78680 Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 

1. Is not a ‘‘significant regulatory 

action’’ under Executive Order 12866, 

2. Is not a ‘‘significant rule’’ under the 

DOT Regulatory Policies and Procedures 

(44 FR 11034, February 26, 1979), and 

3. Will not have a significant 

economic impact, positive or negative, 

on a substantial number of small entities 

under the criteria of the Regulatory 

Flexibility Act. 

You can find our regulatory 

evaluation and the estimated costs of 

compliance in the AD Docket. 

List of Subjects in 14 CFR Part 39 

Air transportation, Aircraft, Aviation 

safety, Safety. 

The Proposed Amendment 

Accordingly, under the authority 

delegated to me by the Administrator, 

the FAA proposes to amend 14 CFR part 

39 as follows: 

PART 39—AIRWORTHINESS 

DIRECTIVES 

1. The authority citation for part 39 

continues to read as follows: 

Authority: 49 U.S.C. 106(g), 40113, 44701. 

§ 39.13 [Amended] 

2. The FAA amends § 39.13 by adding 

the following new AD: 

McDonnell Douglas: Docket No. FAA–2008– 

1324; Directorate Identifier 2008–NM– 

101–AD. 

Comments Due Date 

(a) We must receive comments by February 

6, 2009. 

Affected ADs 

(b) None. 

Applicability 

(c) This AD applies to all McDonnell 

Douglas airplanes identified in Table 1 of this 

AD, certificated in any category. 

TABLE 1—APPLICABILITY

Model 

(1) DC–8–51, DC–8–52, DC–8–53, and DC– 

8–55 airplanes. 

(2) DC–8F–54 and DC–8F–55 airplanes. 

(3) DC–8–61, DC–8–62, and DC–8–63 airplanes. 

(4) DC–8–61F, DC–8–62F, and DC–8–63F 

airplanes. 

(5) DC–8–71, DC–8–72, and DC–8–73 airplanes. 

(6) DC–8–71F, DC–8–72F, and DC–8–73F 

airplanes. 

Unsafe Condition 

(d) This AD results from fuel system 

reviews conducted by the manufacturer. We 

are issuing this AD to prevent pump inlet 

friction (i.e., overheating or sparking) when 

the fuel pumps are continually run as the 

center wing fuel tank becomes empty, and/ 

or electrical arc burnthrough, which could 

result in a fuel tank fire or explosion. 

Compliance 

(e) Comply with this AD within the 

compliance times specified, unless already 

done. 

Airplane Flight Manual (AFM) Revision 

(f) Within 14 days after the effective date 

of this AD, revise the Certificate Limitations 

Section of the DC–8 AFM to include the 

following procedures that preclude dry 

running of fuel pumps and/or electrical arc 

burnthrough (This may be done by inserting 

a copy of this AD into the AFM): 

‘‘During level flight, the applicable 

alternate or center wing auxiliary tank boost 

pump switch must be placed in the OFF 

position no more than 5 minutes after the 

auto fill light is continuously illuminated. 

DO NOT reset any tripped fuel pump circuit 

breakers.’’ 

Alternative Methods of Compliance 

(AMOCs) 

(g)(1) The Manager, Los Angeles Aircraft 

Certification Office (ACO), FAA, ATTN: 

William Bond, Aerospace Engineer, 

Propulsion Branch, ANM–140L, FAA, Los 

Angeles ACO, 3960 Paramount Boulevard, 

Lakewood, California 90712–4137; telephone 

(562) 627–5253; fax (562) 627–5210; has the 

authority to approve AMOCs for this AD, if 

requested using the procedures found in 14 

CFR 39.19. 

(2) To request a different method of 

compliance or a different compliance time 

for this AD, follow the procedures in 14 CFR 

39.19. Before using any approved AMOC on 

any airplane to which the AMOC applies, 

notify your appropriate principal inspector 

(PI) in the FAA Flight Standards District 

Office (FSDO), or lacking a PI, your local 

FSDO. 

Issued in Renton, Washington, on 

December 12, 2008. 

Michael J. Kaszycki, 

Acting Manager, Transport Airplane 

Directorate, Aircraft Certification Service. 

[FR Doc. E8–30521 Filed 12–22–08; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF THE INTERIOR 

National Park Service 

36 CFR Part 4 

RIN 1024–AD72 

Vehicles and Traffic Safety 

AGENCY: National Park Service, Interior. 

ACTION: Proposed rule; correction. 

SUMMARY: The National Park Service 

published a proposed rule revising 36 

CFR 4.30 in the Federal Register on 

December 18, 2008, 73 FR 76987, 

inadvertently leaving out the last two 

paragraphs. This correction restores that 

text. 

FOR FURTHER INFORMATION CONTACT: 

Philip A. Selleck, Regulations Program 

Manager, 1849 C St., NW., Washington, 

DC 20240 (202) 208–4206; e-mail 

philip_selleck@nps.gov. 

Correction 

In proposed rule FR Doc. E8–29892, 

beginning on page 76987 in the issue of 

December 18, 2008, make the following 

correction to the text of the proposed 

rule. On page 76990, in the 2nd column, 

add at the end of § 4.30 the following 

paragraphs (f) and (g): 

§ 4.30 Bicycles. 

* * * * * 

(f) A person operating a bicycle is 

subject to all sections of this part that 

apply to an operator of a motor vehicle, 

except §§ 4.4, 4.10, 4.11 and 4.14. 

(g) The following are prohibited: 

(1) Possessing a bicycle in a 

wilderness area established by Federal 

statute. 

(2) Operating a bicycle during periods 

of low visibility, or while traveling 

through a tunnel, or between sunset and 

sunrise, without exhibiting on the 

operator or bicycle a white light or 

reflector that is visible from a distance 

of at least 500 feet to the front and with 

a red light or reflector visible from at 

least 200 feet to the rear. 

(3) Operating a bicycle abreast of 

another bicycle except where authorized 

by the superintendent. 

(4) Operating a bicycle while 

consuming an alcoholic beverage or 

carrying in hand an open container of 

an alcoholic beverage. 

Dated: December 18, 2008. 

Lyle Laverty, 

Assistant Secretary, Fish and Wildlife and 

Parks. 

[FR Doc. E8–30649 Filed 12–22–08; 8:45 am] 

BILLING CODE 4312–52–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 82 

[EPA–HQ–OAR–2008–0496; FRL–8752–7] 

RIN 2060–A076 

Protection of Stratospheric Ozone: 

Adjustments to the Allowance System 

for Controlling HCFC Production, 

Import, and Export 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: EPA is proposing to adjust the 

allowance system for control of U.S. 

consumption and production of 

Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 78681 

hydrochlorofluorocarbons (HCFCs) by 

apportioning baselines and allocating 

production and consumption 

allowances for several HCFCs for which 

the Agency previously allocated 

allowances and other HCFCs that were 

not allocated allowances previously, for 

the control periods 2010–2014. The 

HCFC allowance system is part of EPA’s 

Clean Air Act program to phase out 

ozone-depleting substances (ODSs) to 

protect the stratospheric ozone layer. 

Protection of the stratospheric ozone 

layer helps reduce rates of skin cancer 

and cataracts, as well as other health 

and ecological effects. The U.S. is 

obligated under the Montreal Protocol 

on Substances that Deplete the Ozone 

Layer (Montreal Protocol) to limit HCFC 

consumption and production to a 

specific level and, using stepwise 

reductions, to decrease the specific level 

culminating in a complete HCFC 

phaseout in 2030. The next major 

milestone, to occur on January 1, 2010, 

is a 75 percent reduction from the 

aggregate U.S. HCFC baseline for 

production and consumption. In this 

action EPA proposes to allocate the 

allowances for 2010–2014 that will 

ensure compliance with the 

international stepwise reduction, 

consistent with the 1990 Clean Air Act 

Amendments. In addition, EPA 

proposes to amend the regulatory 

provisions concerning allowances for 

HCFC production for developing 

countries’ basic domestic needs to be 

consistent with the September 2007 

adjustments to the Montreal Protocol. 

Also, the Agency is providing its 

interpretation of a self-effectuating ban 

on introduction into interstate 

commerce and use of HCFCs contained 

in section 605(a) of the Clean Air Act 

and proposes to amend existing 

regulatory provisions to facilitate 

implementation of the statutory 

requirements. 

DATES: Comments must be received on 

or before February 23, 2009, unless a 

public hearing is requested. If a public 

hearing is requested, comments must 

then be received on or before March 9, 

2009. Any party requesting a public 

hearing must notify the contact listed 

below under FOR FURTHER INFORMATION

CONTACT by 5 p.m. Eastern Daylight 

Time on January 2, 2009. If a hearing is 

held, it will take place on January 7, 

2009 and the comment period will then 

close on March 9, 2009. 

ADDRESSES: Submit your comments, 

identified by Docket ID No. EPA–HQ– 

OAR–2008–0496, by one of the 

following methods: 

• http://www.regulations.gov: Follow 

the on-line instructions for submitting 

comments. 

• E-mail: a-and-r-Docket@epa.gov. 

• Fax: 202–566–1741. 

• Mail: Docket #, Air and Radiation 

Docket and Information Center, U.S. 

Environmental Protection Agency, Mail 

Code: 6102T, 1200 Pennsylvania Ave., 

NW., Washington, DC 20460. 

• Hand Delivery: Docket # EPA–HQ– 

OAR–2008–0496 Air and Radiation 

Docket at EPA West, 1301 Constitution 

Avenue, NW., Room B108, Mail Code 

6102T, Washington, DC 20460. Such 

deliveries are only accepted during the 

Docket’s normal hours of operation, and 

special arrangements should be made 

for deliveries of boxed information. 

Instructions: Direct your comments to 

Docket ID No. EPA–HQ–OAR–2008– 

0496. EPA’s policy is that all comments 

received will be included in the public 

docket without change and may be 

made available online at http:// 

www.regulations.gov, including any 

personal information provided, unless 

the comment includes information 

claimed to be Confidential Business 

Information (CBI) or other information 

whose disclosure is restricted by statute. 

Do not submit information that you 

consider to be CBI or otherwise 

protected through www.regulations.gov 

or e-mail. The http:// 

www.regulations.gov Web site is an 

‘‘anonymous access’’ system, which 

means EPA will not know your identity 

or contact information unless you 

provide it in the body of your comment. 

If you send an e-mail comment directly 

to EPA without going through http:// 

www.regulations.gov your e-mail 

address will be automatically captured 

and included as part of the comment 

that is placed in the public docket and 

made available on the Internet. If you 

submit an electronic comment, EPA 

recommends that you include your 

name and other contact information in 

the body of your comment and with any 

disk or CD–ROM you submit. If EPA 

cannot read your comment due to 

technical difficulties and cannot contact 

you for clarification, EPA may not be 

able to consider your comment. 

Electronic files should avoid the use of 

special characters, any form of 

encryption, and be free of any defects or 

viruses. For additional information 

about EPA’s public docket visit the EPA 

Docket Center homepage at http:// 

www.epa.gov/epahome/dockets.htm. 

FOR FURTHER INFORMATION CONTACT: 

Cindy Axinn Newberg, EPA, 

Stratospheric Protection Division, Office 

of Atmospheric Programs, Office of Air 

and Radiation (6205J), 1200 

Pennsylvania Avenue, NW., 

Washington, DC 20460, (202) 343–9729, 

newberg.cindy@epa.gov. 

SUPPLEMENTARY INFORMATION: Under the 

Montreal Protocol on Substances that 

Deplete the Ozone Layer (Montreal 

Protocol), as amended, the U.S. and 

other industrialized countries that are 

Parties to the Protocol have agreed to 

limit production and consumption of 

hydrochlorofluorocarbons (HCFCs), and 

to phase out production and 

consumption in a step-wise fashion over 

time, culminating in a general phaseout 

by 2020 while permitting a small 

amount of HCFC production to continue 

solely for servicing existing appliances 

until 2030. Title VI of the Clean Air Act 

Amendments of 1990 (CAAA of 1990) 

also mandates restrictions on HCFCs, 

culminating in a complete production 

and consumption phaseout in 2030. For 

purposes of both the Montreal Protocol 

and the Clean Air Act, ‘‘consumption’’ 

is defined as production plus imports 

minus exports. Sections 605 and 606 of 

the Clean Air Act authorize EPA to 

promulgate regulations to manage the 

consumption and production of HCFCs 

until the terminal phaseout. In 1993 

EPA established a chemical-bychemical, ‘‘worst-first,’’ approach to 

implement the Montreal Protocol’s 

graduated phaseout in overall HCFC 

levels (58 FR 65018). Key concepts in 

the ‘‘worst-first’’ approach included 

‘‘distinguishing among HCFCs based on 

their [ozone depletion potential (ODP)] 

and phasing out use in new equipment 

prior to use for servicing existing 

equipment’’ (58 FR 65026). The 

consumption cap became effective in 

1996, and HCFC consumption in the 

U.S. remained about 15 percent below 

the cap for the first two years. In 1998 

and 1999, consumption rose to levels 

that approached the cap. On January 21, 

2003, EPA established an allowance 

tracking system for HCFCs (68 FR 2820), 

noting at that time that EPA would 

again pursue a notice-and-comment 

rulemaking to implement a 2010 

stepwise reduction. EPA promulgated 

minor amendments to these regulations 

on June 17, 2004 (69 FR 34024), and 

July 20, 2006 (71 FR 41163). 

In this action, EPA proposes the next 

step in the chemical-by-chemical 

phaseout the United States uses to meet 

its international obligations. 

Specifically, EPA proposes for HCFC– 

141b, HCFC–22, and HCFC–142b, to 

grant specified percentages of the 

consumption and production baselines 

for the control periods 2010–2014; and 

for other HCFCs to apportion companyby-company consumption and 

production baselines as well as grant 

78682 Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 

specified percentages of the 

consumption and production baselines 

for the control periods 2010–2014. EPA 

is also proposing to amend the 

provisions for HCFC production 

allowances to meet the basic domestic 

needs of developing countries. In 

addition, EPA is proposing regulatory 

changes to complete the implementation 

of the section 605(a) ban on 

introduction into interstate commerce or 

use of HCFCs and clarifies its 

interpretation of this Clean Air Act 

provision. 

Abbreviations and Acronyms Used in 

this Document 

CAA—Clean Air Act 

CAAA—Clean Air Act Amendments of 

1990 

CFC—chlorofluorocarbon 

EPA—Environmental Protection Agency 

HCFC—hydrochlorofluorocarbon 

Montreal Protocol—Montreal Protocol 

on Substances that Deplete the Ozone 

Layer 

NPRM—Notice of Proposed Rulemaking 

ODP—ozone depletion potential 

ODS—ozone-depleting substance 

Party—States and regional economic 

integration organizations that have 

consented to be bound by the 

Montreal Protocol on Substances that 

Deplete the Ozone Layer 

SNAP—Significant New Alternatives 

Policy 

UNEP—United Nations Environment 

Programme 

Tips for Preparing Your Comments 

When submitting comments, 

remember to: 

• Identify the rulemaking by docket 

number and other identifying 

information (subject heading, Federal 

Register date and page number). 

• Follow directions—The Agency 

may ask you to respond to specific 

questions or organize comments by 

referencing a Code of Federal 

Regulations (CFR) part or section 

number. 

• Explain why you agree or disagree; 

suggest alternatives and substitute 

language for your requested changes. 

• Describe any assumptions and 

provide any technical information and/ 

or data that you used. 

• If you estimate potential costs or 

burdens, explain how you arrived at 

your estimate in sufficient detail to 

allow for it to be reproduced. 

• Provide specific examples to 

illustrate your concerns, and suggest 

alternatives. 

• Explain your views as clearly as 

possible, avoiding the use of profanity 

or personal threats. 

• Make sure to submit your 

comments by the comment period 

deadline identified. 

Table of Contents 

I. Regulated Entities 

II. Background 

A. How Do the Montreal Protocol and 

Clean Air Act Phase Out HCFCs? 

B. What Sections of the Clean Air Act 

Apply to This Rulemaking? 

III. This Proposal 

A. How Does EPA Propose to Issue 

Production and Consumption 

Allowances for 2010–2014? 

1. What Actions Did EPA Take in the 2003 

Allocation Rule? 

2. How Will EPA Allocate 2010–2014 

Allowances for HCFC–22 and HCFC– 

142b? 

3. How Should EPA Consider Servicing 

Needs for Existing Equipment? 

4. How Will the Allocated Allowances 

Appear in the Regulations? 

5. What Other Methods Could Be Used to 

Determine the Allocation for HCFC–22 

and HCFC–142b Allowances? 

6. How Important Is HCFC–22 in 

Determining the Allocation of 

Allowances? 

7. HCFC–22 Allowances for 2010–2014 

8. HCFC–142b Allowances for 2010–2014 

9. How Does the Aggregate for HCFC–22 

and HCFC–142b Translate to Entity-byEntity? 

10. Baselines for HCFC–123, HCFC–124, 

HCFC–225ca, and HCFC–225cb 

11. What Percentage of the Baseline Will 

EPA Allocate for HCFC–123, HCFC–124, 

HCFC–225ca, and HCFC–225cb for the 

Control Periods 2010–2014? 

12. What About Other HCFCs? 

B. Does the Article 5 Allowance Provision 

Change Given the Adjustments to the 

Montreal Protocol? 

C. How Does EPA Interpret ‘‘Introduce into 

Interstate Commerce or Use?’’ 

IV. Statutory and Executive Order Reviews 

A. Executive Order 12866: Regulatory 

Planning and Review 

B. Paperwork Reduction Act 

C. Regulatory Flexibility Act (RFA) 

D. Unfunded Mandates Reform Act 

E. Executive Order 13132: Federalism 

F. Executive Order 13175: Consultation 

and Coordination With Indian Tribal 

Governments 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

and Safety Risks 

H. Executive Order 13211: Actions That 

Significantly Affect Energy Supply, 

Distribution, or Use 

I. National Technology Transfer 

Advancement Act 

J. Executive Order 12898: Federal Actions 

to Address Environmental Justice in 

Minority Populations and Low-Income 

Populations 

I. Regulated Entities 

These proposed amendments will 

affect the following categories: 

Category NAICS code SIC code Examples of regulated entities 

Chlorofluorocarbon gas manufacturing.325120 2869 Chlorodifluoromethane manufacturers; Dichlorofluoroethane manufacturers; Chlorodifluoroethane manufacturers. 

Chlorofluorocarbon gas importers ... 325120 2869 Chlorodifluoromethane importers; Dichlorofluoroethane importers; 

Chlorodifluoroethane importers. 

Chlorofluorocarbon gas exporters ... 325120 2869 Chlorodifluoromethane exporters; Dichlorofluoroethane exporters; 

Chlorodifluoroethane exporters. 

Manufacturers of air conditioners 

and refrigerators.

333415 ........................ Air-Conditioning Equipment and Commercial and Industrial Refrigeration Equipment manufacturers. 

Importers of air conditioners and refrigerators.333415 3585 Air-Conditioning Equipment and Commercial and Industrial Refrigeration Equipment importers. 

This table is not intended to be 

exhaustive, but rather provides a guide 

for readers regarding entities likely to be 

regulated by this action. This table lists 

the types of entities that EPA is now 

aware potentially could be regulated by 

this action. Other types of entities not 

listed in this table could also be 

affected. To determine whether your 

facility, company, business 

organization, or other entity is regulated 

by this action, you should carefully 

examine these regulations. If you have 

questions regarding the applicability of 

this action to a particular entity, consult 

the person listed in the FOR FURTHER

INFORMATION CONTACT section. 

II. Background 

A. How Do the Montreal Protocol and 

Clean Air Act Phase Out HCFCs? 

The Montreal Protocol on Substances 

that Deplete the Ozone Layer is the 

international agreement aimed at 

reducing and eventually eliminating the 

production and consumption of 

Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 78683 

1Class I refers to the controlled substances listed 

in appendix A to 40 CFR part 82 subpart A. Class 

II refers to the controlled substances listed in 

appendix B to 40 CFR part 82 subpart A. 

2A control period, as defined at 40 CFR 82.3, is 

a twelve-month period from January 1 through 

December 31. 3Under Article 2(9)(d) of the Montreal Protocol, 

an adjustment enters into force six months from the 

date the depositary (the Ozone Secretariat) 

circulates it to the Parties. The depositary accepts 

all notifications and documents related to the 

Protocol and examines whether all formal 

requirements are met. In accordance with the 

procedure in Article 2(9)(d), the depositary 

communicated the adjustment to all Parties on 

November 14, 2007. The adjustment entered into 

force and become binding for all Parties on May 14, 

2008. 

stratospheric ozone-depleting 

substances. The U.S. was one of the 

original signatories to the 1987 Montreal 

Protocol and the U.S. ratified the 

Protocol on April 12, 1988. Congress 

then enacted, and President George 

H.W. Bush signed into law, the Clean 

Air Act Amendments of 1990 (CAAA of 

1990), which included Title VI on 

Stratospheric Ozone Protection, codified 

as 42 U.S.C. Chapter 85, Subchapter VI, 

to ensure that the United States could 

satisfy its obligations under the 

Montreal Protocol. Title VI includes 

restrictions on production, 

consumption, and use of ozonedepleting substances that are subject to 

acceleration if ‘‘the Montreal Protocol is 

modified to include a schedule to 

control or reduce production, 

consumption, or use * * * more rapidly 

than the applicable schedule’’ 

prescribed by the statute. Both the 

Montreal Protocol and the Clean Air Act 

define consumption as production plus 

imports minus exports. 

In 1990, as part of the London 

Amendment to the Montreal Protocol, 

the Parties identified HCFCs as 

‘‘transitional substances’’ to serve as 

temporary, lower-ODP substitutes for 

CFCs and other ODSs. EPA similarly 

viewed HCFCs as ‘‘important interim 

substitutes that will allow for the 

earliest possible phaseout of CFCs and 

other Class I substances’’ 1 (58 FR 

65026). In 1992, through the 

Copenhagen Amendment to the 

Montreal Protocol, the Parties created a 

detailed phaseout schedule for HCFCs 

beginning with a cap on consumption 

for industrialized (Article 2) Parties, a 

schedule to which the United States 

adheres. The consumption cap for each 

Article 2 Party was set at 3.1 percent 

(later tightened to 2.8 percent) of a 

Party’s CFC consumption in 1989, plus 

a Party’s consumption of HCFCs in 1989 

(weighted on an ODP basis). Based on 

this formula, the HCFC consumption 

cap for the U.S. was 15,240 ODPweighted metric tons, effective January 

1, 1996. This became the U.S. 

consumption baseline for HCFCs. 

The 1992 Copenhagen Amendment 

created a schedule with graduated 

reductions and the eventual phaseout of 

HCFC consumption (Copenhagen, 23–25 

November, 1992, Decision IV/4). Prior to 

the 2007 adjustment, the schedule 

called for a 35 percent reduction of the 

consumption cap in 2004, followed by 

a 65 percent reduction in 2010, a 90 

percent reduction in 2015, a 99.5 

percent reduction in 2020 (restricting 

the remaining 0.5 percent of baseline to 

the servicing of existing refrigeration 

and air-conditioning equipment), with a 

total phaseout in 2030. 

The Copenhagen Amendment did not 

cap HCFC production. In 1999, 

however, the Parties created a cap on 

production for Article 2 Parties through 

an amendment to the Montreal Protocol 

agreed by the Eleventh Meeting of the 

Parties (Beijing, 29 November—3 

December 1999, Decision XI/5). The cap 

on production was set at the average of: 

(a) 1989 HCFC production plus 2.8 

percent of 1989 CFC production, and (b) 

1989 HCFC consumption plus 2.8 

percent of 1989 CFC consumption. 

Based on this formula, the HCFC 

production cap for the U.S. was 15,537 

ODP-weighted metric tons, effective 

January 1, 2004. This became the U.S. 

production baseline for HCFCs. 

The U.S. has chosen to implement the 

Montreal Protocol phaseout schedule on 

a chemical-by-chemical basis. In 1992, 

environmental and industry groups 

petitioned EPA to implement the 

required phaseout by eliminating the 

most ozone-depleting HCFCs first. 

Based on the available data at that time, 

EPA believed that the U.S. could meet, 

and possibly exceed, the required 

Montreal Protocol reductions through a 

chemical-by-chemical phaseout that 

employed a ‘‘worst-first’’ approach 

focusing on certain chemicals earlier 

than others. In 1993, as authorized by 

section 606 of the CAA, the U.S. 

established a phaseout schedule that 

eliminated HCFC–141b first and would 

greatly restrict HCFC–142b and HCFC– 

22 next, followed by restrictions on all 

other HCFCs and ultimately a complete 

phaseout. (58 FR 15014, March 18, 

1993; 58 FR 65018, December 10, 1993). 

EPA explained that its action modified 

the schedule contained in paragraphs (a) 

and (b) of section 605 (58 FR 65025). 

Paragraph (a) addresses use and 

introduction into interstate commerce, 

while paragraph (b) addresses 

production. 

On January 21, 2003 (68 FR 2820), 

EPA promulgated regulations to ensure 

compliance with the first milestone in 

the HCFC phaseout: the requirement 

that, by January 1, 2004, the U.S. reduce 

HCFC consumption by 35 percent and 

freeze HCFC production. In that rule 

EPA established chemical-specific 

consumption and production baselines 

for HCFC–141b, HCFC–22, and HCFC– 

142b. To further carry out the 1993 

phaseout schedule, EPA issued 

calendar-year allowances equal to 100 

percent of baseline for HCFC–22 and 

HCFC–142b for each control period 2

from 2003 through 2009. For those same 

control periods EPA issued calendaryear allowances equal to zero for HCFC– 

141b; under the 1993 rule HCFC–141b 

was subject to a complete phaseout on 

January 1, 2003, which allowed the 

United States to meet and exceed the 

2004 stepwise reduction of 35 percent 

below the baseline for all HCFCs. EPA 

did, however, create a petition process 

to allow applicants to request very small 

amounts of HCFC–141b beyond the 

phaseout. EPA considered establishing 

baselines for all HCFCs in that rule but 

deferred such action for all but HCFC– 

141b, HCFC–142b, and HCFC–22. These 

regulations were amended with a 

technical correction on July 16, 2003 (68 

FR 41925), and with direct final rules 

adopting minor amendments on June 

17, 2004 (69 FR 34024) and July 20, 

2006 (71 FR 41163). 

To further protect human health and 

the environment, the Parties to the 

Montreal Protocol adjusted the Montreal 

Protocol’s phaseout schedule for HCFCs 

at the 19th Meeting of the Parties in 

September 2007. In accordance with 

Article 2(9)(d) of the Montreal Protocol, 

the adjustment to the phaseout schedule 

was effective on May 14, 2008.3

As a result of the 2007 Montreal 

Adjustment (reflected in Decision XIX/ 

6), the United States and other 

industrialized countries are obligated to 

reduce HCFC production and 

consumption 75 percent below the 

established baseline by 2010, rather 

than 65 percent as was the previous 

requirement. The other milestones 

remain the same: 90 percent below the 

baseline by 2015, and 99.5 percent 

below the baseline by 2020—allowing, 

during 2020 to 2030, production and 

consumption at only 0.5 percent of 

baseline solely for servicing existing airconditioning and refrigeration 

equipment. The adjustment also 

resulted in a phaseout schedule for 

HCFC production that parallels the 

consumption phaseout schedule. All 

production and consumption for Article 

2 Parties is phased out by 2030. 

Decision XIX/6 also adjusted the 

provisions for Parties operating under 

78684 Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 

4Paragraphs 4–6 of adjusted Article 2F read as 

follows: 

‘‘4. Each Party shall ensure that for the twelvemonth period commencing on 1 January 2010, and 

in each twelve-month period thereafter, its 

calculated level of consumption of the controlled 

substances in Group I of Annex C does not exceed, 

annually, twenty-five per cent of the sum referred 

to in paragraph 1 of this Article. Each Party 

producing one or more of these substances shall, for 

the same periods, ensure that its calculated level of 

production of the controlled substances in Group I 

of Annex C does not exceed, annually, twenty-five 

per cent of the calculated level referred to in 

paragraph 2 of this Article. However, in order to 

satisfy the basic domestic needs of the Parties 

operating under paragraph 1 of Article 5, its 

calculated level of production may exceed that limit 

by up to ten per cent of its calculated level of 

production of the controlled substances in Group I 

of Annex C as referred to in paragraph 2. 

5. Each Party shall ensure that for the twelvemonth period commencing on 1 January 2015, and 

in each twelve-month period thereafter, its 

calculated level of consumption of the controlled 

substances in Group I of Annex C does not exceed, 

annually, ten per cent of the sum referred to in 

paragraph 1 of this Article. Each Party producing 

one or more of these substances shall, for the same 

periods, ensure that its calculated level of 

production of the controlled substances in Group I 

of Annex C does not exceed, annually, ten per cent 

of the calculated level referred to in paragraph 2 of 

this Article. However, in order to satisfy the basic 

domestic needs of the Parties operating under 

paragraph 1 of Article 5, its calculated level of 

production may exceed that limit by up to ten per 

cent of its calculated level of production of the 

controlled substances in Group I of Annex C as 

referred to in paragraph 2. 

6. Each Party shall ensure that for the twelvemonth period commencing on 1 January 2020, and 

in each twelve-month period thereafter, its 

calculated level of consumption of the controlled 

substances in Group I of Annex C does not exceed 

zero. Each Party producing one or more of these 

substances shall, for the same periods, ensure that 

its calculated level of production of the controlled 

substances in Group I of Annex C does not exceed 

zero. However: 

i. Each Party may exceed that limit on 

consumption by up to zero point five per cent of 

the sum referred to in paragraph 1 of this Article 

in any such twelve-month period ending before 1 

January 2030, provided that such consumption 

shall be restricted to the servicing of refrigeration 

and air conditioning equipment existing on 1 

January 2020; 

ii. Each Party may exceed that limit on 

production by up to zero point five per cent of the 

average referred to in paragraph 2 of this Article in 

any such twelve-month period ending before 1 

January 2030, provided that such production shall 

be restricted to the servicing of refrigeration and air 

conditioning equipment existing on 1 January 

2020.’’ 

paragraph 1 of Article 5 (developing 

countries): (1) To set production and 

consumption baselines based on the 

average 2009–2010 production and 

consumption, respectively; (2) to freeze 

production and consumption at those 

baselines in 2013; and (3) to add 

stepwise reductions of 10 percent below 

baselines by 2015, 35 percent by 2020, 

67.5 percent by 2025, and 97.5 percent 

by 2030—allowing, between 2030 and 

2040, an annual average of no more than 

2.5 percent to be produced or imported 

solely for servicing existing airconditioning and refrigeration 

equipment. All production and 

consumption for Article 5 Parties is 

phased out by 2040. 

In addition, Decision XIX/6 adjusted 

Article 2F to allow industrialized 

countries to produce ‘‘up to 10 percent 

of baseline levels’’ for export to Article 

5 countries ‘‘in order to satisfy basic 

domestic needs’’ until 2020.4 Paragraph 

14 of Decision XIX/6 notes that no later 

than 2015 the Parties would consider 

‘‘further reduction of production for 

basic domestic needs’’ in 2020 and 

beyond. Under paragraph 13 of Decision 

XIX/6, the Parties will review in 2015 

and 2025, respectively, the need for the 

‘‘servicing tails’’ for industrialized and 

developing countries. The term 

‘‘servicing tail’’ refers to an amount of 

HCFCs used to service existing 

equipment, such as certain types of airconditioning and refrigeration 

appliances. 

B. What Sections of the Clean Air Act 

Apply to This Rulemaking? 

Several sections of the Clean Air Act 

apply to this proposed rulemaking. 

Section 605 of the Clean Air Act phases 

out production and consumption and 

restricts the use of HCFCs in accordance 

with the schedule set forth in that 

section. Section 606 provides for 

acceleration of the schedule in section 

605 based on a determination by EPA 

regarding current scientific information 

or the availability of substitutes, or to 

conform to any acceleration under the 

Montreal Protocol. EPA has previously 

accelerated the section 605 schedule 

through a rulemaking published 

December 10, 1993 (58 FR 65018). 

Though this action, EPA is further 

accelerating the section 605 HCFC 

production and consumption phaseouts. 

Section 606 provides authority for 

EPA to promulgate regulations that 

establish a schedule for production and 

consumption that is more stringent than 

what is set forth in section 605 if: ‘‘(1) 

Based on an assessment of credible 

current scientific information (including 

any assessment under the Montreal 

Protocol) regarding harmful effects on 

the stratospheric ozone layer associated 

with a Class I or Class II substance, the 

Administrator determines that such 

more stringent schedule may be 

necessary to protect human health and 

the environment against such effects, (2) 

based on the availability of substitutes 

for listed substances, the Administrator 

determines that such more stringent 

schedule is practicable, taking into 

account technological achievability, 

safety, and other relevant factors, or (3) 

the Montreal Protocol is modified to 

include a schedule to control or reduce 

production, consumption, or use of any 

substance more rapidly than the 

applicable schedule under this title.’’ It 

is only necessary to meet one of the 

three criteria. EPA believes that in this 

instance, all three criteria have been 

met. 

The first criterion allows the 

Administrator, based on an assessment 

of credible current scientific 

information, to determine that a more 

stringent schedule may be necessary to 

protect human health. The recent 

scientific findings by the Montreal 

Protocol’s Science Assessment Panel, 

Science Assessment of Ozone Depletion: 

2006, available in the docket for this 

rulemaking, were initially presented to 

the Parties to the Montreal Protocol in 

October 2006 at the 18th Meeting of the 

Parties in New Delhi, India. The 

Assessment was published in March 

2007, and hard copies were available to 

the Parties in advance of the 26th OpenEnded Working Group Meeting held in 

June 2007 in Nairobi, Kenya. The 

assessment report shows that 

notwithstanding the evidence of a 

healing of the ozone layer, there 

continue to be human health and 

environmental effects associated with 

ozone depletion and that recovery 

continues to rely on a successful total 

global phaseout of ODSs. The report 

includes scenarios where additional 

actions taken by the Parties would result 

in a faster recovery. While these specific 

scenarios (including complete phaseout 

by the end of that calendar year) were 

not all necessarily deemed to be 

practical, they demonstrated to the 

Parties what could be achieved with 

additional actions and contributed in 

part to the willingness of many Parties, 

including the United States, to consider 

the adjustments to the Montreal 

Protocol’s HCFC phaseout schedule that 

were successfully negotiated in 

September 2007. EPA published a 

notice of data availability (72 FR 35230) 

concerning the potential changes in 

HCFC consumption from proposed 

adjustments to the Montreal Protocol 

submitted by the United States for 

consideration at the 19th Meeting of the 

Parties held in Montreal September 

2007. The data made available through 

that notice were specific to the United 

States’ proposal but had general 

applicability to the other five proposals 

submitted by various Parties to the 

Protocol and to what was ultimately 

agreed to by the Parties at the 19th 

Meeting. 

Reductions in stratospheric ozone 

levels lead to higher levels of ultraviolet 

radiation reaching the Earth’s surface, 

and a higher risk of negative health 

Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 78685 

effects. According to the American 

Cancer Society, one in five Americans 

will develop skin cancer in their 

lifetime, and one American dies every 

hour from this disease. While medical 

research continues to improve the 

understanding of the causes and effects 

of skin cancer, many health and 

education groups are working to reduce 

the incidence of this disease. EPA 

believes the recent scientific findings on 

stratospheric ozone depletion, together 

with the well-established relationship 

between ozone depletion and increased 

risk of human health effects, support a 

determination that a more stringent 

HCFC phaseout schedule may be 

necessary to protect against such effects. 

The second criterion allows the 

Administrator to determine a more 

stringent schedule is practicable based 

on the availability of substitutes for 

ODS, taking into account technological 

achievability, safety, and other relevant 

factors. Since the establishment of the 

domestic chemical-by-chemical 

phaseout in the United States, advances 

by industry have resulted in the 

availability of substitutes for a large 

variety of end-use applications. Under 

section 612 of the CAA, EPA’s 

Significant New Alternatives Policy 

(SNAP) program evaluates and lists 

alternatives for ODSs that reduce overall 

risk to human health and the 

environment and are currently or 

potentially available. Alternatives 

include chemical replacements, product 

substitutes, and alternative 

technologies. The SNAP program has 

reviewed approximately 450 

combinations of alternatives and end 

uses to date. EPA makes information 

available concerning potential 

alternatives for various end-use 

applications. Suitable alternatives—in 

many cases, multiple suitable 

alternatives—are available for all enduse applications for the HCFCs 

considered in this action. The SNAP 

program has reviewed substitutes for the 

following industrial sectors: 

• Refrigeration & Air Conditioning. 

• Foam Blowing Agents. 

• Cleaning Solvents. 

• Fire Suppression and Explosion 

Protection. 

• Aerosols. 

• Sterilants. 

• Tobacco Expansion. 

• Adhesives, Coatings & Inks. 

HCFCs have been used in almost all 

of these industrial sectors. For example, 

within the air conditioning and 

refrigeration industrial sector, end uses 

where HCFCs have been used include 

chillers, industrial process refrigeration 

systems, ice skating rinks, cold storage 

warehouses, refrigerated transport, retail 

food refrigeration, household 

appliances, and residential and light 

commercial air conditioning and heat 

pumps. The SNAP program lists 

substitutes for each of the end uses. (For 

a complete list of substitutes the reader 

is directed to: http://www.epa.gov/ 

ozone/snap/lists/index.html.) EPA 

believes that given the availability of 

substitutes, a more stringent HCFC 

phaseout schedule now is practicable. 

The last criterion is that the Montreal 

Protocol be modified to include a 

schedule to control or reduce 

production, consumption, or use of any 

substance more rapidly than section 605 

would dictate. The United States 

submitted a proposal to adjust the 

Montreal Protocol in March 2007 to 

accelerate the phaseout of HCFCs. This 

was one of six proposals considered by 

the Parties at their 19th Meeting. Due to 

the efforts of the United States and 

others, the Parties agreed to adjustments 

that result in a more aggressive phaseout 

schedule for both developed and 

developing countries. Therefore, this 

third criterion has been met. Through 

this action, EPA is proposing to 

incorporate a schedule that reflects the 

2007 Montreal Adjustment in its 

regulations. In order to meet the 2010 

stepdown, EPA is proposing to allocate 

HCFC allowances for the years 2010 

through 2014 at a level that will ensure 

the aggregate HCFC production and 

consumption will not exceed 25 percent 

of the U.S. baselines. 

While section 606 is sufficient 

authority for this acceleration of the 

section 605 phaseout schedule, EPA 

also notes that section 614(b) of the 

Clean Air Act provides that in the case 

of a conflict between the Act and the 

Protocol, the more stringent provision 

shall govern. Thus, section 614(b) 

requires the Agency to establish 

phaseout schedules at least as stringent 

as the schedules contained in the 

Protocol. 

In addition to implementing the 2007 

Montreal Adjustment, today’s proposed 

rule would also address provisions in 

section 605 of the Clean Air Act that 

relate to use and introduction intro 

interstate commerce of class II 

substances. In today’s action, EPA is 

proposing to complete its 

implementation (begun in 1993) of the 

section 605 provisions on use of class II 

substances. EPA is also proposing 

regulatory language to reflect the section 

605 provisions on introduction into 

interstate commerce of class II 

substances. EPA previously addressed 

the provisions concerning use of class II 

substances in a 1993 rulemaking that 

accelerated the phaseout schedule for 

HCFC–22 and HCFC–142b (58 FR 

15014, 58 FR 65018). The intent of the 

1993 rulemaking was to accelerate not 

only the production and consumption 

schedule, but also the use restrictions 

for those two substances. In the March 

18, 1993 notice of proposed rulemaking, 

EPA stated that the effect of this 

acceleration was ‘‘to prohibit the use of 

the chemicals (virgin material only) for 

any use except as a feedstock or as a 

refrigerant in existing equipment as of 

January 1, 2010’’ (58 FR 15028). EPA 

noted in the December 10, 1993 notice 

of final rulemaking that ‘‘HCFC 

restrictions and the approach included 

in today’s final rule have not changed 

from those proposed by the Agency in 

March’’ (58 FR 65028). The regulatory 

prohibitions included with that notice, 

however, did not control use directly, 

but instead banned production and 

import for most uses. In today’s action, 

EPA is proposing to add the direct use 

prohibitions contemplated in the 1993 

rule as well as the corresponding 

prohibitions on introduction into 

interstate commerce. EPA is also 

clarifying its interpretation of section 

605(a). 

III. This Proposal 

EPA is proposing to adjust existing 

regulations to address the next major 

milestone in the HCFC phaseout. As a 

Party to the Montreal Protocol, and 

having ratified the Montreal Protocol 

and all of its amendments, the United 

States is required to decrease its amount 

of HCFC consumption and production 

to 25 percent of the U.S. baseline by 

2010. Our domestic chemical-bychemical approach results in differing 

schedules for the phaseout of individual 

HCFC compounds. EPA believes that 

the chemical-by-chemical HCFC 

allocation of allowances proposed in 

this notice of proposed rulemaking 

(NPRM) will ensure that the United 

States continues to maintain an overall 

HCFC production and consumption 

level that is below the 2010 cap 

specified by the September 2007 

Montreal Adjustment, while at the same 

time ensuring that servicing needs 

consistent with Section 605(a) of the 

Clean Air Act and EPA’s implementing 

regulations continue to be met. Thus the 

aggregate allowances for all U.S. HCFC 

consumption in the years 2010–2014 

will not exceed 3,810 ODP-weighted 

metric tons (25 percent of the aggregate 

U.S. consumption baseline) annually 

and the aggregate allowances for all U.S. 

HCFC production in the years 2010– 

2014 will not exceed 3,884.25 ODPweighted metric tons (25 percent of the 

aggregate U.S. production baseline) 

annually. 

78686 Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 

5EPA is not proposing any changes and thus is 

not seeking comment with regard to the HCFC–141b 

petition process for the 2010–2014 control periods. 

To meet the 2010 cap for the 2010– 

2014 control periods, EPA is proposing 

to continue its past practice of 

apportioning company-specific 

production and consumption baselines 

for individual HCFCs, and granting a 

certain percent of that baseline as 

necessary to achieve compliance with 

the cap. For HCFC–141b, HCFC–22, and 

HCFC–142b, EPA is proposing to 

apportion company-specific baselines in 

amounts that are equivalent to those 

currently published at § 82.17 (for 

production) and § 82.19 (for 

consumption), adjusted as necessary to 

reflect permanent transfers of baseline 

allowances and changes to the names of 

entities identified in the tables at § 82.17 

and § 82.19. Companies are currently 

granted, in § 82.16, 0 percent of baseline 

for HCFC–141b and 100 percent of 

baseline for HCFC–22 and HCFC–142b. 

For 2010–2014, given the previous 

phaseout of HCFC–141b, EPA will 

continue to allocate zero percent for 

HCFC–141b, continuing to allow only 

limited amounts of production via an 

EPA petition process.5 EPA is proposing 

to allocate less than 100 percent of 

baseline for HCFC–22 and HCFC–142b 

to meet our obligations under the 

Montreal Protocol and reflecting the use 

restrictions under section 605(a) that are 

discussed later in this proposal while 

providing for servicing needs consistent 

with those restrictions. 

EPA is proposing a similar approach 

for HCFC–123, HCFC–124, HCFC– 

225ca, and HCFC–225cb, which 

currently do not have baselines. EPA is 

proposing to apportion companyspecific baselines for these HCFCs based 

on production and import data available 

to the Agency. For control periods 

2010–2014, EPA is proposing to grant 

125 percent of baseline for these HCFCs. 

The allocations described above for 

HCFC–22, HCFC–142b, HCFC–123, 

HCFC–124, HCFC–225ca, and HCFC– 

225cb reflect EPA’s analysis of market 

data for these chemicals. The proposed 

allocations were developed to allow the 

need for virgin material to be met and 

to avoid shortages during the affected 

control periods, as well as to 

accommodate some market growth for 

HCFCs–123, –124, –225ca, and –225cb, 

for which baselines were not developed 

in the 2003 allocation rule. The total 

proposed allocation of HCFC allowances 

to meet the U.S. need for virgin material 

is less than the 3,810 ODP-ton cap. The 

differential between the cap and the 

total proposed allocation will have the 

effect of accommodating minor 

adjustments in the market, particularly 

to allow potential market growth for 

HCFCs that have not been produced or 

imported since 2003 (and which are 

therefore not reflected here). In 

summary, of the 3,810 ODP tons of 

consumption and 3,884.25 ODP tons of 

production allowable for the 2010–2014 

control periods as established by the 

Montreal Protocol, EPA is proposing to 

allocate allowances, in aggregate, for 

2,920 ODP tons of consumption and 

2,646 ODP tons of production. 

These proposed allocations represent 

77 percent of the consumption cap and 

68 percent of the production cap 

established by the Montreal Protocol for 

2010. EPA seeks comment on whether 

the proposed allocations, together with 

the amounts assumed to be available 

from reclaimed refrigerant, will suffice 

to meet HCFC needs for the existing 

uses (primarily refrigerant servicing) 

that will still be permitted in 2010, as 

well as potential adjustments in the 

HCFC market. Please provide 

information and documentation on 

newly emerging uses of HCFCs and 

other uses of HCFCs, if any, that are not 

accounted for by EPA currently. EPA is 

especially interested in information 

pertaining to the years 2010 through 

2014. 

EPA is proposing two other changes 

in this proposed rule. First, to reflect the 

September 2007 Montreal Adjustments, 

EPA is proposing to adjust the amount 

of Article 5 allowances for control 

periods 2010–2019. Second, EPA is 

completing its implementation of the 

provisions in section 605 of the Clean 

Air Act that relate to use and 

introduction into interstate commerce of 

class II substances. 

EPA is not proposing changes to other 

provisions of 40 CFR part 82 subpart A, 

such as the recordkeeping and reporting 

obligations, the essential use and critical 

use provisions, and the HCFC–141b 

petition process. EPA is only seeking 

comments on the portions of 40 CFR 

part 82 subpart A that are specifically 

addressed by this proposal. 

A. How Does EPA Propose to Issue 

Production and Consumption 

Allowances for 2010–2014? 

In the United States, an allowance is 

the unit of measure that controls 

production and consumption of ozonedepleting substances. An allowance 

represents the privilege granted to a 

company to produce or import one 

kilogram (not ODP-weighted) of the 

specific substance. EPA establishes 

company-by-company baselines (also 

known as ‘‘baseline allowances’’) and 

allocates calendar-year allowances equal 

to a percentage of the baseline for 

specified control periods. EPA has 

allocated two types of calendar-year 

allowances—production allowances and 

consumption allowances—for HCFC–22 

and HCFC–142b. ‘‘Production 

allowance’’ and ‘‘consumption 

allowance’’ are defined at 40 CFR 82.3. 

To produce an HCFC for which 

allowances have been allocated, an 

allowance holder must expend both 

production and consumption 

allowances. To import an HCFC for 

which allowances have been allocated, 

an allowance holder must expend 

consumption allowances. An allowance 

holder exporting HCFCs for which it has 

expended consumption allowances may 

obtain a refund of those consumption 

allowances upon submittal of proper 

documentation to EPA. 

Since EPA is implementing the 

phaseout on a chemical-by-chemical 

basis, it allocates and tracks production 

and consumption allowances on an 

absolute kilogram basis for each 

chemical. Upon EPA approval, an 

allowance holder may trade allowances 

for one type of HCFC for allowances of 

another type of HCFC, with transactions 

weighted according to the ozone 

depletion potential of the chemicals 

involved. Pursuant to section 607 of the 

Clean Air Act, EPA applies an offset to 

each HCFC trade by deducting 0.1 

percent from the transferor’s allowance 

balance. The offset is viewed as a 

benefit to the ozone layer since it 

‘‘results in greater total reductions in the 

production in each year of * * * class 

II substances than would occur in that 

year in the absence of such 

transactions’’ (42 U.S.C. 7671f). 

Under current regulations at 40 CFR 

82.15(a) and (b), HCFC–22 and HCFC– 

142b may not be produced or imported 

in excess of the calendar-year 

allowances held by the producer or 

importer. EPA has not yet allocated any 

calendar-year allowances for HCFC– 

142b or HCFC–22 to cover the 2010 

control period and beyond. Absent a 

grant of calendar-year allowances for 

these HCFCs, § 82.15 would prohibit 

their production and import after 

December 31, 2009. EPA intends to 

avoid that result by issuing a final rule 

in advance of that date that will allocate 

calendar-year allowances for 2010– 

2014. 

1. What Actions Did EPA Take in the 

2003 Allocation Rule? 

In the January 21, 2003, allocation 

rule, EPA established baselines for 

HCFC–141b, HCFC–22, and HCFC– 

142b. Section 601(2) states that EPA 

may select ‘‘a representative calendar 

year’’ to serve as the baseline for HCFCs. 

In the 2003 allocation rule, however, 

Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 78687 

EPA concluded that because the entities 

eligible for allowances had differing 

production and import histories, no one 

year was representative for all 

companies. Therefore, in the 2003 

allocation rule EPA assigned an 

individual consumption baseline year to 

each company by selecting its highest 

ODP-weighted consumption year from 

among the years 1994 through 1997. 

EPA assigned individual production 

baseline years in the same manner. EPA 

did not consider years after 1997 to 

avoid creating an uneven playing field 

that would skew allocations to those 

companies with ample resources and 

good access to information regarding the 

impending phaseout. EPA is not 

proposing to revisit decisions made in 

the 2003 allocation rule, such as the 

Agency’s discretion to consider data 

from multiple years in establishing a 

baseline. 

The 2003 allocation rule apportioned 

production and consumption baselines 

to each company in amounts equal to 

the amounts in the company’s highest 

‘‘production year’’ or ‘‘consumption 

year,’’ as described above. It completely 

phased out the production and import 

of HCFC–141b, with the limited 

exception described above, by granting 

0 percent of that chemical’s baseline for 

production and consumption in the 

table at § 82.16. The rule granted 100 

percent of baseline for production and 

consumption of HCFC–22 and HCFC– 

142b. EPA was able to allocate 

allowances for HCFC–22 and HCFC– 

142b at 100 percent of baseline because, 

in light of the concurrent complete 

phaseout of HCFC–141b, the allocations 

for HCFC–22 and HCFC–142b, 

combined with projections for 

consumption of all other HCFCs, 

remained below the 2004 cap of 65 

percent of the baseline. 

Because EPA has allocated the same 

amount of allowances every year from 

2004 to 2009—with minor changes 

reflecting permanent trades of baseline 

allowances—and because EPA tracks 

the production and consumption of all 

HCFCs (including those for which 

baselines are not allocated), the Agency 

can ascertain that the U.S. will remain 

comfortably below the cap through 

2009. The January 2003 allocation rule 

announced that EPA would allocate 

allowances for 2010–2014 in a 

subsequent action and that those 

allowances would be lower in aggregate 

than for 2003–2009, consistent with the 

next stepwise reduction for HCFCs 

under the Montreal Protocol. EPA stated 

its intention to determine the exact 

amount of allowances that would be 

needed for HCFC–22 and HCFC–142b, 

bearing in mind that other HCFCs 

would also contribute to total HCFC 

consumption. EPA stated that it would 

likely achieve the 2010 reduction step 

by applying a percentage reduction to 

the HCFC–22 and HCFC–142b baseline 

allowances. EPA has monitored the 

market to ascertain servicing needs and 

market adjustments in the use of HCFCs, 

including HCFCs for which EPA did not 

establish baselines in the 2003 

allocation rule. 

2. How Will EPA Allocate 2010–2014 

Allowances for HCFC–22 and HCFC– 

142b? 

This proposal identifies five primary 

options for allocating HCFC–22 and 

HCFC–142b allowances for the control 

periods 2010–2014: (1) Allocating a 

percentage of the baseline allowances 

(§§ 82.17 and 82.19) for each HCFC 

respectively with or without 

considering any permanent baseline 

transfers and/or inter-pollutant transfers 

that resulted in a different amount of 

production or consumption for a 

specific HCFC; (2) allocating allowances 

based on evaluation of the most recent 

three years of production, import, and/ 

or export data as reported to EPA; (3) 

allocating allowances based on 

evaluation of past sales of HCFCs by 

allowance holders by considering how 

the HCFCs were ultimately used (e.g., 

servicing refrigeration or airconditioning, original manufacture of 

refrigeration or air-conditioning 

equipment, foam blowing); (4) allocating 

allowances based on aggregated ODP 

tons; or (5) allocating a total amount of 

allowances and allowing for purchase 

by establishing an auction system. 

These options are described in more 

detail in section III.A.9 of this preamble. 

Each of these five methods offers 

advantages and disadvantages for 

potential allowance holders which vary 

according to whether a particular entity 

is predominantly a producer or 

importer; whether it currently sells 

HCFC–22 and HCFC–142b to original 

equipment manufacturers, wholesalers, 

retailers, or companies that service 

appliances; whether the portion of its 

business that is ODS-based is expanding 

or contracting as the next major 

milestone in the phaseout approaches; 

its liquidity; whether it holds both 

HCFC–142b and HCFC–22 allowances 

and/or engages in inter-pollutant 

transfers; and whether it sold HCFCs for 

applications that do not lend themselves 

to servicing. Without regard to the 

practices of individual entities, each of 

the potential allocation schemes also 

offers advantages and disadvantages 

associated with the ease of 

implementation and other 

administrative burdens. EPA has placed 

in the docket to this NPRM a 

memorandum titled ‘‘Draft Regulatory 

Options for Allocating HCFC 

Allowances after 2009’’ that explores 

the advantages and disadvantages of the 

various options. In addition to the 

memorandum, EPA has also placed in 

the docket written correspondence by 

entities that also discusses various 

options for allocating HCFC allowances. 

EPA provided notice of the leading 

option for implementing the 2010 

milestone in the preamble to the 2003 

allocation rule by indicating that EPA 

‘‘intends to achieve this reduction step 

through notice and comment prior to 

2010 and will likely implement the 

reduction by simply listing a percent of 

baseline allowances to be granted in 

§ 82.16 for the years after 2009’’ (68 FR 

2823). The Agency said that it would 

allocate allowances for HCFC–22 and 

HCFC–142b at less than 100 percent of 

the respective baselines during the 

control periods 2010–2014. EPA 

continues to believe that this option is 

the most appropriate, but seeks 

comment on other options. This 

approach offers a transparent design and 

provides stability in that it uses a wellvetted baseline. EPA believes this 

option also is the least burdensome 

because it would not require additional 

one-time or periodic reporting 

obligations that may be necessary if EPA 

were to adopt a different option. 

Producers and importers have adapted 

to the current HCFC allocation method 

and aligned their business activities 

around the baselines set forth in the 

2003 allocation rule. Currently, EPA 

manages a tracking system and issues 

calendar-year allowances per control 

period to specific entities listed in 

§ 82.17 and § 82.19. An option that 

utilizes this system would limit 

administrative burdens for the Agency 

and allowance holders. 

In the 2003 allocation rule, EPA did 

not forecast the amount of reduction for 

HCFC–22 and HCFC–142b that would 

be needed to ensure that the United 

States stayed sufficiently below the 

2010 stepwise reduction, which at the 

time was a reduction of 65 percent from 

the Montreal Protocol baseline. EPA did 

not determine whether it would reduce 

the allocations for the two substances by 

the same percentage or by different 

percentages. Several factors affect 

determination of the appropriate 

percentage of the HCFC–22 and HCFC– 

142b production and consumption 

baselines to allocate for 2010–2014. 

Factors include the percentage of the 

aggregate U.S. production and 

consumption caps that other HCFCs 

comprise as well as provisions in the 

Clean Air Act and implementing 

78688 Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 

regulations that include use restrictions 

(discussed in section III.C of this 

NPRM). 

EPA uses information from quarterly, 

annual, and other periodic reporting 

requirements to monitor consumption, 

production, imports, and exports of all 

HCFCs. EPA uses this information to 

ensure companies’ compliance with 

regulatory requirements and to develop 

reports that are requested by the Parties 

to the Montreal Protocol, including 

reports ascertaining U.S. compliance 

with the phaseout caps. The information 

enables EPA to monitor production and 

consumption for all HCFCs, including 

HCFCs for which baselines have not yet 

been established and for which 

allowances have not yet been allocated. 

Although EPA’s July 20, 2001, 

proposed HCFC allocation rulemaking 

would have allocated production and 

consumption allowances for all HCFCs, 

the January 2003 final rule apportioned 

company-specific baselines, and 

allocated a specific percentage of 

baseline allowances for the 2003–2009 

control periods, only for HCFC–141b, 

HCFC–22, and HCFC–142b. EPA 

applied a ‘‘worst-first’’ approach to 

these HCFCs since they are the most 

damaging to the stratospheric ozone 

layer. The 2003 final rule noted that the 

HCFC market was continuing to evolve. 

At that time, the market for HCFCs with 

lower ODPs did not reflect rapid 

expansion and thus it was not necessary 

to establish specific baselines by 

chemical and issue allowances to ensure 

that the United States remained below 

its cap. Later in this proposal, EPA 

further discusses establishing and 

apportioning baselines as well as 

allocating calendar-year allowances for 

these lower-ODP HCFCs for the control 

periods 2010–2014. 

3. How Should EPA Consider Servicing 

Needs for Existing Equipment? 

EPA is proposing to use projected 

servicing needs in its determination of 

the amounts of HCFC–22 and HCFC– 

142b allowances to be allocated for the 

2010–2014 control periods. EPA is 

focusing on servicing needs because 

under section 605(a) of the Clean Air 

Act and EPA’s implementing 

regulations, nearly all other uses of 

these two HCFCs will be banned 

effective January 1, 2010. EPA has 

previously issued a draft analysis of 

servicing demand for the HCFC 

appliances in the U.S. refrigeration and 

air-conditioning sector projected to be 

in service from 2010–2019. The report is 

titled The U.S. Phaseout of HCFCs: 

Projected Servicing Needs in the U.S. 

Air-Conditioning and Refrigeration 

Sector (the ‘‘Servicing Tail’’ report). On 

November 4, 2005, EPA published a 

notice of data availability (70 FR 67172) 

making a draft of the report available for 

public review and comment. On 

September 29, 2006, EPA held a 

stakeholder meeting presenting the 

findings of a revision to the Servicing 

Tail report along with other important 

information regarding the next major 

milestones in the HCFC phaseout. EPA 

solicited comments on the findings 

presented at the meeting. Some 

stakeholders, including representatives 

of manufacturers, chemical producers, 

importers, reclaimers, industry 

associations, and environmental 

organizations, commented on the 

projected amount of HCFCs needed to 

service this installed base of equipment 

and on the amounts expected to be 

available from reclamation. 

EPA focused the analysis on airconditioning and refrigeration 

appliances because such equipment will 

represent the bulk of the servicing need. 

In addition, the servicing exception to 

the use ban for HCFC–22 and HCFC– 

142b pertains only to use as a refrigerant 

in such equipment. EPA also focused 

the analysis on HCFC–22 because 

HCFC–22 is the predominant HCFC in 

the installed base of air-conditioning 

and refrigerant equipment for which 

servicing in the U.S. will likely 

continue. The findings in the Servicing 

Tail report have helped to shape EPA’s 

views regarding the allocation for the 

control periods 2010–2014. 

The majority of HCFC–22 equipment 

that is projected to be in use from 2010 

onward will be air-conditioning 

applications, including window units, 

packaged terminal units, residential and 

commercial unitary air-conditioning, 

chillers, dehumidifiers, water and 

ground source heat pumps, and nonlight duty mobile air-conditioning in 

buses and trains. Approximately 147.5 

million units of all such types of HCFC– 

22 air-conditioning equipment will be 

in use in 2010, decreasing from 2010 

levels by about 41 percent by 2015 and 

76 percent by 2020. In 2010, 

approximately 2.2 million units of 

HCFC–22 refrigeration equipment will 

be in use, including retail food, 

industrial process refrigeration, and 

transport refrigeration equipment (but 

not including cold storage warehouses). 

The installed base of HCFC–22 

refrigeration equipment is projected to 

decrease from 2010 levels by about 29 

percent by 2015 and 51 percent by 2020. 

EPA developed these estimates using its 

Vintaging Model, a tool for estimating 

the annual chemical emissions from 

industrial sectors that have historically 

used ozone-depleting substances in 

their products. Additional information 

on the Vintaging Model is available in 

the docket for this rulemaking. 

As a result of the September 2007 

Montreal Adjustment, in which the 

Parties agreed to adjust the stepwise 

reduction in 2010 from 65 percent of 

baseline to 75 percent of baseline for 

non-Article 5 Parties, and recognizing 

the overall advances by industry in 

transitioning to non-ODS substitutes, 

EPA has prepared a draft revised 

Servicing Tail report to: (1) Reflect the 

75 percent reduction in 2010; (2) 

consider more recent production and 

consumption data in the United States; 

and (3) consider more recent trends in 

the air-conditioning and refrigeration 

sectors. This revised draft report is 

available in the docket for this 

rulemaking. EPA is accepting comments 

on the analysis and the draft findings 

until February 23, 2009 or March 9, 

2009 if a hearing regarding this 

rulemaking is held. 

The Servicing Tail report utilizes 

production, import, and export data 

reported to the Agency on a quarterly, 

annual, and transactional basis, as 

required by § 82.24. EPA’s analysis of 

the reported data confirms that the 

United States is satisfying its obligations 

as it phases out ODSs and enables EPA 

to consider trends in the HCFC markets 

on a chemical-by-chemical basis. EPA 

also uses this information to submit an 

annual report to the Ozone Secretariat 

as requested by the Parties to the 

Montreal Protocol. 

Using the reported data, the draft 

revised Servicing Tail report, and the 

comments provided at the September 

2006 stakeholder meeting and submitted 

in subsequent correspondence (available 

in the docket), EPA believes it has 

sufficient information to propose 

through this action to allocate a 

percentage of baseline allowances for 

HCFC–22 and for HCFC–142b for 

production and consumption for the 

control periods 2010–2014 that will 

address servicing needs. The specific 

percentage of baseline for each of the 

affected compounds is discussed below. 

EPA requests comments regarding 

whether it should consider other 

sources of information in addition to the 

required reports, the Servicing Tail 

report, and stakeholder comments. In 

particular, EPA is interested in whether 

these sources provide sufficient 

information to allow EPA to reasonably 

estimate servicing needs for 2010–2014, 

especially for HCFC–22, which accounts 

for the majority of the market. 

4. How Will the Allocated Allowances 

Appear in the Regulations? 

EPA is proposing to revise two types 

of tables in 40 CFR part 82 that together 

Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 78689 

6EPA estimates that to stay below the aggregate 

cap while reducing HCFC–22 and HCFC–142b by 

equal percentages, the resulting HCFC–22 

allowances would equal less than two-thirds of the 

projected demand for HCFC–22. 

7EPA has defined Reclaim, Recover and Recycle 

at § 82.152 as follows: (1) Reclaim refrigerant means 

to reprocess refrigerant to all of the specifications 

in appendix A to 40 CFR part 82, subpart F (based 

on ARI Standard 700–1995, Specification for 

Fluorocarbons and other Refrigerants) that are 

applicable to that refrigerant and to verify that the 

refrigerant meets these specifications using the 

analytical methodology prescribed in section 5 of 

appendix A of 40 CFR part 82, subpart F; (2) recover 

refrigerant means to remove refrigerant in any 

condition from an appliance and to store it in a 

external container without necessarily testing or 

reprocessing it in any way; (3) recycle refrigerant 

means to extract refrigerant from an appliance and 

clean refrigerant for reuse without meeting all of the 

requirements for reclamation. In general, recycled 

refrigerant is refrigerant that is cleaned using oil 

separation and singe or multiple passes through 

devices, such as replaceable core filter-driers, 

which reduce moisture, acidity, and particulate 

matter. These procedures are usually implemented 

at the field job site. 

specify the production and 

consumption allowances available to 

allowance holders during specified 

control periods. Tables at § 82.17 and 

§ 82.19 apportion baseline production 

and consumption amounts (also referred 

to as baseline production allowances 

and baseline consumption allowances), 

respectively, to individual companies 

for individual HCFCs. Complementing 

these tables, the table at § 82.16 lists the 

percentage of baseline allocated to 

allowance holders for specific control 

periods. EPA is proposing to retain this 

framework of complementary tables, 

revising them to reflect adjustments to 

baselines, and to grant percentages of 

baselines in a manner that achieves the 

2010 phasedown goal. 

Currently the table at § 82.16 allocates 

zero percent of baseline to HCFC–141b 

and 100 percent of baseline to HCFC–22 

and HCFC–142b (combined in a single 

column) for each control period 

spanning 2003–2009. EPA is proposing 

to amend the table by including control 

periods 2010–2014, by continuing to 

allocate zero percent to HCFC–141b, 

and by allocating specified percentages 

(in separate columns) to HCFC–22, 

HCFC–142b, and—as will be discussed 

later—other HCFCs. 

The proposed percentages for HCFC– 

22 and HCFC–142b differ because EPA 

projects that the needs will differ for 

servicing air-conditioning and 

refrigeration appliances during the 

2010–2014 control periods. EPA’s 

analysis shows that there will be a 

significantly greater need for HCFC–22 

than for HCFC–142b during the control 

periods 2010–2014. Based on the 

Servicing Tail report and reporting 

information already required by EPA 

(which includes inter-pollutant 

transfers), the needs for individual 

HCFCs are not uniform. 

EPA believes that allocating the same 

percentage of baseline for HCFC–22 and 

HCFC–142b would result in too few 

allowances for HCFC–22 and too many 

allowances for HCFC–142b.6 While 

inter-pollutant transfers in accordance 

with § 82.23(b) could continue to be 

used as a means to trade allowances for 

one HCFC for another, EPA is not 

planning to rely on such transfers as a 

mechanism for large-scale corrections. 

Instead, EPA anticipates that the 

continued availability of inter-pollutant 

transfers will permit the market to selfcorrect for unforeseen changes in 

demand and allow individuals to 

consider a range of options for their 

allowances. EPA seeks to avoid 

unnecessary disruptions in the 

marketplace. EPA’s goal is to promote a 

smooth transition for industry. 

EPA requests comments on allocating 

different percentages of baseline 

production allowances and baseline 

consumption allowances for HCFC–22 

and HCFC–142b. 

5. What Other Methods Could Be Used 

to Determine the Allocation for HCFC– 

22 and HCFC–142b Allowances? 

EPA is proposing to allocate HCFC–22 

and HCFC–142b allowances based on 

the projected servicing needs for those 

compounds, taking into account the 

amount of those needs that can be met 

through recycling and reclamation. 

However, EPA can envision other 

methods for determining how many 

allowances to allocate for the control 

periods 2010–2014 for these two 

compounds, including allocating the 

maximum amount that ensures 

compliance under the Montreal Protocol 

aggregate 2010 cap without room for 

other HCFCs. EPA notes above that 

HCFCs other than HCFC–22 and HCFC– 

142b are likely to be needed during the 

control periods 2010–2014. Thus EPA 

favors an approach that includes other 

HCFCs, recognizing that for such HCFCs 

baselines must be established and 

apportioned for each substance, and a 

percentage of the baseline must be 

allocated for these control periods. EPA 

believes it would not be appropriate to 

allocate the full 3,810 ODP-weighted 

metric tons of consumption and 

3,884.25 ODP-weighted metric tons of 

production solely to HCFC–22 and 

HCFC–142b, given the projected needs 

for other HCFCs as discussed in section 

III.B.11 of this preamble. 

Approaches that do not consider 

servicing needs could result in shortages 

of HCFC–22. EPA considered, but is not 

proposing, allocating a percentage of the 

2010 aggregate HCFC consumption and 

production caps for HCFC–22 and 

HCFC–142b respectively equal to the 

same overall percentage of the aggregate 

HCFC consumption and production 

caps allocated for each substance in the 

2003 allocation rule. Under this 

approach, EPA would start with the 

percentage of the total allowable HCFC 

consumption and production level 

attributable to each HCFC in the 2003 

rule. For example, beginning in 2004, 

the total allowable HCFC consumption 

level was 9,906 ODP-weighted metric 

tons. Using the consumption data for 

each company’s highest ODP-weighted 

consumption year, EPA allocated 

HCFC–22 allowances equal to 66 

percent of 9,906 ODP tons and HCFC– 

142b allowances equal to 13 percent of 

9,906 ODP tons. We could apply the 

same percentages to the total allowable 

HCFC consumption level for 2010–2014 

of 3,810 ODP-weighted metric tons. This 

would provide congruence for the 

overall ‘‘pie.’’ EPA is concerned, 

however, that such an approach would 

provide significantly fewer HCFC–22 

allowances in 2010 than would be 

needed for servicing. Sixty-six percent 

of the aggregate HCFC cap for the 

control periods 2010–2014 equals 2,515 

ODP-weighted metric tons, which is 

approximately equal to 46,000 metric 

tons of HCFC–22. The Servicing Tail 

report, however, estimates that 

approximately 62,500 metric tons of 

HCFC–22 will be needed for servicing in 

2010. EPA is concerned that if large 

quantities of recycled or reclaimed 7

HCFC–22 are not available, the need to 

make up the almost 20,000-metric-ton 

shortfall could trigger illegal activities 

such as imports of HCFC–22 by those 

that do not hold consumption 

allowances. As noted elsewhere in this 

NPRM, EPA does not believe it should 

rely on inter-pollutant transfers to 

secure such a significant amount of 

HCFC–22 allowances. 

While EPA regulations aim at 

maximizing refrigerant reuse, EPA 

believes that reclamation rates in 2010– 

2014 would not be sufficient to avert a 

shortfall if EPA were to issue 46,000 

metric tons of consumption allowances 

to HCFC–22 using this option. This 

shortfall would equal approximately 30 

percent of the total projected servicing 

need for 2010–2014. As explained in the 

next section, amounts reported to EPA 

of reclaimed refrigerant coupled with 

estimates for available recycled 

refrigerants indicate that currently less 

than 30 percent of the servicing need 

can be met through refrigerant recovery 

and reuse during these control periods. 

Thus, EPA has rejected this method as 

a basis for deciding the relative amounts 

78690 Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 

of HCFC–22 and HCFC–142b 

allowances to issue for the 2010–2014 

control periods. A memorandum to the 

docket entitled ‘‘Summary: EPA 

Analysis of U.S. Reclamation Practices 

and Trends’’ provides additional 

information on reclamation practices 

underlying the assumptions in EPA’s 

analysis. 

EPA’s primary objective is to ensure 

compliance with the obligation under 

the Montreal Protocol to reduce the 

ODP-weighted ‘‘basket’’ of HCFCs to 75 

percent below the baseline for 

production and consumption beginning 

January 1, 2010. Various options, alone 

or in combination, could be used to 

meet this objective. EPA believes, 

however, that the proposed option 

provides the best assurance that 

allocations will be available to meet the 

projected needs for all HCFCs during 

the 2010–2014 control periods. 

6. How Important Is HCFC–22 in 

Determining the Allocation of 

Allowances? 

HCFC–22 is the HCFC most widely 

produced and used in applications for 

which servicing of existing equipment 

will occur during 2010–2019. The 

Servicing Tail analysis focused on 

HCFC–22, which represents a majority 

of the market, but also includes 

information on other refrigerants and 

components of blends including HCFC– 

142b and HCFC–123. The report 

included in the docket focuses on two 

major equipment types: refrigeration 

and air conditioning. 

Refrigeration equipment can be 

broken down into four categories: (1) 

Domestic refrigeration, (2) refrigerated 

transport, (3) industrial process 

refrigeration (IPR), and (4) commercial 

refrigeration. Domestic refrigeration 

includes household refrigerators, 

household freezers, combination 

refrigerator/freezer units, and water 

coolers. With the exception of certain 

older household freezers that use 

HCFC–22, this category typically does 

not use HCFCs or blends containing 

HCFCs. Refrigerated transport includes 

refrigeration used in equipment that 

moves products from one place to 

another and includes refrigerated ship 

holds, truck trailers (i.e., reefer trucks), 

railway freight cars, and other shipping 

containers. Industrial process 

refrigeration systems are complex, 

customized systems used to cool 

process streams in the chemical, food 

processing, pharmaceutical, 

petrochemical, and manufacturing 

industries. This sector also includes 

industrial ice machines, equipment 

used directly in the generation of 

electricity, and ice rinks. Commercial 

refrigeration can be further broken down 

into three end-uses: cold storage 

warehouses, retail food systems, and ice 

makers. 

EPA estimates that HCFC–22 use in 

air-conditioning and refrigeration 

equipment was approximately 115,000 

metric tons in 2006. Approximately 66 

percent—about 76,000 metric tons—was 

for servicing existing equipment, with 

the percentage higher for the 

refrigeration industry than the airconditioning industry. The majority of 

HCFC–22 consumption for servicing is 

currently attributed to residential and 

small commercial unitary equipment 

and retail food refrigeration equipment. 

The projected servicing need for 

HCFC–22 in 2010 is approximately 

62,500 MT (3,438 ODP-weighted metric 

tons) or approximately 90 percent of the 

consumption cap for all HCFCs in 2010, 

which is 3,810 ODP-weighted metric 

tons. Although EPA estimates that the 

servicing need for HCFC–22 will 

decrease each year beginning in 2010, 

EPA is not convinced that there is 

enough room under the aggregate HCFC 

cap to consider any scenario where the 

allocation of allowances for HCFC–22 

production or consumption is 

substantially higher than the projected 

servicing need, given the need to 

allocate allowances for other HCFCs as 

discussed elsewhere in this NPRM. 

In the 2003 allocation rule, EPA 

issued baseline consumption 

allowances for HCFC–22 equaling 

119,384,852 kilograms (119,385 metric 

tons, or 6,566 ODP-weighted metric 

tons) and allocated 100 percent of the 

baseline for the 2003–2009 control 

periods. The Montreal Protocol cap for 

all U.S. HCFC consumption beginning 

in 2004 was 9,906 ODP-weighted metric 

tons. The baseline allowances for 

HCFC–22 consumption represented 

approximately 66 percent of the 

Montreal Protocol HCFC consumption 

cap for the United States. 

In the 2003 allocation rule EPA issued 

baseline production allowances for 

HCFC–22 equaling 110,619,359 

kilograms (110,619 metric tons, or 6,084 

ODP-weighted metric tons) and 

allocated 100 percent of the baseline for 

the 2003–2009 control periods. The 

Montreal Protocol cap for all U.S. HCFC 

production beginning in 2004 was 

10,999 ODP-weighted metric tons. The 

baseline allowances for HCFC–22 

production represented approximately 

70 percent of the Montreal Protocol 

HCFC production cap for the United 

States. 

In the 2003 allocation rule EPA issued 

baseline consumption allowances for 

HCFC–142b equaling 21,088,677 

kilograms (21,089 metric tons, or 1,371 

ODP-weighted metric tons) and 

allocated 100 percent of the baseline for 

the 2003–2009 control periods. This 

represented approximately 14 percent of 

the Montreal Protocol HCFC 

consumption cap of 9,906 ODPweighted metric tons for the United 

States. 

In the 2003 allocation rule EPA issued 

baseline production allowances for 

HCFC–142b equaling 25,090,394 

kilograms (25,090 metric tons, or 1,631 

ODP-weighted metric tons) and 

allocated 100 percent of the baseline for 

the 2003–2009 control periods. This 

represented approximately 15 percent of 

the 10,999 ODP-weighted metric tons 

allowed for the United States under the 

Montreal Protocol HCFC cap. 

In the 2003 allocation rule EPA issued 

baseline consumption and production 

allowances for HCFC–141b, and under 

its ‘‘worst first’’ chemical-specific 

approach allocated 0 percent of baseline 

for consumption and production— 

eliminating, with certain narrow 

exemptions, the production and import 

of HCFC–141b. EPA projects that a 

minimal amount of HCFC–141b will 

continue to be needed for exempted 

HCFC–141b production until 2015. 

Although EPA does not intend to 

allocate HCFC–141b production or 

consumption allowances, EPA must 

account for continued consumption and 

production of minimal exempted 

amounts of HCFC–141b to ensure 

compliance with the 2010 caps. 

In addition, EPA must ensure that 

production and consumption of HCFCs 

for which baselines were not established 

in the 2003 allocation rule does not 

result in an aggregate allocation 

exceeding the HCFC production or 

HCFC consumption caps established by 

the Montreal Protocol. 

Air-conditioning and refrigeration 

equipment commonly requires 

servicing, which may include the need 

to add refrigerant to account for 

refrigerant losses that occur over time. 

The limited amount of production and 

import of HCFC–22 and HCFC–142b 

beginning January 1, 2010, will be 

allowed only for servicing equipment 

manufactured prior to January 1, 2010. 

Later in this proposal, EPA will 

consider what is meant by 

‘‘manufactured.’’ 

The Agency recognizes that servicing 

needs can be met with a combination of 

newly manufactured HCFCs (virgin 

HCFCs) and HCFCs that have been 

recovered and either recycled or 

reclaimed. Therefore, EPA does not 

anticipate that the entire projected 

HCFC–22 servicing need (3,438 ODP 

tons) will need to be produced or 

imported to meet the anticipated 

Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 78691 

demand. A percentage of that servicing 

need will be met by recovering used 

HCFC–22 from existing equipment. The 

‘‘servicing tail’’ report provides analysis 

of various scenarios regarding 

reclamation. In addition, EPA’s memo to 

the docket ‘‘Summary: EPA Analysis of 

U.S. Reclamation Practices and Trends’’ 

provides background on the reclamation 

industry, which includes information 

concerning capacity to reclaim greater 

amounts of refrigerants, and projects 

that more than 20 percent of the 

servicing need can be met by recovering 

used HCFC–22 from existing equipment. 

Recycled and reclaimed HCFCs offset 

the need for newly-manufactured 

HCFCs and after the terminal phaseout, 

as with the CFC phaseout, will become 

the sole source of HCFCs for servicing 

existing equipment. EPA regulations at 

40 CFR part 82 Subpart F manage the 

recovery, recycling, reclamation, and 

reuse of HCFCs under section 608 of the 

CAAA. Under those regulations, HCFCs 

may not be vented and must be 

recovered and are then generally either 

recycled, reclaimed, or in some cases 

destroyed. Therefore, it is reasonable to 

assume that some amount of used 

HCFCs will be available to meet 

servicing needs. In accordance with the 

chemical-by-chemical phaseout regime 

adopted by the United States, after 2020 

only recycled, reclaimed, and stockpiled 

HCFC–22 and HCFC–142b will be 

available to service appliances that 

require those substances. EPA’s existing 

regulations at § 82.16 terminate HCFC– 

22 and HCFC–142b production and 

consumption at the end of 2019, and 

EPA is not proposing to modify that 

provision. The very small amount of 

additional production and consumption 

of HCFCs allowed under Article 2F of 

the Montreal Protocol between 2020 and 

2030 for servicing existing appliances 

(0.5 percent of baseline) will only be 

permitted for HCFCs other than HCFC– 

141b, HCFC–22, and HCFC–142b, per 

§ 82.16(e), and restricted to servicing 

only air-conditioning and refrigeration 

equipment manufactured prior to 

January 1, 2020 per § 82.16(d). 

Given its previous experience with 

the Class I phaseout, EPA believes that 

over time a larger percentage of 

recovered HCFCs will be available for 

reuse. For example, after the 1996 CFC 

phaseout, motor vehicles with CFC–12 

air-conditioning systems continued to 

be serviced with used CFC–12. In fact, 

even today recovered CFC refrigerants 

are still in use for servicing a range of 

older equipment. 

The Servicing Tail report used EPA’s 

Vintaging Model to determine the 

quantities of HCFC–22 from existing 

(recycled or reclaimed) sources that can 

meet post-2010 servicing needs with the 

remaining quantities required through 

virgin manufacture (expending 

allowances). For a given year, the 

Vintaging Model assumes that a certain 

percentage of refrigerants, which varies 

by end-use, is recovered from discarded 

equipment. The model aggregates the 

quantities recovered but does not 

distinguish the ‘‘pool’’ of refrigerant 

between quantities that are reclaimed 

versus those that are recycled. EPA’s 

Vintaging Model was the primary tool 

used to launch the analysis and form the 

basis for quantitative estimates of 

projected HCFC consumption. The 

Vintaging Model estimates the annual 

chemical emissions from industry 

sectors that have historically used ODS, 

including air conditioning, refrigeration, 

foams, solvents, aerosols, and fire 

protection. Within these industry 

sectors, there are over 50 independently 

modeled end-uses. The model uses 

information on the market size and 

growth for each of the end-uses, as well 

as a history and projections of the 

market transition from ODS to 

alternatives. As ODS are phased out, a 

percentage of the market share 

originally filled by the ODS is allocated 

to each of its substitutes. The model 

tracks emissions of annual ‘‘vintages’’ of 

new equipment that enter into operation 

by incorporating information on 

estimates of the quantity of equipment 

or products sold, serviced, and retired 

or converted each year, and the quantity 

of the compound required to 

manufacture, charge, and/or maintain 

the equipment. EPA’s Vintaging Model 

makes use of this market information to 

build an annual inventory of in-use 

stocks of equipment and the ODS 

refrigerant and non-ODS substitutes in 

each of the end-uses. 

For purposes of analysis, the 

Servicing Tail report considers 

scenarios for HCFC–22 and HCFC–142b 

where differing amounts of servicing 

needs were met by recycled and 

reclaimed refrigerants. For example, the 

report examines scenarios in which 10 

percent, 15 percent, 20 percent, 25 

percent, 50 percent, and 75 percent of 

the total amount of HCFC–22 in retired 

or converted equipment is recovered. 

These analyses depict the potential 

ratios of new and recovered HCFCs that 

could be available during the years 

2010–2019 to meet the overall servicing 

needs recognizing that the higher 

recovery rates are less likely for the 

earlier control periods. 

EPA has anecdotal and reported 

information concerning recovery rates 

for refrigerants. Commenters at the 

September 2006 stakeholder meeting 

indicated that approximately 10 percent 

of HCFC–22 in current use was 

recovered and either reclaimed or 

recycled. Data reported to EPA 

consistent with 40 CFR Part 82 Subpart 

F shows that approximately 3716 metric 

tons (204 ODP tons) of HCFC–22 was 

reclaimed in 2007. EPA does not track 

recycled refrigerants, since recycled 

refrigerant (unlike reclaimed refrigerant) 

typically is charged back into 

equipment with the same ownership 

rather than re-entering the market. 

Readers interested in additional 

information concerning recovery and 

recycling should review the Servicing 

Tail report. Given the regulatory 

requirements for recycling and 

reclamation (at 40 CFR part 82 subpart 

F), experience with the CFC phaseout, 

and industry practices, EPA estimates 

that during the period 2010–2014, an 

amount greater than 20 percent of the 

total servicing need for HCFC–22 can be 

met with HCFC–22 that has been 

recovered and either recycled or 

reclaimed. Since EPA is not banning the 

use of HCFC–22 equipment, recovered 

and reclaimed HCFC–22 will become a 

more valuable commodity as the U.S. 

approaches the January 1, 2015, 

stepdown. The demand for HCFC–22 to 

service existing equipment should 

provide an economic incentive for an 

increase in the quantities of used 

HCFC–22 available for reclamation. As 

an indicator, EPA notes that several 

reclamation companies have recently 

started offering financial payments for 

used HCFC–22. The docket for this 

NPRM provides further information 

regarding EPA’s assumptions regarding 

the availability of recycled or reclaimed 

HCFC–22 to meet servicing needs. 

EPA has considered, but is proposing 

to reject, using an increasing number to 

represent the contribution of recycled 

and reclaimed refrigerant for each of the 

control periods from 2010–2014 and 

thus simultaneously reducing the 

amount of allowances needed for 

HCFC–22. EPA believes for these 

control periods, maintaining a constant 

number of allowances would reduce the 

overall burden for the allowance holders 

and would ease business practices. EPA 

notes that recovery rates could fluctuate 

yearly and thus holding steady for 

control periods 2010–2014 is an 

appropriate approach. In addition, the 

step downs in the expected recycling 

and reclamation rates then more closely 

reflect the international commitments in 

Decision XIX/6. EPA expects that for the 

2015–2019 control periods, the percent 

of servicing need met by recovered 

refrigerants will increase and, as noted 

above, beginning in 2020 all servicing 

needs for HCFC–22 will be met with 

78692 Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 

recovered refrigerants. EPA will address 

the percent of servicing need to be met 

by recovered refrigerants in 2015–2019 

in a subsequent rulemaking to reflect 

the 2015 stepdown required by Article 

2F: 

Each Party shall ensure that for the twelvemonth period commencing on 1 January 

2020, and in each twelve-month period 

thereafter, its calculated level of 

consumption of the controlled substances in 

Group 1 of Annex C does not exceed zero. 

Each Party producing one or more of these 

substances shall, for the same periods, ensure 

that its calculated level of the controlled 

substances in Group 1 of Annex C does not 

exceed zero. However, * * * each Party may 

exceed that limit on consumption by up to 

zero point five percent of the sum referred to 

in paragraph 1 of this Article in any such 

twelve-month period ending before 1 January 

2030, provided that such consumption shall 

be restricted to the servicing of refrigeration 

and air conditioning equipment existing on 

1 January 2020. 

EPA believes that meeting demand after 

2010 will require the reuse of HCFC–22, 

and is particularly concerned with 

ensuring that demand is met during the 

first years of the 2010–2014 control 

periods when a large number of 

appliances using HCFC–22 will still be 

suitable for use. EPA notes that a 

smooth transition for stakeholders— 

including continued availability of 

needed material for approved uses—has 

historically been an essential aspect of 

the U.S.’s success in implementing the 

Montreal Protocol and Clean Air Act 

requirements. For purposes of the 2010– 

2014 control periods, EPA is proposing 

to use a number in the range of 15—25 

percent to represent the contribution of 

recovered refrigerant to the total 

servicing need. EPA requests comments 

on the amount of the total servicing 

need for HCFC–22 that can be met with 

recovered refrigerants, which is between 

15 and 25 percent of total estimated 

servicing need. 

7. HCFC–22 Allowances for 2010–2014 

EPA is proposing to allocate HCFC–22 

consumption allowances to meet 80 

percent of the servicing need, assuming 

that the remaining 20 percent will be 

met by recovered HCFC–22 that is either 

recycled or reclaimed. This translates 

into approximately 50,000 metric tons 

(2,750 ODP-weighted metric tons), or 

approximately 72 percent of the total 

HCFC consumption cap for each of the 

control periods from 2010 through 2014. 

As it did in the 2003 allocation rule, 

EPA is proposing to allocate production 

allowances among different chemicals 

using the same percentage breakdown as 

for consumption allowances. This 

would allocate 45,498 metric tons (2,502 

ODP tons) of the 3,884.25-ODP-ton 

production cap to HCFC–22 production. 

This is consistent with section 605(c) of 

the Clean Air Act, which states that EPA 

shall promulgate a phaseout schedule 

for HCFC consumption that is the same 

as that applicable to HCFC production. 

EPA recognizes that there is a difference 

between the amount of imported and 

produced HCFCs and that the degree of 

difference may vary over time. However, 

EPA does not believe it is necessary to 

use two different chemical-by-chemical 

percentage breakdowns (i.e., one for 

consumption allowances and another 

for production allowances) to ensure 

compliance with the production and 

consumption caps. Therefore, for 

simplicity and for consistency with 

section 605(c), EPA is proposing to use 

the same percentages for production and 

consumption allocations—deriving the 

percentages based on estimated need for 

each individual HCFC. 

If more HCFC–22 is recovered, 

recycled, and reclaimed than assumed 

in this proposed rule, EPA anticipates 

that the demand for virgin HCFC–22 

will decrease. Thus it is possible that 

not all the production and consumption 

allowances will be used. It is also 

possible that any ‘‘extra’’ HCFC–22 

allowances could be converted via interpollutant transfers to meet other HCFC 

needs. 

EPA requests comments on its 

application of a 20 percent rate of 

availability of recovered (recycled or 

reclaimed) HCFC–22. As discussed 

above, EPA estimates that at least 20 

percent of the 2010–2014 servicing need 

can be met from recycled or reclaimed 

material. EPA believes that by the 

January 1, 2010, effective date of this 

rule, 20 percent of the 2010–2014 

servicing needs should be available 

from recycled or reclaimed material, 

and that the availability of recycled or 

reclaimed material would be expected 

to increase as the phaseout progresses. 

EPA notes that in 2020 all HCFC–22 and 

HCFC–142b used to service airconditioning and refrigerant equipment 

will need to be recycled or reclaimed, in 

light of the nearly-complete phasedown 

of production and import of virgin 

material that is scheduled to occur by 

that date. Additionally, EPA regulations 

already prohibit the intentional venting 

of refrigerants and require refrigerant 

recovery, and the market for recycled 

and reclaimed refrigerant is predicted to 

grow as the phaseout progresses. EPA is 

interested in other data regarding the 

actual and projected rates of refrigerant 

recycling and reclamation in the U.S., as 

well as whether it should consider 

allocating allowances for HCFC–22 at 

other levels, such as approximately 100 

percent, 90 percent, 80 percent, or 75 

percent of the aggregate 2010 cap. 

8. HCFC–142b Allowances for 2010– 

2014 

After subtracting out the proposed 72 

percent of the 2010 cap for HCFC–22, 28 

percent remains to meet all other HCFC 

needs. EPA believes that the remaining 

28 percent is more than the projected 

HCFC–142b servicing needs, the 

amounts of HCFC–141b that EPA 

expects to allow based on the petition 

process, and all other likely HCFC 

consumption for the 2010–2014 control 

periods. This is based on a review of 

required quarterly, annual, and periodic 

reports; the Servicing Tail analysis; and 

comments submitted to EPA by 

stakeholders in advance of this 

proposed rulemaking. As described 

below, the amounts allocated for these 

substances reflect these assumptions. 

As discussed in the Servicing Tail 

report described above, the projected 

servicing need for HCFC–142b is 

extremely low: Approximately 100 

metric tons (7 ODP tons). In estimating 

the need for 2010–2014, EPA has 

considered the amount of HCFC–142b 

produced and imported into the United 

States as reported to EPA in recent years 

under the existing requirements. 

Whereas earlier versions of the 

Servicing Tail analysis focused on 

HCFC–22, the most recent version— 

which is included in the docket for this 

rulemaking—also projects the demand 

for all other HCFCs for which 

consumption and production are likely 

to occur: HCFC–142b, HCFC–123, 

HCFC–124, HCFC–225ca, and HCFC– 

225cb. The recovery, recycling, and 

reclamation requirements apply to 

HCFC–142b as they do to all 

refrigerants, but recovery rates for 

HCFC–142b are considerably lower than 

for HCFC–22, largely because HCFC– 

142b is typically used in blended 

refrigerants. The limited amount of data 

available to EPA indicates that less than 

1 percent of HCFC–142b is recycled or 

reclaimed. In light of the limited data 

available, and the extremely low 

estimate of recycling and reclamation, 

EPA is proposing to allocate 100 percent 

of the projected HCFC–142b servicing 

need rather than assuming that a 

specified percentage of the need will be 

met through the use of recycled or 

reclaimed amounts. EPA is proposing to 

issue consumption allowances for 

HCFC–142b of 100 metric tons (7 ODP 

tons). Allocating 72 percent of the 

consumption cap to HCFC–22 and less 

than 1 percent to HCFC–142b allows up 

to 27 percent to be allocated to other 

HCFCs. 

Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 78693 

EPA is proposing to allocate 

production allowances for HCFC–142b 

at the same proportion of the production 

cap as was used to allocate consumption 

allowances as a proportion of the 

consumption cap. Thus EPA is 

proposing to allocate production 

allowances for HCFC–142b at 142 

metric tons (9.2 ODP tons). 

9. How Does the Aggregate for HCFC– 

22 and HCFC–142b Translate to Entityby-Entity? 

EPA is proposing to allocate up to a 

total of no more than 50,000 metric tons 

of HCFC–22 consumption allowances, 

45,498 metric tons of HCFC–22 

production allowances, 100 metric tons 

of HCFC–142b consumption allowances, 

and 142 metric tons of HCFC–142b 

production allowances. However, EPA 

actually allocates allowances to 

individual persons (i.e., legal entities). 

As discussed in section III.A.2 of this 

preamble, EPA’s preferred approach is 

to apportion baselines and allocate 

allowances on a pro-rata basis to the 

entities that received baseline 

allowances in the 2003 allocation rule. 

Nevertheless, the Agency is taking 

comment on other allocation options, 

which are discussed below. 

Company-specific production and 

consumption baselines (also referred to 

as ‘‘baseline allowances’’) for HCFC– 

141b, HCFC–22, and HCFC–142b are 

listed at §§ 82.17 and 82.19(a), 

respectively. The percentage of baseline 

each entity receives in each control 

period from 2003 through 2009 appears 

at § 82.16(a). EPA is proposing to amend 

§ 82.16(a) to include the 2010–2014 

control periods. For the years 2010– 

2014, as for the years 2003–2009, EPA’s 

preferred approach is to specify the 

same percentage of baseline for each 

entity. EPA considers allocation of the 

same percentage to each entity listed at 

§ 82.17 and § 82.19 to be the most 

equitable approach. EPA does not 

believe that its allocation of baseline 

allowances should reflect sales of 

controlled substances that would 

subsequently occur. EPA believes that 

the market for HCFCs that the allowance 

holders sell to, will evolve to reflect 

these restrictions as it would evolve 

other market conditions. This approach 

is consistent with EPA’s previous 

approach to allocations. However, EPA 

does note that there have been and 

continue to be restrictions on use of 

controlled substances. EPA considered 

alternative approaches such as 

evaluating sales information for HCFCs 

where allowances were expended and 

considering the differences between 

expended allowances versus allowances 

acquired via inter-pollutant transfers. 

EPA has included in the docket to this 

rulemaking a memorandum titled Draft 

Regulatory Options for Allocating HCFC 

Allowances after 2009 as well as 

comments submitted by stakeholders 

describing alternative approaches that 

the Agency may consider. 

As previously noted, allowances 

allocated for individual control periods 

may be thought of as ‘‘calendar-year 

allowances’’ to distinguish them from 

the apportioned baseline production or 

consumption allowances (§ 82.17 and 

§ 82.19). For 2010–2014, EPA is 

proposing to apportion production and 

consumption baselines for HCFC–22 

and HCFC–142b to the same entities 

that were apportioned HCFC–22 and 

HCFC–142b baselines in the 2003 

allocation rule. EPA is proposing to 

amend that list of entities and their 

baselines to reflect changes in the 

entities’ names as well as mergers and 

acquisitions, but only where EPA has 

been notified of changes in writing 

before or during the comment period for 

this rulemaking, which closes February 

23, 2009 or March 9, 2009 if a hearing 

is held. 

The proposed company-specific 

baselines also reflect adjustments 

resulting from approved inter-pollutant 

and/or inter-company transfers of 

baseline allowances (i.e., permanent 

rather than calendar-year allowances) 

through the process described in 

§ 82.23. To be reflected in the final 

apportionment of baselines in the final 

rule, such transfers must have occurred, 

with EPA approval, before or during the 

second quarter of the 2008 control 

period (i.e., by June 16, 2008). As noted 

in the 2003 allocation rulemaking, EPA 

is sensitive to the need to avoid creating 

an ‘‘uneven playing field’’ that could 

potentially skew allocations to entities 

with ample resources and good access to 

information. EPA held a public meeting 

on June 16, 2008. As it did in the 2003 

allocation rulemaking when 

determining which years to use for 

establishing a baseline, EPA is using the 

date of the public meeting as a cutoff 

date for inter-pollutant and intercompany transfers of permanent 

baseline allowances that would be 

reflected in the revised tables shown in 

this NPRM. EPA believes that since 

allowance transfers affect the pool of 

allowances for each controlled 

substance and thus the amounts 

apportioned company-by-company, a 

cutoff date in advance of the issuance of 

the NPRM is necessary and thus 

selected a date based on availability and 

access to information. 

EPA recognizes that in some cases 

entities are no longer actively involved 

in HCFC production, import, and/or 

export activities. EPA is seeking 

comment on whether it should retain 

the baselines for such entities (the 

preferred approach) or whether it 

should retire, auction, or redistribute 

the baselines among the active entities. 

EPA has placed in the docket to this 

proposed rule a memorandum that 

considers and evaluates each of these 

options, discussing both the advantages 

and disadvantages, titled Draft 

Regulatory Options for Adjusting the 

HCFC Baseline for Allowance 

Allocations. For example, apportioning 

a baseline to an entity that is no longer 

active means that its allowances might 

not be expended, resulting in a net 

environmental benefit. Allocating 

allowances via an auction may allow for 

new entrants to purchase allowances or 

for allowances to be purchased and 

intentionally retired. However, EPA 

currently does not use an auction for 

allocating allowances and anticipates 

that designing and deploying an auction 

system could cause administrative 

delays. An auction system could impose 

costs on new participants, which would 

be borne by non-participants who 

received allowances for the 2003–2009 

control periods without charge. EPA 

notes, however, that under the current 

allowance system for new entrants to 

acquire allowances, allowances must be 

transferred from an existing allowance 

holder and that when such a transfer 

occurs, costs are likely to arise from the 

purchase price and any transaction 

costs. Allocating allowances to entities 

that are no longer active in the field may 

provide an option for new entrants and 

for entities seeking to purchase and 

retire allowances, as the inactive entities 

would presumably be willing sellers. 

EPA is proposing to retain the baselines 

for HCFC–22 and HCFC–142b as 

previously apportioned, subject to 

updates to reflect name changes and 

permanent inter-company and interpollutant transfers. 

Consistent with past practice, EPA is 

publishing baseline allowance 

information in this NPRM, having first 

notified the affected companies of its 

intention to do so. 

Applying the approach described 

above, EPA proposes to apportion 

production and consumption baselines 

for HCFC–141b, HCFC–22, and HCFC– 

142b to the following entities in the 

following amounts: 

Table 

78694 Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 

Person Controlled substance Allowances 

(kg) 

Production Allowance Allocation 

Arkema ......................................................................................................................... HCFC–22 .................................................. 46,692,336 

HCFC–141b .............................................. 24,647,925 

HCFC–142b .............................................. 484,369 

DuPont .......................................................................................................................... HCFC–22 .................................................. 42,638,049 

Honeywell ..................................................................................................................... HCFC–22 .................................................. 37,378,252 

HCFC–141b .............................................. 28,705,200 

HCFC–142b .............................................. 2,417,534 

MDA Manufacturing ...................................................................................................... HCFC–22 .................................................. 2,383,835 

Solvay Solexis .............................................................................................................. HCFC–142b .............................................. 6,541,764 

Consumption Allowance Allocation 

ABCO Refrigeration Supply ......................................................................................... HCFC–22 .................................................. 279,366 

Altair Partners ............................................................................................................... HCFC–22 .................................................. 302,011 

Arkema ......................................................................................................................... HCFC–22 .................................................. 48,637,642 

HCFC–141b .............................................. 25,405,570 

HCFC–142b .............................................. 483,827 

Automatic Equipment Sales ......................................................................................... HCFC–22 .................................................. 54,088 

Condor Products .......................................................................................................... HCFC–22 .................................................. 74,843 

Continental Industrial Group ........................................................................................ HCFC–141b .............................................. 20,315 

Coolgas, Inc ................................................................................................................. HCFC–141b .............................................. 16,097,869 

Coolgas Investment Property ....................................................................................... HCFC–22 .................................................. 590,737 

Discount Refrigerants ................................................................................................... HCFC–22 .................................................. 375,328 

HCFC–141b .............................................. 994 

Dupont .......................................................................................................................... HCFC–22 .................................................. 38,814,862 

HCFC–141b .............................................. 9,049 

HCFC–142b .............................................. 52,797 

Full Circle ..................................................................................................................... HCFC–22 .................................................. 14,865 

H.G. Refrigeration Supply ............................................................................................ HCFC–22 .................................................. 40,068 

Honeywell ..................................................................................................................... HCFC–22 .................................................. 35,392,492 

HCFC–141b .............................................. 20,749,489 

HCFC–142b .............................................. 1,315,819 

ICC Chemical Corp ...................................................................................................... HCFC–141b .............................................. 81,225 

Ineos Fluor Americas ................................................................................................... HCFC–22 .................................................. 2,546,305 

Kivlan & Company ........................................................................................................ HCFC–22 .................................................. 2,081,018 

MDA Manufacturing ...................................................................................................... HCFC–22 .................................................. 2,541,545 

Mondy Global ............................................................................................................... HCFC–22 .................................................. 281,824 

National Refrigerants .................................................................................................... HCFC–22 .................................................. 5,528,316 

Refricenter of Miami ..................................................................................................... HCFC–22 .................................................. 381,293 

Refricentro .................................................................................................................... HCFC–22 .................................................. 45,979 

R-Lines ......................................................................................................................... HCFC–22 .................................................. 63,172 

Saez Distributors .......................................................................................................... HCFC–22 .................................................. 37,936 

Solvay Fluorides ........................................................................................................... HCFC–22 .................................................. 3,781,691 

HCFC–141b .............................................. 3,940,115 

Solvay Solexis .............................................................................................................. HCFC–142b .............................................. 194,536 

Tulstar Products ........................................................................................................... HCFC–141b .............................................. 89,913 

EPA requests comments on the 

proposed method and calculations for 

allocating allowances on an entity-byentity basis for HCFC–22 and HCFC– 

142b production and consumption. 

10. Baselines for HCFC–123, HCFC–124, 

HCFC–225ca, and HCFC–225cb 

EPA is proposing to establish and 

apportion baselines for other HCFCs 

that have been produced or imported in 

recent years by using information on 

production, import, export, and other 

transactions that has been reported to 

the Agency under existing regulations. 

EPA requires recordkeeping and 

reporting for production, import, export, 

and trade of all ozone-depleting 

substances, including HCFCs for which 

baseline allowances have not yet been 

established. The recordkeeping and 

reporting requirements implement 

section 603 of the Clean Air Act and 

ensure that companies are in 

compliance with regulatory and Clean 

Air Act requirements and that the 

United States is able to meet 

international obligations. EPA is not 

proposing any changes to these 

requirements. 

EPA reviewed HCFC production, 

import, and export data for the years 

leading up to the 2003 allocation rule, 

and chose to establish baselines and 

allocate allowances for the highest-ODP 

HCFCs (e.g., a ‘‘worst-first’’ approach) in 

a manner that ensured U.S. compliance 

with the 2004 cap (35 percent below the 

U.S. baseline). Prior to the tightening of 

the 2010 HCFC cap at the 19th Meeting 

of the Parties to the Montreal Protocol 

in September 2007, EPA anticipated that 

limiting production and consumption of 

HCFC–22 and HCFC–142b for the 2010– 

2014 control periods would ensure 

sufficient room under the then-effective 

65 percent reduction cap without the 

need to restrict production and 

consumption of other HCFCs. Prior to 

attending the 19th Meeting of the Parties 

where agreement was reached to reduce 

the 2010 cap from a 65 percent 

reduction to a 75 percent reduction, 

EPA conducted analysis which was 

shared with stakeholders to ensure that 

the U.S. could consider changes to our 

obligations that were both meaningful 

for ozone layer protection and 

achievable, allowing servicing needs to 

continue to be met. Considering that the 

Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 78695 

September 2007 Montreal Adjustment 

provides for adjustment of the cap from 

a 65 percent to a 75 percent reduction, 

EPA is proposing additional precautions 

to ensure that the more stringent cap 

will not be exceeded. These precautions 

include establishing and apportioning 

baselines for the 2010–2014 control 

periods for other HCFCs that were 

produced or imported during the 2003– 

2007 control periods. 

EPA is proposing to apportion 

baselines for the other HCFCs by 

amending §§ 82.17 and 82.19 to include 

company-specific production and 

consumption baselines for HCFC–123, 

HCFC–124, HCFC–225ca, and HCFC– 

225cb. EPA data indicate that those four 

HCFCs were produced, imported, or 

exported during the 2003–2007 control 

periods. 

In the 2003 allocation rule, EPA did 

not issue allowances for all HCFCs, 

noting in part ‘‘that the continuously 

developing HCFC market would be 

hampered by such distribution’’ and 

that the market proportions at that time 

‘‘of these lower-ODP HCFCs do not 

reflect the rapidly expanding market 

and that distributing allowances for 

these HCFCs at [that] time would 

unnecessarily restrict their supply and 

impede transition to less ozonedepleting substances’’ (68 FR 2823). 

Considering the recent adjustments to 

the Montreal Protocol and the evolution 

in the HCFC market, EPA believes it is 

now appropriate to establish a baseline 

and apportion baseline allowances for 

HCFC–123, HCFC–124, HCFC–225ca, 

and HCFC–225cb. 

All HCFCs are covered under the 

Montreal Protocol stepwise reductions, 

and EPA must consider all HCFC 

production and import in ensuring that 

the United States continues to meet its 

international obligations. The four 

HCFCs identified in this proposal are 

the only remaining HCFCs commonly 

used in the United States that do not 

currently have established baselines. 

EPA does not expect that establishing 

baseline allowances for these four 

HCFCs would trigger additional 

recordkeeping or reporting obligations, 

since companies that produce, import, 

or export any HCFC already report 

production and consumption data to 

EPA. The impacts stem from the years 

chosen for establishing a baseline, the 

apportionment of the baseline among 

companies, and the percentage of 

baseline allocated for the control years 

2010–2014. EPA discusses these issues 

more specifically below. 

EPA recognizes that many different 

methods and data sources can be used 

to establish baseline allowances. EPA 

believes that the best data to use for this 

purpose are the data reported to the 

Agency under § 82.24. Entities that have 

not reported data would not be included 

in the baseline calculations and would 

not receive baseline allowances. If 

necessary, EPA could augment the data 

for completeness or to verify accuracy 

by issuing requests for information 

under section 114 of the CAA. EPA 

seeks comment on its proposal to use 

data reported under § 82.24 as the basis 

for identifying the entities to which 

allowances should be allocated. 

In the 2003 allocation rule, EPA 

calculated each entity’s HCFC–141b, 

HCFC–22, and HCFC–142b baseline 

from that entity’s highest reported 

consumption and production from the 

years 1994–1997. EPA chose that 

particular range of years because 

beginning in 1998, some entities were 

aware of the impending rulemaking and 

could have increased production or 

import in an effort to secure higher 

baseline allowances. EPA stated in the 

2003 allocation rulemaking that ‘‘by not 

selecting a year after 1997 it will avoid 

creating an uneven playing field that 

skews allocations to those companies 

with ample resources and good access to 

information’’ (68 FR 2832). EPA is 

proposing to follow a similar approach 

for these four HCFCs by considering the 

highest reported data from a range of 

years rather than selecting a single 

baseline year. EPA is proposing to use 

the data reported for the 2005–2007 

control periods to calculate baselines for 

the four additional HCFCs, based on an 

entity’s highest reported consumption 

and production for the 2005–2007 

control periods. By using past years, 

EPA avoids any ramp-up in the level of 

production and consumption resulting 

from a desire to maximize individual 

baselines in anticipation of this rule 

going into effect. By using recent data, 

EPA ensures the baseline reflects the 

current market as closely as possible, 

and issues raised when EPA decided to 

postpone allocating baseline allowances 

for these HCFCs in 2003. 

EPA requests comment on the need to 

establish baselines for these four 

additional HCFCs at this time. In 

particular, EPA is interested in 

comments concerning whether 

establishing and apportioning a baseline 

for these four HCFCs, and allocating a 

percentage of that baseline for the 2010– 

2014 control periods, is necessary to 

ensure that the United States does not 

exceed the 25 percent HCFC cap under 

the 2007 Montreal Adjustment. EPA 

requests comments on the 

appropriateness of using each 

company’s highest reported 

consumption and production for 2005– 

2007 rather than the lowest or an 

average. 

11. What Percentage of the Baseline Will 

EPA Allocate for HCFC–123, HCFC–124, 

HCFC–225ca, and HCFC–225cb for the 

Control Periods 2010–2014? 

EPA is proposing to establish baseline 

production and consumption 

allowances for HCFC–123, HCFC–124, 

HCFC–225ca, and HCFC–225cb, and to 

allocate 125 percent of these baselines 

for the 2010–2014 control periods. By 

establishing these baseline production 

and consumption allowances, EPA 

would be creating a mechanism for 

limiting growth in production and 

consumption for these HCFCs during 

those control periods. Regardless of any 

action by EPA, given the 605(a) selfeffectuating provisions, further growth 

for these HCFCs will be constrained in 

2015 by the provisions on use. For 

example, given the characteristics of 

HCFC–225ca and HCFC–225cb, they are 

generally used as solvents. As of January 

1, 2015 that application will be 

restricted. Thus any growth in the use 

of these HCFCs will be balanced to some 

extent by the self-effectuating 

provisions. Thus EPA is recognizing 

that other limiting factors, such as 

section 605(a) of the CAA, will 

considerably affect how these HCFCs 

can be used in subsequent control 

periods. While it is appropriate and 

necessary for EPA to allocate less than 

100 percent of the baseline allowances 

for HCFC–22 and HCFC–142b, given the 

use restrictions that apply beginning 

January 1, 2010, these four low-ODP 

HCFCs are not subject to domestic use 

restrictions until a later date. For 

example, while newly manufactured 

HCFC–22 cannot be produced or 

imported for charging into new airconditioning and refrigeration 

appliances as of January 1, 2010 (40 CFR 

82.16(c)), HCFC–123 can be produced or 

imported for new appliances until 2020 

(40 CFR 82.16(d)). Therefore, EPA 

believes that it is not appropriate to 

allocate less than 100 percent of 

baseline for these compounds in this 

action. EPA has included information 

and analysis on these HCFCs in Chapter 

3 of the Servicing Tail analysis, which 

is in the docket for this rulemaking. 

After reviewing trends in the 

production, import, export, and trade 

data submitted to EPA since 2003, EPA 

believes that allocating 100 percent of 

the baseline should be sufficient to meet 

current demand. The Servicing Tail 

analysis available in the docket provides 

additional information concerning 

trends based on the Vintaging Model 

and additional information provided by 

stakeholders. However, EPA has heard 

78696 Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 

from stakeholders that some amount of 

market expansion for these low-ODP 

HCFCs is possible during the 2010–2014 

control periods. Given the low ODPs for 

these HCFCs, EPA believes that if it 

were to allocate 125 percent of the 

baseline for 2010–2014, the United 

States could still meet the overall HCFC 

cap of 75 percent below the baseline 

during these control periods. EPA 

believes that any continued growth for 

these HCFCs will be considerably 

affected by section 605(a) as of January 

1, 2015. 

Through this action, EPA is proposing 

to allocate allowances equaling 125 

percent of the baseline for HCFC–123, 

HCFC–124, HCFC–225ca, and HCFC– 

225cb for the 2010–2014 control 

periods. If rapid growth were to occur, 

creating the need for additional amounts 

of these HCFCs, EPA believes that interpollutant transfers could be used to 

make adjustments. If the full amount of 

allowances is not needed, then some 

allowances may go unused. In 

accordance with the next stepdown 

under the Montreal Protocol, EPA will 

issue a rule prior to the 2015 HCFC 

milestone to limit aggregate production 

and consumption of all HCFCs to no 

more than 10 percent of the U.S. 

baselines for production and 

consumption. At that time, EPA plans to 

consider the appropriate level of 

allowances for 2015 and beyond based 

on market demand and the section 

605(a) restrictions on introduction into 

interstate commerce and use discussed 

elsewhere in this NPRM. Examples of 

uses that will be limited by section 

605(a) beginning in 2015 are solvent 

uses and fire suppression. EPA 

anticipates other changes as well. For 

example, EPA’s proposed allowance 

level for HCFC–123, HCFC–124, HCFC– 

225ca, and HCFC–225cb does not 

assume a specified level of recycling 

and reclamation. For HCFCs used in 

non-refrigeration applications, such as 

those used as solvents (i.e., HCFC–225ca 

and HCFC–225cb), the section 608 ‘‘no 

venting’’ prohibition is not applicable. 

HCFC–123 is used in chillers that in 

some cases are replacing CFC chillers. 

Given that in many cases these 

appliances will last a long time, it will 

be some time before significant amounts 

of HCFC–123 are recovered and 

recycled or reclaimed. In future 

rulemakings, however, EPA may 

estimate the amount of the total need for 

HCFC–123 that can be met through 

recycling and reclamation. As the 

HCFC–123 market matures, the 

refrigerant recovery, recycling, and 

reclamation requirements in 40 CFR 

part 82 subpart F, will result in a greater 

amount of reusable HCFC–123. 

Recognizing that the HCFC market will 

continue to evolve, subject to the 

constraints in section 605(a), EPA is 

proposing to establish and apportion 

baseline allowances and provide 

calendar-year allowances for the control 

periods 2010–2014 for these HCFCs. 

EPA has established company 

baselines for these four low-ODP HCFCs 

by choosing each company’s highest 

production and consumption years from 

2005, 2006, and 2007. This is the same 

approach EPA used to establish the 

company baselines for HCFC–141b, 

HCFC–22, and HCFC–142b in the 2003 

allocation rule. 

Data show that 125 percent of the 

highest year’s consumption of HCFC– 

123, HCFC–124, HCFC–225ca, and 

HCFC–225cb for all the companies 

combined equals 163 ODP-weighted 

metric tons, which is slightly more than 

4 percent of the total HCFC 

consumption cap of 3,810 ODP tons. 

EPA data also show that 125 percent 

of the highest year’s production of 

HCFC–123, HCFC–124, HCFC–225ca, 

and HCFC–225cb for all the companies 

combined equals 135 ODP-weighted 

metric tons, which is slightly more than 

3 percent of the total HCFC production 

cap of 3,884.25 ODP tons. 

EPA proposes to allocate production 

allowances to the following entities for 

the following amounts: 

Person Controlled substance Allowances 

(kg.) 

AGC Chemicals Americas ............................................................................................ HCFC–225ca ............................................ 266,608 

HCFC–225cb ............................................ 373,952 

DuPont .......................................................................................................................... HCFC–124 ................................................ 2,269,210 

Honeywell ..................................................................................................................... HCFC–124 ................................................ 1,804,121 

EPA also proposes to allocate 

consumption allowances to the 

following entities for the following 

amounts: 

Person Controlled substance Allowances 

(kg.) 

AGC Chemicals Americas ............................................................................................ HCFC–225ca ............................................ 285,328 

HCFC–225cb ............................................ 286,832 

Arkema ......................................................................................................................... HCFC–124 ................................................ 3,719 

Condor Products .......................................................................................................... HCFC–124 ................................................ 3,746 

Coolgas, Inc ................................................................................................................. HCFC–123 ................................................ 20,000 

Dupont .......................................................................................................................... HCFC–123 ................................................ 2,933,906 

HCFC–124 ................................................ 743,312 

Honeywell ..................................................................................................................... HCFC–124 ................................................ 1,284,265 

ICOR ............................................................................................................................. HCFC–124 ................................................ 81,220 

National Refrigerants .................................................................................................... HCFC–123 ................................................ 72,600 

HCFC–124 ................................................ 50,380 

Tulstar Products ........................................................................................................... HCFC–123 ................................................ 34,800 

HCFC–124 ................................................ 229,582 

EPA is proposing to allocate 125 

percent of each company’s baseline for 

these low-ODP HCFCs for the 2010– 

2014 control periods. These allocations 

would appear as additions to the table 

at § 82.16. EPA requests comments on 

its proposal to grant 125 percent of 

baseline to companies for these HCFCs 

for the 2010–2014 control periods. 

Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 78697 

12. What About Other HCFCs? 

In addition to HCFC–141b, HCFC–22, 

and HCFC–142b, as well as newly 

addressed HCFC–123, HCFC–124, 

HCFC–225ca, and HCFC–225cb, EPA 

recognizes that the list of HCFCs in 

appendix B to subpart A includes 

additional substances. EPA’s proposed 

allocations, based on projected 2010– 

2014 need, have the effect of reserving 

some room under the 2010 aggregate 

HCFC cap for any HCFCs not 

specifically included in §§ 82.16, 82.18, 

and 82.19. Given the 4 percent of the 

3,810 consumption cap EPA is 

proposing to allocate for the newly 

addressed HCFCs (–123, –124, –225ca 

and –225cb), room under the 2010 

production and consumption caps still 

remains. EPA notes that some niche 

applications in the U.S. use other 

HCFCs, such as HCFC–21. However, 

EPA is not aware of additional need for 

production or import of these 

substances at this time. Also, some 

amount of HCFC–141b will likely 

continue to be produced or imported via 

the petition process during the 2010– 

2014 control periods. EPA believes it is 

appropriate to reserve some room in 

case circumstances were to change and 

users of another HCFC were to seek to 

acquire an amount either by production 

or by import. EPA notes that the 

producer or importer would be required 

to report to EPA consistent with the 

existing recordkeeping and reporting 

requirements. If necessary, EPA could 

subsequently propose amending the 

regulations to set and apportion 

baselines and issue allowances for these 

HCFCs. EPA requests comments on its 

proposed approach of allocating 

baseline allowances for HCFC–141b, 

HCFC–22, HCFC–142b, HCFC–123, 

HCFC–124, HCFC–225ca, and HCFC– 

225cb based on the projected need for 

virgin material in the U.S., which would 

have the effect of not allocating 

allowances for the remaining amount 

under the 3,810 ODP-ton cap. 

B. Does the Article 5 Allowance 

Provision Change Given the 

Adjustments to the Montreal Protocol? 

Under the Montreal Protocol, 

industrialized countries and developing 

countries have different schedules for 

phasing out ODS production and 

consumption. Developing countries 

operating under Article 5, paragraph 1 

of the Montreal Protocol in most cases 

have additional time in which to phase 

out ODSs. Recognizing that it would be 

inadvisable for developing countries to 

spend their scarce resources to build 

new ODS manufacturing facilities to 

meet basic domestic needs for chemicals 

they would ultimately phase out, the 

Parties to the Montreal Protocol decided 

to permit a small amount of production 

in industrialized countries, in addition 

to the amounts otherwise permitted for 

such countries under the relevant 

phaseout schedules, for export to meet 

the basic domestic needs of developing 

countries. As discussed above, at the 

19th Meeting of the Parties (MOP) to the 

Montreal Protocol held in September 

2007, the Parties agreed to a revised 

phaseout schedule for both Article 5 

and non-Article 5 Parties. Included with 

the changes to the phaseout schedule 

were changes to the amount of 

production in industrialized countries 

that would be permitted to meet the 

basic domestic needs of Article 5 

Parties. These changes were in keeping 

with the more stringent phaseout 

schedule for developing countries. 

Previously, the Montreal Protocol had 

allowed non-Article 5 countries to 

produce at 15 percent of their baseline 

levels for export to Article 5 countries 

from 2016, the year in which Article 5 

countries were required to freeze 

consumption, through the terminal 

phaseout in 2040. At the 19th MOP the 

Parties agreed that to satisfy basic 

domestic needs of Article 5 countries, 

non-Article 5 Parties would be allowed 

to produce up to 10 percent of baseline 

levels until 2020. For the period after 

2020, the Parties agreed to consider 

further reduction of the production for 

basic domestic needs no later than 2015 

(UNEP/Ozl.Pro.19/7 Decision XIX/6: 

Adjustments to the Montreal Protocol 

with regard to Annex C, Group I, 

substances (hydrochlorofluorocarbons)). 

Section 605(d)(2) of the Clean Air Act 

states that notwithstanding the 

restrictions on production, use, and 

introduction into interstate commerce 

set forth in paragraphs (a) and (b) of that 

section, EPA ‘‘may authorize the 

production of limited quantities of a 

class II substance in excess of the 

quantities otherwise permitted under 

such provisions solely for export to and 

use in developing countries that are 

Parties to the Montreal Protocol, as 

determined by the Administrator’’ (42 

U.S.C. 7671d(d)(2)). EPA’s 

implementing regulation at 40 CFR 

§ 82.18(a) provides for allocation of 

‘‘Article 5 allowances’’ for production of 

specified ODSs solely for export to 

Article 5 Parties to meet those countries’ 

basic domestic needs. The ‘‘Article 5’’ 

Parties are listed at 40 CFR part 82, 

subpart A, appendix E. Currently under 

§ 82.18(a) an entity that is apportioned 

baseline HCFC production allowances 

receives an amount of Article 5 

allowances equal to 15 percent of that 

production baseline. 

EPA is proposing to amend § 82.18(a) 

to reflect the adjustment to the Montreal 

Protocol at the 19th MOP and to ensure 

that the United States does not permit 

a level of production to meet basic 

domestic needs in Article 5 Parties that 

exceeds the level specified in the 

adjustments. EPA is taking this action in 

accordance with section 606(a)(3) of the 

Clean Air Act. EPA is also proposing 

minor changes to 82.15(c) to clarify that 

HCFCs produced with Article 5 

allowances may be introduced into 

interstate commerce if destined for 

export. 

Section 82.18(a)(1) currently states 

that a person apportioned baseline 

production allowances for specified 

HCFCs is also apportioned Article 5 

allowances for the specified HCFCs 

equal to the following percentages of 

that person’s baseline: For control 

periods through 2014, 15 percent; for 

control periods from 2015 through 2029, 

10 percent; and for control periods from 

2020 through 2039, 15 percent. While 

the Montreal Protocol previously 

permitted production for the basic 

domestic needs of Article 5 countries 

equal to 15 percent of the U.S. 

production baseline for each control 

period until 2040, section 605(d)(2)(B) 

of the Clean Air Act requires that for the 

period between 2015 and 2030 the 

production for Article 5 countries be 

limited to 10 percent of baseline. Thus 

EPA regulations at § 82.18(a) currently 

restrict Article 5 allowances to 10 

percent of production baseline from 

January 1, 2015, through December 31, 

2029, but otherwise allow the full 15 

percent previously permitted by the 

Protocol. 

EPA is proposing to amend § 82.18(a) 

to allocate Article 5 allowances for the 

HCFCs covered by this rulemaking, for 

the period 2010–2019, consistent with 

the recent changes to the Montreal 

Protocol. Prior to 2015, exports to 

Article 5 Parties of HCFC–123, HCFC– 

124, HCFC–225ca, or HCFC–225cb 

would not require expending Article 5 

allowances. 

Given that Article 2F of the Montreal 

Protocol, as adjusted in September 2007, 

does not provide for additional HCFC 

production to meet the basic domestic 

needs of Article 5 Parties past 2019, 

EPA is proposing to sunset the Article 

5 allowance provision for all HCFCs at 

the end of 2019 in the absence of further 

adjustments to the Protocol. Decision 

XIX/6 paragraph 14 states ‘‘In order to 

satisfy basic domestic needs [the 

Parties] agree to allow for up to 10% of 

baseline until 2020, and for the period 

after that, to consider no later than 2015 

78698 Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 

8The petition process for HCFC–141b exemption 

allowances at 82.16(h) would sunset in 2015, since 

HCFC–141b is not used as a refrigerant and thus 

does not meet the criteria established by 605(a) for 

an exception from the statutory ban on use. EPA 

intends to revise § 82.16(h) when it addresses the 

control periods 2015–2019. 

further reductions of production for 

basic domestic needs.’’ If the Parties 

were to adjust the basic domestic needs 

provisions of the Protocol to permit 

continued production for such needs 

past 2019, EPA would evaluate that 

adjustment and consider issuing a 

proposed regulation to extend the 

availability of Article 5 allowances for 

basic domestic needs to the extent 

consistent with the Clean Air Act. Any 

such proposed regulations would 

include production levels and schedules 

that were at least as stringent as those 

specified in the Montreal Protocol, as 

adjusted. 

EPA requests comments on its 

proposed revisions to § 82.18(a). 

C. How Does EPA Interpret ‘‘Introduce 

Into Interstate Commerce or Use’’? 

Section 605(a) is titled ‘‘Restriction of 

use of class II substances’’ and reads: 

‘‘Effective January 1, 2015, it shall be 

unlawful for any person to introduce 

into interstate commerce or use any 

Class II substance unless such 

substance— 

(1) Has been used, recovered, and 

recycled; 

(2) Is used and entirely consumed 

(except for trace quantities) in the 

production of other chemicals; or 

(3) Is used as a refrigerant in 

appliances manufactured prior to 

January 1, 2020. 

As used in this subsection, the term 

‘refrigerant’ means any class II 

substance used for heat transfer in a 

refrigerating system.’’ 

Section 605(a) is self-effectuating, 

banning the introduction into interstate 

commerce and use of HCFCs by its own 

terms. In section 605(c), however, 

Congress directed EPA to promulgate 

regulations restricting the use of class II 

substances in accordance with section 

605. In today’s action, EPA is proposing 

to complete its implementation of the 

section 605 provisions on use of class II 

substances. EPA is also proposing 

regulatory language to reflect the section 

605 provisions on introduction into 

interstate commerce of class II 

substances. 

As discussed earlier in this notice, the 

provisions governing HCFC–22 and 

HCFC–142b promulgated as part of the 

1993 phaseout rule were intended ‘‘to 

prohibit the use of the chemicals (virgin 

material only) for any use except as a 

feedstock or as a refrigerant in existing 

equipment as of January 1, 2010’’ (58 FR 

15028). As promulgated, however, the 

regulatory prohibitions did not control 

use directly, but instead banned 

production and import for most uses. 

EPA is proposing to add the direct use 

prohibitions contemplated in the 1993 

phaseout rule as well as the 

corresponding prohibitions on 

introduction into interstate commerce 

contained in section 605(a). Consistent 

with the schedule adopted in the 1993 

phaseout rule, the section 605(a) use 

and interstate commerce restrictions 

would apply to HCFC–22 and HCFC– 

142b beginning in 2010 and to all other 

HCFCs beginning in 2015.8 The 

restrictions on production and import, 

both in general and for particular uses, 

that were promulgated in 1993 are at 40 

CFR 82.16(b)–(g). EPA is not proposing 

to change these provisions in this 

action. However, EPA is further 

implementing section 605(a) by 

proposing direct restrictions on use and 

introduction into interstate commerce to 

be codified at § 82.15 and by clarifying 

its interpretation of the statutory 

requirements. 

Since the promulgation of the 2003 

allocation rule, EPA has received 

questions from stakeholders regarding 

the Agency’s interpretations of section 

605(a). Based on these questions, EPA 

has decided to include in this proposed 

rule a discussion of how it interprets 

that section, particularly the terms 

‘‘introduction into interstate commerce’’ 

and ‘‘use.’’ EPA is proposing to 

promulgate a definition of interstate 

commerce to facilitate the 

implementation of section 605(a). 

Section 605(a) includes the phrase 

‘‘introduction into interstate 

commerce.’’ Section 611 (Labeling) 

contains a similar phrase, noting that 

certain products shall not be 

‘‘introduced into interstate commerce’’ 

unless the product bears a clearly 

legible and conspicuous warning label. 

EPA’s definition of interstate commerce 

for section 611 purposes appears at 40 

CFR 82.104(n): 

Interstate Commerce means the 

distribution or transportation of any product 

between one state, territory, possession or the 

District of Columbia, and another state, 

territory, possession or the District of 

Columbia, or the sale, use or manufacture of 

any product in more than one state, territory, 

possession or District of Columbia. The entry 

points for which a product is introduced into 

interstate commerce are the release of a 

product from the facility in which the 

product was manufactured, the entry into a 

warehouse from which the domestic 

manufacturer releases the product for sale or 

distribution, and at the site of United States 

customs clearance. 

After considering this regulatory 

definition, and noting the similarities in 

the statutory language, EPA proposes to 

amend § 82.3 to include a definition of 

‘‘interstate commerce’’ that is identical 

to the definition at § 82.104(n), except 

that the phrase ‘‘controlled substance’’ 

would appear where the § 82.104(n) 

definition uses the term ‘‘product.’’ This 

is because section 605(a) addresses 

substances rather than products. Adding 

a definition of interstate commerce to 

§ 82.3 will clarify the applicability of 

the section 605(a) provisions. Choosing 

a definition that is already wellestablished in the labeling program will 

minimize stakeholder confusion. EPA 

requests comments on adding this 

definition of interstate commerce to 

subpart A. 

EPA notes that under this definition, 

‘‘introduction into interstate commerce’’ 

would include release of HCFCs by the 

domestic manufacturer for distribution 

and transport prior to export. The 

section 605(a) ban thus has relevance to 

the export of HCFCs—limiting exports 

to HCFCs that are ‘‘used, recovered, and 

recycled’’ (section 605(a)(1)); HCFCs 

that are destined for transformation 

(section 605(a)(2)); HCFCs that will be 

used as a refrigerant in appliances 

manufactured before the date specified 

in the regulations (section 605(a)(3)); 

and HCFCs that will be exported to 

Article 5 Parties (section 605(d)(2)). As 

a result, HCFC exports to non-Article 5 

Parties would be limited as of January 

1, 2010, or January 1, 2015, depending 

on the specific HCFC. 

In addition to banning ‘‘introduction 

into interstate commerce’’ of HCFCs, 

section 605(a) also bans ‘‘use,’’ subject 

to three statutory exceptions that inform 

EPA’s understanding of the term ‘‘use.’’ 

While these exceptions apply to the 

‘‘interstate commerce’’ ban as well as 

the ‘‘use’’ ban, the discussion below 

focuses on the ‘‘use’’ aspects of the 

exceptions. EPA is proposing to 

interpret the ‘‘use’’ ban as applying to 

the use of HCFCs in manufacturing and 

servicing HCFC products. 

The first exception, which appears at 

section 605(a)(1), applies to class II 

substances that have been ‘‘used, 

recovered, and recycled.’’ This 

exception confirms EPA’s 

understanding of the use ban as limited 

to the manufacture and servicing of 

HCFC products. If the ban applied to 

use of HCFCs by a consumer, such 

‘‘use’’ might include the continued 

operation of an appliance (e.g., a 

residential air conditioner) where an 

HCFC acts as the refrigerant. Under this 

broad definition of ‘‘use,’’ there would 

be an incentive for consumers to hire 

servicing technicians to recover the 

Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 78699 

HCFCs from appliances already in their 

homes and businesses, to recycle the 

HCFCs for reuse, and to charge the 

HCFCs back into the same appliances. 

These steps should not be necessary for 

continued operation of installed 

equipment. However, by taking these 

steps, consumers could avail themselves 

of the exception for ‘‘used, recovered, 

and recycled’’ substances at section 

605(a)(1). There would be no 

environmental benefit to following such 

a procedure. There could even be an 

environmental detriment, given the 

potential for losses of refrigerant during 

the recovery and recycling process. EPA 

does not believe that Congress intended 

such a result. Moreover, EPA believes 

that Congress intended to permit the 

continued use of previously 

manufactured appliances, as indicated 

by the third exception to the use ban 

(section 605(a)(3)). Thus, EPA is not 

proposing an interpretation that would 

result in shortening the useful lifetime 

of appliances that were manufactured 

prior to the effective date of the use 

restriction. EPA concludes that the 

section 605(a) ‘‘use’’ ban does not apply 

to a consumer’s operation of equipment 

that contains HCFCs. Rather, it applies 

to use during manufacture and servicing 

of equipment. EPA believes that 

Congress meant for the section 605(a)(1) 

exception to allow the use of ‘‘used, 

recovered, and recycled’’ HCFCs in 

appropriate instances by servicing 

technicians, reclaimers, and appliance 

manufacturers. 

Section 605(a)(2) refers to HCFCs that 

are ‘‘used and entirely consumed 

(except for trace quantities) in the 

production of other chemicals.’’ Similar 

language appears as an exception to the 

definition of ‘‘production’’ at section 

601(11). This type of use is referred to 

in EPA’s regulations as 

‘‘transformation’’ (see the definition of 

‘‘transform’’ at 40 CFR 82.3). The 

current phaseout schedule for HCFC 

production and consumption already 

includes a transformation exception 

within § 82.16. EPA intends to 

implement the transformation exception 

in section 605(a)(2) consistent with the 

transformation exception to the HCFC 

production phaseout. 

Section 605(a)(3) provides an 

exception for HCFCs that are ‘‘used as 

a refrigerant in appliances manufactured 

prior to January 1, 2020.’’ EPA reads this 

exception as allowing appliances 

manufactured before the specified date 

to be serviced with virgin HCFCs. This 

is consistent with the legislative history 

of the exception. The predecessor to 

section 605(a)(3) in the Senate bill was 

an exception for ‘‘other regulated 

substances’’ (such as HCFCs) that are 

‘‘used to maintain and service 

household appliances or commercial 

refrigeration units manufactured prior to 

January 1, 2015.’’ The House 

amendment contained identical 

language. While the language that 

emerged in the Conference Agreement is 

less specific, we can infer that this 

exception was intended to address, at a 

minimum, maintenance and servicing 

needs. 

As noted above, EPA interprets the 

605(a) use ban to cover initial charges as 

well as maintenance and servicing. As 

written, the section 605(a)(3) exception 

would permit some newly 

manufactured appliances (i.e., those 

manufactured prior to January 1, 2020) 

to be charged with virgin HCFCs 

following the effective date of the use 

ban. In the 1993 phaseout rule, 

however, EPA banned production and 

import of HCFC–22 and HCFC–142b, 

effective January 1, 2010, for use in 

appliances manufactured after 2009. 

EPA also indicated that it intended to 

ban use of virgin HCFC–22 and HCFC– 

142b in such appliances. Consistent 

with decisions made in the 1993 rule, 

EPA is proposing, for HCFC–22 and 

HCFC–142b, to apply the section 

605(a)(3) exception only to the use of 

these HCFCs in appliances 

manufactured before 2010. Such use 

would consist of servicing and 

maintenance of these appliances. EPA 

notes that servicing could entail a wide 

range of activities including replacing 

parts or components. For the low ODPrefrigerants covered by 82.16(d), 

however, EPA is proposing to apply the 

section 605(a)(3) exception to the use of 

HCFCs in equipment manufactured 

before January 1, 2020, which would 

allow initial charging of equipment for 

a limited period as well as servicing and 

maintenance uses. For those 

refrigerants, 82.16(d) bans production 

and import effective January 1, 2015 for 

use in appliances manufactured after 

2019. 

EPA notes that the exception at 

section 605(a)(3) limits introduction 

into interstate commerce and use to 

situations where the HCFC: ‘‘is used as 

a refrigerant in appliances manufactured 

prior to’’ the specified date. Section 601 

defines appliance as ‘‘any device which 

contains and uses a class I or class II 

substance as a refrigerant and which is 

used for household or commercial 

purposes, including any air conditioner, 

refrigerator, chiller, or freezer.’’ EPA 

recognizes many devices meet the 

section 601 definition of appliance. For 

example, commercial refrigeration 

includes the retail food and cold storage 

sectors. Industrial process refrigeration 

includes customized appliances used in 

the chemical, pharmaceutical, 

petrochemical and manufacturing 

industries. Other types of appliances 

include household refrigerators and 

freezers; chillers; water coolers; vending 

machines; residential and light 

commercial heat pumps; residential 

dehumidifiers; unitary systems; and 

commercial ice machines. Under the 

SNAP program and regulations 

promulgated under § 608, EPA has 

recognized the differences in these 

appliances and in some cases has found 

substitute refrigerants acceptable for 

some appliances but not others or 

established different control thresholds 

such as different leak rate requirements. 

For the purposes of this action, EPA has 

considered the definition of appliance 

carefully, particularly evaluating at 

what point a device becomes a 

manufactured appliance. EPA believes 

that the difference in types of 

appliances affects the point when 

manufacture is complete. 

Through this action, EPA is providing 

an interpretation of section 605(a) under 

which air-conditioning and refrigeration 

appliances are ‘‘manufactured’’ when 

the refrigerant loop is completed, the 

appliance can function, the appliance 

holds the complete and proper charge, 

and is ready for use for its intended 

purposes. For refrigerators and room airconditioners, manufacture may be 

complete while the appliance is still at 

a manufacturing facility. For instance, if 

such an appliance has been pre-charged 

with the desired amount of refrigerant, 

has gone through the entire 

manufacturing line so that all 

mechanical, electrical, labeling and 

painting/marking procedures are 

complete, and is ready to be packaged 

and shipped, and is a ‘‘stand-alone’’ 

piece of equipment (i.e., it only needs to 

be plugged into an electrical outlet and 

turned on to function properly), then 

EPA would consider the appliance as 

‘‘manufactured.’’ The situation differs, 

however, for other appliances, such as 

commercial refrigeration and industrial 

process refrigeration, involving more 

complex installation processes. Such 

devices are field charged with 

refrigerant; the refrigerant loop typically 

is completed onsite, and—particularly 

with industrial process refrigeration— 

the parts are custom-built. EPA would 

consider these field-charged appliances 

‘‘manufactured’’ at the point installation 

of all parts is completed and fully 

charged refrigerant (whether or not the 

appliance had started operation). For 

some appliances, such as condensing 

(outside) units for split-system air 

conditioners, refrigerant charge is often 

included in the product during the 

78700 Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 

9As discussed earlier in this action, there is an 

additional exception for production to meet the 

basic domestic needs of Article 5 countries, 

consistent with section 605(d). 

manufacturing process but then is 

typically adjusted in the field to account 

for different line sizes and indoor unit 

configurations. EPA would consider the 

‘‘manufacture’’ of this type of appliance 

similar to that for field-charged 

equipment; that is, manufacture would 

not be complete until the device is 

installed in the field, connected with 

the indoor unit, and charged to the 

proper level. 

EPA does not interpret ‘‘use’’ to 

include destruction, recovery for 

disposal, discharge consistent with all 

other regulatory requirements or other 

similar actions where the substance is 

part of a disposal chain. At the point 

disposal-related actions occur, other 

statutory and regulatory provisions 

generally govern. For example, Congress 

addressed the issue of disposal under 

section 608. EPA has promulgated 

regulations to implement section 608 for 

appliances: These safe disposal 

requirements are codified at 40 CFR part 

82 subpart F. In some instances, HCFCs 

may need to be introduced into 

interstate commerce in order to reach an 

appropriate destruction facility. 

Consistent with its interpretation of 

‘‘use,’’ EPA is interpreting the interstate 

commerce prohibition to exclude 

introduction into interstate commerce 

for the purpose of destruction. 

As noted above, the current regulatory 

provisions already preclude production 

or import of HCFC–22 and HCFC–142b 

in 2010 and beyond for purposes that 

are not exempted at § 82.16(c) consistent 

with section 605(a).9 However, EPA is 

proposing through this action to amend 

§ 82.15 to add prohibitions that 

specifically preclude any person from 

introducing into interstate commerce or 

using (according to the interpretations 

above) any HCFCs for purposes that are 

not consistent with section 605. EPA 

believes that this is appropriate because 

section 605(a) specifically bans use and 

introduction into interstate commerce. 

In addition, under the current regulatory 

structure the prohibitions apply to the 

producer or importer of the HCFC 

compounds. The provisions EPA is 

proposing to add to the regulations 

would apply to manufacturers of 

appliances and other HCFC products, as 

well as anyone who services such 

products. EPA requests comments on 

adding these prohibitions and on its 

interpretation of section 605(a). 

Finally, EPA is proposing revisions to 

its regulations on export production 

allowances to ensure consistency with 

section 605(a). Export production 

allowances allow an HCFC that is 

subject to a domestic phaseout to be 

produced for export to Parties that 

continue to allow imports of that 

substance (40 CFR 82.18(b)). Currently, 

entities that hold baseline production 

allowances for HCFC–141b are allocated 

export production allowances equal to 

100 percent of their baseline production 

allowances. EPA is proposing to sunset 

this provision on December 31, 2009, in 

order to avoid a conflict with the section 

605(a) restrictions on use and 

introduction into interstate commerce. 

Under the proposed interstate 

commerce definition, ‘‘introduction into 

interstate commerce’’ would include 

release of HCFCs by the domestic 

manufacturer for distribution and 

transport prior to export. EPA is not 

proposing to allocate export production 

allowances for any other HCFCs. EPA 

seeks comment on the sunset of 

provisions for export production 

allowances. 

IV. Statutory and Executive Order 

Reviews 

A. Executive Order 12866: Regulatory 

Planning and Review 

Under Executive Order (EO) 12866 

(58 FR 51735, October 4, 1993), this 

action is a ‘‘significant regulatory 

action.’’ Accordingly, EPA submitted 

this action to the Office of Management 

and Budget (OMB) for review under EO 

12866 and any changes made in 

response to OMB recommendations 

have been documented in the docket for 

this action. 

EPA did not conduct a specific 

analysis of the benefits and costs 

associated with this NPRM. Many 

previous analyses provide a wealth of 

information on the costs and benefits of 

the U.S. HCFC phaseout including: 

• The 1993 Addendum to the 1992 

phaseout regulatory impact analysis: 

Accelerating the phaseout of CFCs, 

halons, methyl chloroform, carbon 

tetrachloride, and HCFCs. 

• The 1999 Report Costs and Benefits 

of the HCFC Allowance Allocation 

System. 

• The 2000 Memorandum Cost/ 

Benefit comparison of the HCFC 

Allowance Allocation System. 

• The 2005 Memorandum 

Recommended scenarios for HCFC 

phaseout costs estimation. 

• The 2006 ICR Reporting and 

Recordkeeping Requirements of the 

HCFC Allowance System. 

• The 2007 Memorandum 

Preliminary estimates of the incremental 

cost of the HCFC phaseout in Article 5 

countries. 

• The 2007 Memorandum Revised 

Ozone and Climate Benefits Associated 

with the 2010 HCFC Production and 

Consumption Stepwise Reductions and 

a Ban on HCFC Pre-charged Imports. 

Copies of these documents and a 

summary memorandum is available in 

the docket. 

B. Paperwork Reduction Act 

This action does not impose any new 

information collection burden. EPA 

already requires recordkeeping and 

reporting requirements and through this 

action is not proposing to amend those 

provisions. However, the Office of 

Management and Budget (OMB) has 

previously approved the information 

collection requirements contained in the 

existing regulations at 40 CFR part 82 

subpart A under the provisions of the 

Paperwork Reduction Act, 44 U.S.C. 

3501 et seq. and has assigned OMB 

control number 2060–0498. The OMB 

control numbers for EPA’s regulations 

in 40 CFR are listed in 40 CFR part 9. 

C. Regulatory Flexibility Act (RFA) 

The Regulatory Flexibility Act (RFA) 

generally requires an agency to prepare 

a regulatory flexibility analysis of any 

rule subject to notice and comment 

rulemaking requirements under the 

Administrative Procedure Act or any 

other statute unless the agency certifies 

that the rule will not have a significant 

economic impact on a substantial 

number of small entities. Small entities 

include small businesses, small 

organizations, and small governmental 

jurisdictions. 

For purposes of assessing the impacts 

of this proposal on small entities, small 

entity is defined as: (1) A small business 

as defined by the Small Business 

Administration’s (SBA) regulations at 13 

CFR 121.201; (2) a small governmental 

jurisdiction that is a government of a 

city, county, town, school district or 

special district with a population of less 

than 50,000; and (3) a small 

organization that is any not-for-profit 

enterprise which is independently 

owned and operated and is not 

dominant in its field. 

This proposal will affect the following 

categories: 

Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 78701 

Category NAICS code SIC code Examples of regulated entities 

Chlorofluorocarbon gas manufacturing .................. 325120 2869 Chlorodifluoromethane manufacturers; Dichlorofluoroethane 

manufacturers; Chlorodifluoroethane manufacturers. 

Chlorofluorocarbon gas importers .......................... 325120 2869 Chlorodifluoromethane importers; Dichlorofluoroethane importers; Chlorodifluoroethane importers. 

Chlorofluorocarbon gas exporters .......................... 325120 2869 Chlorodifluoromethane exporters; Dichlorofluoroethane exporters; Chlorodifluoroethane exporters. 

Manufacturers of air conditioners and refrigerators 333415 Air-Conditioning Equipment and Commercial and Industrial 

Refrigeration Equipment Manufacturing. 

Importers of air conditioners and refrigerators ....... 333415 3585 Air-Conditioning Equipment and Commercial and Industrial 

Refrigeration Equipment Manufacturing. 

After considering the economic 

impacts of the proposed rule on small 

entities, I certify that this action will not 

have a significant economic impact on 

a substantial number of small entities. 

EPA is not proposing to change the 

methodology for the 2010–2014 control 

periods. Instead, EPA is continuing to 

allocate production and consumption 

allowances using the same approach 

currently used for control periods 2003– 

2009. Thus the 13 small businesses 

eligible for allowances for HCFC–22 and 

HCFC–142b identified in that 

rulemaking (68 FR 2845) are still 

eligible for allowances under this rule. 

In addition, small businesses eligible for 

HCFC–123, HCFC–124, HCFC–225ca, 

and HCFC–225cb using the same 

methodology, will also be eligible for 

allowances. EPA is not proposing any 

changes to the recordkeeping or 

reporting provisions and thus will not 

have any impact on the burden to these 

businesses. 

While EPA does not believe this 

proposal will have a significant 

economic impact on a substantial 

number of small entities, nonetheless, 

EPA continues to try to reduce further 

any impacts on small entities. With 

respect to the allowance allocation 

system as a whole, EPA is proposing to 

continue to provide flexibility. 

Consistent with the methodology for 

establishing baselines for HCFC–141b, 

HCFC–22, and HCFC–142b, while small 

entities will be on the same footing as 

larger entities, EPA is again is proposing 

to use the highest year of consumption. 

EPA is also to limit consideration of 

company-specific baseline adjustments 

to reflect permanent inter-company or 

inter-pollutant transfers made prior to 

June 16, 2008 as discussed elsewhere in 

the preamble to avoiding skewing 

baselines to entities with ample 

resources or access to information. EPA 

also believes that the ability to transfer 

allowances among entities provides the 

greatest flexibility for small entities to 

manage their allocation. As noted in the 

2003 allocation (68 FR 2846), unlike 

with the class I substances, there is no 

restriction to limit inter-pollutant 

transfers to groups of substances. Both 

inter-pollutant and inter-company 

transfers of allowances are possible, 

either on a calendar-year or permanent 

basis. A small entity can opt for shortterm or long-term decisions concerning 

the allowances it holds after evaluating 

its place in the overall market. EPA 

continues to be interested in the 

potential impacts of the proposed rule 

on small entities and welcomes 

comments on issues related to such 

impacts. 

D. Unfunded Mandates Reform Act 

This rule does not contain 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 year. 

The requirements already established at 

40 CFR part 82 subpart A already govern 

the production, import, and export of 

ODS. The regulatory changes for the 

next major milestone in the general 

phaseout continue to implement the 

same general framework previously 

established. EPA does not anticipate 

that this proposed rulemaking will have 

any significant direct impacts or State, 

local and tribal governments or private 

sector entities. Thus, this rule is not 

subject to the requirements of sections 

202 or 205 of 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 

uniquely affect small governments. This 

proposed rule would apportion 

production and consumption 

allowances and establish baselines for 

private entities, not small governments. 

E. Executive Order 13132: Federalism 

Executive Order 13132, entitled 

‘‘Federalism’’ (64 FR 43255, August 10, 

1999), requires EPA to develop an 

accountable process to ensure 

‘‘meaningful and timely input by State 

and local officials in the development of 

regulatory policies that have federalism 

implications.’’ ‘‘Policies that have 

federalism implications’’ is defined in 

the Executive Order to include 

regulations that have ‘‘substantial direct 

effects on the States, on the relationship 

between the national government and 

the States, or on the distribution of 

power and responsibilities among the 

various levels of government.’’ 

This proposed rule does not have 

federalism implications. It will not have 

substantial direct effects on the States, 

on the relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government, as specified in 

Executive Order 13132. Today’s 

proposal is expected to primarily affect 

producers, importers, and exporters of 

HCFCs. Thus, the requirements of 

section 6 of the Executive Order do not 

apply. In the spirit of Executive Order 

13132, and consistent with EPA policy 

to promote communications between 

EPA and State and local governments, 

EPA specifically solicits comment on 

this proposed rule from State and local 

officials. 

F. Executive Order 13175: Consultation 

and Coordination With Indian Tribal 

Governments 

Executive Order 13175, entitled 

‘‘Consultation and Coordination with 

Indian Tribal Governments’’ (65 FR 

67249, November 9, 2000), requires EPA 

to develop an accountable process to 

ensure ‘‘meaningful and timely input by 

tribal officials in the development of 

regulatory policies that have tribal 

implications.’’ This proposed rule does 

not have tribal implications, as specified 

in Executive Order 13175. This proposal 

does not significantly or uniquely affect 

the communities of Indian tribal 

governments. It does not impose any 

enforceable duties on communities of 

Indian tribal governments. Thus, 

Executive Order 13175 does not apply 

to this proposed rule. 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

and Safety Risks 

This action is not subject to EO 13045 

(62 F.R. 19885, April 23, 1997) because 

it is not economically significant as 

78702 Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 

defined in EO 12866. The Agency 

nonetheless has reason to believe that 

the environmental health or safety risk 

addressed by this action may have a 

disproportionate effect on children. 

Depletion of stratospheric ozone results 

in greater transmission of the sun’s 

ultraviolet (UV) radiation to the earth’s 

surface. The following studies describe 

the effects of excessive exposure to UV 

radiation on children: (1) Westerdahl J, 

Olsson H, Ingvar C. ‘‘At what age do 

sunburn episodes play a crucial role for 

the development of malignant 

melanoma,’’ Eur J Cancer 1994: 30A: 

1647–54; (2) Elwood JM, Japson J. 

‘‘Melanoma and sun exposure: an 

overview of published studies,’’ Int J 

Cancer 1997; 73:198–203; (3) Armstrong 

BK, ‘‘Melanoma: childhood or lifelong 

sun exposure,’’ In: Grobb JJ, Stern RS 

Mackie RM, Weinstock WA, eds. 

‘‘Epidemiology, causes and prevention 

of skin diseases,’’ 1st ed. London, 

England: Blackwell Science, 1997: 63–6; 

(4) Whieman D., Green A. ‘‘Melanoma 

and Sunburn,’’ Cancer Causes Control, 

1994: 5:564–72; (5) Heenan, PJ. ‘‘Does 

intermittent sun exposure cause basal 

cell carcinoma? A case control study in 

Western Australia,’’ Int J Cancer 1995; 

60: 489–94; (6) Gallagher, RP, Hill, GB, 

Bajdik, CD, et al. ‘‘Sunlight exposure, 

pigmentary factors, and risk of 

nonmelanocytic skin cancer I, Basal cell 

carcinoma.’’ Arch Dermatol 1995; 131: 

157–63; (7) Armstrong, DK. ‘‘How sun 

exposure causes skin cancer: an 

epidemiological perspective,’’ 

Prevention of Skin Cancer. 2004. 89– 

116. The public is invited to submit or 

identify peer-reviewed studies and data, 

of which EPA may not be aware, that 

assess results of early-life exposure to 

UV radiation. 

This action proposes to reduce the 

potential continued use of Class II 

controlled substances and the emissions 

of such substances. It implements the 

United States commitment to reduce the 

total basket of HCFCs produced and 

imported to a level that is 75 percent 

below the respective baselines. While 

on an ODP-weighted basis, this is not as 

large a step as previous actions, such as 

the 1996 Class I phaseout, it is one of 

the most significant remaining actions 

the United States can take to complete 

the overall phaseout of ODS and further 

decrease impacts on children’s health 

from stratospheric ozone depletion. EPA 

requests comments regarding the 

impacts of this proposal on the 

continued efforts to protect children’s 

health. 

H. Executive Order 13211: Actions That 

Significantly Affect Energy Supply, 

Distribution, or Use 

This rule is not a ‘‘significant energy 

action’’ as defined in Executive Order 

13211, ‘‘Actions Concerning Regulations 

That Significantly Affect Energy Supply, 

Distribution, or Use’’ (66 FR 28355 (May 

22, 2001)) because it is not likely to 

have a significant adverse effect on the 

supply, distribution, or use of energy. 

The proposed regulation predominately 

impacts HCFC production, imports, 

exports, and trades. The Agency has 

concluded that this rule is not likely to 

have any adverse energy effects. 

I. National Technology Transfer and 

Advancement Act 

Section 12(d) of the National 

Technology Transfer and Advancement 

Act of 1995 (‘‘NTTAA’’), Public Law No. 

104–113, 12(d) (15 U.S.C. 272 note) 

directs EPA to use voluntary consensus 

standards in its regulatory activities 

unless to do so would be inconsistent 

with applicable law or otherwise 

impractical. Voluntary consensus 

standards are technical standards (e.g., 

materials specifications, test methods, 

sampling procedures, and business 

practices) that are developed or adopted 

by voluntary consensus standards 

bodies. The NTTAA directs EPA to 

provide Congress, through OMB, 

explanations when the Agency decides 

not to use available and applicable 

voluntary consensus standards. This 

proposed rulemaking does not involve 

technical standards. Therefore, EPA is 

not considering the use of any voluntary 

consensus standards. 

J. Executive Order 12898: Federal 

Actions To Address Environmental 

Justice in Minority Populations and 

Low-Income Populations 

Executive Order (EO) 12898 (59 FR 

7629 (Feb. 16, 1994)) establishes federal 

executive policy on environmental 

justice. Its main provision directs 

federal agencies, to the greatest extent 

practicable and permitted by law, to 

make environmental justice part of their 

mission by identifying and addressing, 

as appropriate, disproportionately high 

and adverse human health or 

environmental effects of their programs, 

policies, and activities on minority 

populations and low-income 

populations in the United States. 

EPA has determined that this 

proposed rule will not have 

disproportionately high and adverse 

human health or environmental effects 

on minority or low-income populations 

because it increases the level of 

environmental protection for all affected 

populations without having any 

disproportionately high and adverse 

human health or environmental effects 

on any population, including any 

minority or low-income population. By 

allocating allowances for HCFCs and 

thus restricting the amount of HCFCs 

available as of January 1, 2010, this rule 

avoids emissions of these ozonedepleting substances, lessening the 

adverse human health effects for the 

entire population. 

List of Subjects in 40 CFR Part 82 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Chemicals, 

Chlorofluorocarbons, Exports, 

Hydrochlorofluorocarbons, Imports, 

Reporting and recordkeeping 

requirements. 

Dated: December 11, 2008. 

Stephen L. Johnson, 

Administrator. 

40 CFR part 82 is proposed to be 

amended as follows: 

PART 82—PROTECTION OF 

STRATOSPHERIC OZONE 

1. The authority citation for part 82 

continues to read as follows: 

Authority: 42 U.S.C. 7414, 7601, 7671– 

7671(q). 

Subpart A—Production and 

Consumption Controls 

2. Amend § 82.3 by adding in 

alphabetical order the definition of 

‘‘Interstate Commerce’’ to read as 

follows: 

§ 82.3 Definitions for Class I and Class II 

Controlled Substances. 

* * * * * 

Interstate Commerce means the 

distribution or transportation of any 

controlled substance between one state, 

territory, possession or the District of 

Columbia, and another state, territory, 

possession or the District of Columbia, 

or the sale, use or manufacture of any 

controlled substance in more than one 

state, territory, possession or District of 

Columbia. The entry points for which a 

controlled substance is introduced into 

interstate commerce are the release of a 

controlled substance from the facility in 

which the controlled substance was 

manufactured, the entry into a 

warehouse from which the domestic 

manufacturer releases the controlled 

substance for sale or distribution, and at 

the site of United States customs 

clearance. 

* * * * * 

Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 78703 

3. Amend § 82.15 by revising 

paragraph (c) and adding paragraph (g) 

to read as follows: 

§ 82.15 Prohibitions for Class II Controlled 

Substances. 

* * * * * 

(c) Production with Article 5 

allowances. No person may introduce 

into U.S. interstate commerce any class 

II controlled substance produced with 

Article 5 allowances, except for export 

to an Article 5 Party as listed in 

Appendix E of this subpart. Every 

kilogram of a class II controlled 

substance produced with Article 5 

allowances that is introduced into 

interstate commerce other than for 

export to an Article 5 Party constitutes 

a separate violation under this subpart. 

No person may export any class II 

controlled substance produced with 

Article 5 allowances to a non-Article 5 

Party. Every kilogram of a class II 

controlled substance that was produced 

with Article 5 allowances that is 

exported to a non-Article 5 Party 

constitutes a separate violation under 

this subpart. 

* * * * * 

(g) Introduction into interstate 

commerce or use. (1) Effective January 

1, 2010, no person may introduce into 

interstate commerce or use HCFC–141b 

(unless used, recovered, and recycled) 

for any purpose except for use in a 

process resulting in its transformation or 

its destruction; for export to Article 5 

Parties under § 82.18(a); for HCFC–141b 

exemption needs; as a transshipment or 

heel; or for exemptions permitted in 

§ 82.15(f). 

(2) Effective January 1, 2010, no 

person may introduce into interstate 

commerce or use HCFC–22 or HCFC– 

142b (unless used, recovered, and 

recycled) for any purpose other than for 

use in a process resulting in its 

transformation or its destruction, for use 

as a refrigerant in equipment 

manufactured before January 1, 2010; 

for export to Article 5 Parties under 

§ 82.18(a); as a transshipment or heel; or 

for exemptions permitted in § 82.15(f). 

(3) Effective January 1, 2015, no 

person may introduce into interstate 

commerce or use HCFC–141b (unless 

used, recovered, and recycled) for any 

purpose other than for use in a process 

resulting in its transformation or its 

destruction; for export to Article 5 

Parties under § 82.18(a), as a 

transshipment or heel; or for 

exemptions permitted in § 82.15(f). 

(4) Effective January 1, 2015, no 

person may introduce into interstate 

commerce or use any class II controlled 

substance not governed by paragraphs 

(g)(1) through (3) of this section (unless 

used, recovered, and recycled) for any 

purpose other than for use in a process 

resulting in its transformation or its 

destruction; for use as a refrigerant in 

equipment manufactured before January 

1, 2020; for export to Article 5 Parties 

under § 82.18(a); as a transshipment or 

heel; or for exemptions permitted in 

§ 82.15(f). 

(5) Effective January 1, 2030, no 

person may introduce into interstate 

commerce or use any class II controlled 

substance (unless used, recovered, and 

recycled) for any purpose other than for 

use in a process resulting in its 

transformation or its destruction; for 

export to Article 5 Parties under 

§ 82.18(a); as a transshipment or heel; or 

for exemptions permitted in § 82.15(f). 

(6) Effective January 1, 2040, no 

person may introduce into interstate 

commerce or use any class II controlled 

substance (unless used, recovered, and 

recycled) for any purpose other than for 

use in a process resulting in its 

transformation or its destruction, as a 

transshipment or heel, or for 

exemptions permitted in § 82.15(f). 

4. Revise § 82.16(a) to read as follows: 

§ 82.16 Phaseout Schedule of Class II 

Controlled Substances. 

(a) In each control period as indicated 

in the following table, each person is 

granted the specified percentage of 

baseline production allowances and 

baseline consumption allowances for 

the specified Class II controlled 

substances apportioned under §§ 82.17 

and 82.19: 

Control period HCFC–141b HCFC–22 HCFC–142b HCFC–123 HCFC–124 HCFC– 

225ca 

HCFC– 

225cb 

2003 ..................................................... 0 100 100 .................... .................... .................... ....................

2004 ..................................................... 0 100 100 .................... .................... .................... ....................

2005 ..................................................... 0 100 100 .................... .................... .................... ....................

2006 ..................................................... 0 100 100 .................... .................... .................... ....................

2007 ..................................................... 0 100 100 .................... .................... .................... ....................

2008 ..................................................... 0 100 100 .................... .................... .................... ....................

2009 ..................................................... 0 100 100 .................... .................... .................... ....................

2010 ..................................................... 0 35 .2 4 .9 125 125 125 125 

2011 ..................................................... 0 35 .2 4 .9 125 125 125 125 

2012 ..................................................... 0 35 .2 4 .9 125 125 125 125 

2013 ..................................................... 0 35 .2 4 .9 125 125 125 125 

2014 ..................................................... 0 35 .2 4 .9 125 125 125 125 

* * * * * 

5. Revise § 82.17 to read as follows: 

§ 82.17 Apportionment of Baseline 

Production Allowances for Class II 

Controlled Substances. 

Effective January 1, 2010, the 

following persons are apportioned 

baseline production allowances for 

HCFC–22, HCFC–141b, HCFC–142b, 

HCFC–123, HCFC–124, HCFC–225ca, 

and HCFC–225cb, as set forth in the 

following table: 

Person Controlled substance Allowances 

(kg.) 

AGC Chemicals Americas ............................................................................................ HCFC–225ca ............................................ 266,608 

HCFC–225cb ............................................ 373,952 

Arkema ......................................................................................................................... HCFC–22 .................................................. 46,692,336 

HCFC–141b .............................................. 24,647,925 

HCFC–142b .............................................. 484,369 

DuPont .......................................................................................................................... HCFC–22 .................................................. 42,638,049 

HCFC–124 ................................................ 2,269,210 

78704 Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 

Person Controlled substance Allowances 

(kg.) 

Honeywell ..................................................................................................................... HCFC–22 .................................................. 37,378,252 

HCFC–141b .............................................. 28,705,200 

HCFC–142b .............................................. 2,417,534 

HCFC–124 ................................................ 1,804,121 

MDA Manufacturing ...................................................................................................... HCFC–22 .................................................. 2,383,835 

Solvay Solexis .............................................................................................................. HCFC–142b .............................................. 6,541,764 

6. Revise § 82.18(a) and (b) to read as 

follows: 

§ 82.18 Availability of Production in 

Addition to Baseline Production Allowances 

for Class II Controlled Substances. 

(a) Article 5 allowances. 

(1) Effective January 1, 2003, a person 

apportioned baseline production 

allowances for HCFC–141b, HCFC–22, 

or HCFC–142b under § 82.17 is also 

apportioned Article 5 allowances, equal 

to 15 percent of their baseline 

production allowances, for the specified 

HCFC for each control period up until 

December 31, 2009, to be used for the 

production of the specified HCFC for 

export only to foreign states listed in 

Appendix E to this subpart. 

(2) Effective January 1, 2010, a person 

apportioned baseline production 

allowances under § 82.17 for HCFC– 

141b, HCFC–22, or HCFC–142b is also 

apportioned Article 5 allowances, equal 

to 10 percent of their baseline 

production allowances, for the specified 

HCFC for each control period up until 

December 31, 2019, to be used for the 

production of the specified HCFC for 

export only to foreign states listed in 

Appendix E to this subpart. 

(3) Effective January 1, 2015, a person 

apportioned baseline production 

allowances under § 82.17 for HCFC–123, 

HCFC–124, HCFC–225ca, and HCFC– 

225cb is also apportioned Article 5 

allowances, equal to 10 percent of their 

baseline production allowances, for the 

specified HCFC for each control period 

up until December 31, 2019, to be used 

for the production of the specified 

HCFC for export only to foreign states 

listed in Appendix E to this subpart. 

(b) Export Production Allowances. 

(1) Effective January 1, 2003, a person 

apportioned baseline production 

allowances for HCFC–141b under 

§ 82.17 is also apportioned export 

production allowances, equal to 100 

percent of their baseline production 

allowances, for HCFC–141b for each 

control period up until December 31, 

2009 to be used for the production of 

HCFC–141b for export only, in 

accordance with this section. 

(2) [Reserved] 

* * * * * 

7. Revise § 82.19 to read as follows: 

§ 82.19 Apportionment of Baseline 

Consumption Allowances for Class II 

Controlled Substances. 

(a) Effective January 1, 2010, the 

following persons are apportioned 

baseline consumption allowances for 

HCFC–22, HCFC–141b, HCFC–142b, 

HCFC–123, HCFC–124, HCFC–225ca, 

and HCFC–225cb, as set forth in the 

following table: 

Person Controlled substance Allocation (kg) 

ABCO Refrigeration Supply ......................................................................................... HCFC–22 .................................................. 279,366 

AGC Chemicals Americas ............................................................................................ HCFC–225ca ............................................ 285,328 

HCFC–225cb ............................................ 286,832 

Altair Partners ............................................................................................................... HCFC–22 .................................................. 302,011 

HCFC–22 .................................................. 48,637,642 

Arkema ......................................................................................................................... HCFC–141b .............................................. 25,405,570 

HCFC–142b .............................................. 483,827 

HCFC–124 ................................................ 3,719 

Automatic Equipment Sales ......................................................................................... HCFC–22 .................................................. 54,088 

Condor Products .......................................................................................................... HCFC–22 .................................................. 74,843 

HCFC–124 ................................................ 3,746 

Continental Industrial Group ........................................................................................ HCFC–141b .............................................. 20,315 

Coolgas, Inc ................................................................................................................. HCFC–141b .............................................. 16,097,869 

HCFC–123 ................................................ 20,000 

Coolgas Investment Property ....................................................................................... HCFC–22 .................................................. 590,737 

Discount Refrigerants ................................................................................................... HCFC–22 .................................................. 375,328 

HCFC–141b .............................................. 994 

Dupont .......................................................................................................................... HCFC–22 .................................................. 38,814,862 

HCFC–141b .............................................. 9,049 

HCFC–142b .............................................. 52,797 

HCFC–123 ................................................ 2,933,906 

HCFC–124 ................................................ 743,312 

Full Circle ..................................................................................................................... HCFC–22 .................................................. 14,865 

H.G. Refrigeration Supply ............................................................................................ HCFC–22 .................................................. 40,068 

Honeywell ..................................................................................................................... HCFC–22 .................................................. 35,392,492 

HCFC–141b .............................................. 20,749,489 

HCFC–142b .............................................. 1,315,819 

HCFC–124 ................................................ 1,284,265 

ICC Chemical Corp ...................................................................................................... HCFC–141b .............................................. 81,225 

ICOR ............................................................................................................................. HCFC–124 ................................................ 81,220 

Ineos Fluor Americas ................................................................................................... HCFC–22 .................................................. 2,546,305 

Kivlan & Company ........................................................................................................ HCFC–22 .................................................. 2,081,018 

MDA Manufacturing ...................................................................................................... HCFC–22 .................................................. 2,541,545 

Mondy Global ............................................................................................................... HCFC–22 .................................................. 281,824 

National Refrigerants .................................................................................................... HCFC–22 .................................................. 5,528,316 

HCFC–123 ................................................ 72,600 

Federal Register / Vol. 73, No. 247 / Tuesday, December 23, 2008 / Proposed Rules 78705 

Person Controlled substance Allocation (kg) 

HCFC–124 ................................................ 50,380 

Refricenter of Miami ..................................................................................................... HCFC–22 .................................................. 381,293 

Refricentro .................................................................................................................... HCFC–22 .................................................. 45,979 

R-Lines ......................................................................................................................... HCFC–22 .................................................. 63,172 

Saez Distributors .......................................................................................................... HCFC–22 .................................................. 37,936 

Solvay Fluorides ........................................................................................................... HCFC–22 .................................................. 3,781,691 

HCFC–141b .............................................. 3,940,115 

Solvay Solexis .............................................................................................................. HCFC–142b .............................................. 194,536 

Tulstar Products ........................................................................................................... HCFC–141b .............................................. 89,913 

HCFC–123 ................................................ 34,800 

HCFC–124 ................................................ 229,582 

(b) [Reserved] 

[FR Doc. E8–29965 Filed 12–22–08; 8:45 am] 

BILLING CODE 6560–50–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 82 

[EPA–HQ–OAR–2007–0163; FRL–8752–6] 

RIN 2060–AH67 

Protection of Stratospheric Ozone: 

Ban on the Sale or Distribution of PreCharged Appliances 

AGENCY: Environmental Protection 

Agency [EPA]. 

ACTION: Proposed rule. 

SUMMARY: EPA is proposing to ban the 

sale or distribution of air-conditioning 

and refrigeration appliances containing 

HCFC–22, HCFC–142b, or blends 

containing one or both of these 

substances, beginning January 1, 2010. 

In addition, EPA is proposing to extend 

these requirements to air-conditioning 

and refrigeration appliances that are 

suitable only for use with newly 

produced HCFC–22, HCFC–142b, or 

blends containing one or both of these 

controlled substances as the refrigerant, 

and pre-charged appliance parts. We are 

proposing these restrictions to protect 

stratospheric ozone. 

DATES: Comments must be received on 

or before January 22, 2009, unless a 

public hearing is requested. Comments 

must then be received on or before 

February 6, 2009. Any party requesting 

a public hearing must notify the contact 

listed below under FOR FURTHER

INFORMATION CONTACT by 5 p.m. Eastern 

Standard Time on January 2, 2009. If a 

hearing is held, it will take place on 

January 7, 2009. 

ADDRESSES: Submit your comments, 

identified by Docket ID No. EPA–HQ– 

OAR–2007–0163, by one of the 

following methods: 

• http://www.regulations.gov: Follow 

the on-line instructions for submitting 

comments. 

• E-mail: a-and-r-Docket@epa.gov. 

• Fax: 202–566–1741. 

• Mail: Docket #, Air and Radiation 

Docket and Information Center, U.S. 

Environmental Protection Agency, Mail 

code: 6102T, 1200 Pennsylvania Ave., 

NW., Washington, DC 20460. 

• Hand Delivery: Docket #EPA–HQ– 

OAR–2003–0163, Air and Radiation 

Docket at EPA West, 1301 Constitution 

Avenue, NW., Room B108, Mail Code 

6102T, Washington, DC 20460. Such 

deliveries are only accepted during the 

Docket’s normal hours of operation, and 

special arrangements should be made 

for deliveries of boxed information. 

Instructions: Direct your comments to 

Docket ID No. EPA–HQ–OAR–2007– 

0163. EPA’s policy is that all comments 

received will be included in the public 

docket without change and may be 

made available online at http:// 

www.regulations.gov, including any 

personal information provided, unless 

the comment includes information 

claimed to be Confidential Business 

Information (CBI) or other information 

whose disclosure is restricted by statute. 

Do not submit information that you 

consider to be CBI or otherwise 

protected through http:// 

www.regulations.gov or e-mail. The 

http://www.regulations.gov Web site is 

an ‘‘anonymous access’’ system, which 

means EPA will not know your identity 

or contact information unless you 

provide it in the body of your comment. 

If you send an e-mail comment directly 

to EPA without going through http:// 

www.regulations.gov your e-mail 

address will be automatically captured 

and included as part of the comment 

that is placed in the public docket and 

made available on the Internet. If you 

submit an electronic comment, EPA 

recommends that you include your 

name and other contact information in 

the body of your comment and with any 

disk or CD–ROM you submit. If EPA 

cannot read your comment due to 

technical difficulties and cannot contact 

you for clarification, EPA may not be 

able to consider your comment. 

Electronic files should avoid the use of 

special characters, any form of 

encryption, and be free of any defects or 

viruses. For additional information 

about EPA’s public docket visit the EPA 

Docket Center homepage at http:// 

www.epa.gov/epahome/dockets.htm. 

FOR FURTHER INFORMATION CONTACT: 

Cindy Axinn Newberg, EPA, 

Stratospheric Protection Division, Office 

of Atmospheric Programs, Office of Air 

and Radiation (6205J), 1200 

Pennsylvania Avenue, NW., 

Washington, DC 20460, (202) 343–9729, 

newberg.cindy@epa.gov. 

SUPPLEMENTARY INFORMATION: (1) Under 

the Montreal Protocol on Substances 

that Deplete the Ozone Layer (Protocol), 

as amended, the U.S. and other 

industrialized countries that are Parties 

to the Protocol have agreed to limit 

production and consumption of 

hydrochlorofluorocarbons (HCFCs) and 

to phase out consumption in a step-wise 

fashion over time, culminating in a 

complete phaseout in 2030. Title VI of 

the Clean Air Act Amendments of 1990 

(CAAA) authorizes EPA to promulgate 

regulations to manage the consumption 

and production of HCFCs until the total 

phaseout in 2030. EPA promulgated 

final regulations establishing an 

allowance tracking system for HCFCs on 

January 21, 2003 (68 FR 2820). These 

regulations were amended on June 17, 

2004 (69 FR 34024) and July 20, 2006 

(71 FR 41163). This action proposes a 

ban on sale or distribution of airconditioning and refrigeration 

appliances that contain HCFC–22, 

HCFC–142b, or blends containing one or 

both of these controlled substances. In 

addition, EPA is proposing to extend 

these requirements to air-conditioning 

and refrigeration appliances that are 

suitable only for use with newly 

produced HCFC–22, HCFC–142b, or 

blends containing one or both of these 

controlled substances as the refrigerant. 

(2) Abbreviations and Acronyms Used 

in This Document. 

CAAA—Clean Air Act Amendments of 

1990 

CFC—chlorofluorocarbon 

HCFC—hydrochlorofluorocarbon