimed to those specifications. The EPA is finalizing its
proposal to add ``EPA-certified'' to the description of reclamation
facilities in the provisions containing this requirement, 40 CFR
82.13(g)(2)(xiii) and 82.24(c)(3)(xiii). This will highlight
[[Page 15277]]
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.\35\
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\34\ Clarifications to subpart F are being finalized in 40 CFR
82.13(g)(2)(xiii) to match 40 CFR 82.24(b)(2)(xiii). This was not
addressed in the proposal.
\35\ The EPA's reclamation program is described at https://www.epa.gov/section608/stationary-refrigeration-refrigerant-reclamation-requirements.
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Finally, the Agency is allowing flexibility for the timing of the
import, which is particularly useful when the Agency issues non-
objection notices towards the end of the year. The EPA previously
required 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 proposed to provide
importers one year from the date stamped on the non-objection notice to
import that shipment. The EPA received one comment, from HRC, in
support of providing flexibility on the timing of imports. The
commenter states that the requirement that the import occur in the same
calendar year can cause logistical challenges. To avoid such delays and
logistical problems, the EPA is finalizing this change as proposed.
ii. Changes to the Exemption for the Import Petitions Process for
Hydrostatic Testing
As noted above, the EPA proposed to exempt aircraft halon bottles
containing halon 1211 from the import petitions process when being
imported for hydrostatic testing. The proposal would allow the same
exemption for aircraft halon bottles containing halon 1211 as already
exists for halon 1301 aircraft halon bottles. The EPA received
supportive comments on this proposal from The Alliance and HRC and no
adverse comments; it also received comments suggesting that the
exemption be extended to aircraft halon bottles imported for other
purposes. For the reasons discussed below, the Agency is finalizing the
changes as proposed.
The existing regulations at 40 CFR 82.3 defined ``aircraft halon
bottle'' \36\ as a vessel used as a component of an aircraft fire
suppression system containing halon 1301. To facilitate the import and
testing of more types of aircraft halon bottles for hydrostatic
testing, the EPA is extending the definition of ``aircraft halon
bottle'' in 40 CFR 82.3 to also include vessels containing halon 1211,
as proposed. Because the existing regulations in 40 CFR 82.13(g)(2)
exempt aircraft halon bottles that are imported for hydrostatic testing
from the import petition process, revising this definition would extend
this exemption to such vessels containing halon 1211. This exemption
facilitates proper maintenance of bottles containing halon 1211 and
allows transit and testing to occur more quickly for such bottles.
Promoting proper maintenance of these additional fire suppression
devices helps 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. The EPA notes that
the exemption of imports of aircraft halon bottles containing halon
1211 for hydrostatic testing only exempts them from the petition
process. Recordkeeping and reporting are currently required, and will
continue to be required, for the import and export of aircraft halon
bottles. Importers of such bottles also still need to maintain import
records, as set forth in 40 CFR 82.13(g)(1) and submit quarterly
reports within 30 days of the end of the applicable quarter in
accordance with 40 CFR 82.13(g)(4).
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\36\ An aircraft halon bottle is considered a ``used controlled
substance'' as defined in 40 CFR 82.3, which is a controlled
substance that has been recovered from its intended use system (and
may include controlled substances that have been, or may be
subsequently, recycled or reclaimed). Halon is placed into aircraft
halon bottles and the bottles are then inserted into a fire
suppression system. When the system is dismantled or the bottles are
removed from the system, the halon contained in the bottles is
considered used since it was removed from the system.
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HRC comments that halon bottles supplied by aerospace original
equipment manufacturers (OEMs) to service global aircraft fleets are
sometimes imported into the United States for purposes other than
hydrostatic testing (e.g., spares restocking, customer returns, etc.).
HRC states that such additional purposes tend to be intermittent,
involve limited quantities, and in most cases involve equipment that
was originally exported from the United States by the aerospace OEM. As
such, HRC states they should not be subject to the same level of
scrutiny as other used ODS imports.
The EPA is not making the revisions suggested in this comment as it
is beyond the scope of this rulemaking and the EPA does not have enough
information about restocking or customer returns of aircraft halon
bottles to support such a change. For example, the EPA currently lacks
information on what type of containers would be imported for restocking
or customer returns. Controlled products as defined in 40 CFR 82.3,
which include fire extinguishers, are exempt from the petitions process
because they are not controlled substances, as defined in 40 CFR 82.3.
Aircraft halon bottles are not considered controlled products because
they do not function unless connected to the onboard fire suppression
system. Rather they are components of larger fire suppression systems
used on aircraft (see 74 FR 10185, March 10, 2009). The EPA also lacks
information on how these vessels are currently being imported, such as
whether the imports have historically been approved through the import
petition process, what the quantity of aircraft halon bottles imported
for this purpose might be, and the frequency of petitions by the
aviation industry to determine the burden reduction opportunity. The
EPA also lacks a description of restocking and customer returns and how
this contributes to safety and maintenance of these aircraft halon
bottles. All of this information would be useful in considering whether
to consider proposing a change to the exemption for aircraft halon
bottles in a future rulemaking.
iii. Imports for Destruction
This portion of the document discusses two sets of changes to the
import process for ODS specifically imported for destruction, which
were proposed and are being finalized.\37\ First, the EPA is
establishing a streamlined approach for importing used ODS for
destruction called the Certification of Intent to Import ODS for
Destruction. Second, the EPA is extending that approach to virgin ODS,
as there was no existing mechanism defined in the regulations for the
EPA to pre-approve import of virgin ODS for destruction. The EPA
received three comments on its proposal to create this process for both
used and virgin ODS. The Agency received supportive comments on a
streamlined approach and extending the approach to virgin material, but
one commenter expresses concern about the potential for illegal
imports. After considering the comments, the Agency is finalizing many
of these provisions as proposed and is also adding requirements to
obtain more information on the chain of custody after ODS is imported
under this process.
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\37\ The EPA refers to the import of ODS intended to be
destroyed in the United States throughout this document as ``imports
for destruction.''
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ODS from decommissioned equipment, unwanted stockpiles, and
mixtures that are contaminated and cannot be reclaimed are often
imported into the United States for destruction. Facilitating the
destruction of ODS is beneficial to the environment since it averts ODS
emissions into the
[[Page 15278]]
atmosphere and thus supports 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 \38\ in 2015 could avoid 1.8 million ODP-weighted metric
tons of future emissions through 2050 and return stratospheric chlorine
levels at mid-latitudes to 1980 levels more than six years sooner than
in the baseline scenario.\39\ The EPA recognizes that there is ongoing
commercial demand for certain substances, as discussed earlier in this
document 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. A process for the import of ODS
for destruction helps facilitate the destruction of such ODS and
reduces the risk of such releases. Destruction of unwanted ODS in the
United States supports the ongoing availability of destruction options
of ODS worldwide and may also generate revenue for domestic destruction
facilities.\40\ More information on the destruction facilities that
destroy ODS and their technologies is available in the report in the
docket titled ``U.S. Destruction in the United States and Abroad.''
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\38\ 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. This definition is
broader than the definition of the term ``halon bank'' being
finalized in this action.
\39\ 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.
\40\ 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 above, the EPA's petition process 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 under
the pretense of being ``used.'' Under the existing regulations at 40
CFR 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 (40 CFR 82.13(k) and 82.24(e)). Importers are
required to keep records on imports for destruction of ODS under 40 CFR
82.13(g)(1) and 82.24(c)(2) and to submit quarterly reports, in
accordance with 40 CFR 82.13(g)(4) and 82.24(c)(1). The 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.
To facilitate the importation of used ODS for destruction, the EPA
proposed 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, in 40 CFR 82.13(g)(5) and 82.24(c)(6). Under this
proposed process, the importer would submit the petition 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 was shorter than the
corresponding period for the import petition process, which is 40
working days from departure, because the petition would contain less
information for the EPA to review and verify. The proposal was based on
the expectation that 30 working days is enough for the EPA to review
the petition and that this timeframe will not impede the import. The
Agency proposed to use the same objection notice conditions as in the
existing petition process for importing used ODS for reuse, such as if
the petition provides insufficient information or if it contains false
or misleading information. The EPA also proposed to require that the
petitioner submit a destruction verification 30 days after destruction
under 40 CFR 82.13(g)(6) and 82.24(c)(7). The Agency is finalizing the
supporting prohibitions in 40 CFR 82.4(j)(2) and 82.15(b)(3) to
prohibit the import of ODS for destruction without having received a
non-objection notice consistent with the new Certification of Intent to
Import ODS for Destruction.\41\
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\41\ The proposed regulatory text for 40 CFR 82.4(j)(2) and
82.15(b)(3) included different proposed effective dates. The EPA is
finalizing both changes effective 30 days after publication of the
rule to harmonize these requirements.
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After considering the public comments received, as described below,
the EPA is finalizing this process largely as proposed. The Agency is
also making some changes to what was proposed based on its
consideration of public comments. In general terms, this new process
omits collecting the detailed source information that is required in
import petitions, as that information is not necessary if the ODS is to
be destroyed. Instead, it is more important for the EPA to collect
information from the petitioner about the destruction. In particular,
the Certification of Intent to Import ODS for Destruction finalized in
this rulemaking does not include the following elements (which are
included in the existing import petition process): 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 omitting these information elements because they are
collected for import petitions to verify that the material is used, and
the Agency concludes it is not necessary to verify that ODS is used if
it is being imported for destruction. Simplifying the information
requirements decreases the regulatory burden on existing importers who
followed the import petition process to import used ODS for
destruction. In addition, the information requirements for petitions to
import used ODS had the potential to hinder imports for destruction if
petitioners were 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,
might have been 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 of Intent to Import ODS for Destruction
relaxes the information requirements for importing used ODS for
destruction compared to the existing import petition process, the EPA
concludes that this relaxation benefits the environment because
companies wishing to import used ODS into the United States for
destruction will be able to do so more easily, and therefore more used
ODS may be destroyed. This is consistent with the overarching goal of
Title VI to protect stratospheric ozone.
[[Page 15279]]
To better ensure that the ODS is destroyed, the EPA is adding
provisions 40 CFR 82.13(g)(9) and (10) and 82.24(c)(10) and (11) to
require importers and intermediaries that aggregate ODS for destruction
\42\ to keep certain records about the destruction of the ODS. In
particular, the EPA is requiring 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, export license application, or official communication from the
appropriate government agency; 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. The EPA is requiring that intermediaries maintain:
transactional records that include the name and address of the entity
from whom they received the ODS and to whom they sent the ODS; records
that include the date and quantity of controlled substances received
and sent for destruction; and a copy of the destruction verification if
they are the final aggregator.
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\42\ The discussion of the requirements for intermediaries is
included in the response to the comment received from ClimeCo which
is discussed further below.
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The EPA is also extending the Certification of Intent to Import ODS
for Destruction to imports of virgin ODS for destruction. While modeled
in large part on the petition to import used ODS, there are also
benefits to facilitating the import of virgin ODS for destruction.
Virgin ODS that are to be destroyed may be imported without consumption
allowances (see 40 CFR 82.4(d) and 82.15(b)). However, under existing
regulations there was no established regulatory mechanism for the EPA
to review and pre-approve those imports. As such, shipments may have
been held at the port while the EPA determined 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 an established regulatory mechanism for such approvals has created
some uncertainty for these imports. Moreover, establishing regulatory
requirements for such imports creates a mechanism to ensure that
imports of virgin ODS for destruction are destroyed.
Providing an established mechanism to import virgin ODS for
destruction is beneficial to importers and the EPA. Having a
transparent process that allows approval to occur before the shipment
reaches the port facilitates such imports and reduces potential delays
and costs associated with the prior approach to imports of virgin ODS
for destruction, as well as providing more certainty as to which
imports can proceed. In turn, this encourages imports of unwanted
virgin ODS for destruction, potentially avoiding the emission of such
ODS. As noted above, this is consistent with an overarching goal of
Title VI, to protect stratospheric ozone. The extension also closes a
gap in regulatory provisions for the import of virgin material for
destruction. As discussed previously in this document, 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 concludes that a
mechanism is needed to verify that virgin ODS imported for destruction
are 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 of used material for destruction and has
applied an analogous but simpler process to imports of virgin material
for destruction 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 concludes that having the same process for imports for
destruction of both used and virgin ODS is both feasible and
appropriate. Furthermore, establishing a consistent regulatory process
for used and virgin ODS simplifies the administration of this approach
because the same requirements generally apply regardless of the type of
ODS to be imported for destruction. Thus, the EPA is finalizing the
proposal to have the same requirements for both used and virgin ODS in
this new process.
The EPA is also revising the definitions of ``individual shipment''
and ``non-objection notice'' at 40 CFR 82.3, both of which previously
referred only to the import of used material. As proposed, the EPA is
amending 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.
As for the import petitions process, the Agency is finalizing
revisions that provide for flexibility for the timing of imports for
destruction. In the previous petitions process, the EPA required the
import to occur in the same control period (i.e., calendar year) that
the non-objection notice was issued. The EPA is finalizing a provision
that non-objection notices issued for the Certification of Intent to
Import for Destruction allow a year from the date of the notice to
import the material. Therefore, once a non-objection notice is issued,
the person receiving the non-objection notice is permitted to import
the individual shipment within a year of the date stamped on the non-
objection notice. For instance, if a non-objection letter is date-
stamped October 1, the import of that material could occur up to and
including September 30 of the following year but not thereafter. This
provides flexibility to imports for destruction that may not operate on
a calendar year basis.
As noted above, the EPA received three supportive comments for the
portions of the proposed rule addressing the Certification of Intent to
Import for Destruction. The Agency also received one comment suggesting
changes to the proposed provisions. The first commenter suggesting
changes to the proposal requests that the Agency require imports for
destruction be sent directly to the destruction facility, instead of
allowing for it to be sent to intermediaries. Specifically, ClimeCo, a
company that assists in projects that destroy class I substances,
states that several destruction facilities and offset project
developers have imported ODS into the United States for destruction but
have not shipped it directly to the destruction facility. They state
that the ODS was shipped to intermediate facilities before being
``bulked up,'' in other words aggregated with other ODS, and sent to a
destruction facility. The commenter states this could create
opportunities for bad actors to manipulate, re-direct, or re-sell the
imported ODS. ClimeCo suggests that the EPA require the ODS entering
the United States be shipped directly to a destruction facility without
any intermediate handling, processing, or other activities.
The EPA agrees that it is important to minimize the possibility
that an ODS imported for destruction is diverted and sold illegally
rather than being destroyed. The EPA notes that the importer has an
obligation to ensure that
[[Page 15280]]
it identifies a destruction facility for all ODS imported for
destruction, obtains a destruction verification once the destruction is
complete, and submits that verification to the EPA. It is ultimately
the importer's responsibility to ensure the imported ODS is destroyed
in the required time frame, regardless of whether they engage an
intermediate aggregator to facilitate the destruction. In light of
these responsibilities, the EPA disagrees that it is necessary to
prohibit intermediaries from aggregating ODS in a manner that
facilitates destruction. However, after considering this comment, the
EPA concludes that additional provisions are appropriate to address the
concerns about the potential for material being diverted during the
aggregation process. As discussed previously in this document and in
the proposal, a mechanism is needed to verify that virgin ODS imported
for destruction are destroyed and that claims of importing for
destruction are not used to circumvent the requirement to expend
consumption allowances and it also discussed the benefits of
establishing the same process for imports of used and virgin ODS for
destruction. (See 84 FR 41533, August 14, 2019). EPA is therefore
requiring importers to provide in the Certification of Intent to Import
ODS for Destruction the contact information of all persons who will
aggregate ODS prior to it being sent to the destruction facility. Thus,
the entire chain of custody from import to destruction must be known by
the importer and the EPA prior to the EPA authorizing the import.
Providing this information to the EPA helps the Agency track the chain
of custody of imported ODS for destruction and ensure that it is
destroyed. Providing this information is less burdensome to an importer
than not allowing aggregation of imported ODS for destruction, as the
commenter suggests. Thus, the EPA is finalizing provisions at 40 CFR
82.13(g)(5) and (10) and 82.24(c)(6) and (11).
To ensure accountability and allow for the Agency to verify, as
needed, the material that intermediaries receive is transferred for
destruction, the EPA is finalizing additional requirements in 40 CFR
82.13(g)(10) and 82.24(c)(11). Intermediaries aggregating ODS after it
is imported, but prior to destruction, must keep records of the name,
address, date, and amount of imported ODS bound for destruction that
they receive from another entity and transfer to another entity. These
records could include sales or other transactional records already
generated during the normal course of business, so long as they include
the required information. Additionally, the intermediary must maintain
a record of the destruction verification if they are the final
intermediary to receive the ODS prior to destruction. These additional
provisions are intended to address the concern raised in comments on
the proposal about the potential for material being diverted during the
aggregation process. Further, establishing mechanisms to ensure that
key information from both importers and intermediaries is available to
the EPA helps meet the Agency's ability to fully track the chain of
custody of imported ODS for destruction and ensure that it is
destroyed, consistent with the goals described in the proposal. The EPA
concludes that these provisions combined will allow for the EPA to
check compliance and determine whether ODS imported for destruction is
actually destroyed, even if it is aggregated prior to destruction.
iv. Prohibiting the Sale of Illegal Imports
The EPA proposed to prohibit the sale of illegal imports. The
Agency received supportive comments on this proposal and no adverse
comments. However, one commenter requested that the EPA prohibit the
sale of disposable cylinders. For the reasons described in below, the
Agency is finalizing the prohibition as proposed.
Based on the EPA's experience with the CFC phaseout, the incentive
to illegally import class II substances will continue to increase after
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 2020. In addition, there continues to be risk
of illegal imports of class I substances. To allow for better
enforcement of these requirements, the EPA proposed to add to 40 CFR
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.\43\
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\43\ The EPA has previously issued restrictions on sale as a
means for implementing restrictions on consumption. See, e.g., 40
CFR 82.4(h) (``No person may sell in the U.S. any Class I controlled
substance produced explicitly for export to an Article 5 country'');
82.4(n)(2) (``Any person selling unused class I controlled
substances produced or imported under authority of essential-use
allowances or the essential-use exemption for uses other than an
essential-use is in violation of this subpart.'').
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In finalizing this proposal, the EPA is relying primarily on its
authority under sections 604(c) and 605(c) of the CAA. 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 section 601 of the CAA as the amount of a
substance produced in the United States, plus the amount of that
substance imported, minus the amount exported.
The EPA remains concerned about the potential for 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. ODS that is imported without
allowances generally counts 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). There are no allowances for class I ODS as they have
all been phased out. Furthermore, following the 2020 stepdown, there is
a greater risk that illegal imports of HCFC-22 not destroyed or re-
exported could cause an exceedance of the cap set forth under the
Montreal Protocol and CAA.
To address this concern, as proposed, the EPA is strengthening its
ability to enforce the phaseout of ODS by adding at 40 CFR 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
imported into the United States in violation of the import
regulations.\44\ These revisions to the regulations clarify that it is
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
[[Page 15281]]
provided for in the regulations (e.g., for transformation or
destruction, or for used ODS). The revisions also explicitly state that
every kilogram of illegally imported material sold or distributed, or
offered for sale or distribution, constitutes a separate violation.
They also include an exception for actions that are needed to re-export
the controlled substance in such a situation.
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\44\ The proposed regulatory text for 40 CFR 82.4(s) and
82.15(g)(8) included different proposed effective dates. The EPA is
finalizing both changes effective 30 days after publication of the
rule to harmonize these requirements.
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The intent of this change is to 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.\45\ This
change also increases the EPA's compliance and enforcement options
where the Agency is not able to identify the importer. For example,
these provisions facilitate the EPA's ability 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 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 40 CFR 82.4 and 82.15, which will 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 sections 604(c) and 605(c) of the CAA, as
well as with the overarching goals of Title VI of the CAA.
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\45\ The addition of these prohibitions to the regulatory text
does not change any regulated entity's obligations under the
existing statutory and regulatory provisions, nor does it limit the
Agency's ability to enforce, or to take measures to assure
compliance with, the existing provisions.
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This change also encourages distributors to be more cautious when
purchasing ODS that seem 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. While the incentive to circumvent
the import controls will always exist, the EPA intends for these
provisions to reduce the market for smuggled ODS, which will reduce
illegal imports.
The Agency received supportive comments from The Alliance and
National Refrigerants. EIA submitted supportive comments also
requesting that the EPA prohibit the sale of disposable cylinders. EIA
states that the majority of known ODS smuggling cases are facilitated
by the use of disposable cylinders, also referred to as ``non-
refillable containers.'' Disposable cylinders are containers charged
with refrigerant, sold, used for servicing or commissioning equipment,
and then discarded. The Agency responds that EIA's suggestion is beyond
the scope of this rulemaking because it was not included in the
proposed rule and that the Agency does not believe it prudent at this
time to act on the suggestion without soliciting input from refrigerant
distributors and other affected stakeholders. The Agency may consider
in the future whether a ban on disposable cylinders could guard against
illegal import of refrigerants and may consider proposing such a
prohibition in a future rulemaking.
EIA also commented that the EPA should work more closely with other
agencies to help prevent illegal imports. The EPA responds that the
Agency has worked closely with other agencies and in particular with
CBP to ensure compliance with the phaseout of ODS under sections 604,
605, and 606 of the CAA. Historically, the Agency has participated on
interagency tasks forces to address potential illegal imports of ODS.
Recent illegal imports have demonstrated to the Agency that additional
regulatory clarity is needed to address the potential for domestic
distribution of illegally imported material, as such material would
generally be considered consumption. After considering all the comments
on this issue, the Agency is finalizing its proposal to prohibit the
sale or distribution or offer for sale or distribution of illegally
imported ODS in 40 CFR 82.4(s) and 82.15(g)(8), for the reasons
discussed above.
I. Electronic Reporting and Updates to Other Provisions of the
Production and Consumption Control Program
The EPA proposed to require the use of an electronic reporting
system for producers, importers, exporters, transformers, and
destroyers of ODS in 40 CFR 82.3, 82.13, 82.14, 82.23, and 82.24 and to
clarify the certification requirements for methyl bromide quarantine
and preshipment uses in 40 CFR 82.4 and 82.13. The EPA did not receive
any adverse comments on these proposals. For the reasons discussed
below, the EPA is finalizing these provisions as proposed.
i. Electronic Reporting and Changes to Reporting Requirements in 40 CFR
82.3, 82.13, 82.14, 82.23, and 82.24
The EPA proposed to require that reports, petitions, and related
reports be submitted through Central Data Exchange (CDX), and the
Agency proposed to consolidate and harmonize requirements for class I
and II substances for ease or reporting. The Agency received supportive
comments on this proposal and no adverse comments. For the reasons
described below, the Agency is finalizing these requirements as
proposed.
The EPA is finalizing as proposed the requirements for the use of
the Agency's CDX to submit reports electronically. The compliance date
for this requirement is 30 days after the publication of the final rule
in the Federal Register, in part to ensure that stakeholders have
adequate time to register in CDX. To achieve this, the EPA is updating
the definition of ``Administrator'' in 40 CFR 82.3, defining ``Central
Data Exchange'' in Sec. 82.3, adding a new section at Sec. 82.14 with
instructions on the process for electronic reporting, and revising
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. Thus, the EPA is amending the definition of
``Administrator'' to note that electronic reporting is required 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. The EPA
is also adding the definition of ``Central Data Exchange'' in Sec.
82.3 and providing instructions on how to register in CDX and submit
information electronically in Sec. 82.14.
The Agency has provided the option of electronic reporting for most
submissions since 2008, and many stakeholders have transitioned to an
electronic reporting system. The regulatory changes reflect the current
practices of the vast majority of reporting entities. Electronic
reporting allows for faster review and transmission of submissions to
the EPA. Additionally, all information submitted electronically is
linked in an improved tracking system, which facilitates document
management and allows companies to more easily manage past and future
submissions.
The EPA monitors company compliance, in part, through the
recordkeeping and reporting regulations at 40 CFR 82.13 and 82.24. The
regulatory changes in this final rule will
[[Page 15282]]
ease the reporting burden. For example, the EPA is removing reporting
elements in 40 CFR 82.23(a)(i)(F) and 82.24(b)(1)(iv) and (c)(1)(vi)
that require the reporter to calculate values from data already
provided. Requiring this is unnecessary because the requirement to
report electronically through CDX means these values can automatically
be calculated and populated. This will save reporting entities time in
reporting and reduce errors in submissions. The EPA is also finalizing
a change in 40 CFR 82.13(h)(1)(iii) and 82.24(d)(1)(iii) \46\ to report
the quantity (rather than the percentage) of used, recycled, or
reclaimed class I and class II substances. This change improves
consistency with the importer reporting requirements and corresponds
with the way companies report their annual data. It also streamlines
the exporter reporting forms by eliminating the need for an entity to
calculate a percentage. The EPA is also removing references to expended
and unexpended production and consumption allowances at 40 CFR
82.13(f)(3)(iv) and (g)(4)(vii), as they can be calculated
automatically with the use of electronic reporting forms.
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\46\ The preamble to the proposed rule discussed the EPA's
intent to make this change at both 40 CFR 82.13(h) and 82.24(d),
though the regulatory text accompanying the proposal contained text
for only 40 CFR 82.13(h)(1)(iii). In order to ensure that the
regulatory revisions fully implement the objective described in the
preamble to the proposal, the EPA is revising 40 CFR
82.24(d)(1)(iii) in this final action to include the prohibition
described above.
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Other regulatory changes to the recordkeeping and reporting
provisions harmonize the requirements for class I and class II
substances. For example, under the existing regulations, the timeframe
that submitters have to make revisions to forms for class I and class
II substances is not the same. The EPA is adding a provision for
reports for class I substances under 40 CFR 82.13 that revisions can be
made within 180 days of the end of the applicable reporting period.
This change is consistent with the previously established regulations
in 40 CFR 82.24 for revisions to reports for class II substances.
Likewise, the EPA is revising 40 CFR 82.13 and 82.24 to clarify that
forms for both class I and class II ODS must be submitted
electronically through CDX within 45 days of the end of the control
period to harmonize the reporting timeframes for the two classes of
ODS.
The EPA is amending 40 CFR 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 40
CFR 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. The existing regulatory text at 40 CFR 82.24(d)(1) excluded
quarterly reporting for those RACAs even though exporters do typically
include those exports in their quarterly reporting. Thus, for ease of
review by the EPA, and for consistency of reporting by exporters, the
Agency is finalizing a requirement 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. The EPA is also
amending the reporting requirements at 40 CFR 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. Lastly,
the EPA is revising class I reporting requirements for exporters by
replacing the term ``Employee Identification Number'' with the correct
term ``Employer Identification Number'' in 40 CFR 82.13(h).
ii. Changes to Methyl Bromide Provisions in 40 CFR 82.4 and 82.13
As discussed in more detail in the preamble to the proposed rule,
the EPA proposed several changes to the QPS provisions under section
604(d)(5) of the CAA. In part, these changes were proposed in response
to the misuse of QPS methyl bromide by applicators and distributors in
the U.S. Virgin Islands and Puerto Rico, which led to human exposures
and life-altering illnesses for some of the people exposed. Methyl
bromide is highly toxic. Studies in humans indicate that the lung may
be severely injured by the acute (short-term) inhalation of methyl
bromide. Acute and chronic (long-term) inhalation of methyl bromide can
lead to neurological effects in humans. To help prevent future
exposures stemming from misuse of QPS methyl bromide and protect human
health, the EPA is finalizing revisions to the QPS provisions to: (1)
Clarify that it is a violation to sell or use methyl bromide produced
under the QPS exemption for any uses other than QPS applications; (2)
extend the existing certification requirement to all purchasers of QPS
methyl bromide; and (3) make non-substantive changes to 40 CFR 82.4 and
82.13 to improve readability. The Agency did not receive any comments
on these proposed provisions. For the reasons discussed below, the
Agency is finalizing these revisions as proposed.
The EPA's regulations implementing section 604(h) of the CAA set
January 1, 2005 as the production and import phaseout date for methyl
bromide (40 CFR 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 40 CFR 82.3. 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 recordkeeping and reporting regulations relating to QPS
methyl bromide appear at 40 CFR 82.13 and establish specific
requirements for producers, importers, distributors, and applicators,
including in some instances a written certification that the methyl
bromide will be used only for QPS applications in accordance with the
definitions in 40 CFR 82.3.
First, the Agency is adding an express statement at 40 CFR 82.4(r)
that no person may sell or use QPS methyl bromide for any purpose other
than QPS applications. The existing regulations at 40 CFR 82.13(y)(1)
and (z)(2) require certification statements from distributors,
applicators, commodity owners, shippers or their agents that methyl
bromide ``will be used only for quarantine and preshipment
applications.'' Similarly, 40 CFR 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. However, the EPA is adding an express statement of the
prohibition at 40 CFR 82.4(r) to provide clarity to this prohibition;
this revision does not change the existing requirements. The revisions
at 40 CFR 82.4(r) also explicitly state that every kilogram of methyl
bromide produced or imported under the authority of the QPS exemption
and sold or used for a use other than QPS is a separate violation.
Second, the EPA is finalizing as proposed the extension of the
existing certification requirement to all
[[Page 15283]]
purchasers of QPS methyl bromide, including purchasers who purchase for
further distribution. Under the existing recordkeeping and reporting
requirements at 40 CFR 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 40 CFR 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 for QPS applications under the existing regulation at
40 CFR 82.13(z).
The purpose of this certification requirement when established was
to ensure that anyone selling or purchasing QPS methyl bromide verified
that they will comply with requirements under Title VI of the CAA (see
66 FR 37760, July 19, 2001). However, the EPA 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 was required to certify or
maintain a certification that the material will be used only for a QPS
application. 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 EPA is extending the certification
requirement to all purchasers of QPS methyl bromide. This is meant to
help ensure that distributors are knowledgeable about the requirements
for the sale of QPS methyl bromide. Distributors are more likely to
make themselves aware of those requirements, and to be mindful of the
fact that QPS methyl bromide can be used only for QPS applications, if
they are required to sign a certification addressing these requirements
and to provide it before each purchase. This will fill the gap in the
distribution chain and ensure the original intent of the regulation is
implemented.
More specifically, the EPA is extending the existing requirement in
40 CFR 82.13(y) that every distributor of QPS methyl bromide certify to
the producer or importer from whom the distributor purchased or
received the material that quantities purchased or received will be
sold only for quarantine applications or preshipment applications. The
EPA is extending this requirement to also require such a certification
when the material is purchased or received from a distributor.
Likewise, the EPA is extending 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 will be used or sold solely for
quarantine or preshipment applications in accordance with definitions
in subpart A. The EPA is extending this requirement to sales and
deliveries to any exporter or distributor. The Agency is not making
parallel revisions for exporters because the invoice or sales agreement
required in 40 CFR 82.13(h)(2)(viii) is adequate for this purpose.
The EPA is also finalizing a revision that the distributor certify
that the distributor is 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 will 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.
Third, the EPA is finalizing as proposed non-substantive changes to
40 CFR 82.4 and 82.13 that improve readability and clarity. The EPA is
editing 40 CFR 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 making edits to
clarify what is meant by ``type'' of methyl bromide. The final rule
more clearly states 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 statement matches the information requested in the
existing reporting forms. The EPA is removing 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 the
Federal Insecticide, Fungicide, and Rodenticide Act (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 replacing references to ``class I, Group VI
controlled substances'' with ``methyl bromide'' where appropriate for
readability throughout 40 CFR 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 will improve
the readability of the QPS regulations.
J. Addition of Polyurethane Foam Systems Containing CFCs to the
Nonessential Products Ban
The EPA proposed to add polyurethane foam systems containing CFCs
to the list of nonessential products at 40 CFR part 82, subpart C. The
Agency received supportive comments from The Alliance and EIA and is
finalizing as proposed for the reasons discussed below. This provision
has the effect of prohibiting 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, an unexpected increase of CFC-11 emissions has been
detected in the atmosphere. Recent reports indicate that this is the
result of new production of CFC-11 in China likely for use in
foams.\47\ \48\ \49\ \50\ \51\ Except for feedstock applications,
production and import of CFCs has been prohibited in the United States
and many other countries since 1996 \52\ and globally production and
consumption of CFCs have been phased out since 2010 under the Montreal
[[Page 15284]]
Protocol. The nonessential products ban implemented under section 610
of the CAA 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. After reviewing
the EPA's import restrictions and the nonessential product ban, the
Agency identified the potential for sale or distribution, or offer for
sale or distribution, of imported polyurethane foam systems \53\
containing illegally-produced CFCs. The EPA is not currently aware of
any imports of CFC-11 polyurethane systems into the United States, but
the Agency is finalizing revisions to amend the list of nonessential
products in 40 CFR 82.66 to address this gap and to ensure that the
United States does not inadvertently contribute to demand for CFCs and
prevent CFC emissions in the United States. The EPA is also adding a
definition of ``polyurethane foam systems'' in 40 CFR 82.62 to
correspond with the amendment to the list of nonessential products.
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\47\ 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.
\48\ WMO. (2018) 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.
\49\ 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.
\50\ Rigby, M. et al. ``Increase in CFC-11 emissions from
eastern China based on atmospheric observations.'' Nature 569.7757
(2019): 546-550.
\51\ UNEP. (2019) Decision XXX/3 TEAP Task Force Report on
Unexpected Emissions of Trichlorofluoromethane (CFC-11). Available
at http://conf.montreal-protocol.org/meeting/mop/mop-31/presession/Background%20Documents/TEAP-TF-DecXXX-3-unexpected_CFC11_emissions-september2019.pdf.
\52\ Historically, limited amounts of CFC production and
consumption were authorized after the phaseout for essential uses.
\53\ These systems are also referred to as polyols, which are
defined in Montreal Protocol reports as pre-blended foam chemicals.
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The EPA is also adding in 40 CFR 82.64(h) a prohibition on the sale
or distribution, or offer for sale or distribution, of the products
identified as being nonessential in Sec. 82.66(f). While the EPA did
not include specific text for the prohibition at 40 CFR 82.64(h) in the
proposal, the Agency discussed in the proposal that the proposed
changes would prohibit the sale or distribution, or offer for sale or
distribution, of polyurethane foam systems containing CFCs (see, e.g.,
84 FR 41535, August 14, 2019). In order to ensure that the regulatory
revisions fully implement the objective described in the preamble to
the proposal, the EPA is revising 40 CFR 82.64(h) in this final action
to include the prohibition described above. This revision is wholly
consistent with the description of the EPA's intent for this regulation
as set forth in the preamble to the proposal.
With respect to the added definition, the EPA is defining
``polyurethane foam systems'' in 40 CFR 82.62 as 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. In such systems, the components are sent
to a mixing gun and dispensed as foam directly to a surface such as a
roof or tank, usually to provide thermal insulation. 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 not a bulk ODS because the ODS is
contained in a system and packaged as a product. Under the regulations
in subpart A, bulk CFCs are a ``controlled substance'' and thus are
subject to import controls such as the consumption allowance regime
under 40 CFR 82.4. However, the definition of ``controlled substance''
in 40 CFR 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 a
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 already listed
as a nonessential product at 40 CFR 82.66(c) and are banned from sale
or distribution, and from being offered for sale or distribution, in
interstate commerce at 40 CFR 82.64(c).
The revisions to the nonessential product ban in this rulemaking
are made under section 610 of the CAA, titled ``Nonessential products
containing chlorofluorocarbons.'' That statutory section 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 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, or 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 taking this final action to add polyurethane foam systems
containing CFCs as a nonessential product, the EPA 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 ODS 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, have
provided 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,
January 15, 1993 and 66 FR 57514, January 14, 2002). For example, use
of a class I
[[Page 15285]]
substance in a product may be considered nonessential where substitutes
are readily available, even if the product itself is important (see 58
FR 4474, January 15, 1993, and 66 FR 57514, January 14, 2002). 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. As first explained in 1993, the EPA interprets this
criterion to include both currently available substitutes and
potentially available substitutes (see 58 FR 4474, January 15, 1993).
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.\54\ As the EPA
stated in the initial class I nonessential products rule, 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 (see 58 FR 4474, January 15, 1993). As in previous
considerations of this criterion, in this rulemaking the EPA is
examining sectors where the market has previously switched to
substitutes. 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 for polyurethane foam systems. All U.S. manufacturers have
therefore 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.
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\54\ The current list of SNAP-approved substitutes for foam
blowing is available here: https://www.epa.gov/snap/substitutes-foam-blowing-agents.
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For the criteria of safety and health, as in prior rules related to
the nonessential product ban (see 66 FR 57514, January 14, 2002), 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 considered the direct
and indirect effects of product use, and the direct and indirect
effects of alternatives, such as ODP, flammability, toxicity,
corrosiveness, energy efficiency, ground-level air hazards, and other
environmental factors (see 66 FR 57514, January 14, 2002). 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, there is not a
substantive difference between foam systems and plastic foam products,
given that the former is a precursor for the latter. In developing the
initial 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 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 ODPs of CFC-11, CFC-12, and CFC-114, all of which are 1. 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.\55\ The EPA
considered all these sources of information when deciding whether 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.
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\55\ UNEP. 2018 TEAP Report Available at http://conf.montreal-protocol.org/meeting/oewg/oewg-41/presession/Background-Documents/TEAP_2018_Assessment_Report.pdf.
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Considering all these factors together, the EPA concludes that
polyurethane foam systems containing CFCs meet the criteria in section
610 of the CAA for listing as a nonessential product and is adding them
to the list of nonessential products in 40 CFR 82.66(f) and prohibiting
their sale in 40 CFR 82.64(h).
K. Updates to 40 CFR 82.3, 82.104, and 82.270 Related to Destruction
The EPA proposed to update and harmonize definitions related to ODS
destruction in 40 CFR 82.3, 82.104, and 82.270, by adding to the list
of destruction technologies and amending the definition of
``destruction'' to allow inclusion of destruction technologies that
incidentally result in commercially useful end products. The EPA
received supportive comments from The Alliance on the proposal to
update the list of destruction technologies consistent with the
Montreal Protocol, and no adverse comments on this aspect of the
proposal. For the reasons discussed below, the EPA is finalizing these
revisions as proposed.
The EPA added a definition of the term ``destruction'' to 40 CFR
82.3 in 1993 (see 58 FR 65047-65048, December 10, 1993). 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 (see 58 FR 65049, December 10, 1993). Revising
the definition of destruction to include these technologies will not
affect the applicability of other regulatory requirements relating to
use of these technologies.
In the revisions finalized in this rulemaking, the Agency is
updating the definition of ``destruction'' in 40 CFR 82.3, as proposed,
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 adding these destruction
[[Page 15286]]
technologies so that industry in the United States has a greater
variety of technology 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 adding the following incineration technology: Porous thermal
reactor. Porous thermal 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. For plasma,
the EPA is adding nitrogen plasma arc, portable plasma arc, argon
plasma arc, microwave plasma, and inductively coupled radio frequency
plasma to allow for greater industry flexibility for using plasma
destruction technologies. Although they reach higher temperatures than
incineration technologies, plasma technologies are considered to be
non-incineration technologies because they involve the thermo-chemical
decomposition of organic material in a limited oxygen environment.
Lastly, the EPA is also adding four non-incineration technologies:
Chemical reaction with hydrogen and carbon dioxide, gas phase catalytic
de-halogenation, superheated steam reactor, and thermal reaction with
methane.
The EPA is also amending the definition of ``destruction'' to
modify the statement that the process must not result in a commercially
useful end product. The EPA is finalizing revisions to harmonize the
definitions of the term ``destruction'' at 40 CFR 82.3, 82.104, and
82.270. These two existing definitions are intended to convey the same
meaning but are slightly different. For instance, the definition in 40
CFR 82.104 refers to a code of good housekeeping contained in a United
Nations Environment Programme report while the definition in 40 CFR
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 40 CFR 82.3 contains seven technologies while the
list at 40 CFR 82.104 contains five.\56\ Both lists are out of date in
that they fail to include certain technologies that can destroy ODS or
convert them into byproducts and have been approved under more recent
decisions of the Parties. Similarly, the existing prohibition on
disposing of halons in 40 CFR 82.270 includes an exception for
destruction that also provides an outdated list of destruction
technologies. The EPA is therefore harmonizing these three definitions
of destruction and updating the list of destruction technologies to
allow the use of more destruction technologies in the United States. An
explanation of these technologies appears in the EPA's report on
destruction ``ODS Destruction in the United States and Abroad,'' which
is available in the docket.
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\56\ Similarly, the definition of ``completely destroy'' at 40
CFR 82.104 refers to using ``one of the five'' destruction processes
approved by the Parties. The EPA is also removing this outdated
language.
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The EPA is also revising the definition of ``destruction'' in 40
CFR 82.104 and the prohibition in 40 CFR Sec. 82.270 by removing the
outdated lists found in those provisions and adding a cross reference
to the list of destruction technologies in 40 CFR 82.3. This conforms
the list of destruction technologies that can be used across subparts
A, E, and H of 40 CFR part 82. The destruction technologies finalized
through this action in Sec. 82.3 are also applicable to these other
subparts, although the EPA notes that the listing of municipal waste
incinerators in the existing regulations at 40 CFR 82.3 is limited to
the destruction of foams, and thus the added cross reference to 40 CFR
82.3 in Sec. 82.270 does not make that technology available for the
exception for the destruction of halons at 40 CFR 82.270.
As noted above, the EPA is also amending the definitions of
``destruction'' at 40 CFR 82.3 and 82.104 to modify language regarding
commercially useful end products. The EPA is also editing provisions in
40 CFR 82.104 (subpart E, ``The Labeling of Products Using Ozone-
Depleting Substances'') and 40 CFR 82.270 (subpart H, ``Halon Emissions
Reduction'') to conform with the changes in this definition. The
previously existing definition contained a restriction that a
destruction technology cannot result in a commercially useful product.
The EPA is revising that restriction in part because one of the
destruction technologies that this action adds to the definition of
destruction breaks down ODS into substances that have commercial
viability. The process ``Chemical Reaction with hydrogen and carbon
dioxide'' 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. Because the EPA has concluded that a process
that would otherwise qualify as ``destruction'' should not fail to
qualify simply because one of the outputs is a commercially useful end
product, it is revising the definition of ``destruction'' so that the
mere existence of such an end product does not bar the technology from
being used. The revisions further clarify that for destruction
processes, the commercial usefulness of the end product is secondary to
the act of the ODS destruction. Thus, the 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 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 (see 58 FR 65048-65049, December
10, 1993). 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 under the
destruction exclusion, but the material had to be entirely consumed in
the process (except for trace quantities) to qualify for the
transformation exclusion (see 58 FR 65048, December 10, 1993).
Intent has been an important aspect of the distinction between
``destruction'' and ``transformation'' since the EPA first promulgated
these definitions. 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
[[Page 15287]]
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.'' (See 58 FR 65049, December 10, 1993). 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.'' (See 58 FR 65047, December
10, 1993).
Consistent with that recognition and with the inclusion of a new
destruction technology with commercially useful end products, the EPA
concludes that the creation of a 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. Thus, the
purpose is to create new compounds using the ODS as a feedstock rather
than the decomposition of ODS as a waste.
Accordingly, to update the regulatory text but preserve a
distinction between transformation and destruction, the EPA is amending
the definitions of ``destruction'' at 40 CFR 82.3 and 82.104 by
removing the previously existing restriction that a destruction
technology cannot result in a commercially useful product and by also
adding a clarification that, while destruction might result in a
commercially useful end product, such usefulness would be secondary to
the act of destruction.
L. Removal of Obsolete Provisions in 40 CFR 82.3, 82.4, 82.9, 82.10,
82.12, 82.13, 82.16, and 82.24
The EPA proposed to remove obsolete provisions from several
sections of part 82. The Agency received supportive comments from The
Alliance on this proposal and no adverse comments. For the reasons
described below, the EPA is finalizing the removal of outdated
provisions for class I ODS related to Article 5 allowances,
transformation and destruction credits, and transfers of allowances
issued prior to the phaseout as proposed for ease of reading and to
reduce confusion. The EPA is also removing definitions and reporting
provisions for HCFC-141b exemption allowances and export production
allowances.
i. Class I Article 5 Allowances
Before the global 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.\57\ 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 removing
the schedule for issuing Article 5 allowances found at 40 CFR 82.9(a)
and the corresponding recordkeeping and reporting requirements in 40
CFR 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 removing these provisions as well.
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\57\ For the purposes of the Montreal Protocol, this is called
production for basic domestic need.
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ii. 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 removing these provisions and
removing 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 removing 40 CFR
82.9(e) and related obsolete reporting and recordkeeping requirements
in 40 CFR 82.13(f)(2)(iv), (g)(1)(xv), and (g)(4)(xi) and (i).
Section 82.9(f) authorized persons who were nominated for an
essential use exemption to obtain destruction and transformation
credits between 1996 and 2000. The EPA established these provisions
because of the difference between the phaseout date for class I
substances under the CAA and the phaseout date for the same substances
under the Montreal Protocol. These provisions include a description of
the information needed and the grounds for which the EPA can disallow
the request. Section 82.4(f) addresses production and import with
destruction and transformation credits. The EPA stopped issuing such
credits in 2000. Because these provisions no longer have any purpose or
effect, the EPA is removing 40 CFR 82.4(f) and 82.9(f).
iii. 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 removing 40 CFR 82.10 in its entirety. The EPA is also
finalizing the removal of references to 40 CFR 82.10 from the
definition of ``consumption allowance'' in 40 CFR 82.3, as well as from
the provisions in 40 CFR 82.9(c) and 82.13(h)(1) and (2) as those
references are no longer applicable. As discussed earlier in this
document, the EPA is entirely removing 40 CFR 82.9(e) and (f) in this
action, and it is also removing Sec. 82.13(i), as its provisions are
no longer needed. Accordingly, the
[[Page 15288]]
references to Sec. 82.10 in those provisions will also be removed.
iv. Transfer 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 40 CFR 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 removing provisions related to pre-1996 allowance transfers for
class I ODS (and pre-2005 for methyl bromide) found at 40 CFR 82.12, by
revising paragraph (a)(1) and removing paragraph (b)(1), as any such
transfers occurred years ago and these provisions no longer have any
purpose or effect.
As discussed earlier in this section, the EPA is removing certain
provisions governing class I Article 5 allowances and destruction and
transformation credits. The EPA is therefore also removing provisions
allowing for the transfer of class I Article 5 allowances and
destruction and transformation credits found at 40 CFR 82.12(a)(2),
(b)(2) through (5), and (c) as those provisions are longer needed.
v. HCFC-141b Allowances
In 2003, the EPA issued regulations (see 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 40 CFR 82.16(b)). The EPA created a petition
process at 40 CFR 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 40 CFR 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. In the current rulemaking, the EPA proposed to remove those
provisions, and is now finalizing those revisions as proposed, as
described in the following paragraphs.
In this action, the EPA is removing the definitions in 40 CFR 82.3
specific to HCFC-141b production or import after the 2003 phaseout, in
particular, 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 removing
references to HCFC-141b in the definition of ``Confer,'' but is
retaining the remainder of that definition. The EPA is also removing
references and recordkeeping and reporting requirements specifically
relating to HCFC-141b exemption allowances. These edits are made by
removing 40 CFR 82.24(b)(1)(ix) and (xi), (b)(2)(xiv), (c)(1)(xi),
(c)(2)(xvi),and (g).
The EPA also created provisions at 40 CFR 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 retaining the definition of export production allowances and certain
references where appropriate to provide context to the reader but is
removing the recordkeeping and reporting provisions. These edits are
made in 40 CFR 82.16(e)(1) and (2) and 82.24(b)(2)(iv), and by removing
Sec. 82.24(b)(1)(iv) and (ix), (b)(2)(xii), and (d)(2).
M. Other Comments Not Related to the Proposal
The EPA received a comment that is unrelated to the proposed rule
on the management and destruction of ODS held in banks in relation to
the venting prohibition in section 608 of the CAA. In this comment, EIA
notes that a substantial bank of ODS persists in the United States,
including of CFC-11 contained in foams as well as other class I and
class II ODS substances contained in existing refrigeration and air-
conditioning equipment or stockpiles. They state that despite a growing
bank of ODS found to be available for recovery from retired equipment,
the rate of proper disposal of these substances through either
reclamation or destruction has declined. The commenter suggests that
the low rates of reclamation and destruction in the United States,
particularly of class II ODS, indicates that significant quantities of
these substances are likely being vented in violation of section 608 of
the CAA. They argue that in order to enforce the venting prohibition
and encourage responsible management and disposal of the remaining bank
of ODS, the EPA should propose additional measures on lifecycle ODS
management. The EPA notes that this comment pertains to section 608 of
the CAA and the regulations under 40 CFR part 82, subpart F, and is
beyond the scope of this rulemaking, which did not propose and is not
finalizing any changes to the subpart F requirements. As the comment is
not relevant to this final action, no response is required.
IV. Economic Analysis
The EPA considered the incremental costs and benefits associated
with this rulemaking, which primarily stem from changes to reporting
and recordkeeping requirements. In total, the EPA estimates that the
quantified costs and benefits of this rule results in a net savings of
$13,000 per year. The Agency analyzed the quantitative costs and
benefits associated with transitioning to electronic reporting, the
streamlined import petition process for used halons, exempting halon
1211 in aircraft bottles from the import petitions process,
establishing the Certification of Intent to Import ODS for Destruction,
adding a recordkeeping requirement for certain distributors of methyl
bromide QPS applications, and labeling containers of Halotron[supreg]
I. The quantifiable costs and benefits of this rule primarily result
from the 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.\58\ Many of the regulatory revisions finalized
in this action, such as the removal of obsolete requirements, will not
result in any new costs or benefits. The EPA has provided in the docket
technical support documents that consider the costs and the benefits
commensurate with changes to the ODS phaseout regulations.
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\58\ The following documents are available in the docket: ``EPA.
1999. The Benefits and Costs of the Clean Air Act: 1990 to 2010;''
``EPA. 1992. Regulatory Impact Analysis: Compliance with Section 604
of the Clean Air Act for the Phaseout of Ozone Depleting
Chemicals;'' and ``EPA. 1993. Addendum to the 1992 Phaseout
Regulatory Impact Analysis: Accelerating the Phaseout of CFCs,
Halons, Methyl Chloroform, Carbon Tetrachloride, and HCFCs.''
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Electronic reporting allows for faster review and transmission of
submissions to the EPA. Additionally, all information submitted
electronically is linked in an improved tracking system, which
facilitates document management and allows companies to more easily
[[Page 15289]]
manage past and future submissions. The estimated burden hours and
labor costs will decrease as a result of the complete transition from
paper to electronic reporting, including removing unnecessary data
elements and auto-populating others. Similarly, the estimated Agency
burden hours and labor costs decreases. The streamlined petitions
process for importing used halons and the new Certification of Intent
to Import ODS for Destruction both decrease the estimated respondent
burden. Specifically, the number of reporting elements for importers
for destruction is reduced from 13 to 9, reducing burden hours per
response by four hours. The EPA also estimates that exempting halon
1211 used in aircraft bottles from the petition process reduces the
number of responses per respondent by one. These changes are detailed
in the supporting statement for the Information Collection Request
available in the docket to this rule.
The EPA estimates that redesigning the existing labels on
containers of Halotron[supreg] I will result in a one-time cost of
approximately $4,000. 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. Hourly costs include
wages, overhead rates, and fringe rates. Additional information on this
analysis is available in the docket titled ``Estimated costs of
Regulatory Changes to Labeling of Containers of HCFC Fire Suppression
Agent, 2020-2029.''
There are also unquantifiable effects of this rule. Prohibiting
both the sale of QPS methyl bromide for non-QPS purposes and the sale
of illegally imported ODS is designed to improve compliance with the
existing provisions. These costs are unquantifiable as the scale of
these sales is not known but are anticipated to be small due to the
illegality of such sales. The prohibition on sales and distribution of
polyurethane foam systems containing CFCs will have no cost because
there is no evidence to suggest this practice is occurring in the
United States. Updating the definition of destruction allows for the
use of new destruction technologies that are currently not in use in
the United States but can now be employed with the additional
technologies. Additional destruction of unwanted ODS in the United
States may generate revenue for domestic destruction facilities.
Lastly, the removal of obsolete provisions is not anticipated to have
any material cost or benefit.
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.\59\
This rule allows for the production and consumption of HCFC-123 and
HCFC-124 that will otherwise not be allowed in the absence of this
rulemaking. These HCFCs will then be used to service existing fire
suppression, refrigeration, and air-conditioning equipment, as modeled
in the 2019 Final Servicing Tail Report. This rule relieves a
regulatory prohibition on production and consumption of HCFC-123 and
HCFC-124 and results in greater benefits than taking no action.
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\59\ EPA 2008, ``HCFC Cost Analysis'' and EPA 2018, ``Overview
of CFC and HCFC Phaseout.''
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In finalizing the level of allocation for HCFC-123, the EPA
considered the quantities needed to satisfy estimated demand for HCFC-
123 to service equipment manufactured before 2020 and the amount of
HCFC-123 that will likely be reclaimed annually, and thus be available
to meet part of the demand for HCFC-123. The Agency is issuing
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 then decreasing
the number of allowances issued in each subsequent year by an equal
amount each year such that there are zero allowances issued in 2030.
This allocation will avoid stranding existing equipment due to an
inadequate supply of HCFCs while achieving a complete phaseout of
production and consumption by 2030. As discussed in Section III of this
document, a viable reclamation market is a necessary element in
achieving those two goals. Issuing allowances in excess of demand would
suppress the reclamation market and result in less supply to service
equipment after the 2030 phaseout. In the near term, the final
allocation provides sufficient allowances to meet the near-term needs
of the market while also fostering reclamation and transition. A final
allocation that is significantly too high or too low could adversely
affect 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 once stockpiles of
previously-imported material is exhausted. Thus, if the reclaim market
is suppressed from 2020 through 2029, there will be less supply and
higher costs for HCFC-123 for the manufacture of new fire suppression
equipment and less supply and higher costs as the phaseout progresses
since the supply of HCFC-123 will eventually only be from the recycling
or reclamation market.
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. This analysis is available
in the docket. Based on the screening analysis of allowance holders of
HCFC-123 and HCFC-124, this rulemaking has no SISNOSE because it is
expected to result in a small net benefit to small businesses 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 three
of which are small businesses.
V. 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 not subject to Executive Order 13771, because this
final rule is expected to result in no more than de minimis costs.
C. Paperwork Reduction Act (PRA)
The information collection activities in this rule have been
submitted for approval to OMB under the PRA. The Information Collection
Request (ICR) document that the EPA prepared has been assigned the EPA
ICR number 1432.34. You can find a copy of the ICR and supporting
statement in the docket for this rule, and it is briefly summarized
here. The information collection requirements are not enforceable until
OMB approves them.
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
[[Page 15290]]
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: 98.
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: $363,683, includes $7,400 annualized capital
or operation & maintenance costs.
The ICR addresses 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. When OMB
approves this ICR, the Agency will announce that approval in the
Federal Register and publish a technical amendment to 40 CFR part 9 to
display the OMB control number for the approved information collection
activities contained in this 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 final rule is $13,000 per year
in 2019 dollars.
E. Unfunded Mandates Reform Act
This action does not contain any unfunded mandate as described in
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect
small governments. The action imposes no enforceable duty on any state,
local or tribal governments or the private sector.
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 it is not feasible to quantify any
disproportionately high and adverse effects from this action on
minority populations, low-income populations and/or indigenous peoples,
as specified in Executive Order 12898 (59 FR 7629, February 16, 1994).
L. Congressional Review Act (CRA)
This action is subject to the CRA, and the EPA will submit a rule
report to each House of the Congress and to the Comptroller General of
the United States. This action is not a ``major rule'' as defined by 5
U.S.C. 804(2).
List of Subjects in 40 CFR Part 82
Environmental protection, Air pollution control, Chemicals,
Reporting and recordkeeping requirements.
Dated: December 19, 2019.
Andrew R. Wheeler,
Administrator.
For the reasons set forth in the preamble, the EPA amends 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:
[[Page 15291]]
Authority: 42 U.S.C. 7414, 7601, 7671-767q.
0
2. Effective April 16, 2020, amend Sec. 82.3 by:
0
a. Revising the definitions for ``Administrator'' and ``Aircraft halon
bottle;''
0
b. Adding a definition in alphabetical order for ``Central Data
Exchange;''
0
c. Revising the definitions for ``Confer,'' ``Consumption allowances,''
and ``Destruction;''
0
d. Removing the definition for ``Formulator;''
0
e. Adding a definition in alphabetical order for ``Halon bank;''
0
f. Removing the definition for ``HCFC-141b exemption allowances;''
0
g. Revising the definitions for ``Individual shipment,'' ``Non-
Objection notice,'' and ``Production;'' and
0
h. Removing the definition for ``Unexpended HCFC-141b exemption
allowances.''
The revisions and additions read as follows:
Sec. 82.3 Definitions for class I and class II controlled
substances.
* * * * *
Administrator means the Administrator of the United States
Environmental Protection Agency or his or her authorized
representative. Starting May 18, 2020, reports and petitions that are
available to be submitted through the Central Data Exchange, as well as
any related supporting documents, 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.
* * * * *
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 hydrogen and carbon dioxide;
(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.
* * * * *
Halon bank means a facility run by a national government or
privately run and authorized by a national government that collects and
stores previously-recovered halon for reuse at a later date.
* * * * *
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) and 82.24(c).
* * * * *
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 approved destruction
technologies; or
(4) Amounts that are spilled or vented unintentionally.
* * * * *
0
3. Effective April 16, 2020, 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).
The revision and additions 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) 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 substance stated in the non-objection notice. For imports
intended to be destroyed in the United
[[Page 15292]]
States, a person issued a non-objection notice must destroy the
controlled substance within one year of the date stamped on 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) 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) 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 (s)
that is sold or distributed, or offered for sale or distribution,
constitutes a separate violation of this subpart.
0
4. Effective April 16, 2020, amend Sec. 82.9 by:
0
a. Removing and reserving paragraphs (a) and (b);
0
b. Revising paragraph (c) introductory text; and
0
c. Removing and reserving paragraphs (e) and (f).
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. Sec. 82.6
and 82.7 in order to produce with the additional production allowances.
* * * * *
Sec. 82.10 [Removed and Reserved]
0
5. Effective April 16, 2020, remove and reserve Sec. 82.10.
0
6. April 16, 2020, 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. Effective April 16, 2020, amend Sec. 82.13 by:
0
a. Revising paragraphs (a) and (c);
0
b. Adding headings for paragraphs (f) and (f)(2);
0
c. Removing and reserving paragraphs (f)(2)(iv) and (v);
0
d. In paragraphs (f)(2)(xiv) and (xv), removing the periods at the ends
of the paragraphs and adding semicolons in their places;
0
e. Removing and reserving paragraph (f)(2)(xvi);
0
f. Revising paragraphs (f)(2)(xvii) through (xxii);
0
g. Removing ``Reporting Requirements--Producers'' in paragraph (f)(3)
introductory text and adding in its place ``Reporting requirements--
producers'';
0
h. Removing and reserving paragraphs (f)(3)(iv) and (ix);
0
i. Revising paragraphs (f)(3)(xiii) through (xvii) and (g)(1)(xi),
(xv), and (xvii) through (xxi);
0
j. Adding a heading for paragraph (g);
0
k. Removing ``Recordkeeping--Importers'' in paragraph (g)(1)
introductory text and adding in its place ``Recordkeeping--importers'';
0
l. Revising paragraphs (g)(2) introductory text and (g)(2)(i) through
(iii), (vi), and (viii) through (xiii);
0
m. Removing and reserving paragraph (g)(2)(xiv);
0
n. Adding paragraph (g)(2)(xv) and a heading for paragraph (g)(3);
0
o. Revising paragraphs (g)(3)(i)(A) and (g)(3)(vii);
0
p. Adding a heading for paragraph (g)(4);
0
q. Removing and reserving paragraphs (g)(4)(vii) and (xi);
0
r. Revising paragraphs (g)(4)(xv) through (xviii);
0
s. Adding paragraphs (g)(5) through (10);
0
t. Revising paragraphs (h) heading, (h)(1) introductory text,
(h)(1)(ii) and (iii), (h)(2) introductory text, and (h)(2)(ii) through
(v) and (viii);
0
u. Removing and reserving paragraph (i);
0
v. Revising paragraph (v);
0
w. Adding a heading for paragraph (w); and
0
x. Revising paragraphs (w)(2), (y), (z), and (aa).
The revisions and additions read as follows:
Sec. 82.13 Recordkeeping and reporting requirements for class I
controlled substances.
(a) Effective dates. 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) Timing of reports. 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. 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. Starting May 18, 2020, reports that
are available for submission through the Central Data Exchange must be
submitted electronically through that tool.
* * * * *
[[Page 15293]]
(f) Producers. * * *
(2) Recordkeeping requirements--producers. * * *
(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 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) Importers. * * *
(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; and
* * * * *
(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 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 halon bank storing the controlled
substance;
* * * * *
(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
[[Page 15294]]
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) The export license, application for an export license, or
official communication acknowledging the export from the appropriate
government agency in the country of export and, if recovered in another
country, the export license or official communication from the
appropriate government agency in that country, and quantity authorized
for export in kilograms on the export license, and an English
translation of these documents;
(xiii) If the imported used controlled substance is intended to be
sold as a refrigerant in the United States, 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; and
* * * * *
(xv) If the used controlled substance is stored in a halon bank, in
lieu of the information required in paragraphs (g)(2)(iv) through (vi)
of this section, the petitioner may provide an official letter from the
appropriate government agency in the country where the material is
stored indicating that the halon is used and that the halon bank is
authorized to collect used halon. If source information in paragraphs
(g)(2)(iv) through (vi) is available, it should also be provided in
addition to the letter.
(3) Review of petition to import a used substance. * * *
(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 (g)(2) 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.
* * * * *
(4) Reporting requirements--importers. * * *
(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) Name and address of any intermediary who will aggregate
controlled substances imported for destruction, and the contact
person's name, email address, and phone number;
(iv) The U.S. port of entry for the import, the expected date of
shipment and the vessel transporting the material. 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 material, 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 entry of the individual shipment into the
United States;
(v) Name, address, contact person, email address, and phone number
of the responsible party at the destruction facility;
(vi) The export license, application for an export license, or
official communication acknowledging the export from the appropriate
government agency in the country of export and, if recovered in another
country, the export license or official communication from the
appropriate government agency in that country, and quantity authorized
for export in kilograms on the export license, and an English
translation of these documents; and
(vii) A certification of accuracy of the information submitted in
the certification.
(6) Destruction verification. 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) Review of certification of intent to import for destruction.
(i) Starting on the first working day following receipt by the
Administrator of a certification of intent to import a class I
controlled substance for destruction, the Administrator will initiate a
review of the information submitted under paragraph (g)(5) 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 I 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
paragraph (g)(5) of this section or for the reasons listed in
paragraphs (g)(3)(i)(B) through (F) of this section.
(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 I 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
[[Page 15295]]
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 I controlled
substance is not imported into the United States; and
(C) Take appropriate enforcement actions.
(8) Timing of import. 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) Additional recordkeeping requirements--importers of used,
recycled, or reclaimed controlled substances. 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, export license application, or
official communication from the appropriate government agency in the
country of export;
(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;
(vii) A copy of the destruction verification from the destruction
facility; and
(viii) An English translation of the document in paragraph
(g)(9)(iii) of this section.
(10) Recordkeeping requirements-aggregators. A person identified in
paragraph (g)(5)(iii) of this section as aggregating a controlled
substance prior to destruction must:
(i) Maintain transactional records that include the name and
address of the entity from whom they received the controlled substance
imported for destruction;
(ii) Maintain transactional records that include the name and
address of the entity to whom they sent the controlled substance
imported for destruction;
(iii) Maintain records that include the date and quantity of the
imported controlled substance received for destruction;
(iv) Maintain records that include the date and quantity of the
imported controlled substance sent for destruction; and
(v) If the person is the final aggregator of such a controlled
substance before the material is destroyed, maintain a copy of the
destruction verification.
(h) Reporting requirements--exporters. (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:
* * * * *
(ii) The exporter's Employer Identification Number;
(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:
* * * * *
(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) Laboratory use exemption distributors. Any distributor of
laboratory supplies who purchased controlled substances under the
global essential laboratory and analytical use exemption must submit
quarterly (except distributors following procedures in paragraph (x) of
this section) the quantity of each controlled substance purchased by
each laboratory customer or distributor whose certification was
previously provided to the distributor pursuant to paragraph (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) Laboratory use exemption customers. * * *
(2) The name, email address, and phone number of a contact person
for the laboratory customer;
* * * * *
(y) Quarantine and preshipment methyl bromide distributors. 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) Quarantine and preshipment methyl bromide applicators. Every
applicator of methyl bromide who
[[Page 15296]]
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. 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. 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) Quarantine and preshipment methyl bromide end user
certification. 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. Effective April 16, 2020, add Sec. 82.14 to read as follows:
Sec. 82.14 Process for electronic reporting.
(a) Starting May 18, 2020, reports and petitions that are available
to be submitted through the Central Data Exchange, as well as any
related supporting documents, must be submitted through that tool.
(b) Entities 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 (6) as (g)(6) and (7),
respectively; and
0
b. Adding new paragraph (g)(5).
The addition reads as follows:
Sec. 82.15 Prohibitions for class II controlled substances.
* * * * *
(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 and only to
the extent permitted under paragraph (g)(5)(ii) of this section; for
export to Article 5 Parties under Sec. 82.18(a); as a transhipment or
heel; or for exemptions permitted under paragraph (f) of this section.
(ii) HCFC-123 that was produced or imported on or 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, on, 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 on or after January 1, 2020 but before January 1, 2021 is
permitted if the conditions of this paragraph (g)(5)(iii) 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.
* * * * *
0
10. Effective April 16, 2020, amend Sec. 82.15 by adding paragraphs
(b)(3) and (g)(8) to read as follows:
Sec. 82.15 Prohibitions for class II controlled substances.
* * * * *
(b) * * *
(3) 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 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 United States, a person issued a non-
objection notice must destroy the controlled substance within one year
of the date stamped on 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) * * *
(8) 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
(g)(8) that is sold or distributed, or offered for sale or
distribution, constitutes a separate violation of this subpart.
0
11. Amend Sec. 82.16 by removing the heading from paragraph (a) and
revising paragraphs (a)(1) and (e) to read as follows:
Sec. 82.16 Phaseout schedule of class II controlled substances.
(a)(1) Calendar-year allowances. In each control period as
indicated in the
[[Page 15297]]
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. Sec. 82.17 and 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 5.0 0 0
2021.................................... 0 0 0 0 5.0 0 0
2022.................................... 0 0 0 0 5.0 0 0
2023.................................... 0 0 0 0 4.4 0 0
2024.................................... 0 0 0 0 3.8 0 0
2025.................................... 0 0 0 0 3.2 0 0
2026.................................... 0 0 0 0 2.5 0 0
2027.................................... 0 0 0 0 1.9 0 0
2028.................................... 0 0 0 0 1.3 0 0
2029.................................... 0 0 0 0 0.7 0 0
2030.................................... 0 0 0 0 0 0 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
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 8.3 0 0
2021.................................... 0 0 0 32.3 8.3 0 0
2022.................................... 0 0 0 32.3 8.3 0 0
2023.................................... 0 0 0 28.4 7.3 0 0
2024.................................... 0 0 0 24.4 6.3 0 0
2025.................................... 0 0 0 20.4 5.3 0 0
2026.................................... 0 0 0 16.4 4.2 0 0
2027.................................... 0 0 0 12.5 3.2 0 0
2028.................................... 0 0 0 8.5 2.2 0 0
2029.................................... 0 0 0 4.5 1.1 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
[[Page 15298]]
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 and 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
12. Effective April 16, 2020, 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 additions read as follows:
Sec. 82.23 Transfers of allowances of class II controlled substances.
* * * * *
(b) * * *
(1) * * *
(i) 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
13. Effective April 16, 2020, amend Sec. 82.24 by:
0
a. Revising paragraph (a)(1);
0
b. Removing and reserving paragraph (b)(1)(iv);
0
c. In paragraph (b)(1)(viii), adding ``and'' at the end of the
paragraph;
0
d. Removing and reserving paragraph (b)(1)(ix);
0
e. In paragraph (b)(1)(x), removing ``; and'' and adding a period in
its place;
0
f. Removing paragraph (b)(1)(xi);
0
g. Revising paragraph (b)(2)(iv);
0
h. In paragraph (b)(2)(xi), adding ``and'' at the end of the paragraph;
0
i. Removing and reserving paragraph (b)(2)(xii);
0
j. In paragraph (b)(2)(xiii), removing the semicolon and adding a
period in its place;
0
k. Removing paragraph (b)(2)(xiv);
0
l. Removing and reserving paragraph (c)(1)(vi);
0
m. Removing paragraphs (c)(1)(x) and (xi);
0
n. In paragraph (c)(2)(xiv), add ``and'' at the end of the paragraph;
0
o. Removing paragraph (c)(2)(xvi);
0
p. Revising paragraphs (c)(3)(i) through (iii), (vi), and (viii)
through (xiii), (c)(4)(i)(A), and (c)(4)(vii);
0
q. Adding paragraphs (c)(6) through (11);
0
r. Revising paragraphs (d)(1) introductory text and (d)(1)(iii);
0
s. Removing and reserving paragraph (d)(2); and
0
t. Removing paragraph (g).
The revisions and additions 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 May 18, 2020, 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 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) The export license, application for an export license, or
official communication acknowledging the export from the appropriate
government agency in the country of export and, if recovered in another
country, the export license or official communication from the
appropriate government agency in that country, and quantity authorized
for export in kilograms on the export license, and an English
translation of these documents;
(xiii) If the imported used class II controlled substance is
intended to be sold as a refrigerant in the United States, 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; and
* * * * *
(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
[[Page 15299]]
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) Name and address of any intermediary who aggregates
controlled substances imported for destruction, and the contact
person's name, email address, and phone number;
(iv) The U.S. port of entry for the import, the expected date of
shipment and the vessel transporting the material. 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 material, 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 entry of the individual shipment into the
United States;
(v) Name, address, contact person, email address, and phone number
of the responsible party at the destruction facility;
(vi) The export license, application for an export license, or
official communication acknowledging the export from the appropriate
government agency in the country of export and, if recovered in another
country, the export license or official communication from the
appropriate government agency in that country, and quantity authorized
for export in kilograms on the export license, and an English
translation of these documents; and
(vii) A certification of accuracy of the information submitted in
the certification.
(7) Destruction verification. 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) Review of certification of intent to import for destruction.
(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
paragraph (c)(6) of this section or for the reasons listed in
paragraphs (c)(4)(i)(B) through (E) of this section.
(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 United States; and
(C) Take appropriate enforcement actions.
(9) Timing of import. 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) Additional recordkeeping requirements--importers of used,
recycled, or reclaimed controlled substances. 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, export license application, or
official communication from the appropriate government agency in the
country of export;
(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;
(vii) A copy of the destruction verification from the destruction
facility; and
(viii) An English translation of the document in paragraph
(c)(10)(iii) of this section.
(11) Recordkeeping requirements-aggregators. A person identified in
paragraph (c)(6)(iii) of this section as aggregating a controlled
substance prior to destruction must:
(i) Maintain transactional records that include the name and
address of the entity from whom they received the controlled substance
imported for destruction;
(ii) Maintain transactional records that include the name and
address of the entity to whom they sent the controlled substance
imported for destruction;
(iii) Maintain records that include the date and quantity of the
imported controlled substance received for destruction;
(iv) Maintain records that include the date and quantity of the
imported controlled substance sent for destruction; and
(v) If the person is the final aggregator of such a controlled
substance before the material is destroyed, maintain a copy of the
destruction verification.
(d) * * *
(1) Reporting requirements--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 United
States:
* * * * *
(iii) The type and quantity of each class II controlled substance
exported, including the quantity of controlled substance that is used,
reclaimed, or recycled;
* * * * *
0
14. Effective April 16, 2020, revise appendix K to subpart A to read as
follows:
[[Page 15300]]
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
15. Effective April 16, 2020, amend Sec. 82.62 by adding, in
alphabetical order, the definition for ``Polyurethane Foam System'' 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
16. Effective April 16, 2020, amend Sec. 82.64 by adding paragraph (h)
to read as follows:
Sec. 82.64 Prohibitions.
* * * * *
(h) No person may sell or distribute, or offer to sell or
distribute, in interstate commerce any of the products identified as
being nonessential in Sec. 82.66(f).
0
17. Effective April 16, 2020, 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
the Clean Air Act (CAA) 601(1) that contains a Class I substance used
as a refrigerant; and
(f) Any polyurethane foam system that contains any CFC.
0
18. Effective April 16, 2020, amend Sec. 82.104 by revising paragraphs
(c) and (h) 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 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.
* * * * *
0
19. Effective April 16, 2020, amend Sec. 82.106 by revising paragraph
(a) to read as follows:
Sec. 82.106 Warning statement requirements.
(a) Required warning statements. (1) Unless otherwise exempted by
this subpart, each container or product identified in Sec. 82.102(a)
or (b) shall bear the following warning statement, meeting the
requirements of this subpart for placement and form:
WARNING: Contains [or Manufactured with, if applicable] [insert
name of substance], a substance which harms public health and
environment by destroying ozone in the upper atmosphere.
(2) Each container of fire suppression agent containing HCFC-123
produced or imported on or after January 1, 2020 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. Use Only for Recharge of
[[Page 15301]]
Equipment Manufactured before January 1, 2020.
(3) Each container of fire suppression agent containing reclaimed
HCFC-123 or HCFC-123 that was imported prior to January 1, 2020, 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. For use in any equipment.
* * * * *
0
20. Effective April 16, 2020, amend Sec. 82.270 by revising paragraph
(e) to read as follows:
Sec. 82.270 Prohibitions.
* * * * *
(e) 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.
* * * * *
[FR Doc. 2019-28020 Filed 3-16-20; 8:45 am]
BILLING CODE 6560-50-P