### Au **gust 2012** 



# Economic Impact Analysis for the

Mandatory Reporting of Greenhouse Gas Emissions

F - Gases: Subpart I

Final Report

Prepared for Alexis McKittrick Climate Change Division EPA— Office of Air & Radiation

Prepared by Tony Lentz Carrie Richardson Fry

Chris Sichko RTI International 3040 Cornwallis Road Research Triangle Park, NC 27709 RTI Project Number 0210826.029.000.009iii **CONTENTS Section**  **Page** 1 Introduction and Background ................................ ................................ ....................... 1 - 1 1.1 Background ................................ ................................ ................................ .......... 1 - 1 1.2 Proposed Rul e— Grant for Reconsideration ................................ ........................ 1 - 1 1.3 Economic Anal ys is ................................ ................................ .............................. 1 - 3 2 Regulatory

Background ................................ ................................ ................................ 2 - 1 2.1 The EPA’s Overall Rul e m aking Approach ................................ .......................... 2 - 1 2.1.1 Timing of Proposed Rule Implementation ................................ ............... 2 - 1 2.2 Legal Authorit y ................................ ................................ ................................ .... 2 - 2 2.3 Existing Reporting Programs ................................ ................................ ............... 2 - 3 3 Development of Subpart I ................................ ................................ ............................. 3 - 1 3.1 Affected Entities ................................ ................................ ................................ .. 3 - 1 3.2 Summary

of Major Changes

—Petition of Reconsideration ................................ 3 - 2 4 Engineering Cost Anal ys is ................................ ................................ ............................ 4 - 1 4.1 Introducti o n ................................ ................................ ................................ .......... 4 - 1 4.2 Overview of Cost Anal ys is ................................ ................................ .................. 4 - 2 4.2.1 Baseline R eporting ................................ ................................ ................... 4 - 3 4.2.2 Reporting Costs ................................ ................................ ........................ 4 - 3 4.3 Cost Analy sis for Sub p art I

—Electronics Manufacturers ................................ ... 4 - 6 4.3.1 Model Facility

Dev e lo p m ent ................................ ................................ ... 4 - 6 4.3.2 Determination of Cost Elements ................................ .............................. 4 - 7 4.3.3 Proportion of Facilities in the D i fferent Model Facility L evels .............. 4 - 9 4.3.4 Assigning Costs to Cost Elements ................................ ......................... 4 - 10iv

5 Economic Impact Anal ys i s ................................ ................................ ........................... 5 - 1 5.1 Change in National Cost Estimates ................................ ................................ ...... 5 - 1 5.2 Economic Impact Anal ys is ................................ ................................ .................. 5 - 1 5.2.1 Overall Method of Assessing Economic Impacts ................................ .... 5 - 2 5.2.2 Assessing Economic Impacts on Small Entities ................................ ...... 5 - 2 5.3 Sy nopsis of Benefits ................................ ................................ .......................... 5 - 12 6 Statut o ry

and E x ecutive Ord e r Revie w s ................................ ................................ ....... 6 - 1 6.1 Executive Order 12866: Regulatory Planning and Review ................................ . 6 - 1 6.2 Paper

w ork Reduction Act ................................ ................................ .................... 6 - 1 6.3 Regulatory Flexibility Act ................................ ................................ ................... 6 - 2 6.3.1 Id enti f

y Af f ected Se c t o r s and Entities ................................ ..................... 6 - 2 6.3.2 Develop Small Entity Economic Impact Meas u res ................................ . 6 - 2 6.3.3 Results of S creening Analy sis ................................ ................................ . 6 - 3 6.4 Unfunded Mandates Reform Act ................................ ................................ ......... 6 - 4 6.5 Executive Order 13132: Federalism ................................ ................................ .... 6 - 5 6.6 Executive Order 13175: Consultation and Coordination w i th Indian Tribal Governme nts ................................ ................................ ................................ ........ 6 - 5 6.7 Executive Order 13045: Protection of C h ildren from Environmental Health an d Safet y Ri s ks ................................ ................................ ....................... 6 - 6 6.8 Executive Order 13211: Actions that Significantly Affect Energy

Suppl y, Distribution, or Use ................................ ................................ .............................. 6 - 6 6.9 National Technology Transfer Advancement Act ................................ ............... 6 - 6 6.10 Executive Order 12898: Federal Actions to Address Environm ental Justice in Minority

Populations and L o w - Income Populations ................................ ....... 6 - 8 7 Conclusions ................................ ................................ ................................ ................... 6 - 1 7.1 Summary ................................ ................................ ................................ .............. 6 - 1 7.2 Estimat ed Costs and Impacts of the GHG R eporting Pr o gram ............................ 6 - 1 8 Ref e r e nces ................................ ................................ ................................ ..................... 6 - 1v **LIST OF TABLES Number**  **Page** Table 3 - 1. Examples of Affected Entities by Category ................................ ............. 3 - 2 Table 3 - 2. Summary Table: Proposed Changes Based on Petition for Reconsideration and Petitioner’s May 26, 2011 letter ................................ .................. 3 - 3 Table 3 - 3. Summary Table: Methods for Electronics Manufacturing Facilities ....... 3 - 6 Table 4 - 1. Labor Categories and Hourly Rates (in $2011) ................................ ....... 4 - 5 Table 4 - 2. Number of Represent ative Affec t ed Fabs U sed in the Cost Analy sis 4 - 9 Table 4 - 3. Subpart I

—Default Emission Factor Labor Costs (2011 dollars) .......... 4 - 11 Table 4 - 4. Subpart I

— Optional Stack Testing Method Labor Costs (2011 dollars) 4 - 13 Table 5 - 1. National Cost Estimates ................................ ................................ ........... 5 - 1 Table 5 - 2. Number of Establishments by Affec ted Industry

and Enterprise a Size: 2007 5 - 3 Table 5 - 3. Receipts b y Affected Industry and Enterprise a Si z e: 2007 (Thousands of 2011$) b

................................ ................................ ................................ .. 5 - 4 Table 5 - 4. Primary Anal ys is: Establishment Sales Tests by Industry and Enterprise a Size: Default Factor First Year Costs ................................ ......................... 5 - 7 Table 5 - 5. Primary Anal ys is: Establishment Sales Tests by Industry and Enterprise a Size: Default Factor Second Year Costs ................................ .................... 5 - 8 Table 5 - 6. Sensitivity Anal ys is: Establishment Sales Tests by Industry and Enterprise a Size: Stack Testing Fir s t Ye ar Costs ................................ .......................... 5 - 9 Table 5 - 7. Sensitivity Anal ys is: Establishment Sales Tests by Industry and Enterprise a Size: Stack Testing Second Year Costs ................................ .................... 5 - 10 Table 5 - 8. Secondary Data Analy sis: Parent Company Sales Test Ratios .............. 5 - 121 - 1 **SECTION 1 INTRODUCTION AND BAC**  **KGROUND 1.1**  **Background** On Dec e m

b er 26, 2007, President Bush signed the FY2008 Consolidated Appropriations Act authorizing funding for the EPA to issue a rule requiring the m andatory reporting of greenhouse gas (GHG) e m issions (Consolidated App r opriations Act, 2008, Pub. L . No.110 - 161, 121 Stat 1844, 2128 (2008)). An acco m pan yi ng joint explanatory state m ent directed the EPA to “ use its existi ng authority under the Clean Air Act ” to develop a m andatory GHG reporting rule. The Final Greenhouse G as Reporting Rule ( F inal GHG Reporting Rule ) (40 CFR part 98) was signed on September 22, 2009 by Adm i nistrator L isa Jackson and published in the Federal Register on October 30, 2009 (74 FR 56260). The Final GHG Reporting Rule , which became effective on Dece m

ber 29, 2009, included reporting of GHGs from the facilities and suppliers that the EPA deter

m ined appropriatel y responded to the direc t ion in the 2008 Consoli d ated Appropriations Ac t . These source categories capture approxi m ately 85 percent of U.S. GHG e m issions through reporting by certain downstream facilities that emit GHG, as well as certain upstream suppliers of products that will result in GHG emissions when combusted, released or oxidized. The GHG reporting requirements for s ubpart I were initially proposed on April 10, 2009 (74 FR 16448) along with reporting requirements for 39 other source categories and the general provisions for the EPA ’ s GHG reporting program. The EPA did not, however, include s ubpart I in the Final GHG Reporting Rule (74 FR 56260). Instead, the EPA re - proposed the data reporting requirements for s ubpart I on April 12, 2010 (75 FR 18652). The data reporting requirements fo r s ubpart I were finalized on December 1, 2010 (75 FR 74774) as an amendment to Part 98. **1.2 Proposed Rule** 
**— Grant for Reconsideration**  Following the publication of the final s ubpart I rule in the Federal Register, the Semiconductor Industry

Association (SIA) sub mitted an adm inistrative petition on January 31, 2011 titled “ Petition for Reconsideration and Request for Stay Pending Reconsideration of s ubpart I of the Final Rule for Mandatory Reporting of Greenhouse Gases ” ( “ Petition for Reconsideration ” ), requesting reconsideration of numerous provisions in the final rule. Since that petition was filed, the EPA has published actions related to s ubpart I.1 - 2  Final rule: Additional Sources of Fluorinated GHGs: Extension of Best Available Monitoring Provisions for Electron ics Manufacturing (76 FR 36339, June 22, 2011). Granted the Petition for Reconsideration with respect to the provisions for the use of Best Available Monitoring Methods (BAMM). Extended three of the deadlines in s ubpart I related to using the (BAMM) provisions from June 30, 2011 to September 30, 2011.

 Final rule: Changes to Provisions for Electronics Manufacturing to Provide Flexibility (76 FR 5942, September 27, 2011). Amended the calculation and monitoring provisions for the largest semiconductor manufacturing facilities to provide flexibility through the end of 2013 and extended two deadlines in the BAMM provisions.

 Proposed rule: Proposed Confidentiality Determinations for s ubpart I and Proposed Amendments to Subpart I Best Available Monitoring Methods Provisions (77 FR 10434, February

22, 2012). Re - proposed confidentiality determinations for data elements in s ubpart I and proposed amendments to the provisions regarding the calculation and reporting of emissions from facilities that use BAMM.

 Final rule: Revisions to Heat Transfer Fluid Provisions (77 FR 10373, February 22, 2012). Final rule amended the definition of fluorinated heat transfer fluids (fluorinated HTFs) and the provisions to estimate and report emissions from fluorinated HTFs.

 Final ru le **:** Confidentiality Determinations for S ubpart I and Amendments to S ubpart I Best Available Monitoring Methods Provisions (77 FR XXXXX, published XXXXX XX , 2012). Final confidentiality determinations for data elements in s ubpart I and final amendments to the provisions regarding the calculation and reporting of emissions from facilities that use BAMM. In today ’ s proposed rule, the EPA is granting reconsideration on the remaining issues in the Petition for Reconsideration. Section 3 of this document discusse s the specific issues raised in the Petition for Reconsideration and the changes the EPA is proposing in response to the petition. In summary , the major changes we are proposing will reduce industry reporting burden by providing all facilities with the choice of two calculation methods and remov ing the option for certain facilities to determine and use recipe - specific gas utilization rates and by - product formation rates. The proposed rule would provide the option for reporters to either (1) use default g as utilization rates or by - product formation rates, which have been revised for semiconductor manufacturing facilities to reflect new industry data provided to the EPA, or (2) conduct stack testing to establish site - specific emission factors (EFs) for fluorinated GHGs ( F - GHGs) that would be used to calculate F - GHG emissions. The proposed amendments would ensure that the EPA receives high quality and current facility - specific data. The proposed amendments also1 - 3

include provisions for the periodic review o f industry advancements and changes that may impact the default gas utilization rates and by - product formation rates and default destruction and removal efficiency

( DRE ) values used to estimate emissions, to ensure the continued collection of data that rep resent current industry practices. Additionall y, the proposed stack testing approach allows for estimation of emissions based on periodic direct measurements of stack emissions from facilities. These proposed amendments would allow the EPA to accuratel y ch aracterize and anal yz e GHG emissions from the electronics manufacturing industry . **1.3 Economic Analysis**  This economic impact analy sis considers the costs and benefits of today ’ s proposed rulemaking and is intended to provide a measure of the costs of using res ources to compl y with the proposed GHG reporting requirements. T his rep o rt docum ents the m ethods and results and proceeds as follows: Section 2 describes th e curr e nt regu lat o ry context into which the new rule will be inte grated. Section 3 explai n s the deve l o p m ent process for s ubpart I, and Section 4 details the individual c o st analy ses m ethodology used to evaluate the regulation. Section 5 presents the results of the econo m ic i mpact anal ys is. Section 5 also qualitatively describes the benefits of the propos al. A review of executive orders is provided in Section 6, which is followed by a brief Economic Impact Anal ys is ( EIA ) summ ary and c onclusion in Section 7.2 - 1 **SECTION 2 REGULATORY BACKGROUN**  **D** The EPA is proposing amendments to the calculation and monitoring methodologies for s ubpart I, Electronics Manufacturing, of the Greenhouse Gas Reporting Program (GHGRP) . Changes include revising certain calculation methods, amending data reporting require ments, and clarifying terms and definitions. The EPA is proposing these amendments to (1) improve calculation methods and data requirements to better reflect new industry data and current practice; (2) provide additional calculation methods to allow indivi dual facilities to choose the method best suited for their operations; (3) provide flexibility in implementation to balance the burden associated with existing requirements; and (4) address sensitive business information concerns raised b y S IA , while ensuring that reporters continue to provide the EPA with reliable facility specific GHG data. Many of the proposed changes are in response to the Petition for Reconsideration referenc ed in Section 1 . **2.1 The**  **EPA ’**  **s Overall Rul e**  **m a**  **king Approach** The purpose of the GHGRP is to collect co m prehensive and a ccur ate data which will in f orm f uture cli m ate ch ange poli c i e s. To th is en d , the EPA identified the foll ow ing goals of the GHGRP :

 Obtain data that is of sufficient quality that it can be used to support a range of future climate change policies and regulations.

 Balance the rule coverage to m ax i m i ze the am ount of e m issions reported while excluding s m all e m itte r s.

 Create reporting require m ents that are c onsistent with existing GHG rep o rting program s by

using existing GHG e mi ssion e s ti m ation and reporting m ethodologies to reduce reporting burden, where feasible. **2.1.1 Timing of Proposed Rule Implementation**  The EPA has requested comments on today ’ s proposed amendments to s ubpart I and intends to address them and publish the final amendments in 2013. The proposed amendments would become effective on January 1, 2014 and facilities would be required to follow one of the new methods to estimate emissions beginning in 2014. The first reports of emissions estimated using the new methods would be submitted in 2015. However, for the reports for emissions in 2012 and 2013 that are submitted in 2013 and 2014, respectivel y, reporters would be expected to calculate emissions and other relevant data using the existing requirements under part 98.2 - 2

Given the extent of the proposed changes, the EPA has determined that it is not feasible for sources to implement these changes for the data collected in 2013 and reported in 2014. Although the proposed r evisions are expected to reduce compliance costs by chang ing and replac ing existing calculation methods and regulatory requirements, time is nonetheless needed because these changes would greatly affect how emissions are calculated and the ty pe of data that would be reported. For example, the EPA is proposing to give facilities the option of using a new stack testing method to measure and calculate facility F - GHG emissions, to revise process categories and associated emission factors, and to remove existing methods to calculate emissions using recipe - specific emission factors. Because of the potential change in data collection requirements compared to those established by the December 1, 2010 final s ubpart I rule, the EPA does not anticipate that facilities would have enough time to schedule stack tests, revise their current tracking and monitoring methods, or revise the data collection methods for the 2013 reporting ye ar . Furthermore, because the proposed rule may not be finalized until the second half of 20 13, reporters using the current methods in s ubpart I would continue to use these methods for collecting data and calculating emissions until the end of 2013. Reporters would need to select new calculation methods based on the revisions that the EPA finaliz es from today ’ s action after the effective date of the final rule (expected January 1, 2014). **2.2 Legal**  **A uthority**  The EPA is proposing rule amendments to Part 98 under its existing CAA authority , specificall y authorities provided in CAA section 114. As stated in the preamble to the 2009 final rule (74 FR 56260, October 30, 2009) and the Response to Comments on the Proposed Rule, Volume 9, Legal Issues, CAA section 114 provides the EPA broad authority to obtain the information in Part 98, including s ubpart I, be cause such data would inform and are relevant to the EPA ’ s carrying out a wide variet y of CAA provisions. As discussed in the preamble to the initial Part 98 proposal (74 FR 16448, April 10, 2009), CAA section 114(a)(1) authorizes the Administrator to requ ire emissions sources, persons subject to the CAA, manufacturers of control or process equipment, or persons whom the Administrator believes may have necessary information to monitor and report emissions and provide such other information the Administrator requests for the purposes of carrying out any provision of the CAA. In addition, the EPA is proposing confidentiality determinations for proposed data elements in s ubpart I, under its authorities provided in sections 114, 301 and 307 of the CAA. As mentioned above, CAA section 114 provides the EPA authority to obtain the information in Part2 - 3

98, including those in s ubpart I. Section 114(c) requires that the EPA make publicly available information obtained under section 114 except for information (excl uding emission data) that qualify for confidential treatment. The Administrator has determined that this action (proposed amendments and confidentiality

determinations) is subject to the provisions of section 307(d) of the CAA. **2.3 Existing Reporting Programs**  In addition to the federal GHGRP (40 CFR part 98) , a number of voluntary and m andatory

GHG program s alread y exist or are b e ing developed at the s tate , regional, and f ederal levels. These program s have differ e nt scopes and purposes. Many focus on GHG e m ission re d uction, whereas others are purely rep orting p rogram s. In addition to the GHG program s, other f ederal e m ission reporting program s and e m i ssion inventori e s are relevant to the GHG reporting rule. For example, since 1996, the EPA has operated a dome stic voluntary partnership with the semiconductor industry

aimed at reducing PFC e m issions. As part of the p artnership , a third party co m piles data from participating se m i conductor co m panies and sub m its an aggregate (not co m p an y - specific) annual PFC e m issi ons report. In developing the GHGRP, the EPA carefully reviewed the existing reporting program s, particularl y with respect to e m issions s ources covered, thresholds, m onitoring m ethods, frequency of reporting and verification. States m ay have, or intend to develop, reporting program s that are broa d er in sco p e o r are m ore aggressi v e in i m ple m entation becau s e those program s are either co m

ponents of established r e duction program s (e.g., cap and trade) or are being used to design and inform m easures that r e duced GHGs indirectl y ( e .g., energy efficiency). Where possible, the EPA built upon concepts in existing f ederal and s tate pro gram s in developing the GHGRP. For a full summary of the reporting program s reviewed in the develop m ent of the m andatory reporting rule ple a se see the Regulatory Impact Anal ys is for the Mandatory

Reporting of Greenhouse G a s E m issions in the docket (EPA - HQ - OAR - 2008 - 0508).3 - 1 **SECTION 3 DEVELOPMENT OF SUBPA**  **RT I** This section provides a d ditio n al details abo ut the develop m ent of s ubpart I in response to the Petition for Reconsideration and SIA ’ s May 26, 2011 letter supporting the development of the rule changes to provide flexibility that were finalized September 27, 2011 . This section also pro v i d es a brief descri p tion of the affected entities and proposed changes in response to the Petition for Reconsideration and the proposed CBI determinations for emissions data. **3.1 Affected Entities**  Electronics m anufacturing includes, but is not li m it e d to, the m anufacture of se m i conductors, liquid cry st al display s (LC D s), micro - electro - m echanical sy stems (MEMS), and photovoltaic cells (PV). The e l ectronics industry uses m ultiple long - lived F - GHGs su c h as perfluorocarbons (PFCs), hydrofluorocarbons ( H FCs), sulfur hexafluoride (SF 6 ), and nitrogen tri f lu o rid e (N F 3 ), as well as nitrous oxide (N 2 O). This proposed rule would apply to electronics m anufacturing facilities currentl y subject to s ubpart I, that is those that e m it equal to or greater th an 25,000 m etric tons of CO 2 e per ye ar fr o m electronics m anuf a cturing processes such as plas m a etching, thin film deposition, cham ber cleaning, and heat trans f er fluid use. The proposed rule would (1) amend monitoring and calculation methodologies in Subpart I, (2) propose confidentiality

determinations for the repor ting of the new and revised data elements, and (3) amend s ubpart A, General Provisions, to reflect proposed changes to the reporting requirements in s ubpart I . For the purposes of this EIA, we will be examining onl y (1) above, because (2) and (3) will not significantl y impact compliance costs. Table 3 - 1 lists the ty

pes of entities that potentially could be affected by

the reporting requirements under the subpart covered b y this rule. However, this list is not intended to be exhaustive, but rather provides a guide for readers regarding facilities likely to be affected b y this action. Other t ypes of facilities not listed in the table could also be subject to reporting requirements. To determine whether an entit y is affected b y this action, one should carefull y examine the applicability criteria found in 40 CFR part 98, Subpart A as well as 40 CFR part 98, s ubpart I.3 - 2

**Table 3 -**  **1. Examples of Affected Entities by Category**  **Category NAICS**  **Examples of Affected Facilities** Electronics Manufacturing 334111 Microcomputers manufacturing facilities. 334413 Semiconductor, photovoltaic (solid - state) device manufacturing

facilities. 334419 Liquid crystal display unit screens manufacturing facilities. 334419 Micro - electro - mechanical systems manufacturing facilities. **3.2 Summary of Major Changes** 
**— Petition of**  **Reconsideration** Following consideration of the issues raised in the Petition for Reconsideration and data presented b y stakeholders, the EPA is proposing certain amendments to s ubpart I. These amendments would revise certain calculation methods, modify dat a reporting requirements, clarify terms and definitions, and provide technical corrections. Table 3 - 2 presents a summary of the outstanding issues raised by petitioners and the corresponding proposed change to the rule. Section III.B of the preamble to the proposed rule provides further detail including the EPA ’ s rationale for each proposed change. Table 3 - 3 presents a summary of the existing and proposed reporting methods. In addition to the monitoring amendments proposed in rule, the EPA proposes CBI dete rminations for the new data elements that would be added or significantly revised by

the proposed s ubpart I amendments (see Table s 3 - 2 and 3 - 3 ). The EPA currently plans to finalize these determinations after considering on public comment and concurrent with its finalization of the rule amendments to s ubpart I described above.3 - 3

**Table 3 -**  **2. Summary Table: Proposed Changes Based on Petition for Reconsideration**  **and**

**Petitioner’s May 26, 2011 letter Technical Issue**  **Proposed Changes to Rule** Rows 2 and 12 apply to semiconductor facilities only. All other row s apply to all electronics manufacturing facilities. 1. Addition of an emission estimation method as an alternative to recipe - specific emission factors. (See Section III.B.1) Revising 40 CFR 98.93 to provide an option for using stack testing as an alternative method for determining fab - level emission factors for determining fab - level F - GHG emissions for all electronics manufacturing facilities. Revising 40 CFR 98.94 to 98.98 to include the monitoring methods, QA/QC, missing data, reporting, recordkeeping, and definition requirements for the stack testing alternative. 2. Revision of default gas utilization rates and by - product formation rates for the plasma etch process type for semiconductor manufacturing. (See Section III.B.2) Revise 40 CFR 98.92(a) and 40 CFR 98.93(a)(2) and (a)(4) to combine wafer cleaning and plasma etch emission processes and associated gas utilization rates and by - product formation rates. Revise Tables I

– 3 and I

–4 for semiconductor manufacturing with new gas utilization rates and by - product formation rates based on gas type and process type or sub - type using additional data submitted by the Petitioner. 3. Removing recipe - specific emission factors: Requi rem ents for (1) l argest semiconductor manufacturing facilities (defined as those facilities with annual manufacturing capacity of greater than 10,500 m

2 of substrate) to use recipe - specific gas utilization rates and by - product formation rates to estimate e mi ssions from plasma etch processes; and (2) semiconductor facilities using wafers greater than 300 mm diameter to estimate all of their emissions from processes that use fluorinated GHGs using recipe - specific gas utilization rates and by product formation rates. (See Section III.B.3) Revising 40 CFR 98.93, 98.94, 98.96, and 98.97 to remove provisions to use recipe - specific gas utilization rates and by product formation rates and to combine the wafer cleaning process type with the plasma etch process type. Under this proposal, all semiconductor manufacturing facilities, regardless of manufacturing capacity, wo uld have the option to use default gas utilization rates and by - product formation rates to estimate emissions from the plasma etching/wafer cleaning pr ocess type and from the following three subtypes of the chamber cleaning process type: in - situ plasma chamber cleaning, remote plasma chamber cleaning, and in - situ thermal chamber cleaning.
4. Calculation for determining manufacturing capacity. (See Secti on III.B.4) Revising the terminology and definition of maximum designed substrate starts in 40 CFR 98.98 to be maximum substrate starts, meaning for the purposes of Equation I - 5 in subpart I, the maximum quantity of substrates, expressed as surface area, that could be started each month in a reporting year based on the equipment installed in that facility and assuming that the equipment were fully utilized. Manufacturing equipment would be considered installed when it is on the manufacturing floor and conne cted to the required utilities. 5. Reporting provisions for facilities that have integrated production and research and development (R&D) activities. (See Section III.B.5) Facilities would be allowed to report integrated production and R&D emissions and, if doing so, would be required to provide an estimate of the fraction of total emissions from their R&D activities under 40 CFR 98.96. (continued)3 - 4

**Table 3 -**  **2. Summary Table: Proposed Changes Based on Petition for Reconsideration**  **and**

**Petitioner’s May 26, 20 11 letter**  **(continued) Technical Issue**  **Proposed Changes to Rule** 6. Requirements for the accuracy and precision of the equipment measuring gas consumption. (See Section III.B.6) Removing the requirement for one percent of full - scale accuracy for “all flow meters, weigh scales, pressure gauges and thermometers...” in 40 CFR 98.93(i) and referencing the calibration accuracy requirements in 40 CFR 98.3(i) for all measurement devices used to measure quantities that are mo nitored in subpart I. 7. Provisions for re - calculating the facility wide gas specific heel factor and handling exceptional circumstances. (See Section III.B.7) Revising the criteria for an “exceptional circumstance” in 40 CFR 98.94(b)(4) from 20 percent of the original trigger point for change o ut to 50 percent for small cylinders (containing less than 9.08 kilograms (20 pounds) of gas). For large containers, the “exceptional circumstance” would remain as a change out point that differs by 20 percent of the trigger point used to calculate the gas specific heel factor. Clarifying the requirements for recalculating the facility - wide heel factor. 8. Requirements for verifying the model used to apportion gas consumption. (See Section III.B.8) Revising 40 CFR 98.94(c) to allow for development of apportioning factors by using direct measurements using gas flow meters or weigh scales, to measure process sub - ty pe, process ty pe, stack system, or fab - specific input gas consumption. Revising 40 CFR 98.94(c)(2)(i) to allow reporters to select a period of th e reporting year and its duration that is representative of normal operations for the model verification. The representative period would be at least 30 days in duration, and may be as long as one year. The model would be verified using the F - GHG used in the greatest quantity, and would be corrected if it does not meet the verification requirements. A facility would be able to use two F - GHG for model verification if they both meet the criteria and if at least one of them is used in the greatest quantity. I ncreasing the maximum allowed difference between the mo deled and actual gas consumption in the verification process from 5 percent to 20 percent. 9. Provisions for calculating N 2 O emissions. (See Section III.B.9) Revising 40 CFR 98.93(b), 40 CFR 98.96(c)( 3) and 40 CFR 98.96(k) to clarify that facilities must calculate annual fab - level N 2 O emissions from the chemical vapor deposition (CVD) process type and from the aggregate of other electronics manufacturing production processes using default emission fact ors (facilities are not required to report emissions from each CVD process and from each other N 2 O using process). 10. Provisions for reporting controlled emissions from abatement systems. (See Section III.B.10) Revising 40 CFR 98.94(f) to allow facilities to use either revised default destruction or removal efficiency (DRE) values or to establish a site - specific DRE value for each combination of input gas or by - product gas and process type or sub - ty pe using directly measured DREs. Providing alternative methods for a facility to directly measure DRE. (continued)3 - 5

**Table 3 -**  **2. Summary Table: Proposed Changes Based on Petition for Reconsideration**  **and**

**Petitioner’s May 26, 2011 letter (continued)**  **Technical Issue Proposed Changes to Rule**  11. Provisions for determining and calculating abatement system uptime. (See Section III.B.11) Revising Equation I - 15 to allow reporters to calculate the average uptime for the group of systems for each combination of input gas or by - product gas and process type or sub - type, using the same process categories in which F - GHG use and emissions are calculated. Abatement system uptime monitoring and calculation wo uld be simplified by assuming that connected process tools operate with F - GHGs or N 2 O flowing continuously once the y are installed; this would apply for all methods (both default emission factors and stack testing). 12. Absence of a method for updating gas utilization rates and by - product formation rates and DRE values for semiconductor manufacturing. (See Section III .B.12) Revising the data reporting requirements in 40 CFR 98.96 to require certain semiconductor manufacturing facilities to provide a report to the EPA every 3 years covering technology changes at the facility that may affect gas utilization rates and by - product formation rates or DRE values.3 - 6

**Table 3 -**  **3. Summary Table: Methods for**  **E lectronics**  **M anufacturing**  **F acilities**  **Type of Electronics Manufacturing**  **Facility Required Reporting** 

**Method as Finalized in December 2010**  **(75 FR 74775) Optional** 

**Reporting Met**  **hod as Finalized in**  **December 2010 (75 FR 74775)**  **Revised Reporting**

**Method as Proposed Today**  **( XX**  **, 2012) Optional** 

**Reporting Method as**  **Proposed Today (** **XX ,**  **2012)** Semiconductor Manufacturing Facilities that Fabricate Devices on Wafers Measuring 300 mm or Less in Diameter and That Have an Annual Manufacturing Capacity of Less Than or Equal to 10,500m 2 of Substrate Use EPA default emission factors for 5 process types or subtypes

—

plasma etching, chamber cleaning (including in situ plasma chamber cleaning, remote plasma chamber cleaning, in - situ thermal chamber cleaning), and wafer cleaning Use recipe specific emission factor s for all production processes that use F - GHGs Use EPA de fault

emission factor s for 4 process types or subtypes

—

plasma etching/wafer cleaning and chamber cleaning (including in - situ plasma chamber cleaning, remote plasma chamber cleaning, in situ thermal chamber cleaning) Stack testing

Semiconductor Manufacturing Facilities that Fabricate Devices on Wafers Measuring 300 mm or Less in Diameter and That Have an Annual Manufacturing Capacity of Greater Than 10,500m2 of Substrate Use EPA default emission factors for chamber cleaning (including in - situ plasma chamber cleaning, remote plasma chamber cleaning, in - situ thermal chamber cleaning), wafer cleaning, and recipe specific emission factor s for plasma etching* PV, MEMS, and LCD Manufacturing Facilities Use EPA default EFs for plasma etching and chamber cleaning Use EPA default EFs for plasma etching and chamber cleaning ***** Pursuant to a September 2011 final rule (76 FR 59542), through 2013 the largest semiconductor manufacturing facilities (defined as those facilities that fabricate devices on wafers measuring 300 mm or less in diameter and that have an annual manufacturing capacity of greater than 10,500 m2 of substrate) may estimate emissions from the plasma etching process type using default EFs already included in s ubpart I.4 - 1 **SECTION 4 ENGINEERING COST ANA**  **LYSIS 4.1**  **Introducti o**  **n** In November 2010 the EPA generated a s ubpart I engineering cost anal ys is detailing methods for compliance for s ubpart I 1 . In September 2011, the EPA finalized changes that would temporaril y allow the largest semiconductor facilities to estimate emissions from the plasma etching process t ype us ing the default emission factor method already included in the December 2010 rule. Given that the September 2011 amendments are temporary and will expire on December 31, 2013, requirements finalized in the December 2010 rulemaking serve as the baseline for this analy sis. That is, the December 2010 final rule represents compliance requirements that would be effective in the absence of today ’ s proposal. Accordingl y, the costs estimated from December 2010 serve as the baseline comparison for this economic anal ys is. In today ’ s rulemaking, the EPA has proposed revisions to s ubpart I based on industry comments, the petition for reconsideration and associated efforts (see Section 3, Table 3 - 2 for a detailed summary

of the proposed changes). Most notably , the EPA is proposing to remove the requirements for the largest semiconductor manufacturing facilities to develop and use recipe specific factors to estimate emissions from etch processes. As indicated in the 2010 cost anal ys is, the average first ye ar cost for a facility to compl y with the recipe - specific method was $ 45,598 higher than compl yi ng with the default emission factor method (in 2006 dollars). Removal of this requirement therefore significantly decreases the estimated compliance costs. In addition, today ’ s rulemaking proposes two options: a method based on default emissions factors and process categories (the default emission factor method) for semiconductor manufacturing facilities, which has been modified from the previous s ubpart Irule, and a new, opt ional, stack testing method, which would apply to all facilities covered under s ubpart I. The EPA esti m ated costs for each affected industrial facility to compl y with today ’ s proposed rule by completing the default emission factor method. The EPA also cond

ucted a sensitivity

anal ys is to estimate the costs for a scenario in which facilities chose to use the optional stack testing method instead of the default emission factor method. The EPA used available industry and E PA data to characterize conditions at a ffected sources. Incre m ent a l m o nitoring, recordkeeping, and reporting activiti e s were then identified for each t ype of facilit y, and the asso c iated costs were esti m ated.

1 http://www.epa.gov/climatechange/emissions/downloads10/F - gas_EIA.pdf4 - 2

Overall, the EPA ’ s anal ysis shows that the proposed changes would reduce the national burden and that this reduction is driven largel y b y three items: the default emission factor option is updated to include 4 categories instead of 5 (see Table 3 - 2, item 2), the recipe - specific emission factor option is removed ( Table 3 - 2, item 3), and the optional stack testing method is introduced ( Table 3 - 2, item 1). All of these options are discussed in greater detail in this engineering cost anal ys is. The engineering cost estimates presented do not include Items 4 through 1 1 in Table 3 - 2 because these items are primarily technical clarifications, corrections , and removal of requirements. Accordingly , these proposed changes would not result in significant cost impacts and on balance, would either maintain or reduce the overall burden to facilities. T he engineering cost estimates presented also do no t include item 12 , which adds a requirement for certain semiconductor facilities to submit an additional report to the EPA every three ye ars. This report would be optional for all facilities with F - GHG and N 2 O emissions below 40,000 metric tons of CO 2 e per year. It is estimated that only a few facilities (those with F - GHG and N 2 O emissions over 40,000 metric tons of CO 2 e per year) would need to file this report, and it would onl y require approximately 20 hours of additional industrial engineer/technician time. The EPA does not, however, have data available to develop a precise estimate of the number of facilities who would be required to submit the additional report every three ye ars. Given that the EPA does not expect this requirement to significantly affect the compliance costs either on a per facility or a national basis, and the lack of robust data to estimate the number of affected facilities, these estimates are not included in the cost anal ys is. **4.2 Overview**  **of Cost Analysis** The costs of co m

pl yi ng with the changes proposed in today ’ s rule w ould v ary f rom one f acility to anoth e r, depending on the ty pes of e m issions, the num ber of affected sources at the facility , existing m onitoring, recordk eeping, and rep o rting activities at the facility , etc. In general, the compliance costs for affected facilities are the costs to monitor, record, and report F - GHG and N 2 O emissions. These costs i n clu d e labor costs for perfor m i ng the m onitoring, recordkeeping, and reportin g activities necessary to co m ply with the proposed rule as well as capital and operating and maintenance costs. A ll costs referred to in this section are reported in 2011 dollars, and the costs from the 2010 cost analy sis (which were provided in 2006 dollars)4 - 3

have been convert ed up to 2011 dollars in order to facilitate a direct comparison of the costs from the 2010 and 2012 cost anal ys es . 2 For both the proposed option and the sensitivity analy sis, we pr o vide a general over v iew of baseline reporting (if dat a are available) as well as labor costs (i.e., the cost of labor b y facility staff to m eet the in f

or m ation coll ec tion require m ents of the proposed rule). Capital costs and operating and m aintenance costs (e.g., the cost of purchasing and installing monitoring equip m ent or contractor costs associated with providing the required inform ation) are not discussed since we do not anticipate that capital or operating and maintenance costs will be incurred when compl yi ng with the default emission factor method or th e optional stack method. Additional details of the data, m ethods, and ass u mptions underlying the costs are docum ented in following memos, which can be found in the docket ( EPA - HQ - OAR - 2011 - 0028 ) : Technical Support for Accounting for Destruction or Removal Efficiency for Electronics Manufacturing Facilities under s ubpart I, Technical Support for Modifications to the Fluorinated Greenhouse Gas Emission Estimation Method Option for Semiconductor Fac ilities under s ubpart I, Technical Support for the Stack Test Option for Estimating Fluorinated Greenhouse Gas Emissions from Electronics Manufacturing Facilities under Subpart I , Technical Support for Other Technical Issues Addressed in Revisions to s ubpart I. The memos also include technical infor m ation on the assumptions and m ethods used to develop the proposed changes to s ubpart I covered b y this anal ys is. **4.2.1 Baseline R**  **e**

**porting** To complete this anal ys is, the EPA is assuming that facilities are already in c ompliance with the existing s ubpart I requirements, as specified in the December 2010 rule. This EIA presents comprehensive costs for compliance with all of the s ubpart I requirements that would be in effect if today ’ s proposal were finalized. The EIA also aggregates these costs to the national level and compares them to the national costs of the 2010 promulgated rule. **4.2.2 Reporting Costs**  The EPA used the spreadsheets developed in conjunction with the initial economic evaluation for s ubpart I from 2010 to analyze today ’ s proposed changes to s ubpart I. The te m plate included three tables: anal ys is of reporting thresholds, anal ys is of m onitoring and reporting options, and unit costs for m onitoring and reporting. Key varia b les and data fields were

2 For today’s EIA, the costs for the 2010 and 2012 analyses used the labor rates shown in Table 4 - 1 and capital costs were converted to 2011 dollars using a conversion factor of 1.09, the GDP Deflator from the St. Louis Federal Reserve Bank.4 - 4

clearl y defined to ensure th at costs develo p ed for each subpart u s ed a standard set of m ethods and assumptions. Labor Costs . The costs of co m plying with and adm i nistering this rule include the ti m e of m anagers, technical, and adm i nistrative staff in both the private sector and the public sector. Staff hours are esti m ated for activities including:

 monitoring (private): sta f f hours to operate and m a intain e m issions m onitoring sy ste m s;

 reporting (private): staff hours to gather and process available data and report it to the EP A through electronic syste m s; and

 assuring and releasing data (public): staff hours to quality assure, anal yz e, and release reports. Staff activities and associated labor costs m ay vary over t i m e. Thus, we develop and present cost esti m ates for reporting under the proposed revisions in the first year and the second ye ar. Loaded hourl y labor rates (also referred to as “ wage rates ” ) w ere developed for several labor c ateg o ries to rep r e sent the employer costs to use an hour of employees ’ time in each of the m anufacturing sector labor categories used in this anal ys is. T he labor categories correspond to the job responsibilities of the personnel that are likely to be involved in GHG e m issions monitoring activities at the m anufacturing facility level to comply with the rule m aking. For purposes of this study, the EPA adopted the m ethodology used b y Cody

Rice (2002 ) to calc u late the wage rat e s f or the EPA ’ s Toxics Release Inventory (TRI) Program . Thus, the wage rates calculated for different labor categories included the e m ployer co s t

s for employee compensati o n (co m

prising the basic wages and the corresponding benefits) and the o verhead costs to the employer . 3 For each la

b or category , the followi n g fo rm ula was used to calculate th e wage rates: Loaded Hourl y Labor Rate ($/hr.) = Basic W ages ($/hr . ) * (1 + Benefits L oading Factor + Overhead Loadi n g Factor). (4.1)

3 For each employee, the em ployer also incurs overhead costs (comprising the rental costs of the office space, computer hardware and software, telecommunication and other equipment, organizational support, etc.) required for and used by the employee to effectively fulfill his/her jo b responsibilities. These costs are over and above the em ploy ee com

pensation costs.4 - 5

The benefits loading factor corresponds to the relative share of benefits compensation in the total e m

ploy ee co m

pensation (co m

prising b as i c wages and benefits). This factor, which reflects data from the Bureau of Labor Statistics ’ (BL S) Employ er Costs for Employ ee Compensation (ECEC) indices, varies b y labor category (0.37 to 0.50). The overhead loading factor (0.17) corresponds to the sh are of overhead costs to the employer relative to the total employee compensation. For purposes of this analy sis, we have adopted the same overhead loading factor that Cody Rice (2002 ) used in her wage rate calculations. Thus, the overhead loading factor that we used in the wage rate calculations remains the same for all labor categories and across all industry

t ypes within the manufacturing sector. The loaded labor rates f

o r the four labor categories that are u sed in th e c o st anal y sis are reported in Table 4 - 1 below and are also reported in the appropri a te sectors labor cost tables in the following sections. **Table 4 -**  **1. Labor Categories and Hourly Rates**  **(in $2011) Labor Category**  **Descript i**  **o n**  **Loa d**  **ed H**  **o urly**  **R a**  **te ($/**  **h o**  **u r)**  Legal Ov e rsees legal aspects of co m p any re p o rts an d data r e p o rti n g form s. $ 10 9 . 94 / h our Manag e rial Ov e rsees wo rk at a h i gh level and is th e f i n al auth ority on all re p o rti n g r e qu ire ments. $ 77.23 /h o ur Technical Conducts monitoring of e mis s ions source s , c h ecks for accuracy, perform s mea s ure m ents. $ 59.12 /h o ur Clerical Assists with d o cumentation an d rec o rd in g i n f ormation $ 31.35 /h o ur Capital and O&

M Cost s . This includes the cost of purchasing and installing m onitoring equip m ent or contractor costs associated with providing the required inform ation. However, no capital costs are associated with complying with the proposed s ubpart I. Other Reco rdkeeping a n d Reporting. Reporting costs totaling $ 3,152 per facility and recordkeeping costs totaling $1,824 were included i n the default emission factor method for today ’ s rule. These costs are in accord with the costs that were proposed in 2010, and were adjusted to reflect the distinction between fabs and facilities, which is discussed in more detail in Section 4.3.1. Althou gh some minor modifications to recordkeeping and reporting have been included in the proposed rule, such as moving some abatement sy stem requirements to recordkeeping and removing some abatement s ys tem requirements altogether, the EPA assumed that the cost impacts from these changes would be negligible when compared to the cost of the4 - 6

overall method used. For the new (optional) stack testing method, a reporting cost of $536 and a recordkeeping cost of $1,822 were included. These costs are discussed further in Sections 4.3.2 and 4.3.4. **4.3 Cost Analysis for Sub**  **p art I** 
**— Electronics Ma**  **n ufacturers**  The remainder of Section 4 provides the cost data associated with today **’** s s ubpart I proposal, specifically

the data and background infor m ation needed to understand the engineering costs anal ys is cond

u cted for each source and the reporting option selection. The data are the ba s i s for the econ o m i c i m pact ana l ys is described in detail in Section 5 of this docum ent. **4.3.1 Model Facility Dev** **e lo**  **p m**  **ent** This analy sis is based on the cos ts of monitoring F - GHG and N 2 O e m issions from electr o nics m anufacturing facilities. The analy sis for the original s ubpart I proposal (2010) corresponded to “ fabs ” 4 as opposed to facilities. In that anal ys is, the breakdown of fab categories was provided as follows: non - se m i conductor electronics (3 fabs), large se m i conductor (29 f a bs ), and non - large se m ic onductor (62 fabs) for a total of 94 fabs. The non - se m i conductor electronics category includes facilit i es that m anuf a cture m i cro - electro m echanical s ys te m s , liquid cry stal displ ays , and photovoltaics . In today ’ s proposed rule, the EPA has proposed to amend s ubpart I to remove the distinction between large and non - large semiconductor facilities. Therefore, the breakdown of facility categories is as follows, on a facility basis: 3 non - semiconductor electronics facilities and 67 semiconductor facilities. This anal ys is assumes that each non - semiconductor facility , as listed in the 2010 rule, contains a single fab, and that each semiconductor facility , as listed in the 2010 rule, contains an average of 1.36 fabs, which changes the 2010 cost anal ys is total of 94 fabs to 70 facilities total, including both semiconductor and non - semiconductor facilities, for today ’ s anal ys is. Note that the default emissions factor method is being modified for semiconductor manufacturing facilities only , and therefore today ’ s updated analy sis of that method focuses on semiconductor facilities. The calculations associated with the default emission factor method for MEMS, PV, and L CD facilities are unchanged in this rule. The new, optional stack testing method applies to all facilities covered un der s ubpart I. These methods being proposed today include the default emission factor method and the stack testing method. The EPA has included the most cost effective option

—the default emission factor method

—in its estimate of the total costs of the prop osed rule, based on the assumption 4 As stated in the proposed rule, “fab” means the portion of an electronics manufacturing facility located in a separate physical structure that began manufacturing on a ce rtain date.4 - 7

that facilities will choose the lowest cost monitoring option. However, some facilities have expressed a preference for an alternative, i.e., the stack method. When examining the first two ye ars of costs (as is done in th is analy sis), the stack testing method appears more costly than default approach. However, the potential level of heterogeneity in the industry

makes it difficult to estimate how many

stack tests and retests a given facility may need per year. Additionall y , the EPA is proposing provisions for facilities to use the same results from their periodic stack testing for up to five ye ars if they meet certain criteria, which would temporaril y remove the costs associated with conducting annual testing. Therefore, th e EPA recognizes that it may be more cost - effective for some facilities to use the stack method instead. Therefore, the EPA has conducted a sensitivity

analy sis that assumes some facilities use the stack testing method. The EPA does not have tailored estim ates that represent the costs to use the stack testing method at these particular facilities and used the compliance cost for a “ model ” facility . As a result, the EPA expects that the sensitivity analy sis estimates may

be notabl y higher than the costs that would be incurred b y facilities that choose to implement this approach. **4.3.2 Determination of Cost Elements**  The total costs associated with co m p lying w ith the proposed rule m aking b y completing the default emissions factor method for semiconductor manufacturing facilities were broken into monitoring costs and reporting costs, which are described below. The sensitivity anal ys is for the stack testing method is also presented below. The non - semiconductor costs remain the same from the 2010 cost anal ysis. 5 4.3.2.1 Monitoring Costs Two ty pes of monitoring costs were identified:

 collection of activit y data for estimating F - GHG and N 2 O emissions

 annual costs to monitor controlled e m issions from abate m ent s ys te m s Collection of activity

data for estimating F - GHG and N 2 O emissions . Semiconductor manufacturing facilities using the “ default emission factor method ” would be required to use an approach for estimating emissions which includes the following components: (1) gas consumption as calculated using the facility ’ s purch ase records, inventory , and gas - and facil ity specific heel factors, (2) facility specific methods for apportioning gas usage (3) default emission

5 EPA originally estimated the labor cost for non - semiconductors to be $16,046, w hich was in $2006, then adjusted it to $2011 for consistency with today’s analysis. The cost in $2011 is $17,208. EPA determined that non semiconductor facilities would not inc ur capital costs when complying with the 2010 rule.4 - 8

factors (including factors for b y - products) based on four process categories, and (4) either default DRE valu es or properl y measured DRE values, where appropriate. Some facilities may

choose to use the “ stack testing method ” to comply with today ’s proposed revisions to s ubpart I. These facilities are required to estimate emissions using (1) gas consumption as cal culated using the facility ’ s purchase records, inventory , and gas - and faci lity specific heel factors, (2) facility specific methods for apportioning gas usage for fluorinated GHGs , (3) updated default emissions factors for select stack s ys tems that meet ce rtain criteria to exempt them from testing , and (4) either EPA published default DRE value or properly measured DRE, where appropriate. Annual costs to monitor controlled e m issions from abate m ent s ys te m s . In the proposed rule, a number of abatement sy stem requirements would be moved from reporting to recordkeeping. In addition, some abatement s ys tem requirements are being removed from s ubpart I altogether. Also, facilities that report abatement would now provide an effective DRE value. Facility

co s t s incurr ed for assuring abate m ent sy ste m s are properl y installed, operated, m ai ntained, and reported, and accounting for upti m e have been included in this co s t an a ly sis . 6 Subpart Icurrently

requires facilities to use EPA published DRE default values or use properly measured DRE values if facilities choose to account for abatement sy stem DRE, which is optional ; today ’ s proposal would give facilities the option to use additional methods to properl y m easure DRE. Since DRE testing is optional, the EPA ’ s esti m at ed cost s for perfo rm ing DRE testing was not included for an y facilit y categ o ry in this cost anal ys is. 4.3.2.2 Reporting Costs Two ty pes of reporting costs were identified:

 reporting F - GHG e m ission esti m ate

 reporting h eat transfer f luid e m issi o ns esti m ate Reporting F - GHG e m ission esti m ate . Today ’ s proposal would require electronics m anu f acturing f acilities to co m

plete and su

b m it facility - specific annual rep o rts. Costs associated with reporting activity data were inclu d ed for all compliance options. The EPA has not accounted for an y change in reporting costs with respect to abatement s ys tems, but, as noted

6 Facility costs incurred for assuring abatement systems are properly installed, operated, maintained, and reported, and accounting for uptime are based on 32 technical labor hours. This cost is only incl uded for large semiconductor facilities based on SIA ’ s comments that 29 facilities would incur abatement compliance costs.4 - 9

earlier, the EPA is proposing to move some abatement sy stem reporting requirements to recordkeeping and removing som e requirements altogether. It is assum ed there are no oth er costs ass o ciated with using default DRE values, other than those mentioned above. Facilities have the option to confirm abatement through direct DRE measurement. The reporting costs associated with DRE testing are not included because such reporting is optional. Reporting h eat transfer f

luid e m issi o ns esti m ate . Electronics m anufacturing fa c ilities are required to co m

plete and sub m it data - reporting fo rm s about emissions from heat transfer fluids. Al though not all facilities use heat transfer fluids, the EPA does not have an estimate of the number that do so. Therefore, the EPA assumed for purposes of the cost analy sis that all facilities will need to report heat transfer fluid emissions. **4.3.3 Proportion o** 

**f Facilities in the D i** 

**fferent Model Facility Levels** For the electronics manufacturing industry , 70 facilities (which represent 94 out of 175 fabs) in the United States exceed th e 2 5,000 mt C O 2 e threshold and account for 96 percent of total domestic se m i conductor e m issions. 7 The number of each ty pe of f ab that the EPA esti m ates will m eet the 25,000 mt CO 2 e threshold and required to report is identified in Table 4 - 2. These values have not changed substantially since the original s ubpart I rule was finalized and serve as the starting point for analyzing the cost impact of the proposed changes. **Table 4 -**  **2. Number of Represent**  **a tive Affec**  **t ed Fabs**  **U sed in the Cost Analysis**  **Number of Representative Entities Threshold**  **Semiconductors**

**(All) ME**  **M S**  **Liquid C r**  **ystal Displ**  **a y**  **Photov o**  **lt a**  **i cs**  1 , 0 0 0 1 3 4 10 5 16 1 0 , 00 0 1 0 8 4 1 1 2 5 , 00 0 91 2 0 1 1 0 0 ,0 00 55 0 0 0

7 This corresponds to 67 semiconductor facilities and 3 non - semiconductor facilities (see Section 4.3.1).4 - 10

**4.3.4 Assigning Costs to Cost Elements**  The EPA used the four labor categories (legal, m anagerial, technical and clerical) and associated labor rates to assign costs to each of the cost ele m ents (see Table 4 - 1 ). The EPA assigned responsibilities to each labor category to esti m ate labor hours. 4.3.4.1 Determining Labor Categories To evaluate labor costs, it was not o n ly necessary to deter m ine the am ount of ti m e required for all of the tasks associated with monitoring, but also to det e rmine who will perform each task. 4.3.4.2 Allocate Responsibilities and Esti m ate Labor Hours The primary

cost anal ys is assumes that all semiconductor manufacturing facilities report fluorinated greenhouse gas emissions using the default emission factor method. The sensitivity anal ys is assumes that some facilities will use an alternative and optional compliance method, the stack testing method. Default Emission Factor Method This section identifies th e costs associated with co m plying with the rule m aking using the default emission factor method for semiconductor manufacturing facilities. Co m pliance costs for this option include only

labor costs and do not require any non - labor (capital and O & M) costs. A semicon ductor facility

that utilizes the default emission factor method will complete testing for four process typ es or subty pes— the plasma etching/wafer cleaning process ty pe and chamber cleaning process typ e which includes three sub - ty pe s: in - situ plasma chambe r cleaning, remote plasma chamber cleaning, and in - situ thermal chamber cleaning . The planning and quality assurance/quality

control (QA/QC) costs are zero because the primary effort required b y this proposed rule of calculating emissions is captured in th e cost category of “ sampling and anal ys is. ” Additionally , the requirements for reporting the emissions will also include the generation of the majority of the records that must be maintained, so no additional recordkeeping costs were included. The total fi rst y ear cost for the d efault emission f actor method is $18,130 per facility and includes onl y labor costs. Table 4 - 3 summarizes th e labor costs associated with complying with the default emission factor method.4 - 11

**Table 4 -**  **3 .**  **Subpart I**
**— Default Emission Fact**  **or Labor Costs (2011 dollars**  **)**

**Activity Labor Hours and**  **Labor Rates Labor Cost per**  **Year per Reporting**  **Unit/Facility Legal**  **Industrial**

**Manager Industrial** 

**Engineer/ Technician**  **Administrative $**  **10 9**  **. 94**  **$ 7**  **7.23 $**  **59.12 $**  **31.35 First**  **Ye ar**  **Second Year**  **First Year**  **Second Year**  **First Year**  **Second Year**  **First Year**  **Second Year**  **First**

**Year Second** 

**Year** Planning $0 $0 QA/QC $0 $0 Recordkeeping 2.39 2.39 24.7 24.7 5.7 0 5.7 0 $1,824 $1,824 Sam pling 4.96 4.96 213.43 213.43 4.89 4.89 $13,154 $13,154 Reporting 0.26 0.26 14.26 14.26 28.82 28.82 10.14 10.14 $3,152 $3,152 **Total 0.26**  **0.26 21.61**  **21.61 266.95**  **266.95 20.73**  **20.73 $18,130**  **$18,130** Out of the 67 semiconductor facilities that are above the GHGRP threshold, 21 of these facilities would have to comply with the recipe - specific emissions factor method (referred to as the “Tier 2d method” in the 2010 EIA) beginning in 2014 if the EPA does not promulgate the proposed removal of the recipe - specific method. The EPA estimated th e labor cost of the recipe specific method to be $23,153 per facility and the capital cost to be $40,575 per facility for the first y ear . 8 The estimated cost for the default emission factor method under the 2010 rule totaled $21,418 per facility and included only labor costs . 9 Under today ’s proposal, all semiconductor facilities, including those previously required to use the recipe - specific method, may comply with s ubpart I b y using the default emission factor method , which reduces national cost s in the first y ear b y $1, 108,830 . The cost - savings on a facility - specific basis depends on which method the facility

would use in the absence of today ’s proposal. The 21 facilities that EPA estimates would have used the recipe - specific method would each save $ 45,59 8 in the first y ear , which represents the difference between the 2010 cost of $63,728 for the recipe - specific method and the 2012 cost of $18,130 for the default emission factor method. T he 46 facilities that would have used the default emissio n factor method would save $3, 288 in the first ye ar , which represents the difference between the 2010 cost of $21,418 and the 2012 cost of $18,130 for the
8 EPA originally estimated the labor cost to be $21,588 and the capital cost to be $34,151, which was in $2006, then adjusted it to $2011 for consistency with today’s analysis. 9 EPA originally estimated the labor cost to be $19,980, which was in $2006, then adjusted it to $2011 for consistency with today’s analysis. EPA determined that facilities would not incur capital costs when complying with the default emission factor method.4 - 12

default emission factor method . The national cost savings increases to $4, 709,815 in the second ye ar because the capital cost for the recipe - specific method in the current s ubpart I increases significantl y in the second y ear, while the proposed changes do not vary from y ear - to - ye ar . Labor hours for the default emission factor option in today ’s proposed r ule were esti m ated using methods from the 2010 rulemaking cost anal ys is for se m i c onductor facilities and industry co mm ent s. Based on its experience with se m i conductor facilities voluntarily reporting e m ission via its sec t or p artnership and consideration of industry comments, the EPA continued to use the IPCC’s Tier 2b method to estimate the labor hours borne by se m i conductor f

a cilities, and modified the hours to represent 4 process categories, as reflected in today ’s proposed rule. We have presented the lab or costs as first y ear and second y ear costs for consistency with previous GHGRP estimates. As shown in Table 4 - 3 above, f irst year sampling and anal ys is costs include 213.43 hours for the industrial engineer/technician, 4.89 administrative hours and 4.96 management hours. These costs appl y to both the first and second ye ar. Table 4 - 3 also shows that f irst year reporting costs were estimated to include 28.82 industrial engineer/technician hours, 0.26 legal hours, 14.26 management hours and 10.14 administrat ive hours to compile and report data annually . First y ear recordkeeping costs were estimated to include 24.7 industrial engineer/technician hours, 2.39 management hours and 5.7 administrative hours. Both recordkeeping and reporting costs remain unchanged i n the second ye ar. Optional Stack Testing Method This section identifies th e costs associated with co m plying with the rule m aking using the stack testing method, which is an option for all facilities covered under s ubpart I. Co m pliance costs for this option include only labor costs and do not require an y non - labor (capital and O & M) costs. For purposes of the cost analysis, the EPA assumed that a facility that utilizes the stack method will have a total of six stack systems. Initially , all six of these sy stem s will be anal yz ed using a modified version of 2006 IPCC Tier 2a method. Based on the results of the initial Tier 2a anal ys is, the EPA approximates that onl y one of the stack sy stems would be eligible to use the modified Tier 2a anal ys is, while the remaining five stack sy stems would need to complete stack testing. Additionall y, the EPA assumed that 25 percent of the stacks requiring testing would need to be retested in order to comply with the rule . The total first y ear cost for the stack testing method is $101,808 in labor costs. Table 4 - 4 below summarizes the labor costs associated with4 - 13

complying with the optional stack testing method. Labor hours for the optional stack testing method are broken into two parts, the modified Tier 2a anal ys is and the stac k sy stems test. The labor hours required for the modified Tier 2a analysis were esti m ated using corresponding default emission factor method option in the December 2010 rule for non - large semiconductor facilities. For each of the six stack sy stems, first y ear Tier 2a costs include 48.91 hours for the industrial engineer/technician, 2.46 administrative hours and 2.50 management hours. This comes to a total of 293.46 hours for the industrial engineer/technician, 14.76 administrative hours and 15 management h ours. These costs are included under “sampling” in Table 4 - 4 and apply to both the first and second y ear.
**Table 4 -**  **4 .**  **Subpart I**
**— Optional Stack Testing Method Labor Costs (2011**  **dollars )** 

**Activity Labor Hours and**  **Labor Rates Labor Cost per**  **Year per Reporting Unit/Facility**  **Legal Industrial** 

**Manager Industrial** 

**Engineer/ Technician**  **Administrative $10**  **9 .**  **94 $**  **77.23 $**  **59.12 $**  **31.35 First**  **Year Second**  **Year First**  **Year Second**  **Year First** 

**Year Second** 

**Year First**  **Year Second**  **Year First** 

**Year Second** 

**Year** Planning 1.80 1.80 37.60 37.60 19.00 19.00 $2,958 $2,958 QA/QC $0 $0 Recordkeeping 2.39 2.39 24.65 24.65 5.73 5.73 $1,822 $1,822 Sam pling 54.85 54.85 1510.41 1510.41 94.48 94.48 $96,493 $96,493 Reporting 0.70 0.70 7.25 7.25 1.69 1.69 $536 $536 **Total 0**  **0 59.75**  **59.75 1579.91**  **1579.91 120.90**  **120.90 $101,808**  **$101,808** Stack testing labor hours were esti m ated for each of the five stack s ys tems that would be required to complete testing, along with the 25% of stack s ys tems that would need to be retested. For each stack s ys tems, first y ear costs include 194.71 hours for the industrial engineer/technician, 12.76 administrative hours and 6.38 management hours. In total, this comes to 1,216.94 hours for the industrial engineer/technician, 79.75 administrative hours and 39.88 management hours at each facility . These costs apply to both the first and second y ear.4 - 14

As shown in Table 4 - 4, r ecordkeeping costs were estimated on an annual basis, requiring 24.65 industrial engineer/technician hours, 2.39 management hours and 5.73 administrative hours to compile and store dat a, and costing $1,822. L abor requirements for preparing the annual report included 7.25 industrial engineer/technician hours, 0.7 management hours, and 1.69 administrative hours to prepare the annual report, at a cost of $536. These costs remain unchanged in the second y ear. Initial planning and quality assurance/quality

control costs were estimated for the time needed to review the rule, make arrangements for stack sy stem testing and prepare required initial notifications and records. These planning hours include resolving questions, reviewing drawings, conducting source inspections, defining constraints, writing the engineering report and onetime costs for equipment leak measurement, such as walk - down and field verification, populating software and initial monitoring setup costs. T able 4 - 4 shows that the planning labor includes 1.8 hours for the industrial manager, 37.6 hours for the industrial engineer/technician, and 19 administrative hours, totaling $2,958. These costs remain unchanged in the second year .5 - 1 **SECTION 5 ECONOMIC IMPACT**  **ANALYS I**  **S** The EPA has prepared an EIA to provide decision makers with a measure of the social costs of using resources to comply with the proposed GHG reporting requirements. As noted in the EPA ’ s (2010 ) Guidelines for Preparing Economic Analyses , several tools are available to estimate social costs and range from simple direct compliance cost methods to the development of a more complex market anal ys is that estimates market changes (e.g., price and consumption) and economic welfare changes (e.g., changes in consumer and producer surplus). Given data limitations and the size and scope of the proposed rule, the EPA has used the direct compliance cost method as a measure of social costs. In addition, the EIA briefly reviews the qualitative benefits o f this proposed rule based on previous experience with emission inventory programs. **5.1 Change in National Cost Estimates**  As shown in Table 5 - 1, the total national costs for the primary analy sis are esti m ated to be $1. 7 m illion in the fir s t y ear and $1. 7 milli on in the second ye ar (20 11 $). In comparison to the original EIA national cost estimates for s ubpart I, these cost estimates reflect a 3 8 percent and 73 percent reduction in burden for the first and second ye ars of reporting. **Table 5 -**  **1. National Cost Estim**  **ates EIA Estimate December, 2010**  **EIA Estimate June**  **, 2012 Subpart**  **First Year Millions 20**  **11 $**  **Second Year**

**Millions 20 11**  **$ First Year** 

**Millions 20 11**  **$ S**  **econd Year** 

**Millions 20 11**  **$** Subpart I

—Electronics Industry NAICS 334 111 , 334 4 1 3 , 334 4 1 9 $ 2.4 $ 6.0 $1. 3 $1. 3 Private Sector, Total $ 2.4 $ 6.0 $1. 3 $1. 3 Public Sector, Total $0.4 $0.4 $0.4 $0.4 Total $ 2. 8 $ 6.4 $1. 7 $1. 7 **5.2 Economic Impact Analysis**  The EPA assessed how the regulatory program m ay

in f luence the pro f

itability of co m panies b y co m

paring the m onitoring program costs to total s ales (i.e . , a “ sales ” test). The techniques and data we use are identical to the GHGRP and f ocus on small e ntities. We provide additional details of the analy sis below.5 - 2

**5.2.1 Overall Method of Assessing Economic Impacts**  To asses s th e possible econo m ic i m pacts a s s o ciated with the proposed rule, the EPA compared per - f

acility compliance costs to f acility sales f

or f a c ilities of various s izes. Data o n sales rev e nues f

or facilities of various sizes was obtained from the Census Bureau ’ s Statistics of U.S. Businesses (SUSB) database for 2007, the latest y ear for which data are available. SUSB provides e s tablishm ent - level infor m ation on revenues by enterprise size every five ye ars; the EPA is assum i ng that “ ent e rprise ” corresponds to firm or co m pan y, and “ establishm ent ” corresponds to facility . Facility - level costs of co mplying with the rule are co m pared to average sales reve nues for the facilities owned by co m pan i es of various sizes in the tables below. As noted above, the focus of our an al ys is is i m pacts to s m all entities. **5.2.2 Assessing Economic Impacts on Small Entities**  The f irst s t ep in this as s ess m ent was to det er m ine whether th e proposed rule will h ave a sign i f icant i m pact on a substantial num ber of s m all entities (SI S NOSE). To m ake this deter m ination, the EPA used a screening analy sis that allows us to indicate whether the EPA can certify the rule as not having a SI S NOSE. The ele m ents of this analy sis included

 identifying affected entities,

 selecting and describing the m easures and econo m i c i m pact thresholds used in the anal y s is, an d

 deter m ining SISNOSE c ertification category . 5.2.2.1 Identify Affected Entities The industry

subpart covered by

the proposed rule w as identified d uring the develop m ent of the cost anal ys is for the reporting rule. T he S U SB d ata provide national infor m ation on the distribution of econo m i c varia b les b y industry

and size. The s e data were developed in cooperation with, and partially funded b y, the Office of Adv o cacy of the S m all Business Administration (SBA) (SBA, 2008a ). The data include the number of establishments (Table 5 - 2), and receipts (Table 5 - 3) and present information on all entities in an industry covered by

the rule; however, man y of these entities would not be expected to report under the GHGRP because they would fall below the 25,000 MtCO 2 e threshold. SUSB also provides th ese data b y enterprise employ ment size. The census definitions in this data set are as follows:5-3 **Table 5 -**  **2. Number of Establishments by Affected Industry and Enterprise**  **a Size: 2007** 

**2007 NAICS**  **NAICS**

**Description SBA Size** 

**Standard (effective**  **August 22, 2008)**  **Total**

**Establishments Owned by Enterprises with:** 

**1 to 20 Employees**  **20 to 99**

**Employees 100 to 499** 

**Employees 500 to 749** 

**Employees 750 to 999** 

**Employees 1,000 to** 

**1,499 Employees**  334413 Semiconductor and

Related Device Manufacturing 500 967 500 178 108 6 14 22 334 4 19 Other Electronic

Com ponent Manufacturing 500 1,324 704 360 128 21 13 16 334111 Microcomputers

manufacturing facilities. 1,000 439 320 57 20 8 NA 2

a The Census B ureau d efi n es an enterprise as a b u siness organizat i on consisting of one or mo re d o me stic es t ablis hm ents that were specified un d er common ownership or contr o l. The ent e rprise and the es t ablis hm ent are th e sa m e for single - e s t ablishm ent firm s. Each m ulti - estab lishm ent co m

p any form s one e n terprise

—th e enterpr i se empl o ym e nt and annual pay roll ar e summed from the associated establishments. Enterprise size designations are determ ined b y th e s ummed empl o ym ent of a ll associ ated estab l ishm ents. Since the SBA ’ s business size definitions (htt p ://www.sba.gov/size) apply to an establi s hment ’ s ultimate par e nt c o mp any , we assum e in th is an a l y s is th at th e ent e r p rise de f ini t ion above is consistent with the co nc ept of u l timate p arent company that is ty pically us ed for Small B u siness Regulato ry Enforcement F airness Act (S B REFA) screeni n g an al y s es NA: Not available. SUSB did not report this data for disclosure or other reasons.5-4 **Table 5 -**  **3. Receipts**  **b y Affected Industry and Enterprise**  **a Si**  **z e**  **: 2007 (Thousands of**  **2011$ )**  **b**

**2007 NAICS**  **NAICS**

**Description SBA Size** 

**Standard (effective**  **August 22, 2008)**  **Total**

**Establishments Owned by Enterprises with:** 

**1 to 20 Employees**  **20 to 99**

**Employees 100 to 499** 

**Employees 500 to 749** 

**Employees 750 to 999** 

**Employees 1,000 to** 

**1,499 Employees**  334413 Semiconductor and

Related Device Manufacturing 500 $ 70,605,539 $ 684,174 $ 2,143,996 $ 2,467,038 $ 368,840 $ 3,509,352 $ 4,338,009 334 4 19 Other Electronic

Com ponent Manufacturing 500 $11,931,310 $713,260 $2,411,763 $2,689,181 $1,099,350 $463,265 $541,380 334111 Microcomputers

manufacturing facilities. 1,000 $ 32,493,695 $ 260,154 $ 521,157 $ 1,573,064 NA NA NA

a The Census B ureau d efi n es an enterprise as a b u siness organizat i on consisting of one or mo re d o me stic es t ablis hm ents that were specified un d er common ownership or contr o l. The ent e rprise and the es t ablis hm ent are th e sa m e for single - e s t ablishm ent firm s. Each m ulti - estab lishm ent co m

p any form s one e n terprise

—th e enterpr i se empl o ym e nt and annual pay roll ar e summed from the associated establishments. Enterprise size designations are determ ined b y th e s ummed empl o ym ent of a ll associ ated estab l ishm ents. b Receipts have been converted from 2007 dollars to 2011 dollars. Since the SBA ’ s business size definitions (htt p ://www.sba.gov/size) apply to an establi s hment ’ s ultimate par e nt c o mp any , we assum e in th is an a l y s is th at th e ent e r p rise de f ini t ion above is consistent with the co nc ept of u l timate p arent company that is ty pically us ed for Small B u siness Regulato ry Enforcement F airness Act (S B REFA) screeni n g an al y s es. NA: Not available. SUSB did not report this data for disclosure or other reasons.5 - 5  **establishmen t**  : An establishm ent is a single ph y s ical location where business is conducted or where services or industrial operations are perfor m ed.

 **employme n**  **t** : Paid e m p l oy m ent consists of full - and part - ti m e e m ploy ees, including salaried officers and executives of corporations, who were on the pay roll in the pay period including March 12, 2007. Included are e mploy ees on sick leave, holiday s, and vacations; n ot included are pro p rietors and partners of uni n corporated b usinesses.

 **recei p**  **t s**  : Receipts (net of taxes) are defin e d as the revenue for goods produced, distributed, or services provided, i n cluding revenue earned from pre m ium s, comm issions and fees, rents, i nterest, div i dends, and royalties. Receipts exclude all revenue collected for local, state, and federal taxes.

 **enterpri s**  **e** : An enterprise is a business organ i zation consisting of one or more do m estic establishm ents that were specif i ed under comm on ownership or control. The enter p ri s e and the e s tablishm ent ar e the sam e f or singl e - e s ta

b lishm ent f

i r m s. Each multi - e sta b l ishm ent company f

or m s one ent e rprise

—the e nt e rpri s e e m ploym ent and annual pay

roll are summ ed from the ass o ciated establishm e nts. Enterprise size designations are deter

m ined by the s umm ed e m

ploy m ent of a ll associated esta b lishm ents. Because the SBA ’ s business size definitions (SB A , 2008 b ) appl y to an e s tablishm ent ’ s “ ulti m ate parent co m

p any , ” we assum e in th is analy sis that the “ enterprise ” definition above is consistent with the co n cept of ultimate p arent company that is ty picall y used for S m all Business Regulatory

Enforce m ent Fair

n ess Act (SBREFA) screening ana l ys es and the ter m s are used interchangeabl y. We also rep ort th e SBA size standard(s) for each industry gr o up in order to facilitate co m

parisons and different thresholds. 5.2.2.2 Develop Small Entity Economic Impact Meas u res T h e anal ys is generated a set of sales tests (represe nted as cost - to - rec e ipt rati o s ) 10 for NAI CS codes associated w ith th e s ubpart I. Al though th e approp riate SBA size definition s h ould be applied at the parent company (ent erprise) level, data li m itations allowed us only to co m pute and co m pare ratios for a model establishment for six enterprise size ranges (i.e., all categories, enterprises with 1 to 20 e m ploy ees, 20 to 99 employ ees, 100 to 499 e m ploy ees, 500 to 999 e m ploy ees, and 1,000 to 1,499 e m p l oy ees ) . This approach allows us to account for differences in esta b lishm ent re c eipts b etween l arge and s m all enterp rises an d di ff erenc e s in s m all business defin itio n s across affected industries. Itis also a conservative approach, because an

10 T h e f o llowing metrics f

o r o ther s mall e ntity ec o n o mic i m pa ct meas ures (if app licab le) wo u ld p o te ntiall y i n cl ud e  S ma l l gov ernm ent s ( i f app li c a b l e): “ R e v e nu e ” t es t ; annu a li zed c o m p li ance cost as a p e rc e nt age o f annu a l g o v e rnm ent r e ve nu es  S ma ll no n - p r o fits (if app licab l e): “Exp e nd i t ure” test; annualized co m p lian c e cost as a per c entage of annual op e rati n g e xp e nses5 - 6

establishm ent ’ s parent co m pany ( the “ enterprise ” ) m ay

have other econo m ic resources that could be used to cover the cos t s of the reporting program. The primary

anal ys is uses sales tests to exam ine the average e s tablishm ent ’ s total annualized mandatory

reporting c o sts using the proposed default emission factor calculation method to the av erage esta b lishm ent rece ipts for enterprises within several employ m ent categ o rie s 11 ( Tables 5 - 4 and 5 - 5). The average entity costs used to co m

pute the sales te s t are the s am e across all of these e nter p rise s ize categories. As a result, th e sale s - te s t will ov e rst ate the cost - t o - receipt ratio for estab l ishments owned by s m all businesses, bec ause the reporting c o sts are likel y lower than average entit y esti m ates provided by the engi n eering cost analy sis. The sensitivity

anal ys is uses sales tests to exam ine the average e s tablishm ent ’ s total annualized mandatory

reporting c o sts using the proposed stack testing method to the av erage esta b lishm ent rece ipts for enterprises within several employ m ent categ o rie s 12 (Table s 5 - 6 and 5 - 7). The average entit y costs used to co m pute the sales te s t are the s am e across all of these e nter p rise s ize categories. As a result, th e sale s - te s t will ov e rst ate the cost - t o - receipt ratio for estab l ishments owned by s m all businesses, because the reporting c o sts are likely lower than average entit y esti m ates provided by the engi n eering cost analy sis. 5.2.2.3 Results of Screening Analysis The Regulatory

Flexibility

Act generally

r e quires an agency

to prepare a regulat o ry flexibility anal ys is of an y rule subject to notice and comment rule m aking require m ents under the Adm i nistrative Procedure Act or an y other s t atut e, unles s the agency c e rti f ies that the rule will not have a significant econo m i c i m pact on a subst antial num ber of s m all entities. S m all e ntities include s m all businesses, s m all governm ental jurisdictions, and s m all not - for - profit enterprises. For the purposes of assessing the i m pacts of th e r

ule on s m all entities, we de f ined a small entity as (1) a s m all business, as defined by SBA ’ s regulations at 13 CFR Part 121.201; (2) a s m all governm ental jurisdiction that is a governm e nt of a city , count y, town, school district, or special district with a population of less than 50 , 000; or (3) a s m all organization that is any not f or - pro f it e nterp rise that is indep end e ntly own e d and operated and is not do m i nant in its field.

11 For the one to 20 e m

ployee category, we ex clude S U SB d ata f o r e nt e r p r is es with ze r o e m

p l o y ees. Th e se enterprises did not operate t h e entire ye ar . 12 For the one to 20 e m

ployee category, we ex clude S U SB d ata f o r e nt e r p r is es with ze r o e m

p l o y ees. Th e se enterprises did not operate t h e entire ye ar .5-7 **Table 5 -**  **4. Primary Analysis:**  **Establishment Sales Tests by Industry and Enterprise a**  **Size: Default Factor First Year Costs**

**2007 NAICS**  **NAICS Description SBA Size**  **Standard (effective**  **August 22, 2008)**  **Average**

**Cost Per Entity**  **($/entity) All** 

**Enterprises Owned by Enterprises**  **with:**

**1 to 20 Employees**  **20 to 99**

**Employees 100 to 499** 

**Employees 500 to 749** 

**Employees 750 to 999** 

**Employees 1,000 to** 

**1,499 Employees**  334413 Semiconductor and

Related Device Manufacturing 500 $ 18,130 0.02% 1.25% 0.14% 0.07% 0.03% 0.01% 0.01% 334 4 19 Other Electronic

Com ponent Manufacturing 500 $ 18,130 0. 20 % 1.79 % 0. 27 % 0.0 9 % 0.0 3 % 0.05% 0.0 5 % 334111 Microcomputers

manufacturing facilities. 1,000 $ 18,130 0.02% 2.10% 0.19% 0.02% NA NA NA

a The C ensus B ureau d efi n es an enterprise as a b u siness organiz ation consisting of one or mo re d o m e stic es t ablis hm ents that were specified un d er common ownership or contr o l. The ent e rprise and the es t ablis hm ent are th e sa m e for single - e s t ablishm ent firm s. Each m ulti - estab lishm ent co m

p any form s one e n terprise

—th e enterpr i se empl o ym e nt and annual pay roll ar e summed from the associated establishments. Enterprise size designations are determ ined b y th e s ummed empl o ym ent of a ll associ ated estab l ishm ents. Since the SBA ’ s business size definitions (htt p ://www.sba.gov/size) apply to an establi s hment ’ s ultimate par e nt c o mp any , we assum e in th is an a l y s is th at th e ent e r p rise de f ini t ion above is consistent with the co nc ept of u l timate p arent company that is ty pically us ed for Small B u siness Regulato ry Enforcement F airness Act (S B REFA) screeni n g an al y s es NA: Not available. SUSB did not report this data for disclosure or other reasons .5-8 **Table 5 -**  **5. Primary Analysis:**  **Establishment Sales Tests by Industry and Enterprise**  **a Size: Default Factor**  **Second Year Costs** 

**2007 NAICS**  **NAICS Description SBA Size**  **Standard (effective**  **August 22, 2008)**  **Average**

**Cost Per Entity**  **($/entity) All** 

**Enterprises Owned by Enterprises with:** 

**1 to 20 Employees**  **20 to 99**

**Employees 100 to**  **499**

**Employees 500 to 749** 

**Employees 750 to 999** 

**Employees 1,000 to** 

**1,499 Employees**  334413 Semiconductor and

Related Device Manufacturing 500 $ 18,130 0.02% 1.25% 0.14% 0.07% 0.03% 0.01% 0.01% 334 4 19 Other Electronic

Com ponent Manufacturing 500 $ 18,130 0. 20 % 1.79 % 0. 27 % 0. 09 % 0.0 3 % 0.05% 0.0 5 % 334111 Microcomputers

manufacturing facilities. 1,000 $ 18,130 0.02% 2.10% 0.19% 0.02% NA NA NA

a The C ensus B ureau d efi n es an enterprise as a b u siness organiz ation consisting of one or mo re d o m e stic es t ablis hm ents that were specified un d er common ownership or contr o l. The ent e rprise and the es t ablis hm ent are th e sa m e for single - e s t ablishm ent firm s. Each m ulti - estab lishm ent co m

p any form s one e n terprise

—th e enterpr i se empl o ym e nt and annual pay roll ar e summed from the associated establishments. Enterprise size designations are determ ined b y th e s ummed empl o ym ent of a ll associ ated estab l ishm ents. Since the SBA ’ s business size definitions (htt p ://www.sba.gov/size) apply to an establi s hment ’ s ultimate par e nt c o mp any , we assum e in th is an a l y s is th at th e ent e r p rise de f ini t ion above is consistent with the co nc ept of u l timate p arent company that is ty pically us ed for Small B u siness Regulato ry Enforcement F airness Act (S B REFA) screeni n g an al y s es NA: Not available. SUSB did not report this data for disclosure or other reasons .5-9 **Table 5 -**  **6. Sensitivity Analysis:**  **Establishment Sales Tests by Industry and Enterprise a**  **Size: Stack Testing Fir s**  **t Ye a**  **r Costs**

**2007 NAICS**  **NAICS Description SBA Size**  **Standard (effective**  **August 22, 2008)**  **Average**

**Cost Per Entity**  **($/entity) All** 

**Enterprises Owned by Enterprises with:** 

**1 to 20 Employees**  **20 to 99**

**Employees 100 to 499** 

**Employees 500 to 749** 

**Employees 750 to 999** 

**Employees 1,000 to** 

**1,499 Employees**  334413 Semiconductor and

Related Device Manufacturing 500 $ 101,808 0.1 3 % 7.02% 0.80% 0.42% 0.16% 0.04% 0.05% 334 4 19 Other Electronic

Com ponent Manufacturing 500 $ 101,808 1.13 % 10.05 % 1.52 % 0. 48 % 0.1 9 % 0.29 % 0. 30 % 334111 Microcomputers

manufacturing facilities. 1,000 $ 101,808 0.1 3 % 11.81% 1.05% 0.12% NA NA NA

a The C ensus B ureau d efi n es an enterprise as a b u siness organiz ation consisting of one or mo re d o m e stic es t ablis hm ents that were specified un d er common ownership or contr o l. The ent e rprise and the es t ablis hm ent are th e sa m e for single - e s t ablishm ent firm s. Each m ulti - estab lishm ent co m

p any form s one e n terprise

—th e enterpr i se empl o ym e nt and annual pay roll ar e summed from the associated establishments. Enterprise size designations are determ ined b y th e s ummed empl o ym ent of a ll associ ated estab l ishm ents. Since the SBA ’ s business size definitions (htt p ://www.sba.gov/size) apply to an establi s hment ’ s ultimate par e nt c o mp any , we assum e in th is an a l y s is th at th e ent e r p rise de f ini t ion above is consistent with the co nc ept of u l timate p arent company that is ty pically us ed for Small B u siness Regulato ry Enforcement F airness Act (S B REFA) screeni n g an al y s es NA: Not available. SUSB did not report this data for disclosure or other reasons.5-10 **Table 5 -**  **7. Sensitivity Analysis:**  **Establishment Sales Tests by Industry and Enterprise a**  **Size: Stack Testing S econd**  **Year Costs** 

**2007 NAICS**  **NAICS Description SBA Size**  **Standard (effective**  **August 22, 2008)**  **Average**

**Cost Per Entity**  **($/entity) All** 

**En terprises**  **Owned by Enterprises with:**

**1 to 20 Employees**  **20 to 99**

**Employees 100 to 499** 

**Employees 500 to 749** 

**Employees 750 to 999** 

**Employees 1,000 to** 

**1,499 Employees**  334413 Semiconductor and

Related Device Manufacturing 500 $ 101,808 0.1 3 % 7.02% 0.80% 0.42% 0.16% 0.04% 0.05% 334 4 19 Other Electronic

Com ponent Manufacturing 500 $ 101,808 1.13 % 10.05 % 1.52 % 0. 48 % 0.1 9 % 0.29% 0. 30 % 334111 Microcomputers

manufacturing facilities. 1,000 $ 101,808 0.1 3 % 11.81% 1.05% 0.12% NA NA NA

a The C ensus B ureau d efi n es an enterprise as a b u siness organiz ation consisting of one or mo re d o m e stic es t ablis hm ents that were specified un d er common ownership or contr o l. The ent e rprise and the es t ablis hm ent are th e sa m e for single - e s t ablishm ent firm s. Each m ulti - estab lishm ent co m

p any form s one e n terprise

—th e enterpr i se empl o ym e nt and annual pay roll ar e summed from the associated establishments. Enterprise size designations are determ ined b y th e s ummed empl o ym ent of a ll associ ated estab l ishm ents. Since the SBA ’ s business size definitions (htt p ://www.sba.gov/size) apply to an establi s hment ’ s ultimate par e nt c o mp any , we assum e in th is an a l y s is th at th e ent e r p rise de f ini t ion above is consistent with the co nc ept of u l timate p arent company that is ty pically us ed for Small B u siness Regulato ry Enforcement F airness Act (S B REFA) screeni n g an al y s es NA: Not available. SUSB did not report this data for disclosure or other reasons.5 - 11

After considering the econo m i c i m pact of the proposed rule on s m all entities, the EPA has concluded that this action will not h ave a sign ificant econo m ic i m pact on a substantial num ber of s m all entities. As shown in Tables 5 - 4 and 5 - 5, th e average ratio of annu a lized reporting program costs to receipts of establishm ents owned by m odel s m all enterprises was generall y less than 1 percent for industries presum ed likely to have s m all bu s inesses covered b y th e reporting program. As shown in the sensitivity analy sis (Tables 5 - 6 and 5 - 7), if enterprises voluntarily chose the higher cost stack testing option, several enterprise categories have ratios that exceed 3 percent of sales (e.g., enterprise with one to 20 employ ees). Given that this method is voluntary , we assume small entities w ould choose the lower cost method. However, the EPA recognizes that some facilities have expressed a preference for the alternative to use the stack s ys tems testing method . In some cases the realized cost of the stack s ys tems testing method may be less exp ensive than expressed in this analy sis, due to the potential for a facilit y to become exempt from stack testing for up to 5 years if it meets certain criteria after the first several y ears of testing . Below we take a m ore detailed look at the enterprise categories noted above as having sales test ratios above 1 percent . 5.2.2.4 Threshold

- based Analysis of Categori es Having S ales Test R a tios Above 1 Percent Microc o m

puter Manufacturing (334111) , S e m iconductor and Related Device Manufacturing (334413) , and Other Electronic Component Manufacturing (334419) Sub part Icove r s f

aciliti e s included in NA IC S codes for Microcomputer Manufacturing (334111), S e m i conductor and Related Device Manufact uring (334413), and Other Electronic Component Manufacturing (334 4 19). The ce nsus data covers a broader set of establishm ents than the facilities covered in the rule . 13 In addition, preliminary EPA anal ys es of the relation between facility

size (proxied by

employ ment) and emissions show emission levels are proportional to facility

s ize. As a result, small facilities with 1 to 20 e m ployees are unlikel y to emit more than 25,000 MtCO 2 e per year. As a result of the limitations of the census data, we used secondary data sources to better identify the faciliti e s that are likel y to be subject to s ubpart I. The World Fab W atch and the Flat Panel Display

Fabs on Disk datasets i n cludes a total of 216 facilities potentially subject to 13 T he three NAICS codes include a total of 2, 730 establishm ents , many of which do not conduct activities subject to subpart I.

.5 - 12

s ubpart I; 70 of these facilities exceed the 25,000 ton threshold. The EPA was able to collect sales data for 39 of these facilities. Table 5 - 8 reports summary statistics for each anal ys is. **Table 5 -**  **8. Secondary Data Analysis:**  **Parent Company Sales Test Ratios Summary Statistic**  **Sales Test Ratio Choose Default Factor**  **(Prim ary Analysis)**  **Sale s Test Ratio**  **Voluntarily Choose Stack Testing (Sensitivity Analysis)**  Number of Affected Facilities 70 70 Number of Affected Facilities with Parent Company Sales Data 39 39 Mean 0. 11 % 0. 68 % Median 0. 00 % 0.01% Maximum 2.1 0 % 12.5 0 % Minimum 0.0 0 % 0.0 0 % Number of facilities with > 1% sales test ratio 1 5 Number of facilities with > 3% sales test ratio 0 2 The primary

anal ys is has a mean sales test ratio of 0.1%, while the mean sales test ratio for the sensitivity

anal ys is is 0.7%. Both anal ys es have median sales test ratios of 0.01% or less. One facility

had a sales test ratio above 1% under the primary ana ly sis and 5 facilities had ratios above that threshold under the sensitivity anal ys is. **5.3 Synopsis of Benefits**  Under the GHGRP , the EPA requires the collection and verification of emission data from s ubpart I facilities. This section reviews the benefits of the GHGRP for s ubpart I facilities based on previous experience with emission inventory programs in the United States and abroad. Recent policy

discussions have highlighted potential benefits to society of the mandatory GHGRP (Pew, 2008 ). Benefits to the public include: building public confidence through clear and transparent emission measures and reports. A GHG reporting s ys tem will also have the benefit of providing policy makers and anal ys ts with a data set that is comprehensive for the e lectronics industry

if reporting is conducted under s ubpart I and other applicable subparts. Benefits to the industry

include: identifying cost - effective GHG reduction opportunities and disclosing information, which provides firms with incentives to reduce emissions voluntarily and provides emission data to service industries, such as insurance and financial markets.5 - 13

Availability

of emission information to the public, consumers, investors, corporations, and government regulators provides a sound basis for f uture policy

anal ys is, which benefits societ y as a whole. Accurate and transparent information is necessary for the implementation of efficient approaches that meet environmental goals with the lowest cost to the economy .6 - 1 **SECTION 6 STA**  **T UT**  **O RY AND**  **E X**  **ECUTIVE ORD E**  **R REVIE W**  **S** This se c tion descri b es the E PA ’ s co m pliance with several applicable executive orders and statutes. **6.1 Executive Order 12866: Regulatory Planning and Review and Executive Order**  **13563: Improving Regulation and Regulatory Review** Un der section 3(f)(4) of Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and is therefore not subject to review under Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011). In addition, the EPA prepared this E IA, including an anal ys is of the pote ntial costs associated with this action. The costs of the rule are rep o rted in Section 4 , and the econo m ic i m pacts ar e reported in Section 5 . The E P A ’ s cost anal ys is demonstrates that the proposed changes would significantly reduce s ubpart I compliance costs. Specifically , the proposed changes would reduce nationwide compliance costs in the first year b y 3 8 percent ($2. 8 million to $1 . 7 million) and by

73 percent in th e second year ($6.4 million to $1.7 million). Overall, the EPA has concluded that the costs of the F - GHG Reporting Rule under s ubpart I are outweighed by the potential bene f

its of m ore c o mprehensive i n fo rm ation about GHG e m issions. **6.2 Paper** **w ork Reduction Act**  This proposed rule does not increase information collection burden. As previously mentioned, this proposed rule proposes amended reporting methodologies in subpart I, confidentiality

determinations for reported data elements, and amendments to subpart A to reflect proposed changes to the reporting requirements in subpart I. The Office of Management and Budget (OMB) has previously approved the information collection requirements contained in subpart I, under 40 CFR part 98, under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., and has assigned OMB control number 2060 - 0650 for subpart I. The OMB control numbers for the EPA’s regulations in 40 CFR are listed at 40 CFR part 9. Additional information can be found in the docket (see file “Proposed Amendments and Confidentiality Determinations for Subpart I Information Collection Burden”). The EPA continue s to be interested in the potential impacts of this action on the burden associated with the proposed amendments and welcome comments on issues related to such impacts.6 - 2

**6.3 Regulatory**  **Fl exibility**  **Act** The Regulatory

Flexibility

Act generally

requires an a gency

to prepare a regulatory flexibility anal ys is of an y rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or an y other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions. The f irst s t ep in this as s ess m ent was to det er m ine whether th e rule will h ave a sign i f icant i m pact on a su

bstantial num

ber of s m all entities (SI S NOSE). To m ake this deter m ination, the EPA used a screening analy sis that allows us to indicate whether the EPA can certify the rule as not having a SI S NOSE. The ele m ents of this analy sis included :

 identifying affecte d sect o r s and entities,

 selecting and describing the m easures and econo m i c i m pact thresholds used in the anal y s is, an d

 deter m ining SISNOSE c ertification category . **6.3.1 Identi** 

**f y Af**  **f ected Se**  **c t** 

**o r**  **s and Entities** For purposes of assessing the impacts of this re - proposal on small entities, “ small entity” is defined as: (1) a small business as defined b y the Small Business Administration ’ s regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a cit y, count y, town, school district or special district with a population of less than 50,000; or (3) a small organization that is any

not - for - profit enterprise which is independently owned and operated and is not dominant in its field. Fo r the G HG Reporting Rule, small e ntity is defined as a s m all business as defined by the S m all Business Adm i nistration ’ s regulations at 13 CFR 121.201; according to these size standar d s, c rit e ria f

or d e ter m ining if ulti m ate par ent co m panies owning a ff

ected f acilities ar e categ o rized as s m all vary by NAI CS. S m all entity criteria range from total num ber of e m ploy ees at the firm fewer than 100 to num b e r of e m ploy ees fe wer than 1000. Tables 5 - 2 and 5 - 3 present s m all busine s s criteria and e nterprise size distribution data for affected NAICS. **6.3.2 Develop Small Entity Economic**  **Im pact Meas**  **u res**  The ratio of total annualized co m pliance costs to firm sales (or sales test) is the selected i m pact m easure. Details are pro v ided in Section 5 .2, and results ar e presented in Tables 5 - 4 and 5 - 6 for first - ye ar c o sts and in Tables 5 - 5 and 5 - 7 for second year co s t s. T hese sales tests exam ine6 - 3

the average esta

b lishm ent ’ s t o t a l annuali z ed m andatory r ep o rting costs to the av e r a g e esta b lishm ent r e cei p t s f

or enter p ri s es within se veral e m

ploy m ent categories. The average e ntity costs used to co m

pute the sales test are th e same across a l l of these ent e rpri s e si z e c atego ries. A s a res u lt, th e sale s - test will ov e rst ate the co s t - t o - re c eipt ratio for esta b lishm ents owned by

s m all business e s, because the reporting c o sts are likel y lower than average e ntity esti m ates provided b y the engineering cost analy s is . **6.3.3 Results of**  **S**

**creening Analysis** After considering the econo m i c i m pact of the rule on s m all entities, the EPA has concluded that this proposed rule will not h ave a sign ificant econo m ic i m pact on a substantial num ber of s m all entities. The average ratio of annualized reporting program costs to revenues for F - GHG fi rm s owned b y model s m all ente rprises and likely to be affected by

the proposed rule was generall y less than 1 percent . For all three NAI CS ( 334111, 334413 , and 334 419 ) covered by s ubpart I, however, so m e size cat e gories (especially those with 1

–20 employ ees) show costs exceeding 1 percent of sales ( e.g., those with 1 - 20 employ ees had a cost - to - sales ratio of 2 . 10 percent , 1.79 percent, and 1.25 percent for NAI CS 334111 , 334419, and 334413, respectivel y) . A more careful exam ination of i m pacts on s m all fi rm s in these NAICS codes was conducted. Analy sis of fir

m s in the three NAICS industries covered b y s ubpart I shows that fir m s with f e wer than 20 e m

ploy ees produce less than 1.4 percent of output; firms below the 25,000 Mt C O 2 e thresh ol d release approxi m ately 6 percent of emissions. Because e m issions and production levels are highly correlated, fir

m s with fewer than 20 e m ploy ees are generall y not expected to be affected by the f i nal rul e ; if they

are, th eir c o sts are likel y to be lower than the o v erall average costs used in the screen i n g analy sis. Thus, the EPA does not exp e c t the proposed rule to i m pose signi f

i cant c o sts to a substanti a l nu m ber of s m all entities in NAI CS 334111, 334413, and 334419. After considering the economic impacts of today ’ s proposed rule on small entities, the EPA certifies that this action will not have a significant economic impact on a substantial number of small entities. The small entities directly regulated b y this final rule are facilities included in NAICS codes for Microcomputer Manufacturing (334111), Semiconductor and Related Device Manufacturing, (334413) and Other Electronic Component Manufacturing (334419). As shown in Tables 5 - 13 and 5 - 14 of the Economic Impact Analy sis for the Mandatory

Reporting of Greenhouse Gas Emissions Final Rule (74 FR 56260 , October 30, 2009) available in docket number EPA - HQ - OAR - 2008 - 0508, the average ratio of annualized reporting program costs to receipts of establishments owned by model small enterprises was less than 16 - 4

percent for industries presumed likely to have small businesses covered b y the reporting program. **6.4 Unfunded Mandates**  **Reform Act** Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531 - 1538, requires federal agencies, unless otherwise prohibited by law, to assess the effects of their regulatory

actions on state, local, and tribal governments and the private sector. Federal agencies must also develop a plan to provide notice to small governments that might be significantly or uniquely affected by

an y regulatory

requirements. The plan must ena ble officials of affected small governments to have meaningful and timely input in the development of the EPA regulatory

proposals with significant federal intergovernmental mandates and must inform, educate, and advise small governments on compliance with the regulatory requirements. Thi s proposed rule proposes to (1) amend monitoring and calculation methodologies in subpart I ; (2) assign subpart I data reporting elements into CBIdata categories; and (3) amend subpart A to reflect proposed changes to the reporting requirements in subpart I. This proposed rule does not contai n a federal mandate that may result in expenditures of $100 million or more for state, local, and tribal governments, in the aggregate, or the private sector in any one y ear. In some cases, the EPA has increased flexibility in the selection of methods used for calculating and reporting GHGs. Also in this proposed rule, the EPA is revising specific provisions to provide clarity on what is to be reported. These revisions do not add additional burden on reporters but offer flexibility . As part of the process o f finalization of the subpart I rule, the EPA undertook specific steps to evaluate the effect of those final rules on small entities. Based on the proposed amendments to subpart I provisions, burden will stay the same or decrease, therefore the EPA’s deter mination finding of no significant economic impact on a substantial number of small entities has not changed. Thus, this proposed rule is not subject to the requirements of sections 202 or 205 of the UMRA. This rule is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquel y affect small governments. However , in developing Part 98, the EPA consulted with small governments pursuant to a plan established under section 203 o f the UMRA to address impacts of regulatory requirements in the rule that might significantly or uniquely

affect small governments. For a summary of the EPA’s consultations with state and/or local officials or other representatives of state and/or local go vernments in developing Part 98, see Section VIII.D of the preamble to the final rule (74 FR 56370, October 30, 2009).6 - 5

**6.5 Executive Order 13132: Federalism**  This proposed rule does not have federalism implications. It will not have substantial direct effects o n the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. However, for a more detailed discussion ab out how Part 98 relates to existing state programs, please see Section II of the preamble to the final rule (74 FR 56266, October 30, 2009). This proposed rule, which is proposing amended calculation and reporting methodologies in subpart I, proposing new c onfidentialit y determinations for data elements required under subpart I, and proposing amendments to subpart A to reflect proposed changes to the reporting requirements in subpart I, would only appl y to certain electronics manufacturers. No state or local government facilities are known to be engaged in the activities that would be affected b y the provisions in this proposed rule. This proposed rule also does not limit the power of states or localities to collect GHG data and/or regulate GHG emissions. Thu s, Executive Order 13132 does not apply to this proposed rule . In the spirit of Executive Order 13132, and consistent with the EPA policy to promote communications between the EPA and state and local governments, the EPA specifically solicits comment on this proposed rule from state and local officials. For a summary of the EPA’s consultation with state and local organizations and representatives in developing Part 98, see Section VIII.E of the preamble to the final rule (74 FR 56371, October 30, 2009). **6.6 Ex**  **ecutive Order 13175: Consultation a**  **nd Coordination w**  **i th Indian Tribal**  **Governme n**  **ts** This proposed rule does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). This proposed rule proposes to (1) amend monitori ng and calculation methodologies in subpart I ; (2) assign subpart I data reporting elements into CBI data categories; and (3) amend subpart A to reflect proposed changes to the reporting requirements in subpart I. This proposed rule does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). No tribal facilities are known to be engaged in the activities affected b y this action. Thus, Executive Order 13175 does not apply to this proposed rule . For a summary of th e EPA’s consultations with tribal governments and representatives, see Section VIII.F of the preamble to the final rule (74 FR 56371, October 30, 2009). The EPA specifically solicits additional comment on this proposed action from tribal officials.6 - 6

**6.7 Executi** **ve Order 13045: Protection of C h**  **ildren from Environmental Health a n**  **d Safety Ri**  **s ks**  The EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory

actions that concern health or safet y risks, such that the anal ys i s required under section 5 - 501 of the Executive Order has the potential to influence the regulation. This proposed rule, which is proposing to (1) amend monitoring and calculation methodologies in s ubpart I; (2) assign non - input s ubpart I data reporting el ements into CBI data categories; and (3) determine the treatment of inputs to emission equations data elements, is not subject to Executive Order 13045 because it does not establish an environmental standard intended to mitigate health or safet y risks. **6.8 Exe**  **cutive Order 13211: Actions that Significantly Affect Energy Supply,**  **Distribution, or Use** This proposed rule, which proposes to (1) amend monitoring and calculation methodologies in subpart I , (2) assign subpart I data reporting elements into CBI data categories, and (3) amend subpart A to reflect proposed changes to the reporting requirements in subpart I, is not subject to Executive Order 13211 (66 FR 28355, May 22, 2001), because it is not a significant regulatory

action under Executive Order 12866. **6.9 National Technology Transfer Advancement Act**  Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law No. 104 - 113 (15 U.S.C. 272 note) directs the EPA to use voluntary consensus standards (VCS) in its regulatory act ivities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by

VCS bodies. The NTTAA directs the EPA to provide Congress, through OMB, explanations when the agency decides not to use available and applicable VCS. This proposed rule , which is proposing to amend monitoring and calculation methodologies in s ubpart I, involves technical standards. The EPA is proposing to include a stack testing option that would involve using the following EPA reference methods:

 Method 1 or 1A at 40 CFR part 60, appendix A - 1, to select sampling port locations and the number of traverse points in the exhaust stacks.

 Method 2, 2A, 2C, 2D, 2F, or 2G at 40 CFR part 60, appendix A - 1 and A - 2, to determine gas velocity

and volumetric flow rate in the exhaust stacks.6 - 7  Method 3, 3A, or 3B at 40 CFR part 60, appendix A - 2, to determine the gas molecular weight of the exhaust using the same sampling site and at the same time as the F - GHG sampling is performed.

 Method 4 at 40 CFR part 60, appendix A - 3, to measure gas moisture content in the exhaust stacks.

 Method 301 at 40 CFR part 63, appe ndix A, to perform field validations of alternative methods of measuring F - GHG emissions and abatement sy stem DRE.

 Method 320 at 40 CFR part 63, appendix A, to measure the concentration of F - GHG in the stack exhaust. Consistent with the NTTAA, the EPA conducted searches to identify VCS in addition to these EPA methods. The EPA conducted searches for VCS from at least three different voluntary consensus standards bodies, including the following: ASTM, ASME, and Internat ional SEMATECH Manufacturing Initiative (I SMI ). No applicable VCS were identified for EPA Methods 1A, 2A, 2D, 2F, or 2G. The method, ASME PTC 19.10

– 1981, Flue and Exhaust Gas Analy ses, is not cited in this proposed rule for its manual method for measuring the ox ygen, carbon dioxide and carbon monoxide content of the exhaust gas. ASME PTC 19.10

– 1981 is an acceptable alternative to EPA Methods 3A and 3B for the manual procedures only , and not the instrumental procedures. The VCS ASTM D6348

– 03 (2010), Determin ation of Gaseous Compounds by

Extractive Direct Interface Fourier Transform (FTIR) Spectroscopy , has been reviewed b y the EPA as a potential alternative to EPA Method 320. All data and information the EPA has received in support of the stack testing method used EPA Method 320. Since this industry contains specialized gases in low concentrations, the EPA would prefer to have supporting data prior to approving another test method. Because of this, the EPA is not proposing this standard as an acceptable altern ative for EPA Method 320 in this proposed rule. We note that reporters have the option to obtain approval for this method under the procedures outlines in 98.94(k). The EPA is proposing to revise the current s ubpart I provisions for determining abatement sy stem DRE to incorporate language based on methods adapted from the ISMI 2009 Guideline for Environmental Characterization of Semiconductor Process Equipment

—Revision 2. The EPA is proposing to incorporate applicable portions of the I SMI2009 Guideline into the rule in proposed Appendix A to s ubpart I. The EPA is not proposing to incorporate by reference the entire ISMI 2009 Guideline because the ISMI 2009 Guidelines have not been subject to the same level of peer review and validation as other alternative standards (e.g., ASTM or ASME standards). Therefore, The EPA is proposing to incorporate only those portions of the 2009 I SMI6 - 8

Guideline that the EPA has determined are needed to provide flexibility and reduce burden in s ubpart I. The EPA identified no oth er VCS that were potentially applicable for s ubpart I in lieu of EPA reference methods. Therefore, the EPA does not intend to adopt other standards for this purpose. For the methods required or referenced by the proposed rules, a source may apply to the EP A for permission to use alternative test methods or alternative monitoring requirements in place of an y required testing methods, performance specifications or procedures, as specified in proposed 40 CFR part 98, s ubpart I. **6.10 Executive Order 12898: Federal A**  **ctions to Address Environ m**  **ental Justice in Minority Populations and L**  **o w**  **- Income Populations**  Executive Order 12898 (59 FR 7629, February 16, 1994) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low income populations in the United States. This proposed rule is proposing to (1) amend monitoring and calculation methodologies in s ubpart I; (2) assign s ubpart I data reporting elements into CBIdata categorie s; and (3) amend s ubpart A to reflect proposed changes to the reporting requirements in s ubpart I. The EPA has determined that this proposed rule will not have disproportionately high and adverse human health or environmental effects on minority or low - inc ome populations because it does not affect the level of protection provided to human health or the environment. This proposed rule addresses onl y reporting and recordkeeping procedures.6 - 1 **SECTION 7 CONCLUSIONS**  This proposed rule would am end the report i ng requirements of fluorinated greenhouse gas ( F - GHG ) and nitrous oxide (N 2 O ) e m issions from electronics m anufacturing facilities . The s e F - GHG and N 2 O source categories are covered under s ubpart I of the GHGRP. **7.1 Summary**  Electronics m anufacturing includes, but is not li m it e d to, the m anufacture of se m i conductors, liquid cry stal display s (LC D s), micro - electro - m echanical sy stems (MEMS), and photovoltaic cells (PV). The proposed rule affects entities in the electronics industry covered b y NAI CS codes 334111 (Microcomputer Manufacturing), 334413 (Semiconductor and Related Device Manufacturing), and 334419 (Other Electronic Component Manufacturing). The e l ectronics industry

uses m ultiple long - lived F - GHGs su c h as perfluorocarbons (PFCs), hydrofluorocarbons ( H FCs), sulfur hexafluoride (SF 6 ), and nitrogen tri f lu o ride (N F 3 ), as well as nitrous oxide (N 2 O). This proposed rule would apply to electronics m anufacturing facilities currentl y subject to s ubpart I, that is those that that e m it equal to or greater th an 25,000 m etric tons of CO 2 e per ye ar fr o m electronics m anuf a cturing processes such as plas m a etching, thin film deposition, cham

ber cleaning, and heat trans f er fluid use. The proposed rule would (1) amend monitoring and calculation method ologies in s ubpart I, (2) propose confidentialit y determinations for the reporting of the new and revised data elements, and (3) amend subpart A, General Provisions, to reflect proposed changes to the reporting requirements in subpart I . **7.2 Estima**  **t ed Costs and Impacts of**  **t he GHG R**  **e porting Pr**  **o gram**  The E P A ’ s cost analy sis demonstrates that the proposed changes would significantly reduce Subpart I compliance costs. Specifically , the proposed changes would reduce nationwide compliance costs in the first ye ar b y 3 8 percent ($2. 8 million to $1 . 7 million) and b y 73 percent in the second year ($6.4 million to $1.7 million). The national cos t s are distributed to several econo m ic sectors and represent less than 0.01% of 2008 gross domestic product . The EPA has concluded that the proposed rule will not have a significant macroeconomic impact on the national econom y or on small entities within those sectors.6 - 1 **SECTION 8 REF**  **E R** **E NCES**  Pew Center on Global Climate Change. 2008. “ Greenhouse Gas Reporting and Disclosure: Key Elements of a Perspective U.S. Program. ” Innovative Policy Solutions to Climate Change. In Brief

, No. 3 . Arlington, VA: Pew Center on Global Climate Change. Available at <http://www.pewclimate.org/docUploads/ policy _inbrief_ghg.pdf

> . Rice, C. 2002. Wage Rates for Economic Analysis of the Toxics Release Inventory Program . Washington, DC: U.S. EPA, Office of Pollution Prevention and Toxics, Economic and Poli cy Anal ys is Branch, June 10, 2002. U.S. Environm ental Protection Agency (EPA). 20 1 0. Guidelines for Preparing Economic Analyses . E PA 240 - R - 00 - 003. W ashington, DC: EPA. Available at < http://yosemite.epa.gov/ee/epa/eed.nsf/pages/guidelines.html > . U.S. S m all Business Adm i nistration (SBA). 2008a. Firm Size Data from the Statistics of U.S. Businesses: U.S. Detail E m ploy m ent Sizes: 2002. Available at < http://www.sba.gov/content/small - business - size - standards > . U.S. S m all Business Adm i nistration (SBA). 2008b. Table of S m all Business Size Standards Matched to North Am erican Industry Class i fication Sy stem Codes. Eff e ctive August 22, 2008. Available at < http://www.sba.gov/content/summary - size - standards industry> .