# ORAL ARGUMENT NOT YET SCHEDULED

Nos. 10–1347 et al.

UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

________________

H ONEYWELL 

# I NTERNATIONAL 

# I NC



# . AND 

# E. I. D U 

# P ONT 

# D E 

# N EMOURS 

# A ND 

# C OMPANY 

# , Petitioners

,

v.

E NVIRONMENTAL 

# P ROTECTION 

# A GENCY

AND 

# L ISA 

# P EREZ 

# J ACKSON 

# , Respondents

.

________________

On Petitions for Review of Rules of the Environmental Protection Agency

________________

OPENING BRIEF OF PETITIONERS

________________ Chet M. Thompson Robert J. Meyers David Y. Chung CROWELL & MORING LLP 1001 Pennsylvania Avenue, N.W. Washington, D.C. 20004-2595 (202) 624-2500

Counsel for E. I. du Pont de Nemours and Company Timothy K. Webster James R. Wedeking SIDLEY AUSTIN LLP 1501 K Street, NW Washington, DC 20005 (202) 736-8000

Richard Ayres Jessica Olson AYRES LAW GROUP 1615 L Street, N.W., Suite 1350 Washington, D.C. 20036 (202) 452-9200

Counsel for Honeywell International Inc. USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 1 of 139

# i CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES

Parties. Parties to this proceeding are Petitioners Honeywell International

Inc. and E.I. Du Pont de Nemours & Company and Respondents United States

Environmental Protection Agency (“EPA”) and Lisa P. Jackson in her official

capacity as the Administrator of the EP A. On December 8, 2010, this Court

granted the motion of Arkema Inc., Solv ay Fluorides, LLC and Solvay Solexis,

Inc. to intervene on behalf of Respondents. There are no amici

.
Rulings Under Review. The following final Agency actions by the EPA

are under review:

1) EPA’s approval of an April 18, 2008, request by Arkema Inc. to transfer

hydrochlorofluorocarbon (“HCFC”) -142b baseline production allowances to

HCFC-22 baseline production allowances;

2) EPA’s approval of a February 15, 200 8, request by Solvay Solexis, Inc.

and Solvay Fluorides LLC to transf er HCFC-142b baseline consumption

allowances to HCFC-22 baselin e consumption allowances;

3) EPA’s approval of an April 19, 2008, request by Arkema Inc. to transfer

HCFC-142b baseline consump tion allowances to HCFC -22 baseline consumption

allowances; and USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 2 of 139

# ii 4) EPA’s approval of a March 5, 2008, request by Solvay Solexis, Inc. and

Solvay Fluorides LLC to transfer HCFC- 142b baseline consumption allowances to

HCFC-22 baseline consumptio n allowances.

The approvals are found in the Joint Appendix.

Related Cases. Arkema Inc. v. Envir onmental Protection Agency

,
Consolidated Case Nos. 09-1318, 09-1335 , was decided on August 27, 2010. That

case does not involve a challenge to the fi nal actions under review here but rather

to a subsequent rule publishe d in the Federal Register. USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 3 of 139

# iii RULE 26.1 STATEMENT

Pursuant to Rule 26.1 of the Federal Rules of Appellate Procedure and Local

Rule 26.1 of the United States Court of Appeals for the District of Columbia

Circuit, Petitioners Honeywell International Inc. and E. I. DuPont de Nemours and

Company (“DuPont”) submit the fo llowing disclosure statements:

Honeywell International Inc. is a publicly-financed, multinational

corporation with a broad a rray of products in the aer ospace, control systems,

transportation, and specialty materials businesses. Among its specialty chemical

products are hydrochlorofluorocarbons (“ HCFCs”), which are regulated pursuant

to Title VI of the Clean Air Act, 42 U.S.C. §§ 7671-7671q. Specifically,

Honeywell is a recipient of baseline pr oduction and consumption allowances for

HCFC-142b and HCFC-22 from the U.S. Environmental Protection Agency.

Honeywell has no parent corporations. Th e only publicly-held company that has a

10% or greater ownership interest in H oneywell is State Street Corporation.

DuPont is a publicly-financed company that provides products and services

worldwide in a wide range of areas, incl uding agriculture, nutrition, electronics,

communications, safety and protection, hom e and construction, and transportation

and apparel. Relevant to this litigation, DuPont’s bus iness includes the production,

importation, and sales of HCFCs. DuP ont has no parent company and no publiclyheld company owns 10% or more of its shares. USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 4 of 139

# iv TABLE OF CONTENTS

CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES .............. i

RULE 26.1 ST ATEMEN T ...................................................................................... iii

TABLE OF AUTHORITIES .................................................................................... vi

GLOSSARY ............................................................................................................... x

INTRODUCTI ON ..................................................................................................... 1

JURISDICTIONAL STATEMEN T .......................................................................... 2

STATUTES AND RE GULATIONS ......................................................................... 3

STATEMENT OF ISSUES ....................................................................................... 3

STATEMENT OF FACTS ........................................................................................ 4

SUMMARY OF AR GUMENT ............................................................................... 12

STANDING ............................................................................................................. 14

STANDARD OF REVIEW ..................................................................................... 17

ARGUMENT ........................................................................................................... 17

I. THIS COURT HAS JURISDICTION OVER THE P ETITIONS ................ 17

A. The Petitions Are Timely Because EPA Did Not Publish Notice Of The 2008 Approvals In The Federal Regi ster ..................................... 17

B. If, Arguendo, The Initial Period For Filing Had Expired, The Petitions Are Timely Because Th ey Are Based Solely On Grounds Arising After The Close Of The Original Period And Were Filed Within 60 Days After Those Grounds Ar ose ....................................................... 19

C. Neither Petitioners Nor The Cour t Are Obligated To Await EPA Action On The Petitions Fo r Reconsider ation .................................... 22 USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 5 of 139

# v II. EPA UNLAWFULLY APPROVED INTERPOLLUTANT TRANSFERS TO BE EFFECTIVE BEYOND THE 2003-2009 STEPDOWN PERIOD ....................................................................................................................... 25

A. The 2008 Approvals Were Inconsiste nt With The Plain Language Of The CAA ............................................................................................. 26

B. The 2008 Approvals Were A Cha nge In EPA’s Interpretation Accomplished Without Adherence To Procedural Requirements ...... 29

C. The Record Does Not Suppo rt the 2008 A pprovals ........................... 35

III. EPA’S APPROVAL OF PERM ANENT INTERPOLLUTANT TRANSFERS DEPRIVED PETITIONERS OF DUE PROCESS OF LAW ....................................................................................................................... 39

CONCLUSI ON ........................................................................................................ 44 USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 6 of 139

# vi TABLE OF AUTHORITIES

Page(s) C ASES


# Alaska Prof’l Hunters Ass’n v. FAA

, 177 F.3d 1030 (D.C. Cir. 1999) .......................................................................... 34

*Am. Portland Cement Alliance v. EPA

, 101 F.3d 772 (D.C. Ci r. 1996) ...................................................................... 20, 40

Am. Road & Transp. Builders Ass’n v. EPA

, 588 F.3d 1109 (D.C. Cir. 2009) .......................................................................... 25

*Arkema Inc. v. EPA

, 618 F.3d 1 (D.C. Cir. 2010) ................................... 1, 5, 10, 15, 21, 30, 34, 39, 40

Baldwin v. Hale

, 68 U.S. (Wall.) 223 (1864) ................................................................................. 42

Bd. of Regents of State Colleges v. Roth

, 408 U.S. 564 (1 972) ............................................................................................ 39

Bell v. Burson

, 402 U.S. 535 (1 971) ............................................................................................ 39

C&W Fish Co. v. Fox

, 931 F.2d 1556 (D.C. Cir. 1991) .......................................................................... 38

Chevron, U.S.A., Inc. v. NRDC

, 467 U.S. 837 (1 984) ............................................................................................ 27

Ciba-Geigy Corp. v. EPA

, 46 F.3d 1208 (D.C. Cir. 1995) ............................................................................ 25

Cooper Indus., Inc. v. Aviall Servs., Inc.

, 543 U.S. 157 (2 004) ............................................................................................ 28

Dunn v. Commodity Futures Trading Comm’n

, 519 U.S. 465 (1 997) ............................................................................................ 28

* Indicates authorities primarily relied upon USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 7 of 139

# vii Envtl. Def. v. EPA

, 467 F.3d 1329 (D.C. Cir. 2006) .......................................................................... 22

Goldberg v. Kelly

, 397 U.S. 254 (1 970) ............................................................................................ 42

Graceba Total Commc’ns v. FCC

, 115 F.3d 1038 (D.C. Cir. 1997) .......................................................................... 43

Halbach v. Great-West L ife & Annuity Ins. Co.

, 561 F.3d 872 (8th Cir. 2009) .............................................................................. 39

Henderson v. Lujan

, 964 F.2d 1179 (D.C. Cir. 1992) .......................................................................... 43

*Kennecott Utah Copper v. U.S. Dep’t of Interior

, 88 F.3d 1191 (D.C. Cir. 1996) ............................................................................ 21

La. Energy & Power Auth. v. FERC

, 141 F.3d 364 (D.C. Cir. 1998) ............................................................................ 17

Lujan v. Defenders of Wildlife

, 504 U.S. 555 (1 992) ............................................................................................ 14

Mathews v. Eldridge

, 424 U.S. 319 (1 976) ............................................................................................ 42

*Motor Vehicle Mfrs. Ass’n v. St ate Farm Mut. Auto Ins. Co.

, 463 U.S. 29 (198 3) ........................................................................................ 35, 38

Natural Resources Defense Council v. Thomas

, 845 F.2d 1088 (D.C. Ci r. 1988) .................................................................... 23, 24

Oljato Chapter of Navajo Tribe v. Train

, 515 F.2d 654 (D.C. Cir. 1975) ............................................................................ 24

*Paralyzed Veterans of Am. v. DC Arena LP

, 117 F.3d 579 (D.C. Ci r. 1997) ...................................................................... 30, 34

* Indicates authorities primarily relied upon USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 8 of 139

# viii Russello v. United States

, 464 U.S. 16 ( 1983) .............................................................................................. 27

Sherley v. Sebelius

, 610 F.3d 69 (D.C. Cir. 2010) .............................................................................. 16

Small Refiner Lead Phase-Down Task Force v. EPA

, 705 F.2d 506 (D.C. Cir. 1983) ............................................................................ 17

Stilwell v. Office of Thrift Supervision

, 569 F.3d 514 (D.C. Cir. 2009) ............................................................................ 16

Telecommunications Research & Action Center v. FCC

, 800 F.2d 1181 (D.C. Cir. 1986) .......................................................................... 35

Union Oil Co. v. EPA

, 821 F.2d 678 (D.C. Cir. 1987) ............................................................................ 19

West Penn Power Co. v. EPA

, 860 F.2d 581 (3d Ci r. 1988) ............................................................................... 23

STATUTES AND REGULATIONS

42 U.S.C. § 1857h-5 (197 5 pocket pa rt) .................................................................. 24

42 U.S.C. § 7607 .............................................................................. 17, 18, 19, 23, 38

42 U.S.C. § 7671 ........................................................................................................ 5

42 U.S.C. § 7671d ...................................................................................................... 5

42 U.S.C. § 7671e ................................................................................................ 6, 34

42 U.S.C. § 7671 f ............................................................................................. 5, 7, 27

40 C.F.R. pt . 82 ........................................................................................................ 15

40 C.F.R. § 82. 3 ................................................................................................. 5, 6, 8

40 C.F.R. § 82.15 ....................................................................................................... 6

* Indicates authorities primarily relied upon USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 9 of 139

# ix 40 C.F.R. § 82. 16 ................................................................................................. 8, 41

40 C.F.R. § 82.17 ............................................................................................. 5, 6, 15

40 C.F.R. § 82.19 ............................................................................................. 5, 6, 15

40 C.F.R. § 82.23 .............................................................. 7, 8, 20, 33, 35, 36, 37, 38

64 Fed. Reg. 16,373 (April 5, 1999) ............................................................ 30, 31, 32

66 Fed. Reg. 38,064 (J uly 20, 2 001) ........................................................................ 32

68 Fed. Reg. 2,820 (Jan. 21, 2003) ........................................................ 5, 6, 7, 26, 33

73 Fed. Reg. 78,680 (Dec. 23, 2008) ................................................... 8, 9, 18, 19, 21

74 Fed. Reg. 66,412 (Dec. 15, 2009) .................................. 10, 15, 18, 21, 37, 41, 43

76 Fed. Reg. 47,451 (Aug. 5, 2011) ............................................................. 12, 16, 41

OTHER AUTHORITIES

S. Rep. No. 101- 228 (1989) ..................................................................................... 23

Montreal Protocol on Substances that Deplete the Ozone Layer, Sept. 16, 1987, art. 2, 26 I.L.M. 1550 (entered into force Jan. 1, 1989) ................... 5

1 A Legislative History of the Clean Air Act Amendments of 1990 (Comm. Print 1993) ................................................................................................. 29

5 A Legislative History of the Clean Air Act Amendments of 1990 (Comm. Print 1993) ................................................................................................. 23

* Indicates authorities primarily relied upon USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 10 of 139

# x GLOSSARY

Abbreviation

2003 Rule Protection of Stratospheric Ozone: Allowance System for Controlling HCFC Productio n, Import and Export, 68 Fed. Reg. 2,820 (Jan. 21, 2003)

2008 Approvals The four 2008 interpollutant transfer approvals at issue in this matter (see Jurisdictional Statement for a list)

APA Administrative Procedure Act

CAA Clean Air Act

EPA Environmental Protection Agency

EPA Response to MTD EPA’s Substantive Response to Intervenors’ Motion to Dismiss, No. 10-1347, Doc. No. 1296479 (filed Mar. 4, 2011)

HCFCs Hydrochlorofluorocarbons

HCFC-22 Hydrochlorofluorocarbon 22

HCFC-142b Hydrochlorofluorocarbon 142b

Intervenors’ MTD Joint Motion of Arkema Inc., Solvay Fluorides LLC, and Solvay Solexis, Inc. to Dismiss Petitions for Lack of Jurisdiction, No. 10-1347, Doc. No. 1287346 (filed Jan. 11, 2011)

ODP Ozone-depeltion potential

Petitions Petitions for review in this matter

Final 2010-2014 Stepdown Rule Protection of Stratospheric Ozone: Adjustments to the Allowance System for Cont rolling HCFC Production, Import, and Export, 74 Fed. Reg. 66,412 (Dec. 15, 2009) USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 11 of 139

# xi Proposed 2010-2014 Stepdown Rule Protection of Stratospheric Ozone: Adjustments to the Allowance System for Cont rolling HCFC Production, Import, and Export, 73 Fed. Reg. 78,680 (Dec. 23, 2008) USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 12 of 139

# INTRODUCTION

Title VI of the Clean Air Act (“ CAA”), 42 U.S.C. §§ 7671-7671q,

establishes a regime that reduces and eventually eliminates ozone-depleting

substances from domestic production and im portation. Only those companies that

possess “allowances” allocated by the Envi ronmental Protection Agency (“EPA”)

to produce or import the designated subs tances may do so. In 2008, EPA approved

four requests by Arkema Inc., Solvay Fluorides, LLC, and Solvay Solexis

(collectively, “Intervenors”) to transfer allowances to produce and import from one

type of ozone-depleting substance to anot her. These “interpollutant” transfer

requests were made near the end of th e 2003-2009 regulatory period during which

total production and importation had been lim ited by EPA as a st ep towards a total

phaseout. Subsequently, EPA promulgated a rule establishing allocations for the

next regulatory period, 2010- 2014, during which further reductions were required,

and did not account for Intervenors’ 2008 transfers. This Court, in Arkema Inc. v.

EPA , 618 F.3d 1 (D.C. Cir. 2010), vacated th at rule in part, holding that EPA

retroactively deprived the transferors of vested rights in their allowances.

This case is a challenge to EPA’s a pprovals of the four interpollutant

transfers in 2008, an issue not addressed by Arkema . Because EPA li mits the total

number of allowances available for allocation in any one year, permitting

interpollutant transfers to carry forward from one regulatory period to the next USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 13 of 139

# 2 reduces the allowances available to other market participants such as Honeywell

International Inc. and E. I. du Pont de Nemours and Company (“Petitioners”).

Such reduction harms the Petitioners economically.

The Court has jurisdiction to hear this matter. The petitions for review were

timely filed, and the central issue was ripened by the Arkema Court’s findings.

The interpollutant transfer approvals are inconsistent with the CAA, were granted

without adherence to app licable regulatory and procedural requirements in

contravention of EPA’s stated interpre tation of its regulations, and deprived

Petitioners of due process of law.

JURISDICTIONAL STATEMENT

The Court has jurisdiction under CA A Section 307(b)(1), 42 U.S.C.

§ 7607(b)(1). Petitioners seek review of four final actions taken by EPA (the

“2008 Approvals”):

1) Approval of an April 18, 2008, request by Arkema Inc. to transfer

hydrochlorofluorocarbons (“HCFC”) - 142b baseline production allowances to

HCFC-22 baseline production allowances (JA__);

2) Approval of a February 15, 2008, request by Solvay Solexis, Inc. and

Solvay Fluorides, LLC to transfer HCFC -142b baseline consumption allowances to

HCFC-22 baseline consumption allowances (JA__); USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 14 of 139

# 3 3) Approval of an April 19, 2008, request by Arkema Inc. to transfer

HCFC-142b baseline consump tion allowances to HCFC -22 baseline consumption

allowances (JA__); and

4) Approval of a March 5, 2008, re quest by by Solvay Solexis, Inc. and

Solvay Fluorides, LLC to transfer HCFC -142b baseline consumption allowances to

HCFC-22 baseline consumption a llowances (JA__).

On October 26, 2010, Petitioners timely requested that EPA reconsider and

rescind the 2008 Approvals. See Pet. for Reconsideration (Oct. 26, 2010) (JA__).

Timely petitions for review of each final action were filed in this Court and

subsequently consolidated.

STATUTES AND REGULATIONS

The pertinent statutes and regulati ons are reproduced in the addendum. See

Appendix A.

STATEMENT OF ISSUES

1) Whether the petitions for review (“Petitions”) are timely given that EPA

did not publish notice of the four 2008 Approvals in the Federal Register before

the Petitions were filed.

2) Whether the Petitions are timely, a lternatively, because they were filed

within 60 days of new grounds that arose so lely after the close of the initial period

for judicial review, namely, the Arkema Court’s findings. USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 15 of 139

# 4 3) Whether EPA acted contrary to the CAA when it approved permanent

interpollutant transfers of a llowances that, according to Arkema , must persist

beyond the regulatory stepdown period (2003-2009) that existed at that time.

4) Whether EPA’s approvals of pe rmanent interpollutant transfers

effectively reversed, without notice a nd comment rulemaking, the Agency’s

original interpretation of its regulations th at such transfers must be subject to the

phasedown of the transferred substance.

5) Whether the 2008 Approvals were unlawful on the record here because

EPA failed to follow its own regulatory requirements to appr ove interpollutant

transfers of allowances.

6) Whether Petitioners, whose shares of both HCFC-22 allowances and the

market were diminished by the 2008 Approva ls, were denied the due process of

law because they were neither notified of nor provided an opportunity to comment

on those approvals.

STATEMENT OF FACTS

Under the Montreal Protocol on Substa nces that Deplete the Ozone Layer,

Sept. 16, 1987, art. 2, 26 I. L.M. 1550 (entered into for ce Jan. 1, 1989) (“Montreal

Protocol”) and implementing provisions inthe CAA, HCFCs, a class of ozonedepleting substances, are to be phased out in the United States. This case concerns

rights to “produce” and “consume” HCFC s – specifically HCFC-22 and HCFCUSCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 16 of 139

# 5 142b. HCFC-22 is used primarily as a refrigerant and HCFC-142b is used

primarily in the production of insulating foam. The rights to produce and consume

HCFC-22 and HCFC-142b are conferred by allocations of “allowances” by EPA.

42 U.S.C. §§ 767 1d, 7671f.

HCFC-22 and HCFC-142b allowances fa ll into two categories: production

allowances, which were originally grante d to five companies that historically

manufactured HCFC-22 and HFCF-142b, and consumption allowances, which

were granted to seventeen additional comp anies that historically imported HCFC22 and HCFC-142b. 40 C. F.R. §§ 82.17 (Table) & 82.19 (Table) (2003); 42

U.S.C. §§ 7671(6), (11); 40 C. F.R. § 82.3 (definitions). EPA allocates allowances

under a “market-based cap and trade regulatory system,” Arkema v. EPA , 618 F.3d

1, 2 (D.C. Cir. 2010), and reduces the nu mber of allowances available under the

cap in successive “stepdown” periods. Production and consumption of HCFC-22

and 142b are to be completely phased out by 2020, and all HCFCs by 2030. 42

U.S.C. § 7671d(c); 68 Fed. Reg. 2,820, 2,821 (Jan. 21, 2003). 1 

# Additionally,

1 

# The HCFC stepdown periods establishe d by the Montreal Protocol are:

• 2004-2009 (the United States adjust ed this period to include 2003)

• 2010-2014

• 2015-2019

• 2020-2030 26 I.L.M. 1550, Art. 2F(2)-(6). USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 17 of 139

# 6 Congress authorized EPA to accelerate the phaseout of HCFCs. 42 U.S.C.

§ 7671e. For example, EPA exercised that authority by phasing down the

production and consumption of HCFC-142b by 99.53% in 2010. The market for

newly produced HCFCs in the United States exists only as a consequence of the

CAA and EPA regulations because HCFC s may not lawfully be produced or

consumed without allowances allocated by EPA. Id. §§ 7413(b), (c), (d); 40

C.F.R. § 82.15(a), (c).

Allowances are granted to participati ng companies in a two-step process.

First, EPA apportions “baseline pr oduction allowances” and “baseline

consumption allowances” to individu al companies. 40 C.F.R. §§ 82.3

(definitions), 82.17 (production), 82.19 (c onsumption). This apportionment alone,

however, is insufficient to permit production or consumption. Second, EPA grants

separately-defined “produc tion allowances” and “consumption allowances” for

each year within a regulatory period. Id. §§ 82.3 (definitions), 82.15(a), (b).

Those allowances are the product of ba seline times the phasedown percent EPA

has set for any given year. Id. 82.16. In other words, baselines establishes relative

market share of those who may produce or consume HCFCs, but not the actual

amount of HCFCs that may be produced or consumed.

In 2003, EPA apportioned HCFC ba seline and granted production and

consumption allowances for the 2003-2009 st epdown period. 68 Fed. Reg. 2,820 USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 18 of 139

# 7 (Jan. 21, 2003) (“2003 Rule”) . EPA established each co mpany’s share of baseline

allowances following an analysis of historic production and consumption of

HCFCs during 1994-1997. Id. at 2,831-33. EPA was cl ear that it was allocating

each company’s baseline of HCFC allowances “on a one-time basis,” id. at 2,823,

and that the same number of allowances would not necessarily be granted for

future stepdown periods. Id. at 2,832.

The CAA authorizes two forms of HCFC allowance trading: transfers of

allowances for one type of HCFC to t hose of another, known as “interpollutant”

transfers, and transfers of allowances between companies, known as “intercompany” transfers. 42 U.S. C. § 7671f. With regard to interpollutant transfers,

Congress provided that the rules “sha ll permit a production allowance for a

substance for any year to be transferred for a pr oduction allowance for another

substance for the same year on an ozone depletion basis.” Id. § 7671f(b)(1)

(emphasis added). Inter-company transfers, by contrast, are not limited to “the

same year.” Id. § 7671f(c).

When EPA established the first HCFC stepdown period in 2003, it

simultaneously promulgated regulations c odifying the interpollutant and intercompany trading regimes for HCFCs. See 40 C.F.R. § 82.23; 68 Fed. Reg. at

2,833-34. Those rules provide similar but not identical procedures for

interpollutant and inter-company transfer s. For example, in both cases the USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 19 of 139

# 8 transferor must have sufficient allowances to effectuate the transfer. 40 C.F.R.

§ 82.23(a)(ii)(A), (b)(4). Interpollutant transfers, however, are only permitted

“during the control period and during the 30 days after the end of a control period,”

id. § 82.23(b)(2), echoing the statutory limitati on on interpollutant transfers to “the

same year.” 2



# In early 2008, Intervenors sought EPA approval for four interpollutant

transfers of HCFC-142b producti on and consumption allowances. 3 

# Petitioners

were not informed or aw are of these requests. See Declaration of David Diggs ¶6

(“Diggs Decl.”) (Appendix B); Declaration of Jane Austin ¶6 (“Austin Decl.”)

(Appendix B). EPA subsequently issued f our letters approving the transfers – the

2008 Approvals. (JA__- __).

In December 2008, EPA issued a notice of proposed rulemaking concerning

the allocation and phasedown of HCFC production and consumption allowances

for the 2010-2014 stepdown period. See 73 Fed. Reg. 78,680 (Dec. 23, 2008)

(“Proposed 2010-2014 Stepdown Rule”). In that notice, EPA identified five

regulatory options, one of which was base d on the allocation scheme used by EPA

2 

# Each calendar year is defined to mean a “control period.” 40 C.F.R. § 82.3; see also 40 C.F.R. § 82.16(a) (each year in the 2003-2009 stepdown period is a “control period”).

3 

# In two cases, the transfer was both an interpollutant and inter-company transfer between affiliated entities. (JA__, __). Petitioners do not challenge the intercompany aspect of those transfers. USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 20 of 139

# 9 for the 2003-2009 stepdown period. U nder that option, EPA proposed two

alternatives: to allocate allowances in a manner that would have the effect of

carrying Intervenors’ 2008 interpollutant transfers over into the 2010-2014

stepdown period, or to not do so. Id. at 78,687, 78,693.

As far as Petitioners know, this notice of proposed rulemaking was the first

time EPA suggested in a public context that Intervenors had made interpollutant

transfers. The Agency did not, however, provide any speci fic information as to the

number of transfer requests, when they occurred, the Agency’s response, and the

terms or conditions, if any, under which the requests were approved. See generally

73 Fed. Reg. at 78,680, 78,693 (merely no ting that the proposed baseline reflects

transfers); see also Diggs Decl. ¶6; Austin Decl. ¶6; EPA’s Substantive Response

to Intervenors’ Motion to Dismiss, Do c. No. 1296479 (filed March 4, 2011) (“EPA

Resp. to MTD”) at 5 (“Indeed, neither th e Proposed Rule nor its preamble ever

mentions the specific inter-pollutant transfer by Arkema and Solvay that

Petitioners challenge in this case”). EPA did not indicate that it considered the

unspecified interpollutant transfers that had occurred to be su ch that the Agency

was required to carry them forward in to the 2010-2014 stepdown period or that

they would not be subject to the pha sedown of HCFC-142b. Instead, EPA

indicated that there were a dvantages and disadvantages to all the different options

presented. 73 Fed. Reg. at 78,687. USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 21 of 139

# 10 In December 2009, EPA issued a final rule allocating HCFCs for the 2010-

2014 stepdown period. 74 Fed. Reg. 66, 412 (Dec. 15, 2009) (the “Final 2010-2014

Stepdown Rule”). In that rule, EPA deci ded not to enlarge Intervenors HCFC-22

baseline allowances for 2010-2014 by carry ing their prior transfers forward.

Shortly thereafter, the Intervenors filed petiti ons to review that rule in this Court. 4



# EPA argued, inter alia , that the Final Rule was pr ospective only and that HCFC

allowances were privileges granted by the Agency’s regulations, not vested rights.

Brief of Respondent Environmental Prot ection Agency, No. 09-1318, Doc. No.

1237311 (filed Mar. 30, 2010) at 58.

On August 27, 2010, the Court vacated the Final 2010-2014 Stepdown Rule

in part. Arkema Inc. v. EPA , 618 F.3d 1 (D.C. Cir. 2010). A divided Court held

that Intervenors had vested rights in the 2008 approved allowance transfers that

EPA could not retroactively abridge. Id. at 9. The Court focused on whether

EPA’s “practice” of implementing the inte rpollutant transfer regulations differed

4 

# No notice of those petitions was provide d to Petitioners here by Intervenors or Respondents (nor did Petitioners here othe rwise become aware of them until after the Court had rendered its decision, Diggs Decl. ¶6, Austin Decl. ¶6). Petitioners here sought unsuccessfully to intervene in that case out-of-tim e once they learned of it. Honeywell International Inc., et al.’s Motion for Leave to Intervene Out of Time, No. 09-1318, Doc. No. 1271928 (File d Oct. 15, 2010); DuPont Motion for Leave to File Motion to Intervene Ou t of Time, No. 09-1318, Doc. No. 1272251 (Filed Oct. 18, 2010). USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 22 of 139

# 11 impermissibly from the “policy” pos ition EPA took in the Final 2010-2014

Stepdown Rule. E.g., id. at 6, 8.

Specifically, the Court relied on three type s of documents as record evidence

of EPA’s “practice”: (i) the 2008 interpol lutant transfer form s and cover letters

submitted by Intervenors; (ii) EPA’s appr ovals of those transfers; and (iii)

confirmation letters sent by EPA to Inte rvenors regarding the interpollutant

transfers in anticipation of the Proposed 2010-2014 Stepdown Rule. Id. at 7-8.

From these documents, and in light of the Proposed 2010-2014 Stepdown Rule, the

Court found that the “record thus reflects that EPA’s practice under the 2003 Rule

[i.e., the rule establishing the transfer regulations] was to allow Petitioners’

baseline transfers of inter pollutant allowances.” Id. at 8. Having granted such

transfers, the Court further held that EPA could not retroactively exclude those

allowances from the Final 2010-2014 St epdown Rule because Intervenors had

vested rights in them. Id. at 7. Given that the record contained documentation

only of the 2008 transfers, the Court did not examine EPA’s “practice” of granting

interpollutant transfers prior to the 2008 transfers.

The Court neither considered nor d ecided whether the 2008 Approvals were

themselves valid, as th e case at hand only challenged the Final 2010-2014

Stepdown Rule. USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 23 of 139

# 12 Petitioners are injured by the 2008 Approv als to the extent they carry the

transfers beyond the 2003-2009 stepdown pe riod, and because they necessarily

reduce the allowances and market shares of other participants. Diggs Decl. ¶¶10-

12; Austin Decl. ¶¶8-10. In general, any changes to either the specific 2010-2014

allocation of HCFC-22 allowances to indi vidual companies or to the total number

of allowances available for allocation w ill have economic c onsequences for all

allowance-holders, including Petitioners. Di ggs Decl. ¶¶10-12; Austin Decl. ¶8.

For example, on remand following Arkema , EPA has reduced Petitioners’ HCFC22 production and consumption allowances from the amount that would have been

annually allocated under the Final 2010-2 014 Stepdown Rule. This deprived

Petitioners of allowances and significantly reduced Petitioners’ share of the HCFC22 market, with considerable adverse economic effect. See 76 Fed. Reg. 47,451

(Aug. 5, 2011) (interim final rule following Arkema increased Intervenors’ HCFC22 baseline and decreased the number of Pe titioners’ 2011 allowances and share of

the HCFC-22 market); see also Diggs Decl. ¶11; Austin Decl. ¶9.

SUMMARY OF ARGUMENT

The Court has jurisdiction over the Petiti ons for two reasons. First, EPA did

not publish notice of the 2008 Approvals in the Federal Register before the

Petitions were filed, and therefore the C AA’s 60-day period for judicial review had

not yet expired. Second, the Arkema findings provided new grounds for the USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 24 of 139

# 13 challenges, which were then timely f iled within the CAA’s 60-day period for

petitions based on “grounds arising after” th e close of the original filing period.

Furthermore, the CAA is cl ear that the 2008 Approvals are final action subject to

judicial review, notwithstanding Petitioners ’ year-old petition for reconsideration

to EPA, and even Respondent agrees that the Petitions are ripe now. ( See

Argument I).

The validity of the 2008 Approvals was not at issue in Arkema , which was a

challenge only to the Final 2010-2014 Ste pdown Rule. To the extent that the 2008

Approvals have the effect of perpetuati ng Intervenors’ interpollutant transfers

beyond the 2003-2009 stepdown period, they were unlawful for three reasons:

First, they violated the plain lan guage of the CAA, which only permits

interpollutant transfers of one type of HCFC allowances for “any year” to another

HCFC for the “same year.” Second, they conflicted with the Agency’s original

interpretation of its transfer regula tions that the “phasedown follows the

allowance” – in other words, that any in terpollutant transfer is subject to the

phasedown of the transferred chemical. EPA may not change this interpretation

without notice-and-comment rulemaking. Third, they were inconsistent with

EPA’s interpollutant transfer regula tions and the requirements of reasoned

decision-making. ( See Argument II). USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 25 of 139

# 14 Finally, Petitioners’ rights to their a llowances were abridged by the 2008

Approvals without due process of law. Th e market for these a llowances is a “zero

sum game,” meaning a shift in one partic ipant’s share of the baseline necessarily

affects all others. Petitioners have just as much of an interest in their share of the

overall market as Intervenors. Arkema stands for the proposition that baseline

allowances are vested rights. Yet, the as sociated property interest is necessarily

broader than just baseline allowanc es because production and consumption

allowances are also required to pr oduce and consume HCFCs. The 2008

Approvals diminished Petitioners’ rights in both, and EPA should not have granted

those approvals without notice to Petitioners and an opportunity to be heard. ( See

Argument III).

STANDING

Petitioners are regulated entities directly and significantly affected by EPA’s

2008 Approvals because, following the Court’s Arkema decision, EPA treats the

Approvals as having granted permanent baseline interpollutant transfers to

Intervenors that survive beyond the 2003- 2009 stepdown period. The three-part

test for Article III standing is well-establis hed and requires: (1) injury in fact; (2) a

causal connection between the injury and the conduct complained of; and

(3) redressability by a favorable decision. Lujan v. Defenders of Wildlife , 504 U.S.

555, 560-61 (1992). Petitioners satisfy these requirements. USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 26 of 139

# 15 The challenged approvals directly aff ect and injure Petitioners. Petitioners

produce and consume HCFCs and are therefore regulated by EPA’s HCFC

production and consumption al lowance allocation regime. See 40 C.F.R. pt. 82,

subpart A. EPA’s “market-based cap and trade regulatory system,” Arkema , 618

F.3d at 2, establishes a zero-sum game re lationship between co mpanies engaged in

the production and consumption of HCFCs. The total amount of allowances is

“capped” and declines as EPA phases out HCFCs. See 74 Fed. Reg. at 66,415,

66,418; see also Austin Decl. ¶8; Diggs Decl. ¶4 . EPA allocates production and

consumption allowances to individual comp anies as a percentage of total baseline

allowances that EPA previously established. See 40 C.F.R. §§ 82.17 and 82.19.

Accordingly, the permanent enlargem ent of the number of one individual

company’s baseline allowances necessarily affects all other companies in the

market because those other companies will each have a smaller percentage of the

total annual allowances allocat ed to them in future pe riods, as well as a smaller

percentage of the total market. EPA recognizes that to meet Arkema , “EPA must

extract the corresponding production a llowances ... from the allowances of

DuPont, Honeywell and other suppliers.” EP A Resp. to MTD at 3. For example,

in its 2011 interim rule, EPA increas ed the HCFC-22 baseline allowances

apportioned to Intervenors, and allocated Intervenors a dditional allowances, to the

detriment of Petitioners and a ll other allowance recipients . 76 Fed. Reg. at 47,462, USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 27 of 139

# 16 47,467-68; see also Austin Decl. ¶9 (decrease of Petitioner DuPont’s market share

resulted in a decrease of allowances by approximately 16%); Diggs Decl. ¶¶11-12

(decrease in Petitioner Honeywell’s allo wances by approximately 16%).

These decreases in Petiti oners’ production and cons umption allowances and

market share of baseline allowances themse lves have resulted, and will continue to

result, in significant economic harm to Pe titioners. Austin Decl. ¶9; Diggs Decl.

¶12. Such harm satisfies the injury in fact requirement. See Stilwell v. Office of

Thrift Supervision , 569 F.3d 514, 518 (D.C. Cir. 2009) (substantial probability of

economic harm is sufficient to establish standing).

Additionally, parties “suffe r constitutional injury in fact when agencies lift

regulatory restrictions on their compe titors or otherwis e allow increased

competition.” Sherley v. Sebelius , 610 F.3d 69, 72 (D.C. Cir. 2010); accord

Stilwell , 569 F.3d at 518 (citing Clinton v. City of New York, 524 U.S. 417, 432-33

(1998) as support that parties have “standing based on probable economic injury

caused by government action changing market conditions”).

Causation and redressability are virtua lly self-evident. The decreases in

Petitioners’ production and c onsumption allowances and market share of baseline

allowances, and the associated economic losses, are “fairly traceable” to EPA’s

approval of permanent interpollutant tran sfers to Intervenors, as determined by

Arkema . And these injuries “would be redr essed by a favorable decision of this USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 28 of 139

# 17 court vacating” those transfers. La. Energy & Power Auth. v. FERC , 141 F.3d 364,

367 (D.C. Cir. 1998). Without the permanent transfers, there would be no injury.

STANDARD OF REVIEW

The Court “may reverse any [EPA] action found to be ... arbitrary,

capricious, an abuse of discretion, or ot herwise not in accordance with law.” 42

U.S.C. § 7607(d)(9)(A). It may also re verse any action that it finds “to be ...

without observance of proce dure required by law, if ... su ch failure ... is arbitrary

and capricious,” id. § 7607(d)(9)(D), and the error is “so serious and related to

matters of such central rele vance to the rule that ther e is a substantial likelihood

that the rule would have been significantly changed if such errors had not been

made,” id. § 7607(d)(8). This Court has held th at this last requirement means that

“[a]t a minimum, failure to observe the ba sic APA procedures, if reversible error

under the APA, is reversible e rror under the [CAA] as well.” Small Refiner Lead

Phase-Down Task Force v. EPA

, 705 F.2d 506, 523, 543-44 (D.C. Cir. 1983).

ARGUMENT

I. THIS COURT HAS JURISDICTION OVER THE PETITIONS

A. The Petitions Are Timely Becaus e EPA Did Not Publish Notice Of The 2008 Approvals In The Federal Register

Section 307(b)(1) of the CAA provides, in pertinent part, that petitions for

review of final EPA action must be filed “within sixty days from the date notice of USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 29 of 139

# 18 such promulgation, approval, or action ap pears in the Federal Register[.]” 42

U.S.C. § 7607(b)(1).

Here, Petitioners seek review of th e 2008 Approvals. There is no dispute

that EPA did not publish contemporaneous no tice of them in the Federal Register.

See, e.g., EPA Resp. to MTD (Doc . No. 1296479) at 4 (the 2008 Approvals have

never been published in the Federal Register). 5 

# Neither the Proposed nor the Final

2010-2014 Stepdown Rules include pub lication of the 2008 approvals. See

generally 74 Fed. Reg. 66,412; 73 Fe d. Reg. 78,680; EPA Resp . to MTD at 5. For

that matter, EPA did not publish or make available to the general public the 2008

Approvals at any time before the Pe titions in this case were filed.

To the extent that the existence of th e approved interpollutant transfers could

be inferred from Proposed 2010-2014 Step down Rule, that inference would not

constitute publication in the Federal Register . The notice merely stated that “[t]he

proposed company-specific baselines also reflect readjustments resulting from

approved inter-pollutant and/or inter-com pany transfers of baseline allowances,”

5 

# Intervenors filed a motion to dismiss in this case contending that Court lacks jurisdiction. See Joint Motion of Arkema Inc., Solv ay Fluorides LLC, and Solvay Solexis, Inc. to Dismiss Petitions for La ck of Jurisdiction, Doc. No. 1287346 (filed Jan. 11, 2011) (“Intervenors’ MTD”). After EPA filed its response and before Petitioners filed theirs, the Court issued an order directing the parties to address the issues raised in the motion in their ope ning and response briefs. Doc. No. 1301398 (Apr. 4, 2011). USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 30 of 139

# 19 73 Fed. Reg. at 78,693, but it failed to specify how many transfers EPA approved,

when it did so, or under what terms. See Union Oil Co. v. EPA , 821 F.2d 678, 681-

82 (D.C. Cir. 1987) (holding that the Fede ral Register notice must include “the

factual data on which the proposed ru le is based” and “the major legal

interpretations and policy considerati ons underlying the proposed rule.”); see also

Diggs Decl. ¶6; Austin Decl. ¶6 ; EPA Resp. to MTD at 5.

Because EPA has not published notice of the 2008 Approvals in the Federal

Register, the 60-day period for challenging t hose approvals did not expire prior to

the date the Petitions were filed. The Petitions are therefore timely.

B. If, Arguendo, The Initial Period Fo r Filing Had Expired, The Petitions Are Timely Because They Are Based Solely On Grounds Arising After The Close Of The Original Period And Were Filed Within 60 Days After Those Grounds Arose

Assuming, arguendo , that there was an origin al filing period that had

expired, the Arkema decision reset the filing cloc k. The CAA provides that

petitions for review are timely filed wh ere they are “based solely on grounds

arising after” the close of the original 60-day filing period and were “filed within

sixty days after such grounds ar[o]se.” 42 U.S.C. § 7607(b)(1). Clearly, EPA

originally did not view the 2008 Approvals as granting vested rights to

interpollutant transfers such that the Agency would be required to carry such

transfers forward into later stepdown peri ods. That aspect of the 2008 Approvals

was established by Arkema on August 27, 2010, over th e opposition of EPA and is USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 31 of 139

# 20 the new ground for the present Petitions. The Petitions were timely filed on

October 26, 2010, within 60 days of the Arkema decision, and therefore this Court

has jurisdiction.

Petitioners had no basis to file the Petitions prior to the Arkema decision.

First, Petitioners had no actual or cons tructive notice of the 2008 Approvals when

they were issued, and therefore could not have filed petitions for review. See

Diggs Decl. ¶6; Austin Decl. ¶6. 6



# Second, even if the Proposed 2010-2014 Stepdown Ru le had notified

Petitioners of the 2008 Approvals, Petitioners could not have petitioned to review

them at that time. 7 

# A proposed rule is just that: a proposal, not final action. A

petition to review any proposed rule w ould have been given short shrift by a

reviewing court. Am. Portland Cement Alliance v. EPA , 101 F.3d 772, 777 (D.C.

Cir. 1996) (“Where, as here, a proposed regulation is still in ‘flux,’ review is

6 

# Petitioners did not obtain copies of the 2008 Approvals (and related correspondence between EPA and Intervenors critical to the Arkema decision) until after the Arkema decision was issued. Diggs Decl . ¶8; Austin Decl. ¶6. EPA regulations provide only for notice to the transfer applicant. 40 C.F.R. § 82.23(b)(4). See also EPA Resp. to MTD at 9. Neith er the transfer requests, the 2008 Approvals, nor any related correspo ndence were included by EPA in the rukemaking record for the Final 2010-2014 Stepdown Rule. See Docket No. EPAHQ-OAR-2008-0496, available at , http://www.regulations.gov/#!docketDetail;dct =FR%252BPR%252BN% 252BO%252BSR ;rpp=10;po=0;D=EPA-HQ-OAR2008-0496.

7 

# That proposal implied the existence of In tervenors’ interpollutant transfers but did not provide any details about them or include the 2008 Approvals. USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 32 of 139

# 21 premature, and this court has no jurisdic tion ....”) (internal quotations omitted).

As EPA has made clear in this litigatio n, the Proposed 2010-2014 Stepdown Rule

“dispelled any notion” that prior appr oved transfers “must be recognized in

subsequent regulatory periods.” EPA Resp. to MTD at 16. EPA admits that, at the

time of the proposal, it “had not yet deci ded whether it would, in fact, recognize

such transfers in establishing the 2010-2014 baselines” and that “EPA itself did not

believe that” it was required to do so. Id. at 17-18; see also 73 Fed. Reg. at 78,687.

Indeed, EPA takes the position that it “woul d have [had] ample ground to move to

dismiss” such a challenge. See EPA Resp. to MTD at 17.

Finally, EPA’s decision not to carry over the interpollutant transfers in the

Final 2010-2014 Stepdown Rule, see 74 Fed. Reg. at 66,421, confirms that

Petitioners had no reason to file these challenges prior to the Arkema ruling.

Petitioners could not have ch allenged Agency action that was favorable to them, as

any concerns about the permanence of the 2008 Approvals was clearly unripe in

light of EPA’s decision that they were not permanent.

The Arkema decision provided a new ground to challenge the 2008

Approvals. Because of that decision, transfers approved in 2008 have effect

beyond the 2003-2009 stepdown period. See 618 F.3d at 10. The Arkema decision

undeniably changed “the stakes of a court challenge” to EPA’s approvals.

Kennecott Utah Copper v. U.S. Dep’t of Interior , 88 F.3d 1191, 1214 (D.C. Cir. USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 33 of 139

# 22 1996) (the Court’s vacatur of a 1994 ru lemaking “constructiv ely reopened” an

earlier 1986 rulemaking “by the change in th e regulatory context” and that failing

to allow a challenge to the 1986 agency action beyond the statutory deadline

“would be to deny the significance of our own earlier ruling”). Additionally, the

“regulatory context” has changed in a wa y that “could not have been reasonably

anticipated by the regulated entity and is onerous to its interests.” Envtl. Def. v.

EPA , 467 F.3d 1329, 1334 (D.C. Cir. 2006).

The Arkema decision was the first judicial decision that allowance holders

have vested rights in their allowances. Pe titioners stand to suffer economic loss if

they have no opportunity to challenge EPA’s 2008 Approvals given the weight

those Approvals carry after Arkema . The holding in that case is the “ground

arising after” the close the original f iling period for these Petitions. Petitioners

filed within 60 days of the Arkema decision, and thus their Petitions are timely.

C. Neither Petitioners Nor The Cour t Are Obligated To Await EPA Action On The Petition s For Reconsideration

This Court can review the Petitions without waiting for EPA to act on the

pending reconsideration petition. Interve nors have argued that because EPA has

not yet responded to that petitio n, this Court lacks jurisdiction over this case or

must refrain from addressing this case un til EPA has acted. Intervenors’ MTD at

19-20. These argumen ts lack merit. USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 34 of 139

# 23 First, the CAA plainly contradicts Intervenors’ jurisdictional argument by

stating that “[t]he filing of a petition fo r reconsideration by the Administrator of

any otherwise final rule or action shall not affect the finality of such rule or action

for purposes of judicial review[.]” 42 U.S.C. § 7607(b)(1) . Congress amended

Section 307(b)(1) in 1990 in part to clarif y that petitions for reconsideration do not

affect finality for judicial review purposes. See 5 A Legislative History of the

Clean Air Act Amendments of 1990 (C omm. Print 1993) at 8,712 (“This

amendment overrules West Penn Power Co. v. EPA , 860 F.2d 581 (3d Cir. 1988),

which held that the pendency of a petition for agency reconsideration rendered the

challenged agency action non-fi nal for purposes of judicial review. Contrary to the

analysis and decision in that case ... Congress intended EPA rulemaking action to

be final upon final promulgation, not upon a decision on reconsideration”); see

also S. Rep. No. 101-228, at 372 (1989) (Conf. Rep.).

Nor does Natural Resources Defense Council v. Thomas , 845 F.2d 1088

(D.C. Cir. 1988), support Intervenors’ argument. See Intervenors’ MTD at 20; 845

F.2d. at 1091-92. In that case, the Court invoked the prudential doctrine of

ripeness to remand a rulemaki ng petition to EPA for further consideration in part

because petitioners had not demonstrated th at the rule at issue had any impact on

their “day-to-day affairs” and in part because the “agency has had no chance to

crystallize its own decision in a proper rulemaking.” Id. at 1088, 1091-93. Thus, USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 35 of 139

# 24 because Petitioners’ request for reconsidera tion does not affect the finality of the

2008 Approvals and because the petitions for re view here were timely filed, this

Court has jurisdiction.

Second, Intervenors erroneously cite Oljato Chapter of Navajo Tribe v.

Train , 515 F.2d 654 (D.C. Cir. 1975), and its progeny for the proposition that this

Court must await EPA’s response to petiti ons for reconsideration before

proceeding with judicial review, implying that the controversy is otherwise not

ripe. See Intervenors’ MTD at 19-20. In Oljato , the Court endorsed EPA’s

suggested procedures governing petitions for revisions of CAA standards of

performance based on new grounds arising after the initial deadline for seeking

judicial review under then-existing S ection 307(b)(1) (42 U.S.C. § 1857h-5(b)(1)

(1975 pocket part)): (i) a person seeking reconsideration should petition EPA for

reconsideration, providing supporting ma terials or references to supporting

materials; (ii) EPA should respond to the petition and set forth the reasons

supporting its response; and (iii) if th e petition is denied, the person may seek

judicial review. See Oljato , 515 F.2d at 666. The purpose of this process was to

provide the Agency with an opportunity to “crystallize” its thinking and to “make

an adequate record” for judicial review wh en a party has requested EPA to revise a

standard of performance based on ne wly developed technical data. Natural Res.

Defense Council, 845 F.2d. at 1091-92. Thus, the “ Oljato rule” derives from USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 36 of 139

# 25 “ripeness” concerns, not jurisdictional requirements

. 8 

# Ciba-Geigy Corp. v. EPA

,
46 F.3d 1208, 1210 (D .C. Cir. 1995).

Oljato and its progeny are distinguishable from the case at bar because they

“involved claims that new info rmation called for a rule change

− not that a potential

claim had become newly justiciable.” Am. Road & Transp. Builders Ass’n v. EPA

,
588 F.3d 1109, 1114 (D.C. Ci r. 2009). Here, unlike Oljato , Petitioners are not

seeking reconsideration or revision of a prior standard or rulemaking based on new

information. Rather, Petitioners have requ ested only that EPA reconsider its legal

authority for granting Intervenors’ 2008 inte rpollutant transfers. In other words,

this case deals with claims that have be come newly justiciable, not ones calling for

rule revisions based on new information. See supra Argument I.B. It is therefore

ripe for review.

II. EPA UNLAWFULLY APPROV ED INTERPOLLUTANT TRANSFERS TO BE EFFECT IVE BEYOND THE 2003-2009 STEPDOWN PERIOD

The Arkema decision holds that the Agency’s 2008 Approvals effected

permanent baseline interpollutant transfers that affect the allocation of allowances

beyond the 2003-2009 stepdown period. 9 

# The Arkema Court, however, was not

8 

# To the extent Oljato was based on the CAA itself, it has been overruled by the CAA Amendments of 1990 as discussed above.

9 

# Petitioners are not challenging Intervenors’ interpollutant transfers as they apply to 2008 and 2009. Both of those years were within the 2003-2009 stepdown (cont.) USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 37 of 139

# 26 presented with a challenge to the validity of the 2008 Approvals as neither EPA

(which granted them) nor Intervenors (w hich requested them) had any reason to

question them. Consequently, the Court assumed their validit y and interpreted

their effect in reaching the conclusion that the Final 2010-2014 Stepdown Rule

was impermissibly retroactive. Thus, the legality of those interpollutant transfers

has not been addressed by any court and is now ripe for resolution. Because

creation of allowances not subject to re duction and elimination is not consistent

with the CAA and EPA’s regulations a nd prior interpretive statements, the 2008

Approvals must be vacated.

A. The 2008 Approvals Were Inconsistent With The Plain Language Of The CAA

While the Arkema Court decided that Petitione rs there have vested rights

created by their interpollutant transfers th at EPA could not retroactively eliminate,

it never expressly examined the st atutory language that governs EPA’s

interpollutant transfer regime. In fact , no court has interpre ted that language.

Thus, in judging the propriety of the 2008 Approvals, this Court should apply

(cont.) period, and therefore Intervenors had a llowances of HCFC-142b to transfer to HCFC-22 for each individual year. See 68 Fed. Reg. at 2,851-53 (HCFC-142b allowances granted through 2009). Instead, Petitioners are challenging the permanence of the 2008 Approvals, i.e., the extent to which they increased Intervenors’ HCFC-22 ba seline beyond the 2003-2009 stepdown period or became immutable such that they would not be phased down when HCFC-142b was phased down. USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 38 of 139

# 27 Chevron, U.S.A., Inc. v. NRDC , 467 U.S. 837, 842-43 (198 4) and first determine

whether Congress spoke clearly to the point at issue.

Congress has spoken clearly and di rectly. The CAA only permits

interpollutant transfers on a year-to-year ba sis: “The rules under this section shall

permit a production allowanc e for a substance for any year to be transferred for a

production allowance for another substance for the same year on an ozone

depletion weighted basis.” 42 U. S.C. § 7671f(b)(1) (e mphases added); see also id.

§ 7671f(d) (same for consumption allowan ces). By contrast, Congress did not

impose the “same year” limitation on inter- company transfers: “The rules under

this section shall permit 2 or more pe rsons to transfer production allowances

(including interpollutant transfers which meet the requirements of subsections (a)

and (b) of this section) if the transferor of such allowances will be subject, under

such rules, to an enforceable and quan tifiable reduction in annual production.” Id.

§ 7671f(c).

This demonstrates that Congress intended to treat interpollutant and intercompany transfers differently, and that th e “same year” limitation on interpollutant

transfers was intentional. This Court mu st give meaning to this distinction. See

Russello v. United States , 464 U.S. 16, 23 (1983) (hol ding that courts must give

meaning to the distinction made by Congress). USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 39 of 139

# 28 To ignore this distinction would rende r the “same year” restriction mere

surplusage, in violation of the “settled rule that [courts] must, if possible, construe

a statute to give every word some operative effect.” Cooper Indus., Inc. v. Aviall

Servs., Inc. , 543 U.S. 157, 167 (2004); accord Dunn v. Commodity Futures

Trading Comm’n , 519 U.S. 465, 472 (1997) (“[L]egislative enactments should not

be construed to render their provisions mere surplusage.”). For example, a

permanent interpollutant transfer done in 2008 would effectuate a transfer of

allowances from one substance to another substance not only in the “same year” as

the actual transfer (2008), but also in subsequent years ( e.g. , 2010-2014).

The legislative history of this sec tion confirms that Congress intended

interpollutant transfers to be “same year” transfers only. Acco rding to the ChafeeBaucus Statement of Senate Managers, in terpollutant transfers were intended to

limited within a given year:

EXCHANGE AUTHORITY – NEW SECTION 607

Senate bill. The Senate bill makes it unlawful for any person to produce substances covered by the bill in annual quantities greater than specified percentages “of the combined ozone depletion weighted amount of such substances produced by such person during” the baseline year. As a result, a producermay decide to reduce CFC11 by an amount greater than is required in a given year and, in the same year , be authorized to produce a greater amount of CFC-113 than would otherwise be allowed. With the exception of such in terpollutant transfers, the bill does not authorize the exchange of production allowances. USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 40 of 139

# 29 House amendment. The House amendment does not authorize interpollutant transfers. It does, however, direct the Administrator to promulgate regulations regarding the exchange of pr oduction allowances. Such exchanges must meet certain conditions, including a requirement that any exch ange result in an overall reduction in production greater than the reduction that would have occurred in the absence of the exchange.

Conference agreement. The Administrator is directed to promulgate regulations that will authorize interpollutant transfers, as in the Senate bill , and trades with other persons, as in the House amendment.

1 A Legislative History of the Clean Air Act Amendments of 1990 (Comm. Print

1993) at 927 (emphasis added). Thus , when Congress adopted the CAA

Amendments of 1990, it incorporated the “same year” limitation on interpollutant

transfers.

B. The 2008 Approvals Were A Change In EPA’s Interpretation Accomplished Without Adherence To Procedural Requirements

EPA’s regulations set the rules by whic h market participan ts are allocated

allowances. Fairness to those particip ants requires that EPA only change those

rules prospectively. The allowances ar e rights and have an economic value, and

even-handed treatment of all market partic ipants requires a level playing field.

EPA could not have sanctione d permanent, immutable tr ansfers disproportionately

enriching those who made them because doing so would have been flatly

inconsistent with prior Agency interpretations. While the Arkema Court focused

on the shift in EPA’s policy between th e 2008 Approvals and the Final 2010-2014 USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 41 of 139

# 30 Proposed Rule based on the transfer fo rms submitted by Intervenors and other

private correspondence, see 618 F.3d at 7-8; supra p. 11, it did not explore whether

the 2008 Approvals themselves represente d an impermissible change in EPA’s

preexisting interpretations without adhe rence to required notice and comment

rulemaking procedures. If the 2008 Appr ovals created immutable allowance

transfers in direct conflict with prior EPA interpretations, they could not stand

without notice and comment rulemaking that would inform all participants of the

new tilt of the playing field. See, e.g., Paralyzed Veter ans of Am. v. DC Arena LP

,
117 F.3d 579, 586 (D.C. Cir. 1997). A carefu l examination of the history of EPA’s

HCFC allowance allocation and transfer regime reveals a direct conflict.

When EPA first confronted the issue of allocating HCFC allowances and

establishing a trading system, it suggest ed two basic approaches, an “absolute

allowance” system and an “ODP [ozone -depletion potential]-weighted system.”

64 Fed. Reg. 16,373, 16,376 (April 5, 199 9) (advanced notice of proposed

rulemaking). Under the former, allowanc es would be granted on a chemical-bychemical basis. Under the latter, a single pool of allowances would be granted that

could be used for any HCFC, with the preci se amount to be determined according USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 42 of 139

# 31 to each HCFC’s ODP. 10 

# In that advanced notice of proposed rulemaking, EPA

solicited comments and noted various potentia l concerns with each approach and

the resulting trading schemes. In doing so, it several times discussed the special

case of attempted permanent trades of any HCFC that was later to be phased down

or out, using HCHC-141b (which was schedul ed to be phased out by 2003) as the

example:

It is important to note that, under any scenario , when the phaseout date for HCFC-141b is reached in 2003, all HCFC-141b consumption (production + imports - exports) will cease. Those who did not participate in the HCFC-141b market will not be affected in 2003. However, those who did pa rticipate in the HCFC-141b market—through, for example, producing or importing HCFC-141b—would no longer receive any allowances associated with their historic HCFC-141b activity, and thus any authorization to produce or import HCFC–141b. Likewise, any company that , through a baseline trade, received allowances associat ed with historic HCFC– 141b would no longer receive any allowances associated with the baseline trade in 2003.

64 Fed. Reg. 16,378 (e mphasis added). See also id. at 16,380 (permanent transfers

under an ODP-weighted system would be problematical because the amount

attributable to a phased-down HCFC would be difficult to trace and phase down).

This interpretation stands for the prin ciple that the “phasedown follows the

10 

# For example, a pool of 1000 allowances could be used to produce 65 kilograms of HCFC-142b, because that HCFC has an ODP of 0.065 ( i.e. , 1000 x 0.065 = 65). Id. at 16,376. USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 43 of 139

# 32 allowance” when a trade is involved. Othe rwise, a trade could be used to avoid the

phasedown.

Two years later, EPA proposed the “a bsolute allowance” scheme and a

trading regime. 66 Fed. Reg. 38, 064 (July 20, 2001). One of the key

considerations in favor of this decision wa s that transfers of HCFCs that are phased

down or out would be more difficult to tr ack once transferred in an ODP-weighted

system. Id. at 38,068-69. It continued the th eme explicated in the advanced

notice: transfers of allowances of an HC FC that are later phased down or out must

suffer the same consequence. Id. (“If permanent inter-pollutant trades had been

made [prior to the phaseout], an amount equal to the ODP-weighted kilograms of

the baseline HCFC-141b allowan ces that had been received in the transfer would

be deducted from the ba seline allocation”); see also id. at 38,073, 38,086. The

restriction was crisply laid out by EPA in one example:

If a person purchases permanent baseline allowances, ofHCFC–141b, for example, then conducts an interpollutant trade within the company, that person would deduct the ODP-weighted equivalent consumption of the HCFC–141b that was traded to them on a permanent basis. In our example, in 2003, the purchaser of allowances associated with HCFC–141b would have that number of ODP-weighted allo wances associated with HCFC–141b deducted, even if it had conducted an interpollutant trade within the company for another HCFC.

Id. at 38,078-79 (emphasis added). USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 44 of 139

# 33 The principle that the “phasedown follows the allowance,” including

interpollutant transfers, was crystallized two years later when EPA adopted its

chemical-by-chemical allowa nce and trading schemes. See 68 Fed. Reg. 2,820

(Jan. 21, 2003). In the preamble, EPA reiterated the “phasedown follows the

allowance” principle. After first disc ussing a hypothetical inter-company transfer

of allowances, the Agency went on to state that:

Subsequent interpollutant transfers of these baseline allowances would also be permitted. However, at the time of a reduction step or a phaseout of the substance, the current holder of baseline allowances that were received in a permanent transfer would be the person who would have them deducted.

Id. at 2,835 (emphasis added). Similar words where incorporated directly into the

transfer regulations. 40 C.F.R. § 82.23(d) (“A person receiving a permanent

transfer of baseline production allowances or baseline consumption allowances

(the transferee) for a specific class II c ontrolled substance w ill be the person who

has their baseline allowances adjusted in accordance with phaseout schedules in

this section.”).

EPA clearly and consistently interpre ted its regulations as containing a

“phasedown follows the allowance” princi ple. Thus, HCFC market participants

cannot use the inter-pollutant transfer mech anism to perpetuate allowances for one

HCFC that is being phased down by conducting an inter-pollutant transfer to

another HCFC that is not being phased down (or that is being phased down to a USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 45 of 139

# 34 lesser degree than the transferred chemical). This approach is in keeping with both

the letter and intent of the CAA. Without it, market participants would have the

ability to conduct inter-pollutant transfers of expiring HCFC allowances and evade

the phasedown of the original chemical. Permitting such legerdemain would be

inconsistent with the with the Montreal Protocol as well as discretion Congress

granted to EPA to accelerat e the phaseout of HCFCs, 42 U.S.C. § 7671e(a), which

EPA has already invoked to phase out both HCFC-142b and 22 before the 2030

statutory deadline. 11



# EPA was not free to act in a manner inconsistent with its prior interpretation

that the “phasedown follows the allowanc e” without first going through notice and

comment rulemaking, which would inform all market participants of the new

interpretation. See, e.g., Alaska Prof’l Hunters Ass’n v. FAA , 177 F.3d 1030,

1033-34 (D.C. Cir. 1999); Paralyzed Veterans, 117 F.3d at 586. EPA did not

engage in this process. Yet, that is what the Arkema Court said EPA did when it

11 

# Furthermore, nowhere does Arkema specifically address the issue of whether EPA’s 2008 Approvals caused the transferre d allowances to avoid being phased down or out along with the transferred chemic al. It only held that EPA’s failure to honor the transferred allowances in the Final 2010-2014 Stepdown Rule was impermissibly retroactiv e. 618 F.3d at 9. USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 46 of 139

# 35 approved interpollutant transfers that would carry forward beyond the existing

regulatory stepdown period. Thus, th e 2008 Approvals must be vacated. 12



# C. The Record Does Not Support the 2008 Approvals

Assuming, arguendo , the CAA allows permanen t interpollutant baseline

transfers, the 2008 Approvals should still be vacated because the administrative

record here is devoid of any evidence th at EPA conducted the analyses required to

meet its own regulations or enga ged in reasoned decision-making. See 40 C.F.R.

§ 82.23(b); Motor Vehicle Mfrs. Ass’n v. St ate Farm Mut. Auto Ins. Co. , 463 U.S.

29, 48-49 (1983) (“we have frequently reiterated that an agency must cogently

explain why an agency has exercised its discretion in a give n manner”) (citations

omitted). 13

12 

# Even if this Court is inclined to view EPA’s treatment of a llowances associated with trades as mere policy, the result is the same. To alte r a policy position, an agency must provide “a reasoned explana tion for its departure from prior norms.” Telecommunications Research & Action Center v. FCC , 800 F.2d 1181, 1185 (D.C. Cir. 1986). EPA did not do this either.

13 

# The certified administrative record here contains just four documents, the four 2008 Approvals. See Doc. No. 1926773. The certification goes on to note that due to the connection between the instant Petitions and the Arkema case, EPA is also presenting the Court with the administ rative record for the Final 2010-2014 Stepdown Rule at issue in the Arkema case, including some documents that were not in the record certified to that Court. See id. at 3. Of course, the administrative record for the Final 2010-2014 Stepdown Rule is not evidence of the information actually considered by EPA in making the 2008 Approvals. The great majority of material in the record of the Final 2010-20 14 Stepdown Rule is wholly unrelated to the 2008 Approvals. The only documents that do relate to the approvals are among the material EPA added after the fact and that was not in the certified Arkema (cont.) USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 47 of 139

# 36 First, EPA’s own rules unequivocally require that the Agency, upon receipt

of an interpollutant transfer request, “det ermine whether the records maintained by

EPA indicate that the convertor posse sses unexpended allowances sufficient to

cover the transfer claim on the date the transfer claim is processed (i.e., the

quantity (in kilograms) to be converted plus 0.1 percent of that quantity (in

kilograms)).” 40 C.F.R. § 82.23(b)(4). He re – while there is no evidence of the

steps EPA took upon receipt of the four interpollutant transfer requests – EPA

presumably checked its reco rds of the number of unexpended allowances then held

by the Intervenors against the number of allo wances they sought to transfer. If so,

EPA apparently confirmed that In tervenors had enough unexpended HCFC-142b

allowance for 2008 and 2009 to accomplish the transf ers in those years, as

Intervenors requested. (JA __, __) (Intervenors’ cover letters for the transfers

seeking approval for transfers for 2008 and 2009). There is no evidence, however,

that the Agency confirmed the availa bility of unexpended allowances beyond

2009, and in fact it could not have done so because no such allowances for 2010 or

later had yet been allocated to any market participant.

(cont.) record. See Document No. 1926773 at pp. 14-15; compare id. with Document No. 1227362 (certified record in Arkema case). USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 48 of 139

# 37 The hazard of approving interpolluta nt transfers beyond the close of a

stepdown period is well illustrated by EPA’s decision in the Final 2010-2014

Stepdown Rule to phase out 99.53% of HC FC-142b. 74 Fed. Reg. at 66,429. At

the time of the 2008 Approvals, EPA had not made its final HCFC-142b phase-out

decision, and therefore it could not have ve rified that Intervenors had sufficient

unexpended HCFC-142b allowances to tran sfer for years beyond 2009, the final

year of the existing period. If the decision as to future years ha d been made by that

time, EPA would have known it had to reduce the number of allowances that could

be transferred by 99.53%. Instead of bei ng able to collectively transfer 34,653,771

kilograms of HCFC-142b (the total of the 2008 Approvals), Intervenors would

only have been able to transfer a maxi mum of 154,178 kilograms for 2010 because

of the 99.53% reduction. This outcome w ould have been consistent with EPA’s

prior interpretation that the “pha sedown follows the allowance.” See supra

Argument II.B.

Second, EPA’s rules only provide expr ess authority for interpollutant

transfers “during the control period and during the 30 days after the end of a

control period.” 40 C.F.R. § 82.23(b)(2 ). There is no similar restriction on intercompany transfers. Compare 40 C.F.R. § 82.23(a) with (b)(2). As noted above,

Intervenors had allowances for the 2008 a nd 2009 control periods that they were USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 49 of 139

# 38 free to transfer, on a year-to- year basis, to other pollutants within those control

periods. But, they could not have gone further than that. 14



# The interpollutant transfer regulations limit EPA’s authority, and EPA failed

to meet those requirements when it a pproved the “permanent” interpollutant

transfers in this case. Even if EP A had residual authority to go beyond its

regulations on a case-by-case basis, it di d not meet the minimum requirements of

the CAA for doing so. In such circumst ances, EPA would have to have complied

with the CAA’s procedural requirements, see 42 U.S.C. § 7607(d)(2)-(6), in

addition to engaging in reasoned decision-making, see State Farm , 463 U.S. at 52

– neither of which occurred here. 15

14 

# In fact, it is not clear that EPA could have approved the interpollutant transfers for 2009, as the transfer requests were not made during the correct control period. However, Petitioners are not challenging the transfers as applied to 2009 (or 2008). See supra n.9

. 15 

# Finally, approval authority in the regulati ons is granted to the “Administrator.” 40 C.F.R. § 82.23(b) (4). Here, the record is devoid of any evidence that the person who approved the transfers ( see JA__-__) was authorized to do so by the Administrator. If no such authorizati on exists, the 2008 Approvals are invalid. See generally C&W Fish Co. v. Fox , 931 F.2d 1556, 1559-61 (D.C. Cir. 1991) (subordinate officials require formal delega tion to exercise authority vested in the agency head). USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 50 of 139

# 39 III. EPA’S APPROVAL OF PE RMANENT INTERPOLLUTANT TRANSFERS DEPRIVED PETITI ONERS OF DUE PROCESS OF LAW

EPA’s approval of interpollutant tr ansfers that persist beyond the 2003-2009

stepdown period divested Petitioners of both HCFC-22 allowances and part of their

share of the HCFC-22 market wit hout the due process of law. Arkema held that

market participants have vested rights in their baseline allowances. 618 F.3d at 7.

They are thus a form of property rights th at cannot be diminished or taken without

due process. See Bd. of Regents of State Colleges v. Roth , 408 U.S. 564, 571-72,

576 (1972) (“property interests protected by procedural due process extend well

beyond actual ownership of real estate, ch attels, or money” and “may take many

forms”); Halbach v. Great-West Life & Annuity Ins. Co. , 561 F.3d 872, 877 (8th

Cir. 2009) (“[a] ‘vested right’ is commonly defined as a ‘right that so completely

and definitely belongs to a person that it cannot be impaired or taken away without

that person’s consent.’”) (quoting Black’s Law Dict. 1349 (8th ed. 2004)); Bell v.

Burson , 402 U.S. 535 (1971) (licenses cannot be suspended or revoked without due

process). The property interest at stak e here is broader than just baseline

allowances because baselin e allowances alone are in sufficient to authorize

production or consumption. See supra p. 6. The complete bundle of Petitioners’

rights include both their baseline, which establishes market share, and their

production and consumption allowances, which are necessary to produce and USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 51 of 139

# 40 consume HCFC-22. Both were dimini shed by the 2008 Approva ls, and Petitioners

were never provided with notice of th e Intervenors’ 2008 transfers or an

opportunity to be heard or contest EPA’s decision to approve them.

First, it is uncontested that neither Petitioners, nor any other market

participants, were notified of the Inte rvenors’ 2008 transfers. Neither the

Intervenors’ transfer requests nor 2008 Approvals were made public. See EPA

Resp. to MTD at 9 (“Each of th ese non-objection notices was sent only to the

requesting party (two to Arkema and two to Solvay)”); 618 F.3d at 7-8 (describing

non-public correspondence between Intervenors an d Respondent regarding

transfers of allowances). There was no contemporaneous notice of these transfer

requests or the 2008 Approvals in the Fede ral Register. The subsequent Proposed

2010-2014 Stepdown Rule never “mentions th e specific interpollutant transfers by

Arkema and Solvay that Petitioners challenge in this case.” EP A Resp. to MTD at

5. Petitioners learned of their existe nce after the Proposed 2010-2014 Stepdown

Rule was issued, and did not see them until after the Arkema decision was

rendered. Diggs Decl. ¶¶6, 8; Austin Decl. ¶6 .

Second, it is uncontested that Petitione rs had no timely opportunity to be

heard about the validity of the Intervenors’ transfer requests. Nor could Petitioners

challenge a proposed rulemaking. Am. Portland Cement Alliance , 101 F.3d at 777.

Only after the Intervenors succeeded in vacating the Fina l Rule were the transfers USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 52 of 139

# 41 made effective, for the first time, in an interim rule on remand from the Arkema

Court. See 76 Fed. Reg. at 47,467-68.

Third, as is made clear from the example in the table below, both

Petitioners’ pools of 2011 production and cons umption allowances, and thus their

HCFC-22 market share of baseline allowan ces, decreased significantly as a direct

result of the 2008 Approvals:

HCFC-22 Production HCFC-22 Consumption Allowances granted to Petitioners in Final 2010-2014 Stepdown Rule 30,406,194 kg 28,198,794 kg Allowances granted to Petitioners in the 2011 Interim Rule 25,605,216 kg 23,746,353 kg Petitioners’ Decrease in Allowances 15.8% 15.8%

See 76 Fed. Reg. at 47,461-62 (EPA must reduce allowan ces from 38% of baseline

under the 2009 Final Rule to 32% of base line under the 2011 interim final rule to

reflect 2008 approvals); Diggs Decl. ¶ 12. 16 

# Even before the 2011 interim final

16 

# In the 2011 interim rule, EPA elected to maintain the “zero sum game” cap on allowances by increasing Intervenors’ share of baseline allowances, maintaining all other parties’ baselines, and then d ecreasing all parties’ allowances by a higher phase-down percentage (68% rather than 62%) than it otherwise would have. Compare 74 Fed. Reg. at 66,466 (table for 40 C.F.R. § 82.16 showing HCFC-22 allowances equal to 38% of baseline for 2011); with 76 Fed. Reg. at 47,467 (revised table for 40 C.F.R. § 82.16 showi ng HCFC-22 allowances equal to 32% of baseline for 2011 after 2008 transfers). Rega rdless of the method, the net result is the same: Petitioners ha ve far fewer actual pr oduction and consumption allowances than they otherwise would have had if EPA had not issued the 2008 Approvals. USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 53 of 139

# 42 rule, EPA had acknowledged to the Court that the 2008 Approvals deprived

Petitioners of allowances: “EPA must extract the corresponding production

allowances ... from the allowances of Du Pont, Honeywell and other suppliers.”

EPA Resp. to MTD at 3; see also Motion of Arkema Inc. for Leave to Intervene,

Doc. No. 1336514 (filed Oct. 19, 2011) at 11 (“Petitioners are, of course, adverse

to Arkema, since an increased share of allowances for Arkema necessarily means

a decreased share of allowances for Honeywell and DuPont .” (emphasis added)).

To have the allowances “extract ed” by operation of the 2008 Approvals

without an opportunity to be heard is a denial of due process. “Parties whose

rights are to be affected are entitled to be heard; and in order that they may enjoy

that right they must first be notified.” Baldwin v. Hale , 68 U.S. (Wall.) 223, 233

(1864). With few exceptions, due process requires notification and a right to be

heard before the deprivation of a protected interest. Goldberg v. Kelly , 397 U.S.

254, 262-63 (1970) (prior notice and hear ing required where the party’s interest

outweighs “the governmental interest in summary adjudication”). Whenever the

government deprives one of a property inte rest that person must be afforded the

opportunity to protect his or her rights. Mathews v. Eldridge , 424 U.S. 319, 333

(1976).

Petitioners seek only basic and essential due process here: they should have

been given notice of EPA’s proposed acti on to either approve or disapprove the USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 54 of 139

# 43 transfers in such a way that would render them permanent and an opportunity to be

heard before that action was taken. This would have a llowed market participants

to defend their own interests. It would also have allowed EPA to explicate its

position on the permanence of the transfers, if approved. 17



# EPA’s interpollutant transfer regulatio ns do not, of course, require EPA to

provide other market participants notice of transfer requests and an opportunity to

be heard. But those regulations do not foreclose Petitioners’ due process claim

because they do not trump c onstitutional requirements. Graceba Total Commc’ns.

v. FCC , 115 F.3d 1038, 1040 (D.C. Ci r. 1997) (“we permit bo th constitutional and

statutory challenges to an agency’s appli cation or reconsideration of a previously

promulgated rule, even if the period fo r review of the initial rulemaking has

expired.”) (citing cases). Henderson v. Lujan , 964 F.2d 1179, 1183 (D.C. Cir.

1992) (“regulations ... regardless of their longstanding character, do not

undermine” plaintiff’s Firs t Amendment challenge).

Because no notice was given, market participants did not have that

opportunity to address the 2008 Approvals until at least the Proposed 2010-2014

Stepdown Rule. See 74 Fed. Reg. at 66,421 (“Commenters pointed out that

17 

# Knowledge of these proceedings would al so have allowed Petitioners and other market participants to challenge th e 2008 Approvals promptly, before they impacted the Final 2010- 2014 Stepdown Rule. USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 55 of 139

# 44 adjusting the baselines to reflect intra- company, interpollutant transfers could

create incentives for future manipulation of the allocation system in anticipation of

the future control periods.”). By then, however, it was too late.

For these reasons, the 2008 Approvals ha ve an adverse economic effect on

Petitioners’ property, and th ey were granted without affording Petitioners due

process of law.

CONCLUSION

For the foregoing reasons, the Cour t should vacate the 2008 Approvals.

December 1, 2011

/s/ Chet M. Thompson Chet M. Thompson Robert J. Meyers David Y. Chung CROWELL & MORING LLP 1001 Pennsylvania Avenue, N.W. Washington, D.C. 20004-2595 (202) 624-2500

Counsel for E. I. du Pont de Nemours and Company Respectfully submitted,

/s/ Timothy K. Webster Timothy K. Webster James R. Wedeking SIDLEY AUSTIN LLP 1501 K Street, NW Washington, DC 20005 (202) 736-8000

Richard Ayres Jessica Olson AYRES LAW GROUP 1615 L Street, N.W., Suite 1350 Washington, D.C. 20036 (202) 452-9200

Counsel for Honeywell International Inc. USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 56 of 139

# 45 CERTIFICATE OF COMPLIANCE

This brief complies with the type-vol ume limitations of Federal Rule of

Appellate Procedure 32(a)(7 )(B) because it contains 9,955 words (as determined

by the Microsoft Word 2007 word-processing system used to prepare the brief),

excluding the parts of the brief exempted by Federal Rule of Appellate Procedure

32(a)(7)(B)(iii).

This brief complies with the typeface requirements of Federal Rule of

Appellate Procedure 32(a)(5) and the type-style requireme nts of Federal Rule of

Appellate Procedure 32(a)(6 ) because it has been prepared in a proportionally

spaced typeface using the Microsoft Word 2007 word-processing system in 14-

point Times New Roman font.

/s/ Timothy K. Webster Timothy K. Webster USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 57 of 139

# 46 CERTIFICATE OF SERVICE

I certify that on this 1 st 

# day of December, 2011, I caused the foregoing

Opening Brief of Petitioners to be file d via the Court’s CM/ECF System. All

participants in the case are registered CM/ECF user s and will be served by the

appellate CM/ECF system.

/s/ Timothy K. Webster Timothy K. Webster USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 58 of 139

# APPENDIX A

Addendum USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 59 of 139

# STATUTORY ADDENDUM

42 U.S.C. § 7607 (2010) ....................................................................................................... .ADD-1

42 U.S.C. § 7671 (2010) ....................................................................................................... .ADD-8

42 U.S.C. § 7671d (2010) ....................................................................................................AD D-11

42 U.S.C. § 7671f (2010) .....................................................................................................A DD-14

40 C.F.R. § 82.3 (2010) ....................................................................................................... ADD-17

40 C.F.R. § 82.15 (2010) .....................................................................................................A DD-26

40 C.F.R. § 82.16 (2010) .....................................................................................................A DD-30

40 C.F.R. § 82.17 (2003) .....................................................................................................A DD-36

40 C.F.R. § 82.17 (2009) .....................................................................................................A DD-38

40 C.F.R. § 82.19 (2003) .....................................................................................................A DD-40

40 C.F.R. § 82.19 (2009) .....................................................................................................A DD-43

40 C.F.R. § 82.23 (2010) .....................................................................................................A DD-46 USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 60 of 139

# 42 U.S.C. § 7607 (2010)

USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 61 of 139Page 6421 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 7607

1 See References in Text note below.

2 So in original. Probably should be ‘‘this’’.

3 So in original. 4 So in original. Probably should be ‘‘subsection,’’. emption shall (A) promptly notify the Administrator ofsuch exemption and the justification therefor; (B) review the necessity for each such exemption annually; and (C) report to the Administrator annually all such exemptions in effect. Exemptions granted pursuant to this section shall be for a period not to exceed one year. Additional exemptions may be granted for periods notto exceed one year upon the making of a new determination by the head of the Federal agency concerned.(2) The Administrator may, by rule or regulation, exempt any or all Federal agencies from any or all of the provisions of this Order with respect to any class or classes of contracts, grants, or loans, which (A) involveless than specified dollar amounts, or (B) have a minimal potential impact upon the environment, or (C) involve persons who are not prime contractors or direct recipients of Federal assistance by way of contracts, grants, or loans. (b) Federal agencies shall reconsider any exemption granted under subsection (a) whenever requested to do so by the Administrator. (c) The Administrator shall annually notify the President and the Congress of all exemptions granted, or in effect, under this Order during the preceding year. S EC . 9. Related Actions . The imposition of any sanction or penalty under or pursuant to this Order shall not relieve any person of any legal duty to comply with any provisions of the Air Act or the Water Act. S EC . 10. Applicability . This Order shall not apply tocontracts, grants, or loans involving the use of facilities located outside the United States. S EC . 11. Uniformity . Rules, regulations, standards, and guidelines issued pursuant to this order and section 508 of the Water Act [33 U.S.C. 1368] shall, to the maximumextent feasible, be uniform with regulations issued pursuant to this order, Executive Order No. 11602 of June 29, 1971 [formerly set out above], and section 306 of the Air Act [this section]. S EC . 12. Order Superseded . Executive Order No. 11602 of June 29, 1971, is hereby superseded.
R ICHARD N IXON

. § 7607. Administrative proceedings and judicial review(a) Administrative subpenas; confidentiality; witnesses In connection with any determination undersection 7410(f) of this title, or for purposes of obtaining information under section 7521(b)(4) 1 or7545(c)(3) of this title, any investigation, monitoring, reporting requirement, entry, compliance inspection, or administrative enforcement proceeding under the 2 chapter (including but not limited to section 7413, section 7414, section7420, section 7429, section 7477, section 7524, section 7525, section 7542, section 7603, or section 7606 of this title),, 3 the Administrator may issue subpenas for the attendance and testimony of witnesses and the production of relevant papers, books, and documents, and he may administer oaths. Except for emission data, upon a showing satisfactory to the Administrator by such owner or operator that such papers, books, documents, or information or particular part thereof, ifmade public, would divulge trade secrets or secret processes of such owner or operator, the Administrator shall consider such record, report, or information or particular portion thereof confidential in accordance with the purposes of section 1905 of title 18, except that such paper,book, document, or information may be disclosed to other officers, employees, or authorized representatives of the United States concerned with carrying out this chapter, to persons carrying out the National Academy of Sciences’ study and investigation provided for in section 7521(c) of this title, or when relevant in any proceeding under this chapter. Witnessessummoned shall be paid the same fees and mileage that are paid witnesses in the courts of the United States. In case of contumacy or refusal to obey a subpena served upon any person under this subparagraph, 4 the district court of theUnited States for any district in which such person is found or resides or transacts business, upon application by the United States and after notice to such person, shall have jurisdiction to issue an order requiring such person to appear and give testimony before the Administrator toappear and produce papers, books, and documents before the Administrator, or both, and any failure to obey such order of the court maybe punished by such court as a contempt thereof. (b) Judicial review(1) A petition for review of action of the Administrator in promulgating any national primary or secondary ambient air quality standard, any emission standard or requirement under section 7412 of this title, any standard of performance or requirement under section 7411 of this title,, 3 any standard under section 7521 of this title (other than a standard required to be prescribed under section 7521(b)(1) of this title), any determination under section 7521(b)(5) 1 ofthis title, any control or prohibition under section 7545 of this title, any standard under section 7571 of this title, any rule issued under section 7413, 7419, or under section 7420 of this title, or any other nationally applicable regulationspromulgated, or final action taken, by the Administrator under this chapter may be filed only in the United States Court of Appeals for the District of Columbia. A petition for review ofthe Administrator’s action in approving or promulgating any implementation plan under section 7410 of this title or section 7411(d) of this title, any order under section 7411(j) of this title, under section 7412 of this title, under section 7419 of this title, or under section 7420 of this title, or his action under section1857c–10(c)(2)(A), (B), or (C) of this title (as in effect before August 7, 1977) or under regulations thereunder, or revising regulations for enhancedmonitoring and compliance certification programs under section 7414(a)(3) of this title, or any other final action of the Administratorunder this chapter (including any denial or disapproval by the Administrator under subchapter I of this chapter) which is locally or regionally applicable may be filed only in the UnitedStates Court of Appeals for the appropriate circuit. Notwithstanding the preceding sentence a petition for review of any action referred to in such sentence may be filed only in the UnitedStates Court of Appeals for the District of Columbia if such action is based on a determination of nationwide scope or effect and if in taking such action the Administrator finds and pub

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 62 of 139Page 6422 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 7607

5 So in original. The word ‘‘to’’ probably should not appear.lishes that such action is based on such a determination. Any petition for review under this subsection shall be filed within sixty days from the date notice of such promulgation, approval, or action appears in the Federal Register, except that if such petition is based solely on groundsarising after such sixtieth day, then any petition for review under this subsection shall be filed within sixty days after such grounds arise. The filing of a petition for reconsideration by the Administrator of any otherwise final rule or action shall not affect the finality of such ruleor action for purposes of judicial review nor extend the time within which a petition for judicial review of such rule or action under this section may be filed, and shall not postpone the effectiveness of such rule or action. (2) Action of the Administrator with respect to which review could have been obtained underparagraph (1) shall not be subject to judicial review in civil or criminal proceedings for enforcement. Where a final decision by the Administrator defers performance of any nondiscretionary statutory action to a later time, any personmay challenge the deferral pursuant to paragraph (1). (c) Additional evidence In any judicial proceeding in which review issought of a determination under this chapter required to be made on the record after notice and opportunity for hearing, if any party applies tothe court for leave to adduce additional evidence, and shows to the satisfaction of the court that such additional evidence is material andthat there were reasonable grounds for the failure to adduce such evidence in the proceeding before the Administrator, the court may ordersuch additional evidence (and evidence in rebuttal thereof) to be taken before the Administrator, in such manner and upon such terms and conditions as to 5 the court may deem proper. The Administrator may modify his findings as to the facts, or make new findings, by reason of the additional evidence so taken and he shallfile such modified or new findings, and his recommendation, if any, for the modification or setting aside of his original determination, with the return of such additional evidence. (d) Rulemaking (1) This subsection applies to—(A) the promulgation or revision of any national ambient air quality standard under section 7409 of this title,(B) the promulgation or revision of an implementation plan by the Administrator under section 7410(c) of this title, (C) the promulgation or revision of any standard of performance under section 7411 of this title, or emission standard or limitation under section 7412(d) of this title, any standardunder section 7412(f) of this title, or any regulation under section 7412(g)(1)(D) and (F) of this title, or any regulation under section 7412(m) or (n) of this title, (D) the promulgation of any requirement for solid waste combustion under section 7429 of this title, (E) the promulgation or revision of any regulation pertaining to any fuel or fuel additive under section 7545 of this title,(F) the promulgation or revision of any aircraft emission standard under section 7571 of this title,(G) the promulgation or revision of any regulation under subchapter IV–A of this chapter (relating to control of acid deposition), (H) promulgation or revision of regulationspertaining to primary nonferrous smelter orders under section 7419 of this title (but not including the granting or denying of any such order), (I) promulgation or revision of regulations under subchapter VI of this chapter (relating to stratosphere and ozone protection), (J) promulgation or revision of regulations under part C of subchapter I of this chapter(relating to prevention of significant deterioration of air quality and protection of visibility), (K) promulgation or revision of regulationsunder section 7521 of this title and test procedures for new motor vehicles or engines under section 7525 of this title, and the revision of a standard under section 7521(a)(3) of this title, (L) promulgation or revision of regulations for noncompliance penalties under section 7420 of this title,(M) promulgation or revision of any regulations promulgated under section 7541 of this title (relating to warranties and compliance by vehicles in actual use),(N) action of the Administrator under section 7426 of this title (relating to interstate pollution abatement),(O) the promulgation or revision of any regulation pertaining to consumer and commercial products under section 7511b(e) of this title,(P) the promulgation or revision of any regulation pertaining to field citations under section 7413(d)(3) of this title,(Q) the promulgation or revision of any regulation pertaining to urban buses or the cleanfuel vehicle, clean-fuel fleet, and clean fuel programs under part C of subchapter II of this chapter,(R) the promulgation or revision of any regulation pertaining to nonroad engines or nonroad vehicles under section 7547 of this title,(S) the promulgation or revision of any regulation relating to motor vehicle compliance program fees under section 7552 of this title,(T) the promulgation or revision of any regulation under subchapter IV–A of this chapter (relating to acid deposition),(U) the promulgation or revision of any regulation under section 7511b(f) of this title pertaining to marine vessels, and (V) such other actions as the Administrator may determine. The provisions of section 553 through 557 andsection 706 of title 5 shall not, except as expressly provided in this subsection, apply to actions to which this subsection applies. This subsection shall not apply in the case of any rule or circumstance referred to in subparagraphs (A) or (B) of subsection 553(b) of title 5. 

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 63 of 139Page 6423 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 7607

(2) Not later than the date of proposal of anyaction to which this subsection applies, the Administrator shall establish a rulemaking docket for such action (hereinafter in this subsection referred to as a ‘‘rule’’). Whenever a rule appliesonly within a particular State, a second (identical) docket shall be simultaneously established in the appropriate regional office of the Environmental Protection Agency.(3) In the case of any rule to which this subsection applies, notice of proposed rulemaking shall be published in the Federal Register, as provided under section 553(b) of title 5, shall be accompanied by a statement of its basis and purpose and shall specify the period available for public comment (hereinafter referred to as the ‘‘comment period’’). The notice of proposed rulemaking shall also state the docket number, the location or locations of the docket, and the times it will be open to public inspection. The statement of basis and purpose shall include a summary of— (A) the factual data on which the proposed rule is based; (B) the methodology used in obtaining the data and in analyzing the data; and(C) the major legal interpretations and policy considerations underlying the proposed rule.
The statement shall also set forth or summarizeand provide a reference to any pertinent findings, recommendations, and comments by the Scientific Review Committee established under section 7409(d) of this title and the National Academy of Sciences, and, if the proposal differsin any important respect from any of these recommendations, an explanation of the reasons forsuch differences. All data, information, and documents referred to in this paragraph on which the proposed rule relies shall be included in thedocket on the date of publication of the proposed rule. (4)(A) The rulemaking docket required under paragraph (2) shall be open for inspection by thepublic at reasonable times specified in the notice of proposed rulemaking. Any person may copy documents contained in the docket. The Administrator shall provide copying facilities which may be used at the expense of the person seeking copies, but the Administrator may waive or reduce such expenses in such instances as the public interest requires. Any person mayrequest copies by mail if the person pays the expenses, including personnel costs to do the copying. (B)(i) Promptly upon receipt by the agency, allwritten comments and documentary information on the proposed rule received from any person for inclusion in the docket during the comment period shall be placed in the docket. Thetranscript of public hearings, if any, on the proposed rule shall also be included in the docket promptly upon receipt from the person who transcribed such hearings. All documents which become available after the proposed rule hasbeen published and which the Administrator determines are of central relevance to the rulemaking shall be placed in the docket as soon as possible after their availability. (ii) The drafts of proposed rules submitted by the Administrator to the Office of Management and Budget for any interagency review process prior to proposal of any such rule, all documentsaccompanying such drafts, and all written comments thereon by other agencies and all writtenresponses to such written comments by the Administrator shall be placed in the docket no later than the date of proposal of the rule. The drafts of the final rule submitted for such reviewprocess prior to promulgation and all such written comments thereon, all documents accompanying such drafts, and written responses thereto shall be placed in the docket no later than the date of promulgation.(5) In promulgating a rule to which this subsection applies (i) the Administrator shall allow any person to submit written comments, data,or documentary information; (ii) the Administrator shall give interested persons an opportunity for the oral presentation of data, views, or arguments, in addition to an opportunity to make written submissions; (iii) a transcript shall be kept of any oral presentation; and (iv) the Administrator shall keep the record of such proceeding open for thirty days after completion of the proceeding to provide an opportunity forsubmission of rebuttal and supplementary information.(6)(A) The promulgated rule shall be accompanied by (i) a statement of basis and purposelike that referred to in paragraph (3) with respect to a proposed rule and (ii) an explanationof the reasons for any major changes in the promulgated rule from the proposed rule.(B) The promulgated rule shall also be accompanied by a response to each of the significant comments, criticisms, and new data submittedin written or oral presentations during the comment period. (C) The promulgated rule may not be based (in part or whole) on any information or data which has not been placed in the docket as of the date of such promulgation.(7)(A) The record for judicial review shall consist exclusively of the material referred to in paragraph (3), clause (i) of paragraph (4)(B), and subparagraphs (A) and (B) of paragraph (6). (B) Only an objection to a rule or procedure which was raised with reasonable specificity during the period for public comment (includingany public hearing) may be raised during judicial review. If the person raising an objection can demonstrate to the Administrator that it was impracticable to raise such objection within such time or if the grounds for such objection arose after the period for public comment (but within the time specified for judicial review) and if such objection is of central relevance to the outcome of the rule, the Administrator shall convene a proceeding for reconsideration of the rule and provide the same procedural rights as would have been afforded had the informationbeen available at the time the rule was proposed. If the Administrator refuses to convene such a proceeding, such person may seek reviewof such refusal in the United States court of appeals for the appropriate circuit (as provided insubsection (b) of this section). Such reconsideration shall not postpone the effectiveness of the rule. The effectiveness of the rule may be stayed during such reconsideration, however, by the Administrator or the court for a period not to exceed three months. 

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 64 of 139Page 6424 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 7607

6 So in original. Probably should be ‘‘sections’’. (8) The sole forum for challenging procedural determinations made by the Administrator under this subsection shall be in the UnitedStates court of appeals for the appropriate circuit (as provided in subsection (b) of this section) at the time of the substantive review ofthe rule. No interlocutory appeals shall be permitted with respect to such procedural determinations. In reviewing alleged procedural errors, the court may invalidate the rule only if the errors were so serious and related to matters of such central relevance to the rule that there is a substantial likelihood that the rule would have been significantly changed if such errors had not been made. (9) In the case of review of any action of the Administrator to which this subsection applies, the court may reverse any such action found to be—(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (B) contrary to constitutional right, power, privilege, or immunity;(C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; or(D) without observance of procedure required by law, if (i) such failure to observe such procedure is arbitrary or capricious, (ii) the requirement of paragraph (7)(B) has beenmet, and (iii) the condition of the last sentence of paragraph (8) is met.
(10) Each statutory deadline for promulgation of rules to which this subsection applies which requires promulgation less than six months after date of proposal may be extended to not more than six months after date of proposal by the Administrator upon a determination that such extension is necessary to afford the public, and the agency, adequate opportunity to carry out the purposes of this subsection. (11) The requirements of this subsection shall take effect with respect to any rule the proposal of which occurs after ninety days after August 7, 1977.(e) Other methods of judicial review not authorized Nothing in this chapter shall be construed toauthorize judicial review of regulations or orders of the Administrator under this chapter, except as provided in this section. (f) Costs In any judicial proceeding under this section,the court may award costs of litigation (including reasonable attorney and expert witness fees)whenever it determines that such award is appropriate.(g) Stay, injunction, or similar relief in proceedings relating to noncompliance penalties In any action respecting the promulgation of regulations under section 7420 of this title or the administration or enforcement of section 7420 ofthis title no court shall grant any stay, injunctive, or similar relief before final judgment by such court in such action. (h) Public participation It is the intent of Congress that, consistent with the policy of subchapter II of chapter 5 of title 5, the Administrator in promulgating anyregulation under this chapter, including a regulation subject to a deadline, shall ensure a reasonable period for public participation of atleast 30 days, except as otherwise expressly provided in section 6 7407(d), 7502(a), 7511(a) and (b), and 7512(a) and (b) of this title. (July 14, 1955, ch. 360, title III, §307, as added Pub. L. 91–604, §12(a), Dec. 31, 1970, 84 Stat. 1707; amended Pub. L. 92–157, title III, §302(a), Nov. 18, 1971, 85 Stat. 464; Pub. L. 93–319, §6(c), June 22, 1974, 88 Stat. 259; Pub. L. 95–95, title III, §§303(d), 305(a), (c), (f)–(h), Aug. 7, 1977, 91 Stat. 772, 776, 777; Pub. L. 95–190, §14(a)(79), (80), Nov. 16, 1977, 91 Stat. 1404; Pub. L. 101–549, title I, §§108(p), 110(5), title III, §302(g), (h), title VII, §§702(c), 703, 706, 707(h), 710(b), Nov. 15, 1990, 104 Stat. 2469, 2470, 2574, 2681–2684.)

R EFERENCES IN T EXT Section 7521(b)(4) of this title, referred to in subsec. (a), was repealed by Pub. L. 101–549, title II, §230(2), Nov. 15, 1990, 104 Stat. 2529. Section 7521(b)(5) of this title, referred to in subsec. (b)(1), was repealed by Pub. L. 101–549, title II, §230(3), Nov. 15, 1990, 104 Stat. 2529. Section 1857c–10(c)(2)(A), (B), or (C) of this title (as in effect before August 7, 1977), referred to in subsec. (b)(1), was in the original ‘‘section 119(c)(2)(A), (B), or (C) (as in effect before the date of enactment of the Clean Air Act Amendments of 1977)’’, meaning section 119 of act July 14, 1955, ch. 360, title I, as added June 22,1974, Pub. L. 93–319, §3, 88 Stat. 248, (which was classified to section 1857c–10 of this title) as in effect prior to the enactment of Pub. L. 95–95, Aug. 7, 1977, 91 Stat. 691, effective Aug. 7, 1977. Section 112(b)(1) of Pub. L. 95–95 repealed section 119 of act July 14, 1955, ch. 360, title I,as added by Pub. L. 93–319, and provided that all references to such section 119 in any subsequent enactment which supersedes Pub. L. 93–319 shall be construed to refer to section 113(d) of the Clean Air Act and to paragraph (5) thereof in particular which is classified to subsec. (d)(5) of section 7413 of this title. Section7413(d) of this title was subsequently amended generally by Pub. L. 101–549, title VII, §701, Nov. 15, 1990, 104 Stat. 2672, and, as so amended, no longer relates to final compliance orders. Section 117(b) of Pub. L. 95–95 added a new section 119 of act July 14, 1955, which is classified to section 7419 of this title. Part C of subchapter I of this chapter, referred to in subsec. (d)(1)(J), was in the original ‘‘subtitle C of title I’’, and was translated as reading ‘‘part C of title I’’ to reflect the probable intent of Congress, because title I does not contain subtitles.

C ODIFICATION In subsec. (h), ‘‘subchapter II of chapter 5 of title 5’’ was substituted for ‘‘the Administrative Procedures Act’’ on authority of Pub. L. 89–554, §7(b), Sept. 6, 1966, 80 Stat. 631, the first section of which enacted Title 5, Government Organization and Employees. Section was formerly classified to section 1857h–5 of this title.

P RIOR P ROVISIONSA prior section 307 of act July 14, 1955, was renumbered section 314 by Pub. L. 91–604 and is classified to section 7614 of this title. Another prior section 307 of act July 14, 1955, ch. 360, title III, formerly §14, as added Dec. 17, 1963, Pub. L. 88–206, §1, 77 Stat. 401, was renumbered section 307 by Pub. L. 89–272, renumbered section 310 by Pub. L. 90–148, and renumbered section 317 by Pub. L. 91–604, and is set out as a Short Title note under section 7401 of this title. 

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 65 of 139Page 6425 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 7607

A MENDMENTS 1990—Subsec. (a). Pub. L. 101–549, §703, struck out par.(1) designation at beginning, inserted provisions authorizing issuance of subpoenas and administration ofoaths for purposes of investigations, monitoring, reporting requirements, entries, compliance inspections, or administrative enforcement proceedings under this chapter, and struck out ‘‘or section 7521(b)(5)’’ after ‘‘section 7410(f)’’. Subsec. (b)(1). Pub. L. 101–549, §706(2), which directedamendment of second sentence by striking ‘‘under section 7413(d) of this title’’ immediately before ‘‘under section 7419 of this title’’, was executed by striking‘‘under section 7413(d) of this title,’’ before ‘‘under section 7419 of this title’’, to reflect the probable intent of Congress. Pub. L. 101–549, §706(1), inserted at end: ‘‘The filing of a petition for reconsideration by the Administrator of any otherwise final rule or action shall not affect the finality of such rule or action for purposes of judicial review nor extend the time within which a petition for judicial review of such rule or action under this section may be filed, and shall not postpone the effectiveness of such rule or action.’’Pub. L. 101–549, §702(c), inserted ‘‘or revising regulations for enhanced monitoring and compliance certification programs under section 7414(a)(3) of this title,’’before ‘‘or any other final action of the Administrator’’. Pub. L. 101–549, §302(g), substituted ‘‘section 7412’’ for ‘‘section 7412(c)’’.Subsec. (b)(2). Pub. L. 101–549, §707(h), inserted sentence at end authorizing challenge to deferrals of performance of nondiscretionary statutory actions. Subsec. (d)(1)(C). Pub. L. 101–549, §110(5)(A), amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: ‘‘the promulgation or revision of any standard of performance under section 7411 of this title or emission standard under section 7412 of this title,’’. Subsec. (d)(1)(D), (E). Pub. L. 101–549, §302(h), added subpar. (D) and redesignated former subpar. (D) as (E). Former subpar. (E) redesignated (F). Subsec. (d)(1)(F). Pub. L. 101–549, §302(h), redesignated subpar. (E) as (F). Former subpar. (F) redesignated (G).Pub. L. 101–549, §110(5)(B), amended subpar. (F) generally. Prior to amendment, subpar. (F) read as follows: ‘‘promulgation or revision of regulations pertaining to orders for coal conversion under section 7413(d)(5) of this title (but not including orders granting or denying any such orders),’’.Subsec. (d)(1)(G), (H). Pub. L. 101–549, §302(h), redesignated subpars. (F) and (G) as (G) and (H), respectively. Former subpar. (H) redesignated (I).Subsec. (d)(1)(I). Pub. L. 101–549, §710(b), which directed that subpar. (H) be amended by substituting‘‘subchapter VI of this chapter’’ for ‘‘part B of subchapter I of this chapter’’, was executed by making thesubstitution in subpar. (I), to reflect the probable intent of Congress and the intervening redesignation of subpar. (H) as (I) by Pub. L. 101–549, §302(h), see below. Pub. L. 101–549, §302(h), redesignated subpar. (H) as (I). Former subpar. (I) redesignated (J).Subsec. (d)(1)(J) to (M). Pub. L. 101–549, §302(h), redesignated subpars. (I) to (L) as (J) to (M), respectively. Former subpar. (M) redesignated (N). Subsec. (d)(1)(N). Pub. L. 101–549, §302(h), redesignated subpar. (M) as (N). Former subpar. (N) redesignated (O).Pub. L. 101–549, §110(5)(C), added subpar. (N) and redesignated former subpar. (N) as (U).Subsec. (d)(1)(O) to (T). Pub. L. 101–549, §302(h), redesignated subpars. (N) to (S) as (O) to (T), respectively. Former subpar. (T) redesignated (U). Pub. L. 101–549, §110(5)(C), added subpars. (O) to (T). Subsec. (d)(1)(U). Pub. L. 101–549, §302(h), redesignated subpar. (T) as (U). Former subpar. (U) redesignated (V).Pub. L. 101–549, §110(5)(C), redesignated former subpar. (N) as (U). Subsec. (d)(1)(V). Pub. L. 101–549, §302(h), redesignated subpar. (U) as (V). Subsec. (h). Pub. L. 101–549, §108(p), added subsec. (h). 1977—Subsec. (b)(1). Pub. L. 95–190 in text relating to filing of petitions for review in the United States Courtof Appeals for the District of Columbia inserted provision respecting requirements under sections 7411 and 7412 of this title, and substituted provisions authorizing review of any rule issued under section 7413, 7419, or 7420 of this title, for provisions authorizing review of any rule or order issued under section 7420 of this title,relating to noncompliance penalties, and in text relating to filing of petitions for review in the United States Court of Appeals for the appropriate circuit inserted provision respecting review under section 7411(j),7412(c), 7413(d), or 7419 of this title, provision authorizing review under section 1857c–10(c)(2)(A), (B), or (C) tothe period prior to Aug. 7, 1977, and provisions authorizing review of denials or disapprovals by the Administrator under subchapter I of this chapter.Pub. L. 95–95, §305(c), (h), inserted rules or orders issued under section 7420 of this title (relating to noncompliance penalties) and any other nationally applicable regulations promulgated, or final action taken,by the Administrator under this chapter to the enumeration of actions of the Administrator for which a petition for review may be filed only in the United States Court of Appeals for the District of Columbia,added the approval or promulgation by the Administrator of orders under section 7420 of this title, or any other final action of the Administrator under this chapter which is locally or regionally applicable to the enumeration of actions by the Administrator for which a petition for review may be filed only in the UnitedStates Court of Appeals for the appropriate circuit, inserted provision that petitions otherwise capable of being filed in the Court of Appeals for the appropriate circuit may be filed only in the Court of Appeals for theDistrict of Columbia if the action is based on a determination of nationwide scope, and increased from 30 days to 60 days the period during which the petition must be filed. Subsec. (d). Pub. L. 95–95, §305(a), added subsec. (d). Subsec. (e). Pub. L. 95–95, §303(d), added subsec. (e). Subsec. (f). Pub. L. 95–95, §305(f), added subsec. (f). Subsec. (g). Pub. L. 95–95, §305(g), added subsec. (g). 1974—Subsec. (b)(1). Pub. L. 93–319 inserted reference to the Administrator’s action under section1857c–10(c)(2)(A), (B), or (C) of this title or under regulations thereunder and substituted reference to the filingof a petition within 30 days from the date of promulgation, approval, or action for reference to the filing of a petition within 30 days from the date of promulgation or approval.1971—Subsec. (a)(1). Pub. L. 92–157 substituted reference to section ‘‘7545(c)(3)’’ for ‘‘7545(c)(4)’’ of this title.

E FFECTIVE D ATE OF 1977 A MENDMENT
Amendment by Pub. L. 95–95 effective Aug. 7, 1977, except as otherwise expressly provided, see section 406(d) of Pub. L. 95–95, set out as a note under section 7401 of this title.

T ERMINATION OF A DVISORY C OMMITTEES
Advisory committees established after Jan. 5, 1973, to terminate not later than the expiration of the 2-year period beginning on the date of their establishment, unless, in the case of a committee established by the President or an officer of the Federal Government, such committee is renewed by appropriate action prior to the expiration of such 2-year period, or in the case of a committee established by the Congress, its duration is otherwise provided for by law. See section 14 of Pub.L. 92–463, Oct. 6, 1972, 86 Stat. 776, set out in the Appendix to Title 5, Government Organization and Employees.

P ENDING A CTIONS AND P ROCEEDINGS
Suits, actions, and other proceedings lawfully commenced by or against the Administrator or any other 

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 66 of 139Page 6426 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 7608

officer or employee of the United States in his official capacity or in relation to the discharge of his official duties under act July 14, 1955, the Clean Air Act, as in effect immediately prior to the enactment of Pub. L. 95–95 [Aug. 7, 1977], not to abate by reason of the taking effect of Pub. L. 95–95, see section 406(a) of Pub. L. 95–95, set out as an Effective Date of 1977 Amendment note under section 7401 of this title.

M ODIFICATION OR R ESCISSION OF R ULES , R EGULATIONS , O RDERS , D ETERMINATIONS , C ONTRACTS , C ERTIFI

CATIONS , A UTHORIZATIONS , D ELEGATIONS , AND O THER A CTIONS
All rules, regulations, orders, determinations, contracts, certifications, authorizations, delegations, orother actions duly issued, made, or taken by or pursuant to act July 14, 1955, the Clean Air Act, as in effect immediately prior to the date of enactment of Pub. L. 95–95 [Aug. 7, 1977] to continue in full force and effect until modified or rescinded in accordance with act July 14, 1955, as amended by Pub. L. 95–95 [this chapter], see section 406(b) of Pub. L. 95–95, set out as an Effective Date of 1977 Amendment note under section 7401 of this title.
§ 7608. Mandatory licensing
Whenever the Attorney General determines, upon application of the Administrator— (1) that—(A) in the implementation of the requirements of section 7411, 7412, or 7521 of this title, a right under any United States letters patent, which is being used or intended for public or commercial use and not otherwise reasonably available, is necessary to enable any person required to comply with such limitation to so comply, and (B) there are no reasonable alternative methods to accomplish such purpose, and
(2) that the unavailability of such right mayresult in a substantial lessening of competition or tendency to create a monopoly in anyline of commerce in any section of the country,
the Attorney General may so certify to a district court of the United States, which may issue an order requiring the person who owns such patent to license it on such reasonable terms and conditions as the court, after hearing, may determine. Such certification may be made to the district court for the district in which the person owning the patent resides, does business, or is found.
(July 14, 1955, ch. 360, title III, § 308, as added Pub. L. 91–604, §12(a), Dec. 31, 1970, 84 Stat. 1708.)

C ODIFICATION
Section was formerly classified to section 1857h–6 of this title.

P RIOR P ROVISIONS
A prior section 308 of act July 14, 1955, was renumbered section 315 by Pub. L. 91–604 and is classified to section 7615 of this title.

M ODIFICATION OR R ESCISSION OF R ULES , R EGULATIONS , O RDERS , D ETERMINATIONS , C ONTRACTS , C ERTIFI

CATIONS , A UTHORIZATIONS , D ELEGATIONS , AND O THER A CTIONS
All rules, regulations, orders, determinations, contracts, certifications, authorizations, delegations, orother actions duly issued, made, or taken by or pursuant to act July 14, 1955, the Clean Air Act, as in effect immediately prior to the date of enactment of Pub. L. 95–95 [Aug. 7, 1977] to continue in full force and effect until modified or rescinded in accordance with act July 14, 1955, as amended by Pub. L. 95–95 [this chapter], see section 406(b) of Pub. L. 95–95, set out as an Effective Date of 1977 Amendment note under section 7401 of this title. § 7609. Policy review (a) Environmental impact

The Administrator shall review and comment in writing on the environmental impact of any matter relating to duties and responsibilitiesgranted pursuant to this chapter or other provisions of the authority of the Administrator, contained in any (1) legislation proposed by anyFederal department or agency, (2) newly authorized Federal projects for construction and any major Federal agency action (other than a project for construction) to which section 4332(2)(C) of this title applies, and (3) proposed regulations published by any department oragency of the Federal Government. Such written comment shall be made public at the conclusion of any such review.(b) Unsatisfactory legislation, action, or regulation

In the event the Administrator determines that any such legislation, action, or regulation is unsatisfactory from the standpoint of public health or welfare or environmental quality, he shall publish his determination and the mattershall be referred to the Council on Environmental Quality.
(July 14, 1955, ch. 360, title III, § 309, as added Pub. L. 91–604, §12(a), Dec. 31, 1970, 84 Stat. 1709.)

C ODIFICATION
Section was formerly classified to section 1857h–7 of this title.

P RIOR P ROVISIONS
A prior section 309 of act July 14, 1955, ch. 360, title III, formerly §13, as added Dec. 17, 1963, Pub. L. 88–206, §1, 77 Stat. 401; renumbered §306, Oct. 20, 1965, Pub. L. 89–272, title I, §101(4), 79 Stat. 992; renumbered §309, Nov. 21, 1967, Pub. L. 90–148, §2, 81 Stat. 506; renumbered §316, Dec. 31, 1970, Pub. L. 91–604, §12(a), 84 Stat. 1705, related to appropriations and was classified to section 1857 l of this title, prior to repeal by section 306 of Pub. L. 95–95. See section 7626 of this title.

M ODIFICATION OR R ESCISSION OF R ULES , R EGULATIONS , O RDERS , D ETERMINATIONS , C ONTRACTS , C ERTIFI

CATIONS , A UTHORIZATIONS , D ELEGATIONS , AND O THER A CTIONS
All rules, regulations, orders, determinations, contracts, certifications, authorizations, delegations, orother actions duly issued, made, or taken by or pursuant to act July 14, 1955, the Clean Air Act, as in effect immediately prior to the date of enactment of Pub. L. 95–95 [Aug. 7, 1977] to continue in full force and effect until modified or rescinded in accordance with act July 14, 1955, as amended by Pub. L. 95–95 [this chapter], see section 406(b) of Pub. L. 95–95, set out as an Effective Date of 1977 Amendment note under section 7401 of this title. § 7610. Other authority (a) Authority and responsibilities under other laws not affected Except as provided in subsection (b) of this section, this chapter shall not be construed as 

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 67 of 139

# 42 U.S.C. § 7671 (2010)

USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 68 of 139Page 6476 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 7671

the Regulatory Flexibility Act [5 U.S.C. 601 et seq.], and the Equal Access to Justice Act; (3) review information to be issued by the Small Business Stationary Source Technical and Environmental Compliance Assistance Program for small business stationary sourcesto ensure that the information is understandable by the layperson; and (4) have the Small Business StationarySource Technical and Environmental Compliance Assistance Program serve as the secretariat for the development and dissemination of such reports and advisory opinions. (e) Compliance Advisory Panel(1) There shall be created a Compliance Advisory Panel (hereinafter referred to as the‘‘Panel’’) on the State level of not less than 7 individuals. This Panel shall— (A) render advisory opinions concerning the effectiveness of the small business stationarysource technical and environmental compliance assistance program, difficulties encountered, and degree and severity of enforcement;(B) make periodic reports to the Administrator concerning the compliance of the State Small Business Stationary Source Technical and Environmental Compliance AssistanceProgram with the requirements of the Paperwork Reduction Act, 2 the Regulatory Flexibility Act [5 U.S.C. 601 et seq.], and the Equal Access to Justice Act; (C) review information for small business stationary sources to assure such information is understandable by the layperson; and (D) have the Small Business StationarySource Technical and Environmental Compliance Assistance Program serve as the secretariat for the development and dissemination of such reports and advisory opinions.
(2) The Panel shall consist of—(A) 2 members, who are not owners, or representatives of owners, of small business stationary sources, selected by the Governor to represent the general public;(B) 2 members selected by the State legislature who are owners, or who represent owners,of small business stationary sources (1 member each by the majority and minority leadership of the lower house, or in the case of a unicameral State legislature, 2 members each shall be selected by the majority leadership and the minority leadership, respectively, of such legislature, and subparagraph (C) shall not apply);(C) 2 members selected by the State legislature who are owners, or who represent owners,of small business stationary sources (1 member each by the majority and minority leadership of the upper house, or the equivalent State entity); and(D) 1 member selected by the head of the department or agency of the State responsible for air pollution permit programs to represent that agency. (f) Fees The State (or the Administrator) may reduce any fee required under this chapter to take intoaccount the financial resources of small business stationary sources. (g) Continuous emission monitors In developing regulations and CTGs under thischapter that contain continuous emission monitoring requirements, the Administrator, consistent with the requirements of this chapter,before applying such requirements to small business stationary sources, shall consider the necessity and appropriateness of such requirements for such sources. Nothing in this subsection shall affect the applicability of subchapter IV–A of this chapter provisions relating to continuous emissions monitoring. (h) Control technique guidelines The Administrator shall consider, consistent with the requirements of this chapter, the size,type, and technical capabilities of small business stationary sources (and sources which are eligible under subsection (c)(2) of this section to be treated as small business stationary sources) in developing CTGs applicable to such sources under this chapter. (July 14, 1955, ch. 360, title V, §507, as added Pub. L. 101–549, title V, §501, Nov. 15, 1990, 104 Stat. 2645.)

R EFERENCES IN T EXT The Small Business Act, referred to in subsec. (c)(1)(B), is Pub. L. 85–536, §2(1 et seq.), July 18, 1958, 72 Stat. 384, which is classified generally to chapter 14A(§631 et seq.) of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see Short Title note set out under section 631 of Title 15 and Tables. The Paperwork Reduction Act, referred to in subsecs.(d)(2) and (e)(1)(B), probably means the Paperwork Reduction Act of 1980, Pub. L. 96–511, Dec. 11, 1980, 94 Stat. 2812, as amended, which was classified principally to chapter 35 (§3501 et seq.) of Title 44, Public Printing and Documents, prior to the general amendment of that chapter by Pub. L. 104–13, §2, May 22, 1995, 109 Stat. 163. For complete classification of this Act to the Code, see Short Title of 1980 Amendment note set out under section 101 of Title 44 and Tables.The Regulatory Flexibility Act, referred to in subsecs. (d)(2) and (e)(1)(B), is Pub. L. 96–354, Sept. 19, 1980, 94 Stat. 1164, which is classified generally to chapter 6 (§601 et seq.) of Title 5, Government Organization and Employees. For complete classification of this Act to the Code, see Short Title note set out under section 601 of Title 5 and Tables.The Equal Access to Justice Act, referred to in subsecs. (d)(2) and (e)(1)(B), is title II of Pub. L. 96–481, Oct. 21, 1980, 94 Stat. 2325. For complete classification of thisAct to the Code, see Short Title note set out under section 504 of Title 5.

SUBCHAPTER VI—STRATOSPHERIC OZONE

PROTECTION

§ 7671. Definitions
As used in this subchapter— (1) Appliance The term ‘‘appliance’’ means any device which contains and uses a class I or class II substance as a refrigerant and which is usedfor household or commercial purposes, including any air conditioner, refrigerator, chiller, or freezer. (2) Baseline year The term ‘‘baseline year’’ means— (A) the calendar year 1986, in the case of any class I substance listed in Group I or II under section 7671a(a) of this title, 

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 69 of 139Page 6477 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 7671a

(B) the calendar year 1989, in the case of any class I substance listed in Group III, IV, or V under section 7671a(a) of this title, and (C) a representative calendar year selected by the Administrator, in the case of— (i) any substance added to the list of class I substances after the publication of the initial list under section 7671a(a) of this title, and (ii) any class II substance. (3) Class I substance
The term ‘‘class I substance’’ means each of the substances listed as provided in section 7671a(a) of this title. (4) Class II substance
The term ‘‘class II substance’’ means each of the substances listed as provided in section 7671a(b) of this title. (5) Commissioner
The term ‘‘Commissioner’’ means the Commissioner of the Food and Drug Administration. (6) ConsumptionThe term ‘‘consumption’’ means, with respect to any substance, the amount of that substance produced in the United States, plusthe amount imported, minus the amount exported to Parties to the Montreal Protocol.Such term shall be construed in a manner consistent with the Montreal Protocol. (7) Import The term ‘‘import’’ means to land on, bring into, or introduce into, or attempt to land on, bring into, or introduce into, any place subject to the jurisdiction of the United States,whether or not such landing, bringing, or introduction constitutes an importation within the meaning of the customs laws of the United States. (8) Medical deviceThe term ‘‘medical device’’ means any device (as defined in the Federal Food, Drug, andCosmetic Act (21 U.S.C. 321)), diagnostic product, drug (as defined in the Federal Food, Drug, and Cosmetic Act), and drug delivery system— (A) if such device, product, drug, or drug delivery system utilizes a class I or class IIsubstance for which no safe and effective alternative has been developed, and where necessary, approved by the Commissioner; and (B) if such device, product, drug, or drugdelivery system, has, after notice and opportunity for public comment, been approvedand determined to be essential by the Commissioner in consultation with the Administrator. (9) Montreal Protocol
The terms ‘‘Montreal Protocol’’ and ‘‘the Protocol’’ mean the Montreal Protocol on Substances that Deplete the Ozone Layer, a protocol to the Vienna Convention for theProtection of the Ozone Layer, including adjustments adopted by Parties thereto and amendments that have entered into force. (10) Ozone-depletion potential The term ‘‘ozone-depletion potential’’ means a factor established by the Administrator to reflect the ozone-depletion potential of a substance, on a mass per kilogram basis, as compared to chlorofluorocarbon-11 (CFC–11). Suchfactor shall be based upon the substance’s atmospheric lifetime, the molecular weight of bromine and chlorine, and the substance’s ability to be photolytically disassociated, andupon other factors determined to be an accurate measure of relative ozone-depletion potential. (11) Produce, produced, and productionThe terms ‘‘produce’’, ‘‘produced’’, and ‘‘production’’, refer to the manufacture of a substance from any raw material or feedstock chemical, but such terms do not include— (A) the manufacture of a substance that is used and entirely consumed (except for trace quantities) in the manufacture of other chemicals, or (B) the reuse or recycling of a substance.
(July 14, 1955, ch. 360, title VI, §601, as added Pub. L. 101–549, title VI, §602(a), Nov. 15, 1990, 104 Stat. 2649.)

R EFERENCES IN T EXT
The customs laws of the United States, referred to in par. (7), are classified generally to Title 19, Customs Duties. The Federal Food, Drug, and Cosmetic Act, referred to in par. (8), is act June 25, 1938, ch. 675, 52 Stat. 1040, as amended, which is classified generally to chapter 9 (§301 et seq.) of Title 21, Food and Drugs. For complete classification of this Act to the Code, see section 301 of Title 21 and Tables.
§ 7671a. Listing of class I and class II substances
(a) List of class I substancesWithin 60 days after November 15, 1990, the Administrator shall publish an initial list of classI substances, which list shall contain the following substances:
Group I chlorofluorocarbon-11 (CFC–11) chlorofluorocarbon-12 (CFC–12) chlorofluorocarbon-113 (CFC–113) chlorofluorocarbon-114 (CFC–114) chlorofluorocarbon-115 (CFC–115)
Group II halon-1211 halon-1301 halon-2402
Group III chlorofluorocarbon-13 (CFC–13) chlorofluorocarbon-111 (CFC–111) chlorofluorocarbon-112 (CFC–112) chlorofluorocarbon-211 (CFC–211) chlorofluorocarbon-212 (CFC–212) chlorofluorocarbon-213 (CFC–213) chlorofluorocarbon-214 (CFC–214) chlorofluorocarbon-215 (CFC–215) chlorofluorocarbon-216 (CFC–216) chlorofluorocarbon-217 (CFC–217)
Group IV carbon tetrachloride
Group V methyl chloroform

The initial list under this subsection shall also include the isomers of the substances listedabove, other than 1,1,2-trichloroethane (an isomer of methyl chloroform). Pursuant to sub

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 70 of 139

# 42 U.S.C. § 7671d (2010)

USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 71 of 139Page 6483 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 7671d

The Administrator shall not authorize production under this paragraph for purposes of firesafety or explosion prevention training or testing of fire suppression or explosion prevention equipment. In no event shall the Administrator grant an exception under this paragraph that permits production after December 31, 1999.(2) The Administrator shall periodically monitor and assess the status of efforts to obtain substitutes for the substances referred to in paragraph (1) for purposes of fire suppression or explosion prevention and the probability of such substitutes being available by December 31, 1999. The Administrator, as part of such assessment, shall consider any relevant assessments under the Montreal Protocol and the actions of the Parties pursuant to Article 2B of the MontrealProtocol in identifying essential uses and in permitting a level of production or consumption that is necessary to satisfy such uses for whichno adequate alternatives are available after December 31, 1999. The Administrator shall report to Congress the results of such assessment in 1994 and again in 1998.(3) Notwithstanding the termination of production set forth in subsection (b) of this section, the Administrator, after notice and opportunity for public comment, may, to the extentconsistent with the Montreal Protocol, authorize the production of limited quantities ofhalon-1211, halon-1301, and halon-2402 in the period after December 31, 1999, and before December 31, 2004, solely for purposes of fire suppression or explosion prevention in association with domestic production of crude oil and natural gas energy supplies on the North Slope of Alaska, ifthe Administrator, in consultation with the Administrator of the United States Fire Administration, determines that no safe and effectivesubstitute has been developed and that such authorization is necessary for fire suppression andexplosion prevention purposes. The Administrator shall not authorize production under theparagraph for purposes of fire safety or explosion prevention training or testing of fire suppression or explosion prevention equipment. In no event shall the Administrator authorize under this paragraph any person to produce any such halon in an amount greater than 3 percentof that produced by such person during the baseline year. (h) Methyl bromide Notwithstanding subsections (b) and (d) of this section, the Administrator shall not terminate production of methyl bromide prior to January 1, 2005. The Administrator shall promulgaterules for reductions in, and terminate the production, importation, and consumption of,methyl bromide under a schedule that is in accordance with, but not more stringent than, the phaseout schedule of the Montreal Protocol Treaty as in effect on October 21, 1998. (July 14, 1955, ch. 360, title VI, §604, as added Pub. L. 101–549, title VI, §602(a), Nov. 15, 1990, 104 Stat. 2655; amended Pub. L. 105–277, div. A, §101(a) [title VII, §764], Oct. 21, 1998, 112 Stat. 2681, 2681–36.)

A MENDMENTS 1998—Subsec. (d)(5), (6). Pub. L. 105–277, §101(a) [title VII, §764(b)], added pars. (5) and (6). Subsec. (e)(3). Pub. L. 105–277, §101(a) [title VII, §764(c)], added par. (3). Subsec. (h). Pub. L. 105–277, §101(a) [title VII, §764(a)], added subsec. (h).
§ 7671d. Phase-out of production and consumption of class II substances
(a) Restriction of use of class II substances Effective January 1, 2015, it shall be unlawfulfor 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. (b) Production phase-out(1) Effective January 1, 2015, it shall be unlawful for any person to produce any class II substance in an annual quantity greater than the quantity of such substance produced by such person during the baseline year.(2) Effective January 1, 2030, it shall be unlawful for any person to produce any class II substance.(c) Regulations regarding production and consumption of class II substances By December 31, 1999, the Administrator shallpromulgate regulations phasing out the production, and restricting the use, of class II substances in accordance with this section, subjectto any acceleration of the phase-out of production under section 7671e of this title. The Administrator shall also promulgate regulations to insure that the consumption of class II substancesin the United States is phased out and terminated in accordance with the same schedule(subject to the same exceptions and other provisions) as is applicable to the phase-out and termination of production of class II substances under this subchapter. (d) Exceptions (1) Medical devices (A) In generalNotwithstanding the termination of production required under subsection (b)(2) ofthis section and the restriction on use referred to in subsection (a) of this section,the Administrator, after notice and opportunity for public comment, shall, to the extent such action is consistent with the Montreal Protocol, authorize the production anduse of limited quantities of class II substances solely for purposes of use in medical devices if such authorization is determined by the Commissioner, in consultation with the Administrator, to be necessary for use in medical devices. (B) Cap on exception Under no circumstances may the authority set forth in subparagraph (A) be applied to authorize any person to produce a class II 

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 72 of 139Page 6484 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 7671e

substance in annual quantities greater than 10 percent of that produced by such person during the baseline year. (2) Developing countries (A) In generalNotwithstanding the provisions of subsection (a) or (b) of this section, the Administrator, after notice and opportunity forpublic comment, 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, asdetermined by the Administrator. Any production authorized under this subsection shall be solely for purposes of satisfying the basic domestic needs of such countries. (B) Cap on exception(i) Under no circumstances may the authority set forth in subparagraph (A) be applied to authorize any person to produce a class II substance in any year following theeffective date of subsection (b)(1) of this section and before the year 2030 in annual quantities greater than 110 percent of the quantity of such substance produced by such person during the baseline year.(ii) Under no circumstances may the authority set forth in subparagraph (A) be applied to authorize any person to produce a class II substance in the year 2030, or anyyear thereafter, in an annual quantity greater than 15 percent of the quantity of such substance produced by such person during the baseline year. (iii) Each exception authorized under thisparagraph shall terminate no later than January 1, 2040.
(July 14, 1955, ch. 360, title VI, §605, as added Pub. L. 101–549, title VI, §602(a), Nov. 15, 1990, 104 Stat. 2658.)

§ 7671e. Accelerated schedule (a) In generalThe Administrator shall promulgate regulations, after notice and opportunity for public comment, which establish a schedule for phasing out the production and consumption of class Iand class II substances (or use of class II substances) that is more stringent than set forth in section 7671c or 7671d of this title, or both, if—(1) based on an assessment of credible current scientific information (including any assessment under the Montreal Protocol) regarding harmful effects on the stratospheric ozonelayer associated with a class I or class II substance, the Administrator determines thatsuch more stringent schedule may be necessary to protect human health and the environment against such effects, (2) based on the availability of substitutesfor listed substances, the Administrator determines that such more stringent schedule is practicable, taking into account technologicalachievability, 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 subchapter.
In making any determination under paragraphs (1) and (2), the Administrator shall consider thestatus of the period remaining under the applicable schedule under this subchapter. (b) Petition Any person may petition the Administrator to promulgate regulations under this section. The Administrator shall grant or deny the petitionwithin 180 days after receipt of any such petition. If the Administrator denies the petition, the Administrator shall publish an explanationof why the petition was denied. If the Administrator grants such petition, such final regulations shall be promulgated within 1 year. Any petition under this subsection shall include a showing by the petitioner that there are dataadequate to support the petition. If the Administrator determines that information is not sufficient to make a determination under this subsection, the Administrator shall use any authority available to the Administrator, under anylaw administered by the Administrator, to acquire such information.
(July 14, 1955, ch. 360, title VI, §606, as added Pub. L. 101–549, title VI, §602(a), Nov. 15, 1990, 104 Stat. 2660.)
§ 7671f. Exchange authority
(a) Transfers The Administrator shall, within 10 months after November 15, 1990, promulgate rules underthis subchapter providing for the issuance of allowances for the production of class I and II substances in accordance with the requirements of this subchapter and governing the transfer of such allowances. Such rules shall insure thatthe transactions under the authority of this section will result in greater total reductions in the production in each year of class I and class II substances than would occur in that year in the absence of such transactions. (b) Interpollutant transfers (1) The rules under this section shall permit a production allowance for a substance for anyyear to be transferred for a production allowance for another substance for the same year on an ozone depletion weighted basis. (2) Allowances for substances in each group of class I substances (as listed pursuant to section 7671a of this title) may only be transferred for allowances for other substances in the same Group. (3) The Administrator shall, as appropriate,establish groups of class II substances for trading purposes and assign class II substances to such groups. In the case of class II substances,allowances may only be transferred for allowances for other class II substances that are in the same Group. (c) Trades with other persons The rules under this section shall permit 2 or more persons to transfer production allowances (including interpollutant transfers which meet the requirements of subsections (a) and (b) of 

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 73 of 139

# 42 U.S.C. § 7671f (2010)

USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 74 of 139Page 6484 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 7671e

substance in annual quantities greater than 10 percent of that produced by such person during the baseline year. (2) Developing countries (A) In generalNotwithstanding the provisions of subsection (a) or (b) of this section, the Administrator, after notice and opportunity forpublic comment, 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, asdetermined by the Administrator. Any production authorized under this subsection shall be solely for purposes of satisfying the basic domestic needs of such countries. (B) Cap on exception(i) Under no circumstances may the authority set forth in subparagraph (A) be applied to authorize any person to produce a class II substance in any year following theeffective date of subsection (b)(1) of this section and before the year 2030 in annual quantities greater than 110 percent of the quantity of such substance produced by such person during the baseline year.(ii) Under no circumstances may the authority set forth in subparagraph (A) be applied to authorize any person to produce a class II substance in the year 2030, or anyyear thereafter, in an annual quantity greater than 15 percent of the quantity of such substance produced by such person during the baseline year. (iii) Each exception authorized under thisparagraph shall terminate no later than January 1, 2040.
(July 14, 1955, ch. 360, title VI, §605, as added Pub. L. 101–549, title VI, §602(a), Nov. 15, 1990, 104 Stat. 2658.)

§ 7671e. Accelerated schedule (a) In generalThe Administrator shall promulgate regulations, after notice and opportunity for public comment, which establish a schedule for phasing out the production and consumption of class Iand class II substances (or use of class II substances) that is more stringent than set forth in section 7671c or 7671d of this title, or both, if—(1) based on an assessment of credible current scientific information (including any assessment under the Montreal Protocol) regarding harmful effects on the stratospheric ozonelayer associated with a class I or class II substance, the Administrator determines thatsuch more stringent schedule may be necessary to protect human health and the environment against such effects, (2) based on the availability of substitutesfor listed substances, the Administrator determines that such more stringent schedule is practicable, taking into account technologicalachievability, 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 subchapter.
In making any determination under paragraphs (1) and (2), the Administrator shall consider thestatus of the period remaining under the applicable schedule under this subchapter. (b) Petition Any person may petition the Administrator to promulgate regulations under this section. The Administrator shall grant or deny the petitionwithin 180 days after receipt of any such petition. If the Administrator denies the petition, the Administrator shall publish an explanationof why the petition was denied. If the Administrator grants such petition, such final regulations shall be promulgated within 1 year. Any petition under this subsection shall include a showing by the petitioner that there are dataadequate to support the petition. If the Administrator determines that information is not sufficient to make a determination under this subsection, the Administrator shall use any authority available to the Administrator, under anylaw administered by the Administrator, to acquire such information.
(July 14, 1955, ch. 360, title VI, §606, as added Pub. L. 101–549, title VI, §602(a), Nov. 15, 1990, 104 Stat. 2660.)
§ 7671f. Exchange authority
(a) Transfers The Administrator shall, within 10 months after November 15, 1990, promulgate rules underthis subchapter providing for the issuance of allowances for the production of class I and II substances in accordance with the requirements of this subchapter and governing the transfer of such allowances. Such rules shall insure thatthe transactions under the authority of this section will result in greater total reductions in the production in each year of class I and class II substances than would occur in that year in the absence of such transactions. (b) Interpollutant transfers (1) The rules under this section shall permit a production allowance for a substance for anyyear to be transferred for a production allowance for another substance for the same year on an ozone depletion weighted basis. (2) Allowances for substances in each group of class I substances (as listed pursuant to section 7671a of this title) may only be transferred for allowances for other substances in the same Group. (3) The Administrator shall, as appropriate,establish groups of class II substances for trading purposes and assign class II substances to such groups. In the case of class II substances,allowances may only be transferred for allowances for other class II substances that are in the same Group. (c) Trades with other persons The rules under this section shall permit 2 or more persons to transfer production allowances (including interpollutant transfers which meet the requirements of subsections (a) and (b) of 

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 75 of 139Page 6485 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 7671h

this section) if the transferor of such allowanceswill be subject, under such rules, to an enforceable and quantifiable reduction in annual production which—(1) exceeds the reduction otherwise applicable to the transferor under this subchapter,(2) exceeds the production allowances transferred to the transferee, and (3) would not have occurred in the absence of such transaction. (d) Consumption The rules under this section shall also provide for the issuance of consumption allowances inaccordance with the requirements of this subchapter and for the trading of such allowances in the same manner as is applicable under this section to the trading of production allowances under this section. (July 14, 1955, ch. 360, title VI, §607, as added Pub. L. 101–549, title VI, §602(a), Nov. 15, 1990, 104 Stat. 2660.)
§ 7671g. National recycling and emission reduction program (a) In general (1) The Administrator shall, by not later thanJanuary 1, 1992, promulgate regulations establishing standards and requirements regarding the use and disposal of class I substances during the service, repair, or disposal of appliances and industrial process refrigeration. Such standards and requirements shall become effective not later than July 1, 1992. (2) The Administrator shall, within 4 years after November 15, 1990, promulgate regulationsestablishing standards and requirements regarding use and disposal of class I and II substances not covered by paragraph (1), including the useand disposal of class II substances during service, repair, or disposal of appliances and industrial process refrigeration. Such standards and requirements shall become effective not laterthan 12 months after promulgation of the regulations. (3) The regulations under this subsection shall include requirements that—(A) reduce the use and emission of such substances to the lowest achievable level, and (B) maximize the recapture and recycling of such substances. Such regulations may include requirements to use alternative substances (including substances which are not class I or class II substances) or to minimize use of class I or class II substances, or to promote the use of safe alternatives pursuant to section 7671k of this title or any combination of the foregoing. (b) Safe disposal The regulations under subsection (a) of thissection shall establish standards and requirements for the safe disposal of class I and II substances. Such regulations shall include each of the following—(1) Requirements that class I or class II substances contained in bulk in appliances, machines or other goods shall be removed from each such appliance, machine or other goodprior to the disposal of such items or their delivery for recycling. (2) Requirements that any appliance, machine or other good containing a class I orclass II substance in bulk shall not be manufactured, sold, or distributed in interstate commerce or offered for sale or distribution in interstate commerce unless it is equipped witha servicing aperture or an equally effective design feature which will facilitate the recapture of such substance during service and repair or disposal of such item. (3) Requirements that any product in which a class I or class II substance is incorporated so as to constitute an inherent element of such product shall be disposed of in a mannerthat reduces, to the maximum extent practicable, the release of such substance into the environment. If the Administrator determines that the application of this paragraph to anyproduct would result in producing only insignificant environmental benefits, the Administrator shall include in such regulations an exception for such product. (c) Prohibitions (1) Effective July 1, 1992, it shall be unlawful for any person, in the course of maintaining, servicing, repairing, or disposing of an appliance or industrial process refrigeration, to knowingly vent or otherwise knowingly release or disposeof any class I or class II substance used as a refrigerant in such appliance (or industrial process refrigeration) in a manner which permits such substance to enter the environment. De minimis releases associated with good faith attempts to recapture and recycle or safely dispose of anysuch substance shall not be subject to the prohibition set forth in the preceding sentence. (2) Effective 5 years after November 15, 1990,paragraph (1) shall also apply to the venting, release, or disposal of any substitute substance for a class I or class II substance by any person maintaining, servicing, repairing, or disposingof an appliance or industrial process refrigeration which contains and uses as a refrigerant any such substance, unless the Administrator determines that venting, releasing, or disposing of such substance does not pose a threat to the environment. For purposes of this paragraph, the term ‘‘appliance’’ includes any device which contains and uses as a refrigerant a substitute substance and which is used for household orcommercial purposes, including any air conditioner, refrigerator, chiller, or freezer.
(July 14, 1955, ch. 360, title VI, §608, as added Pub. L. 101–549, title VI, §602(a), Nov. 15, 1990, 104 Stat. 2661.)
§ 7671h. Servicing of motor vehicle air conditioners (a) RegulationsWithin 1 year after November 15, 1990, the Administrator shall promulgate regulations in accordance with this section establishing standards and requirements regarding the servicing of motor vehicle air conditioners. (b) Definitions
As used in this section— (1) The term ‘‘refrigerant’’ means any class I or class II substance used in a motor vehicleair conditioner. Effective 5 years after Novem

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 76 of 139

# 40 C.F.R. § 82.3 (2010)

USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 77 of 139

### 574 40 CFR Ch. I (7–1–10 Edition) § 82.1

A PPENDIX E TO S UBPART G—U NACCEPTABLE S UBSTITUTES L ISTED IN THE J ANUARY 26, 1999 F INAL R ULE , E FFECTIVE J ANUARY 26, 1999 A PPENDIX F TO S UBPART G—U NACCEPTABLE S UBSTITUTES L ISTED IN THE J ANUARY 26, 1999 F INAL R ULE , E FFECTIVE J ANUARY 26, 1999 A PPENDIX G TO S UBPART G—S UBSTITUTES S UBJECT TO U SE R ESTRICTIONS AND U NAC

CEPTABLE S UBSTITUTES L ISTED IN THE M ARCH 3, 1999, F INAL R ULE , E FFECTIVE A PRIL 2, 1999 A PPENDIX H TO S UBPART G—S UBSTITUTES S UBJECT TO U SE R ESTRICTIONS AND U NAC

CEPTABLE S UBSTITUTES , E FFECTIVE M AY 28, 1999 A PPENDIX I TO S UBPART G—S UBSTITUTES S UB

JECT TO U SE R ESTRICTIONS , L ISTED IN THE A PRIL 26, 2000, F INAL R ULE , E FFECTIVE M AY 26, 2000 A PPENDIX J TO S UBPART G—S UBSTITUTES
LISTED IN THE J ANUARY 29, 2002 F INAL R ULE , EFFECTIVE A PRIL 1, 2002 A PPENDIX K TO S UBPART G—S UBSTITUTES S UBJECT TO U SE R ESTRICTIONS AND U NAC

CEPTABLE S UBSTITUTES L ISTED IN THE J ULY 22, 2002, F INAL R ULE , E FFECTIVE A U

GUST 21, 2002 A PPENDIX L TO S UBPART G—S UBSTITUTES L ISTED IN THE J ANUARY 27, 2003, F INAL R ULE , E FFECTIVE M ARCH 28, 2003 A PPENDIX M TO S UBPART G—U NACCEPTABLE S UBSTITUTES L ISTED IN THE S EPTEMBER 30, 2004 F INAL R ULE , E FFECTIVE N OVEM

BER 29, 2004 A PPENDIX N TO S UBPART G [R ESERVED ] A PPENDIX O TO S UBPART —S UBSTITUTES L IST

ED IN THE S EPTEMBER 27, 2006 F INAL R ULE , E FFECTIVE N OVEMBER 27, 2006 A PPENDIX P TO S UBPART G—S UBSTITUTES L ISTED IN THE S EPTEMBER 27, 2006 F INAL R ULE , E FFECTIVE N OVEMBER 27, 2006 A PPENDIX Q TO S UBPART G—U NACCEPTABLE S UBSTITUTES L ISTED IN THE M ARCH 28, 2007 F INAL R ULE , E FFECTIVE M AY 29, 2007
Subpart H—Halon Emissions Reduction

82.250 Purpose and scope. 82.260 Definitions. 82.270 Prohibitions.
Subpart I—Ban on Refrigeration and AirConditioning Appliances Containing HCFCs

82.300 Purpose. 82.302 Definitions. 82.304 Prohibitions. 82.306 Prohibited products.

A UTHORITY : 42 U.S.C. 7414, 7601, 7671–7671q.

S OURCE : 57 FR 33787, July 30, 1992, unless otherwise noted. 

### Subpart A—Production and Consumption Controls

S OURCE : 60 FR 24986, May 10, 1995, unless otherwise noted.
§ 82.1 Purpose and scope.

(a) The purpose of the regulations inthis subpart is to implement the Montreal Protocol on Substances that Deplete the Ozone Layer and sections 602, 603, 604, 605, 606, 607, 614 and 616 of the Clean Air Act Amendments of 1990, Public Law 101–549. The Protocol andsection 604 impose limits on the production and consumption (defined as production plus imports minus exports,excluding transhipments and used controlled substances) of certain ozone-depleting substances, according to specified schedules. The Protocol also requires each nation that becomes aParty to the agreement to impose certain restrictions on trade in ozone-depleting substances with non-Parties.

(b) This subpart applies to any person that produces, transforms, destroys,imports or exports a controlled substance or imports or exports a controlled product.

[63 FR 41642, Aug. 4, 1998]

§ 82.2 [Reserved]

§ 82.3 Definitions for class I and class II controlled substances. As used in this subpart, the term: Administrator means the Administrator of the United States Environmental Protection Agency or his authorized representative. For purposesof reports and petitions, the Administrator must be written at the following mailing address: EPA (6205J), Global Programs Division, 1200 Pennsylvania Ave., NW., Washington, DC 20460.

Aircraft halon bottle means a vessel used as a component of an aircraft firesuppression system containing halon1301 approved under FAA rules for installation in a certificated aircraft.

Appliance means any device which contains and uses a refrigerant andwhich is used for household or commercial purposes, including any air conditioner, refrigerator, chiller, or freezer.

Applicator means the person who applies methyl bromide.




## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 78 of 139

### 575 Environmental Protection Agency § 82.3

Approved critical use(s) means thoseuses of methyl bromide listed in Column A of appendix L to this subpart as further clarified in Columns B and C of that appendix.

Approved critical user(s) means a person who:

(1) For the applicable control period,applied to EPA for a critical use exemption or is a member of a consortium that applied to EPA for a critical use exemption for a use and location ofuse that was included in the U.S. nomination, authorized by a Decision of the Parties to the Montreal Protocol, and then finally determined by EPA in a notice-and-comment rulemaking to be an approved critical use; and

(2) Has an area in the applicable location of use that requires methyl bromide fumigation because the person reasonably expects that the area willbe subject to a limiting critical condition during the applicable control period.

Article 5 allowances means the allowances apportioned under §82.9(a), §82.11(a)(2), and §82.18(a).

Baseline consumption allowancesmeans the consumption allowances apportioned under §82.6 and §82.19.

Baseline production allowances means the production allowances apportioned under §82.5 and §82.17.

Beijing Amendments means the Montreal Protocol, as amended at the Eleventh Meeting of the Parties to the Montreal Protocol in Beijing in 1999.

Calculated level means the weightedamount of a controlled substance determined by multiplying the amount(in kilograms) of the controlled substance by that substance’s ozone depletion potential (ODP) weight listed inappendix A or appendix B to this subpart.

Class I refers to the controlled substances listed in appendix A to this subpart.

Class II refers to the controlled substances listed in appendix B to this subpart.

Commodity Owner, Shipper or their Agent means the person requesting that an applicator use methyl bromide forquarantine or preshipment applications.

Completely destroy means to cause the expiration of a controlled substance at a destruction efficiency of 98 percent or greater, using one of the destruction technologies approved by the Parties.

Complying with the Protocol, when referring to a foreign state not Party to the 1987 Montreal Protocol, the London Amendments, or the CopenhagenAmendments, means that the nonParty has been determined as complying with the Protocol, as indicated in appendix C to this subpart, by a meeting of the Parties as noted in the records of the directorate of the United Nations Secretariat.

Confer means to shift the essentialuse allowances obtained under §82.8from the holder of the unexpended essential-use allowances to a person for the production of a specified controlled substance, or to shift the HCFC–141b exemption allowances granted under§82.16(h) from the holder of the unexpended HCFC–141b exemption allowances to a person for the production or import of the controlled substance.

Consortium means an organizationrepresenting a group of methyl bromide users that has collectively submitted an application for a critical use exemption on behalf of all members ofthe group. The members of a consortium shall be determined on the basisof the rules established by the organization. Members may either be required to formally join the consortium ( e.g. , by submitting an application orpaying dues) or may automatically become members upon meeting particular criteria ( e.g. , a grower of a specific crop in a particular region).

Consumption means the productionplus imports minus exports of a controlled substance (other thantranshipments, or used controlled substances).

Consumption allowances means the privileges granted by this subpart toproduce and import controlled substances; however, consumption allowances may be used to produce controlled substances only in conjunction with production allowances. A person’sconsumption allowances for class I substances are the total of the allowances obtained under §§82.6 and 82.7 and 82.10,as may be modified under §82.12 (transfer of allowances). A person’s consumption allowances for class II controlled




## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 79 of 139

### 576 40 CFR Ch. I (7–1–10 Edition) § 82.3

substances are the total of the allowances obtained under §§82.19 and 82.20, as may be modified under §82.23.

Control period means the period from January 1, 1992 through December 31, 1992, and each twelve-month period from January 1 through December 31, thereafter.

Controlled product means a product that contains a controlled substancelisted as a Class I, Group I or II substance in appendix A to this subpart. Controlled products include, but are not limited to, those products listed in appendix D to this subpart.

Controlled products belong to one or more of the following six categories of products:

(1) Automobile and truck air conditioning units (whether incorporated in vehicles or not);

(2) Domestic and commercial refrigeration and air-conditioning/heat pumpequipment (whether containing controlled substances as a refrigerant and/or in insulating material of the product), e.g. Refrigerators, Freezers, Dehumidifiers, Water coolers, Ice machines, Air-conditioning and heat pump units;

(3) Aerosol products, except medical aerosols;

(4) Portable fire extinguishers; (5) Insulation boards, panels and pipe
covers;

(6) Pre-polymers. Controlled substance means any substance listed in appendix A or appendix B to this subpart, whether existing alone or in a mixture, but excluding any such substance or mixture that is in a manufactured product other than a container used for the transportation or storage of the substance or mixture. Thus, any amount of a listed substance in appendix A or appendix B to this subpart that is not part of a use systemcontaining the substance is a controlled substance. If a listed substance or mixture must first be transferredfrom a bulk container to another container, vessel, or piece of equipment in order to realize its intended use, thelisted substance or mixture is a ‘‘controlled substance.’’ The inadvertent or coincidental creation of insignificantquantities of a listed substance in appendix A or appendix B to this subpart;during a chemical manufacturing process, resulting from unreacted feedstock, from the listed substance’s use as a process agent present as a trace quantity in the chemical substancebeing manufactured, or as an unintended byproduct of research and development applications, is not deemeda controlled substance. Controlled substances are divided into two classes, Class I in appendix A to this subpart, and Class II listed in appendix B to this subpart. Class I substances are further divided into eight groups, Group I, Group II, Group III, Group IV, Group V, Group VI, Group VII, and Group VIII,as set forth in appendix A to this subpart.

Copenhagen Amendments means the Montreal Protocol on Substances That Deplete the Ozone Layer, as amended at the Fourth Meeting of the Parties to the Montreal Protocol in Copenhagen in 1992.

Critical stock allowance (CSA) means the right granted by this subpart to sell one (1) kilogram of class I, GroupVI controlled substances from inventory produced or imported prior to theJanuary 1, 2005 phaseout date for an approved critical use during the specified control period to the extent permitted by federal and state pesticide statutes and regulations other than the Clean Air Act and regulations in this part. A person’s critical stock allowances are the total of the allowances obtained under §82.8(c) as may be modified under §82.12 (transfer of allowances).

Critical stock allowance (CSA) holdermeans an entity to which EPA allocates a quantity of critical stock allowances as reflected under §82.8(c), or who receives a quantity of critical stock allowances through a transfer under §82.12.

Critical use means a circumstance in which the following two conditions are satisfied:

(1) There are no technically and economically feasible alternatives or substitutes for methyl bromide availablethat are acceptable from the standpoint of environment and health andare suitable to the crops and circumstances involved, and

(2) The lack of availability of methylbromide for a particular use would result in significant market disruption.

Critical use allowance (CUA) means the privilege granted by this subpart to




## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 80 of 139

### 577 Environmental Protection Agency § 82.3

produce or import one (1) kilogram ofmethyl bromide for an approved critical use during the specified control period. A person’s critical use allowancesare the total of the allowances obtained under §82.8(c) as may be modified under §82.12 (transfer of allowances).

Critical use allowance for pre-plant uses means the privilege granted by this subpart to produce or import one (1) kilogram of methyl bromide solely for an approved critical use in pre-plant categories specified in Appendix L tothis subpart during the specified control period. A person’s critical use allowances for pre-plant uses are the total of the allowances obtained under §82.8(c) as may be modified under §82.12 (transfer of allowances).

Critical use allowance for post-harvest

uses means the privilege granted by this subpart to produce or import one (1) kilogram of methyl bromide solelyfor an approved critical use in postharvest categories specified in appendix L to this subpart during the specified control period. A person’s critical use allowances for post-harvest usesare the total of the allowances obtained under §82.8(c) as may be modified under §82.12 (transfer of allowances).

Critical use allowance (CUA) holdermeans an entity to which EPA allocates a quantity of critical use allowances as reflected in §82.8(c) or who receives a quantity of critical use allowances through a transfer under §82.12.

Critical use methyl bromide means the class I, Group VI controlled substanceproduced or imported through expending a critical use allowance or thatportion of inventory produced or imported prior to the January 1, 2005phaseout date that is sold only for approved critical uses through expending a critical stock allowance.

Destruction means the expiration of a controlled substance to the destruction efficiency actually achieved, unlessconsidered completely destroyed as defined in this section. Such destructiondoes not result in a commercially useful end product and uses one of the following controlled processes approved by the Parties to the Protocol:

(1) Liquid injection incineration; (2) Reactor cracking; (3) Gaseous/fume oxidation; (4) Rotary kiln incineration; (5) Cement kiln; (6) Radio frequency plasma; or (7) Municipal waste incinerators only for the destruction of foams.

Distributor of methyl bromide means the person directly selling a class I, Group VI controlled substance to an applicator.

Essential Metered Dose Inhaler (Essential MDI) means metered dose inhalersfor the treatment of asthma and chronic obstructive pulmonary disease, approved by the Food and Drug Administration or by another Party’s analogous health authority before December 31, 2000, and considered to be essential by the Party where the MDI product will eventually be sold. In addition, if the MDI product is to be sold in the U.S., the active moiety contained in the MDI must be listed as essential at 21 CFR 2.125(e).

Essential-Use Allowances means the privileges granted by §82.4(n) toproduce class I substances, as determined by allocation decisions made by the Parties to the Montreal Protocol and in accordance with the restrictionsdelineated in the Clean Air Act Amendments of 1990.

Essential-Use Chlorofluorocarbons (Essential-use CFCs) are the CFCs (CFC-11, CFC-12, or CFC-114) produced under the authority of essential-use allowancesand not the allowances themselves. Essential-use CFCs include CFCs imported or produced by U.S. entitiesunder the authority of essential-use allowances for use in essential metered dose inhalers, as well as CFCs imported or produced by non-U.S. entities under the authority of privileges granted by the Parties and the national authority of another country for use in essential metered dose inhalers.

Essential-Uses means those uses of controlled substances designated bythe Parties to the Protocol to be necessary for the health and safety of, or critical for the functioning of, society; and for which there are no available technically and economically feasiblealternatives or substitutes that are acceptable from the standpoint of environment and health. Beginning January 1, 2000 (January 1, 2002 for methyl




## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 81 of 139

### 578 40 CFR Ch. I (7–1–10 Edition) § 82.3

1 Taiwan is not considered a foreign state.chloroform) the essential use designations for class I substances must be made in accordance with the provisions of the Clean Air Act Amendments of 1990.

Export means the transport of virginor used controlled substances from inside the United States or its territories to persons outside the United States or its territories, excluding United States military bases and ships for on-board

use.

Export production allowances means the privileges granted by §82.18(b) to produce HCFC-141b for export following the phaseout of HCFC-141b on January 1, 2003.

Exporter means the person who contracts to sell controlled substances forexport or transfers controlled substances to his affiliate in another country.

Facility means any process equipment (e.g., reactor, distillation column) used to convert raw materials or feedstock chemicals into controlled substances or consume controlled substances in the production of other chemicals.

Foreign state means an entity which is recognized as a sovereign nation or country other than the United States of America. 1

Foreign state not Party to or Non-Partymeans a foreign state that has not deposited instruments of ratification, acceptance, or other form of approvalwith the Directorate of the United Nations Secretariat, evidencing the foreign state’s ratification of the provisions of the 1987 Montreal Protocol, theLondon Amendments, or of the Copenhagen Amendments, as specified.

Formulator means an entity that distributes a class II controlled substance(s) or blends of a class II controlled substance(s) to persons who usethe controlled substance(s) for a specific application identified in the formulator’s petition for HCFC-141b exemption allowances.

HCFC-141b exemption allowances means the privileges granted to aHCFC-141b formulator; an agency, department, or instrumentality of theU.S.; or a non-governmental space vehicle entity by this subpart to order production of or to import HCFC-141b, as determined in accordance with §82.16(h).

Heel means the amount of a controlled substance that remains in acontainer after it is discharged or offloaded (that is no more than ten percent of the volume of the container).

Hydrostatic testing means checking a gas pressure vessel for leaks or flaws.The vessel is filled with a nearly incompressible liquid—usually water oroil—and examined for leaks or permanent changes in shape.

Import means to land on, bring into, or introduce into, or attempt to land on, bring into, or introduce into any place subject to the jurisdiction of the United States whether or not suchlanding, bringing, or introduction constitutes an importation within the meaning of the customs laws of theUnited States, with the following exemptions:

(1) Off-loading used or excess controlled substances or controlled products from a ship during servicing,

(2) Bringing controlled substances into the U.S. from Mexico where thecontrolled substance had been admitted into Mexico in bond and was of U.S. origin, and

(3) Bringing a controlled product intothe U.S. when transported in a consignment of personal or household effectsor in a similar non-commercial situation normally exempted from U.S. Customs attention.

Importer means any person who imports a controlled substance or a controlled product into the United States.‘‘Importer’’ includes the person primarily liable for the payment of anyduties on the merchandise or an authorized agent acting on his or her behalf. The term also includes, as appropriate:

(1) The consignee; (2) The importer of record (listed onU.S. Customs Service forms for imported controlled substances, used controlled substances or controlled products);

(3) The actual owner; or (4) The transferee, if the right todraw merchandise in a bonded warehouse has been transferred.

Individual shipment means the kilograms of a used controlled substance for which a person may make one (1)




## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 82 of 139

### 579 Environmental Protection Agency § 82.3

U.S. Customs entry as, as identified inthe non-objection letter from the Administrator under §§82.13(g) and 82.24(c)(4).

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 forwhich 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 entryinto a warehouse from which the domestic manufacturer releases the controlled substance for sale or distribution, and at the site of United States customs clearance.

Limiting critical condition means the regulatory, technical, and economic circumstances listed in Column C ofAppendix L to this subpart that establish conditions of critical use for methyl bromide in a fumigation area.

Location of use means the geographicarea (such as a state, region, or the entire United States) covered by an application for a critical use exemption in which the limiting critical condition
may occur.

London Amendments means the Montreal Protocol, as amended at the Second Meeting of the Parties to the Montreal Protocol in London in 1990.

Manufactured, for an appliance,means the date upon which the appliance’s refrigerant circuit is complete,the appliance can function, the appliance holds a full refrigerant charge, and the appliance is ready for use forits intended purposes; and for a precharged appliance component, meansthe date that such component is completely produced by the original equipment manufacture, charged with refrigerant, and is ready for initial sale or distribution in interstate commerce.

Montreal Anniversary amendments means the Montreal Protocol, as amended at the Ninth Meeting of the Parties to the Montreal Protocol in Montreal in 1997. Montreal Protocol means the Montreal Protocol on Substances that Depletethe Ozone Layer, a protocol to the Vienna Convention for the Protection ofthe Ozone Layer, including adjustments adopted by the Parties thereto and amendments that have entered into force.

1987 Montreal Protocol means theMontreal Protocol, as originally adopted by the Parties in 1987.

Nations complying with, but not joining, the Protocol means any nation listed in Appendix C, Annex 2, to this subpart.

Non-Objection notice means the privilege granted by the Administrator to import a specific individual shipmentof used controlled substance in accordance with §§82.13(g) and 82.24(c)(3) and (4).

Party means any foreign state that is listed in Appendix C to this subpart(pursuant to instruments of ratification, acceptance, or approval depositedwith the Depositary of the United Nations Secretariat), as having ratified the specified control measure in effect under the Montreal Protocol. Thus, for purposes of the trade bans specified in §82.4(l)(2) pursuant to the London Amendments, only those foreign states that are listed in Appendix C to this subpart as having ratified both the 1987 Montreal Protocol and the London Amendments shall be deemed to be Parties.

Person means any individual or legalentity, including an individual, corporation, partnership, association,state, municipality, political subdivision of a state, Indian tribe; any agency, department, or instrumentality of the United States; and any officer, agent, or employee thereof.

Plant means one or more facilities at the same location owned by or under common control of the same person.

Preshipment applications, with respectto class I, Group VI controlled substances, are those non-quarantine applications applied within 21 days priorto export to meet the official requirements of the importing country or existing official requirements of the exporting country. Official requirements are those which are performed by, or




## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 83 of 139

### 580 40 CFR Ch. I (7–1–10 Edition) § 82.3

authorized by, a national plant, animal, environmental, health or stored product authority.

Production means the manufacture of a controlled substance from any raw material or feedstock chemical, but does not include:

(1) The manufacture of a controlledsubstance that is subsequently transformed;

(2) The reuse or recycling of a controlled substance;

(3) Amounts that are destroyed by the approved technologies; or

(4) Amounts that are spilled or vented unintentionally.

Production allowances means the privileges granted by this subpart toproduce controlled substances; however, production allowances may be used to produce controlled substances only in conjunction with consumptionallowances. A person’s production allowances for class I substances are the total of the allowances obtained under §§82.5, 82.7 and 82.9, and as may bemodified under §82.12 (transfer of allowances). A person’s production allowances for class II controlled substancesare the total of the allowances obtained under §82.17 and as may be modified under §§82.18 and 82.23.

Quarantine applications, with respectto class I, Group VI controlled substances, are treatments to prevent the introduction, establishment and/or spread of quarantine pests (including diseases), or to ensure their official control, where: (1) Official control is that performed by, or authorized by, a national (including state, tribal or local) plant, animal or environmental protection or health authority; (2) quarantine pests are pests of potential importance to the areas endangered thereby and not yet present there, or present but not widely distributed andbeing officially controlled. This definition excludes treatments of commodities not entering or leaving the UnitedStates or any State (or political subdivision thereof).

Source facility means the location at which a used controlled substance was recovered from a piece of equipment,including the name of the company responsible for, or owning the piece ofequipment, a contact person at the location, the mailing address for that specific location, and a phone numberand a fax number for the contact person at the location.

Space vehicle means a man-made device, either manned or unmanned, designed for operation beyond earth’s atmosphere. This definition includes integral equipment such as models,mock-ups, prototypes, molds, jigs, tooling, hardware jackets, and test coupons. Also included is auxiliary equipment associated with tests, transport,and storage, which through contamination can compromise the space vehicle performance.

Third party applicator means an applicator of critical use methyl bromide who fumigates or treats commodities, structures, crops, or land on behalf of an approved critical user.

Transform means to use and entirely consume (except for trace quantities) acontrolled substance in the manufacture of other chemicals for commercial
purposes.

Transhipment means the continuous shipment of a controlled substance, from a foreign state of origin through the United States or its territories, toa second foreign state of final destination, as long as the shipment does not enter into United States jurisdiction. A transhipment, as it moves through the United States or its territories, cannot be re-packaged, sorted or otherwise changed in condition.

Unexpended Article 5 allowances means Article 5 allowances that have not been used. At any time in any control perioda person’s unexpended Article 5 allowances are the total of the level of Article 5 allowances the person has authorization under this subpart to hold at that time for that control period,minus the level of controlled substances that the person has produced in that control period until that time.

Unexpended consumption allowances means consumption allowances that have not been used. At any time in any control period a person’s unexpended consumption allowances are the total of the level of consumption allowances the person has authorization under this subpart to hold at that time for thatcontrol period, minus the level of controlled substances that the person has produced or imported (not including




## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 84 of 139

### 581 Environmental Protection Agency § 82.4

transhipments and used controlled substances) in that control period until that time.

Unexpended critical stock allowance (CSA) means critical stock allowances against which methyl bromide has not yet been sold for an approved critical

use.

Unexpended critical use allowances (CUA) means critical use allowances against which methyl bromide has not yet been produced or imported. At any time in any control period a person’s unexpended critical use allowances arethe total of the level of critical use allowances the person holds at that time for that control period, minus the levelof class I, Group VI controlled substances that the person has produced or has imported solely for approved critical uses in that control period.

Unexpended destruction and transformation credits means destruction and transformation credits that have not been used. At any time in any controlperiod a person’s unexpended destruction and transformation credits are the total of the level of destruction and transformation credits the person has authorization under this subpart tohold at that time for that control period, minus the level of controlled substances that the person has produced or imported (not includingtranshipments and used controlled substances) in that control period until that time.

Unexpended essential-use allowances means essential-use allowances that have not been used. At any time in any control period a person’s unexpended essential-use allowances are the total of the level of essential-use allowances the person has authorization under this subpart to hold at that time for thatcontrol period, minus the level of controlled substances that the person hasimported or had produced in that control period until that time.

Unexpended export production allowances means export production allowances that have not been used. A person’s unexpended export production allowances are the total of the quantity of the export production allowances the person has authorization under§82.18(h) to hold for that control period, minus the quantity of class II controlled substances that the person has produced at that time during the same control period.

Unexpended HCFC-141b exemption allowances means HCFC-141b exemption allowances that have not been used. Aperson’s unexpended HCFC-141b exemption allowances are the total of the quantity of the HCFC-141b exemptionallowances the person has authorization under §82.16(h) to hold for that control period, minus the quantity ofHCFC-141b that the person has had produced or has had imported at that time during the same control period.

Unexpended production allowances means production allowances that havenot been used. At any time in any control period a person’s unexpended production allowances are the total of the level of production allowances he has authorization under this subpart tohold at that time for that control period, minus the level of controlled substances that the person has produced in that control period until that time.

Used controlled substances means controlled substances that have been recovered from their intended use systems (may include controlled substances that have been, or may be subsequently, recycled or reclaimed).

[60 FR 24986, May 10, 1995, as amended at 63 FR 41642, Aug. 4, 1998; 66 FR 37767, July 19, 2001; 67 FR 6359, Feb. 11, 2002; 67 FR 79872, Dec. 31, 2002; 67 FR 251, Jan. 2, 2003; 68 FR 2847, Jan. 21, 2003; 68 FR 42891, July 18, 2003; 69 FR 4064, Jan. 28, 2004; 69 FR 77001, Dec. 23, 2004; 70 FR 77047, Dec. 29, 2005; 71 FR 41171, July 20, 2006; 74 FR 10188, Mar. 10, 2009; 74 FR 66445, Dec. 15, 2009]

§ 82.4 Prohibitions for class I controlled substances.
(a)(1) Prior to January 1, 1996, for all Groups of class I controlled substances, and prior to January 1, 2005, for class I,Group VI controlled substances, no person may produce, at any time in anycontrol period, (except that are transformed or destroyed domestically or by a person of another Party) in excess of the amount of unexpended productionallowances or unexpended Article 5 allowances for that substance held by that person under the authority of this subpart at that time for that controlperiod. Every kilogram of excess production constitutes a separate violation of this subpart.




## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 85 of 139

# 40 C.F.R. § 82.15 (2010)

USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 86 of 139

### 615 Environmental Protection Agency § 82.15

along with the name of the entity on whose behalf the material is held;

(iv) The number of unexpended and expended critical stock allowances;

(v) The amount of methyl bromideproduced or imported prior to the January 1, 2005 phaseout date owned by the reporting entity, as well as quantities held by the reporting entity on behalf of another entity, specifying the nameof the entity on whose behalf the material is held.

(dd) Every approved critical user purchasing an amount of critical usemethyl bromide or purchasing fumigation services with critical use methylbromide must, for each request, identify the use as a critical use and certifybeing an approved critical user. The approved critical user certification will state, in part: ‘‘I certify, under penalty of law, I am an approved critical user and I will use this quantity of methyl bromide for an approved critical use.My action conforms to the requirements associated with the critical use exemption published in 40 CFR part 82.I am aware that any agricultural commodity within a treatment chamber, facility or field I fumigate with criticaluse methyl bromide cannot subsequently or concurrently be fumigated with non-critical use methyl bromideduring the same control period, excepting a QPS treatment or a treatment for a different use ( e.g. , a different crop orcommodity). I will not use this quantity of methyl bromide for a treatmentchamber, facility, or field that I previously fumigated with non-critical usemethyl bromide during the same control period, excepting a QPS treatment or a treatment for a different use ( e.g. , a different crop or commodity), unless a local township limit now prevents mefrom using methyl bromide alternatives or I have now become an approved critical user as a result of rulemaking.’’ The certification will also identify the type of critical use methyl bromide purchased, the location of the treatment, the crop or commodity treated, the quantity of critical use methyl bromide purchased, and the acreage/square footage treated, andwill be signed and dated by the approved critical user.

[60 FR 24986, May 10, 1995] E DITORIAL N OTE : For F EDERAL R EGISTER citations affecting §82.13 see the List of CFRSections Affected which appears in the Finding Aids section of the printed volume and on GPO Access.

§ 82.15 Prohibitions for class II controlled substances. (a) Production. (1) Effective January 21, 2003, no person may produce class II controlled substances for which EPA has apportioned baseline production and consumption allowances, in excessof the quantity of unexpended production allowances, unexpended Article 5allowances, unexpended export production allowances, or conferred unexpended HCFC–141b exemption allowances held by that person for that substance under the authority of this subpart at that time in that control period, unless the substances are transformed or destroyed domestically or by a person of another Party, or unless they are produced using an exemption granted in paragraph (f) of this section. Every kilogram of excess production constitutes a separate violation of this subpart.

(2) Effective January 21, 2003, no person may use production allowances toproduce a quantity of class II controlled substance unless that personholds under the authority of this subpart at the same time consumption allowances sufficient to cover that quantity of class II controlled substances.No person may use consumption allowances to produce a quantity of class II controlled substances unless the person holds under authority of this subpartat the same time production allowances sufficient to cover that quantity of class II controlled substances.

(b) Import. (1) Effective January 21, 2003, no person may import class II controlled substances (other than transhipments, heels or used class II controlled substances) for which EPA has apportioned baseline production and consumption allowances , in excessof the quantity of unexpended consumption allowances, or conferred unexpended HCFC–141b exemption allowances held by that person under the authority of this subpart at that time inthat control period, unless the substances are for use in a process resulting in their transformation or their destruction, or unless they are produced




## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 87 of 139

### 616 40 CFR Ch. I (7–1–10 Edition) § 82.15

using an exemption granted in paragraph (f) of this section. Every kilogram of excess import constitutes a separate violation of this subpart.

(2) Effective January 21, 2003, no person may import, at any time in anycontrol period, a used class II controlled substance for which EPA has apportioned baseline production andconsumption allowances, without having submitted a petition to the Administrator and received a non-objection notice in accordance with §82.24(c)(3) and (4). A person issued a non-objection notice for the import of an individual shipment of used class II controlled substances may not transfer or conferthe right to import, and may not import any more than the exact quantity(in kilograms) of the used class II controlled substance stated in the non-objection notice. Every kilogram of import of used class II controlled substance in excess of the quantity stated in the non-objection notice issued by the Administrator in accordance with§82.24(c)(3) and (4) constitutes a separate violation of this subpart.

(c) Production with Article 5 allowances. No person may introduce into U.S. interstate commerce any class IIcontrolled substance produced with Article 5 allowances, except for export to an Article 5 Party as listed in Annex 4 of Appendix C of this subpart. Everykilogram 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 personmay export any class II controlled substance produced with Article 5 allowances to a non-Article 5 Party. Everykilogram of a class II controlled substance that was produced with Article5 allowances that is exported to a nonArticle 5 Party constitutes a separate violation under this subpart.

(d) Production with export production allowances. No person may introduce into U.S. interstate commerceany class II controlled substance produced with export production allowances. Every kilogram of a class II controlled substance that was produced with export production allowances thatis introduced into U.S. interstate commerce constitutes a separate violation under this subpart.

(e) Trade with Parties. No person may import or export any quantity of a class II controlled substance listed in Appendix A to this subpart, from or to any foreign state that is not either:

(1) A Party to the Montreal Protocolthat has ratified the Beijing Amendments. Parties that have ratified the Beijing Amendments as of June 17, 2004 are listed in annex 1 to Appendix C of this subpart. Or,

(2) A Party to the Montreal Protocol that has provided notice, certification, and data in accordance with Decision XV/3(c)(i), (ii), and (iii) respectively, to the Ozone Secretariat. A list of Parties that have provided notice, certification and data in accordance with Decision XV/3(c)(i), (ii), and (iii) respectively, by June 17, 2004 can be found in annex 3 to Appendix C of this subpart and on a list maintained by the Ozone Secretariat. Or,

(3) A Party to the Montreal Protocol operating under Article 5(1) to theMontreal Protocol. A list of Parties operating under Article 5(1) to the Montreal Protocol as of June 17, 2004 can be found in annex 4 to Appendix C of this subpart.

(f) Exemptions. (1) Medical Devices [Reserved]

(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 transhipment or heel; or for exemptions permitted in paragraph (f) of this section.

(2)(i) 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 usein a process resulting in its transformation or its destruction; for use asa refrigerant in equipment manufactured before January 1, 2010; for export to Article 5 Parties under §82.18(a); asa transhipment or heel; or for exemptions permitted in paragraph (f) of this section.




## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 88 of 139

### 617 Environmental Protection Agency § 82.16

(ii) Introduction into interstate commerce and use of HCFC–22 is not subject to the prohibitions in paragraph (g)(2)(i) of this section if the HCFC–22 is for use in medical equipment prior to January 1, 2015; for use in thermostatic expansion valves prior to January 1,2015; or for use as a refrigerant in appliances manufactured before January 1, 2012, provided that the components are manufactured prior to January 1, 2010, and are specified in a building permit or a contract dated before January 1, 2010, for use on a particular project.

(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 transhipment or heel; or for exemptions permitted in paragraph (f) of this section.

(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 inequipment manufactured before January 1, 2020; for export to Article 5 Parties under §82.18(a); as a transhipment or heel; or for exemptions permitted in paragraph (f) of this section.

(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 transhipment or heel; or for exemptions permitted in paragraph (f) of this section.

(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 atranshipment or heel, or for exemptions permitted in paragraph (f) of this section.

[68 FR 2848, Jan. 21, 2003, as amended at 69 FR 34031, June 17, 2004; 71 FR 41171, July 20, 2006; 74 FR 66445, Dec. 15, 2009]

§ 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 forthe specified class II controlled substances apportioned under §§82.17 and 82.19:

Control period Percent of HCFC–141b Percent of HCFC–22 Percent of HCFC–142b Percent of HCFC–123 Percent of HCFC–124 Percent of HCFC– 225ca Percent of HCFC– 225cb

2003 0 100 100

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

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

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

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

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

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

.................... .................... .................... 2010 0 41.9 0.47 125 125 125 125 2011 0 38.0 0.47 125 125 125 125 2012 0 34.1 0.47 125 125 125 125 2013 0 30.1 0.47 125 125 125 125 2014 0 26.1 0.47 125 125 125 125

(b) Effective January 1, 2003, no person may produce HCFC-141b except foruse in a process resulting in its transformation or its destruction, for exportunder §82.18(a) using unexpended Article 5 allowances, for export under §82.18(b) using unexpended export production allowances, for HCFC-141b exemption needs using unexpended HCFC-141b exemption allowances, or for exemptions permitted in §82.15(f). Effective January 1, 2003, no person




## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 89 of 139

# 40 C.F.R. § 82.16 (2010)

USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 90 of 139

### 617 Environmental Protection Agency § 82.16

(ii) Introduction into interstate commerce and use of HCFC–22 is not subject to the prohibitions in paragraph (g)(2)(i) of this section if the HCFC–22 is for use in medical equipment prior to January 1, 2015; for use in thermostatic expansion valves prior to January 1,2015; or for use as a refrigerant in appliances manufactured before January 1, 2012, provided that the components are manufactured prior to January 1, 2010, and are specified in a building permit or a contract dated before January 1, 2010, for use on a particular project.

(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 transhipment or heel; or for exemptions permitted in paragraph (f) of this section.

(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 inequipment manufactured before January 1, 2020; for export to Article 5 Parties under §82.18(a); as a transhipment or heel; or for exemptions permitted in paragraph (f) of this section.

(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 transhipment or heel; or for exemptions permitted in paragraph (f) of this section.

(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 atranshipment or heel, or for exemptions permitted in paragraph (f) of this section.

[68 FR 2848, Jan. 21, 2003, as amended at 69 FR 34031, June 17, 2004; 71 FR 41171, July 20, 2006; 74 FR 66445, Dec. 15, 2009]

§ 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 forthe specified class II controlled substances apportioned under §§82.17 and 82.19:

Control period Percent of HCFC–141b Percent of HCFC–22 Percent of HCFC–142b Percent of HCFC–123 Percent of HCFC–124 Percent of HCFC– 225ca Percent of HCFC– 225cb

2003 0 100 100

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

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

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

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

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

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

.................... .................... .................... 2010 0 41.9 0.47 125 125 125 125 2011 0 38.0 0.47 125 125 125 125 2012 0 34.1 0.47 125 125 125 125 2013 0 30.1 0.47 125 125 125 125 2014 0 26.1 0.47 125 125 125 125

(b) Effective January 1, 2003, no person may produce HCFC-141b except foruse in a process resulting in its transformation or its destruction, for exportunder §82.18(a) using unexpended Article 5 allowances, for export under §82.18(b) using unexpended export production allowances, for HCFC-141b exemption needs using unexpended HCFC-141b exemption allowances, or for exemptions permitted in §82.15(f). Effective January 1, 2003, no person




## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 91 of 139

### 618 40 CFR Ch. I (7–1–10 Edition) § 82.16

may import HCFC-141b (other than transhipments, heels or used class II controlled substances) in excess of thequantity of unexpended HCFC-141b exemption allowances held by that person except for use in a process resulting in its transformation or its destruction, or for exemptions permitted in §82.15(f).

(c) Effective January 1, 2010, no person may produce HCFC-22 or HCFC142b for any purpose other than for usein a process resulting in their transformation or their destruction, for usein equipment manufactured before January 1, 2010, for export under §82.18(a) using unexpended Article 5 allowances,or for export under §82.18(b) using unexpended export production allowances, or for exemptions permitted in §82.15(f). Effective January 1, 2010, noperson may import HCFC-22 or HCFC142b (other than transhipments, heels or used class II controlled substances) for any purpose other than for use in aprocess resulting in their transformation or their destruction, for exemptions permitted in §82.15(f), or for use in equipment manufactured prior to January 1, 2010.

(d) Effective January 1, 2015, no person may produce class II controlled substances not previously controlled, for any purpose other than for use in aprocess resulting in their transformation or their destruction, for useas a refrigerant in equipment manufactured before January 1, 2020, for exportunder §82.18(a) using unexpended Article 5 allowances, or for export under§82.18(b) using unexpended export production allowances, or for exemptionspermitted in §82.15(f). Effective January 1, 2015, no person may import class II controlled substances not subject to the requirements of paragraph (b) or (c) of this section (other than transhipments, heels or used class II controlled substances) for any purposeother than for use in a process resulting in their transformation or their destruction, for exemptions permitted in §82.15(f), or for use as a refrigerant inequipment manufactured prior to January 1, 2020.

(e) Effective January 1, 2020, no person may produce HCFC-22 or HCFC142b for any purpose other than for usein a process resulting in their transformation or their destruction, for export under §82.18(a) using unexpended Article 5 allowances, or for exportunder §82.18(b) using unexpended export production allowances, or for exemptions permitted in §82.15(f). Effective January 1, 2020, no person may import HCFC-22 or HCFC-142b for any purpose other than for use in a process resulting in their transformation or their destruction, or for exemptions permitted in §82.15(f).

(f) Effective January 1, 2030, no person may produce class II controlled substances, for any purpose other than for use in a process resulting in their transformation or their destruction,for export under §82.18(a) using unexpended Article 5 allowances, or for exemptions permitted in §82.15(f). Effective January 1, 2030, no person may import class II controlled substances for any purpose other than for use in aprocess resulting in their transformation or their destruction, or for exemptions permitted in §82.15(f).

(g) Effective January 1, 2040, no person may produce class II controlled substances for any purpose other than for use in a process resulting in their transformation or their destruction, or for exemptions permitted in §82.15(f).

(h) Petition for HCFC-141b exemption allowances.

(1) Effective January 21, 2003, a formulator of HCFC–141b, an agency, department, or instrumentality of theU.S., or a non-governmental space vehicle entity, may petition EPA for HCFC–141b exemption allowances for the production or import of HCFC–141b after the phaseout date, in accordance with this section. Except as provided in paragraphs (h)(4) and (7) of this section, a petitioner must submit the following information to the Director of EPA’s Office of Atmospheric Programs no later than April 21, 2003, for the 2003 control period; and, for any subsequent control period, no later than October 31st of the year preceding the controlperiod for which the HCFC–141b exemption allowances are requested:

(i) Name and address of the HCFC141b formulator, U.S. government entity or non-governmental space vehicle entity;




## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 92 of 139

### 619 Environmental Protection Agency § 82.16

(ii) Name of contact person, phonenumber, fax number and e-mail address;

(iii) Quantity (in kilograms) of HCFC-141b needed for each relevantcalendar year, supported by documentation about past use for at least the previous three years;

(iv) Quantities of HCFC-141b, if any, contained in systems that were sold to other systems houses for at least the previous three years;

(v) Description of the markets and applications served by the use ofHCFC-141b or systems based on HCFC141b;

(vi) Technical description of processes in which HCFC-141b is being used;

(vii) Technical description of the specific conditions under which the product will be applied;

(viii) Technical description of why alternatives and substitutes are not sufficient to eliminate the use of HCFC141b;

(ix) Amount of stockpiled HCFC-141b (on-hand, taken title to, or available from a supplier) along with a detailedanalysis showing why stockpiled, recovered or recycled quantities aredeemed to be unavailable, or technically or commercially infeasible foruse (for example, taking into consideration undue costs for storage and transportation);

(x) An estimate of the number of control periods over which such an exemption would be necessary;

(xi) A detailed description of continuing investigations into and progress on possible alternatives and substitutes;

(xii) A list of alternatives considered, purchased or sampled, including dates and copies of receipts for verification;

(xiii) A summary of the petitioner’sin-house development program including summaries of all relevant test results and their significance to subsequent decision-making and technology selection. Full supporting test data must be available on request including alternative tested and date on which it was tested;

(xiv) A clear statement of the preferred technical option(s) being pursued at the time of the petition and the reasoning for this selection; (xv) A summary of product test results conducted on the preferred technical option(s) by accredited organizations in order to determine whetherproducts meet applicable codes. Relevant test reports and certifications must be made available on request; and

(xvi) A description of the further development testing to be carried out over the number of control periods identified under paragraph (h)(1)(x) of this section.

(2) Within 21 business days of receipt of the petition, the Director of EPA’s Office of Atmospheric Programs willissue to a HCFC-141b formulator, agency, department, or instrumentality of the U.S., or non-governmental space vehicle entity that has petitioned for HCFC-141b exemption allowances,based on information received in accordance with paragraph (h)(1) of this section, a notice indicating one of the following:

(i) A determination by the Directorof EPA’s Office of Atmospheric Programs to grant a specific quantity of HCFC-141b exemption allowances (inkilograms) for the production or import of HCFC-141b in a specified control period based on an assessment thatHCFC-141b is necessary to maintain either safety, or operational or technical viability;

(ii) A determination by the Directorof EPA’s Office of Atmospheric Programs to request additional information because the information received in accordance with paragraph (h)(1) of this section is not sufficient to decide whether to grant or deny HCFC-141b exemption allowances. The Director of EPA’s Office of Atmospheric Programs will decide whether to grant or denyHCFC-141b exemption allowances within 30 days of receipt of the additional information. However, if the petitionerfails to submit the additional information within 20 days of the request, such failure constitutes a basis for denying the petition for HCFC-141b exemption allowances.

(iii) A determination by the Directorof EPA’s Office of Atmospheric Programs to deny a grant of HCFC-141b exemption allowances due to one or more of the following reasons:

(A) The needs can be met by the use of a substance other than HCFC-141b;




## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 93 of 139

### 620 40 CFR Ch. I (7–1–10 Edition) § 82.16

(B) The needs can be met by the use of existing supplies of HCFC-141b;

(C) There is evidence of fraud or misrepresentation;

(D) Approval of the HCFC-141b exemption allowances would be inconsistent with U.S. obligations under the provisions of the Montreal Protocol(including Decisions agreed by the Parties);

(E) Approval of the HCFC-141b exemption allowances would be inconsistent with the Clean Air Act;

(F) There is an inadequate demonstration of efforts undertaken to research and implement alternatives; or

(G) Granting the HCFC-141b exemption allowances may reasonably be expected to endanger human health or the environment.

(3) Within ten working days after receipt of a notice outlining a determination by the Director of EPA’s Office of Atmospheric Programs to deny a grant of HCFC-141b exemption allowances due to one or more of the reasons in paragraph (h)(2)(iii) of this section, the petitioner may file with the Director of EPA’s Office of Atmospheric Programsa one-time appeal with elaborated information. The Director of EPA’s Office of Atmospheric Programs may affirm the determination to deny a grant of HCFC-141b exemption allowances ormake a determination to grant HCFC141b exemption allowance, in light of the available evidence submitted with the appeal. If no appeal is submitted bythe tenth day after receipt of the notice outlining a determination by theDirector of EPA’s Office of Atmospheric Programs to deny a grant of HCFC-141b exemption allowances, the denial will be final on that day.

(4) Any entity that has previously petitioned for HCFC-141b exemption allowances under paragraph (h)(1) of this section may file a petition for renewalfor a subsequent control period by October 31st of the year preceding thatcontrol period. The petition for renewal must contain the following information:

(i) Name and address of the HCFC141b formulator, U.S. government entity or non-governmental space vehicle entity; (ii) Name of contact person, phonenumber, fax number and e-mail address;

(iii) Quantity (in kilograms) ofHCFC-141b needed for the control period;

(iv) Description of markets and applications being served by the use of HCFC-141b;

(v) A technical description of the process in which HCFC-141b is still being used;

(vi) A technical description of the specific conditions under which the product is still being applied;

(vii) Technical description of why alternatives and substitutes are still not sufficient to eliminate the use of HCFC-141b;

(viii) Amount of stockpiled HCFC141b (on-hand, taken title to, or available from a supplier) along with a detailed analysis showing why stockpiled, recovered or recycled quantitiesare deemed to be technically or economically infeasible for use; and

(ix) A detailed description of continuing investigations into and progress on possible alternatives andsubstitutes and how this activity differs from information given in the previous request.

(5) A person granted HCFC-141b exemption allowances by the Director of EPA’s Office of Atmospheric Programs under paragraph (h)(2)(i) or (h)(3) of this section may request a quantity of HCFC-141b be produced or imported in the specified control period listed in the notice by conferring the rights toproduce or import to a producer or importer.

(6) The HCFC-141b exemption allowances held by one entity do not automatically transfer to an acquiring entity. Any entity acquiring another company holding HCFC-141b exemption allowances must submit a renewal application in accordance with paragraph (h)(4) of this section at the time of the acquisition in order to qualify for the HCFC-141b exemption allowances.

(7) A formulator for, or an agency, department, or instrumentality of theU.S., or a non-governmental space vehicle entity that has previously petitioned for and been granted HCFC–141bexemption allowances under paragraphs (h)(1) through (4) of this section




## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 94 of 139

### 621 Environmental Protection Agency § 82.18

is granted, on January 1 of each control period beginning January 1, 2007, HCFC–141b exemption allowancesequivalent to 10% more than the highest amount previously granted under paragraphs (h)(1) through (4) of thissection to that petitioner for space vehicle uses or defense applications.

(8) A formulator for, or an agency, department, or instrumentality of theU.S.; or a non-governmental space vehicle entity that has previously petitioned for and been granted HCFC–141bexemption allowances under paragraphs (h)(1) through (4) of this section but now seeks to obtain allowances inaddition to those granted under paragraph (h)(7) of this section must submita new petition in accordance with paragraph (h)(1) of this section.

[68 FR 2848, Jan. 21, 2003, as amended at 71 FR 41171, July 20, 2006; 74 FR 66446, Dec. 15, 2009] § 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 ................... 28,219,223 HCFC–141b ............... 24,647,925 HCFC–142b ............... 16,131,096 DuPont ....................... HCFC–22 ................... 42,638,049 HCFC–124 ................. 2,269,210 Honeywell .................. HCFC–22 ................... 37,378,252 HCFC–141b ............... 28,705,200 HCFC–142b ............... 2,417,534 HCFC–124 ................. 1,759,681 MDA Manufacturing ... HCFC–22 ................... 2,383,835 Solvay Solexis ........... HCFC–142b ............... 6,541,764

[ 74 FR 66446, Dec. 15, 2009]

§ 82.18 Availability of production inaddition 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 Annex 4 of Appendix C to this subpart.

(2) Effective January 1, 2010, a personapportioned baseline production allowances under §82.17 for HCFC–141b,HCFC–22, or HCFC–142b is also apportioned Article 5 allowances, equal to 10percent 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 toforeign states listed in Annex 4 of Appendix C to this subpart. (3) Effective January 1, 2015, a personapportioned 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 baselineproduction 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 listedin Annex 4 of Appendix C to this subpart.

(b) Export Production Allowances. (1)Effective January 1, 2003, a person apportioned baseline production allowances for HCFC–141b under §82.17 isalso 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] (c) International trades of production allowances, export production allowances and Article 5 allowances. (1) A person




## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 95 of 139

# 40 C.F.R. § 82.17 (2003)

USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 96 of 139

### 365 Environmental Protection Agency § 82.18

§ 82.17 Apportionment of baseline production allowances for class II controlled substances.Effective January 1, 2003, the following persons are apportioned baseline production allowances for HCFC– 141b, HCFC–22, or HCFC–142b as set forth in the following table:

Person Controlled substance Allowances(kg.)

AlliedSignal (Honeywell) .................................................................... HCFC–22 ............................ ........................... 37,378,252 HCFC–141b ................................................... 28,705,200 HCFC–142b ................................................... 2,417,534 Ausimont USA ................................................................................... HCFC–142b ....................... ............................ 6,541,764 DuPont Company .............................................................................. HCFC–22 ............................ ........................... 42,638,049 Elf Atochem (ATOFINA) .................................................................... HCFC–22 ............................... ........................ 28,219,223 HCFC–141b ................................................... 24,647,925 HCFC–142b ................................................... 16,131,096 LaRoche Industries ........................................................................... HCFC–141b ......................... .......................... 17,756,508 MDA Manufacturing ........................................................................... HCFC–22 ............................ ........................... 2,383,835

[68 FR 2848, Jan. 21, 2003]
§ 82.18 Availability of production inaddition to baseline production allowances for class II controlled substances. (a) Article 5 allowances. (1) Effective January 1, 2003, a person apportioned baseline production allowances 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, 2014, 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, 2015, for all HCFCs, a person apportioned baseline production allowances under §82.17 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, 2029, 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, 2030, for all HCFCs, a person apportioned baseline production allowances 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, 2039, 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 isalso apportioned export production allowances equal to 100 percent of their baseline production allowances for HCFC–141b for each control period up until December 31, 2029, to be used for the production of HCFC–141b for export only, in accordance with this section.

(2) [Reserved] (c) International trades of production allowances, export production allowances and Article 5 allowances. (1) A personmay increase or decrease its production allowances, export production allowances, or Article 5 allowances, for a specified control period through trades with another Party to the Protocol asset forth in this paragraph (c). Effective January 1, 2004, a nation listed either: in Appendix L of this subpart that is also listed in Appendix C, Annex 1 ofthe Protocol as having ratified the Beijing Amendments, or in Appendix C,Annex 1 of the Protocol as having ratified the Copenhagen Amendments butnot listed in Appendix L of this subpart, or in Appendix C, Annex 2 of theProtocol, as being a foreign state complying with the Beijing Amendments if the foreign state is listed in Appendix L of this subpart, or as being a foreign state complying with the Copenhagen Amendments if the foreign state is not listed in Appendix L of this subpartmust agree either to trade to the person for the current control period some quantity of production that the nationis permitted under the Montreal Protocol or to receive from the person for




## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 97 of 139

# 40 C.F.R. § 82.17 (2009)

USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 98 of 139

### 496 40 CFR Ch. I (7–1–09 Edition) § 82.17

sufficient to eliminate the use of HCFC-141b;

(viii) Amount of stockpiled HCFC141b (on-hand, taken title to, or available from a supplier) along with a detailed analysis showing why stockpiled, recovered or recycled quantitiesare deemed to be technically or economically infeasible for use; and

(ix) A detailed description of continuing investigations into and progress on possible alternatives andsubstitutes and how this activity differs from information given in the previous request.

(5) A person granted HCFC-141b exemption allowances by the Director of EPA’s Office of Atmospheric Programs under paragraph (h)(2)(i) or (h)(3) of this section may request a quantity of HCFC-141b be produced or imported in the specified control period listed in the notice by conferring the rights toproduce or import to a producer or importer.

(6) The HCFC-141b exemption allowances held by one entity do not automatically transfer to an acquiring entity. Any entity acquiring another company holding HCFC-141b exemption allowances must submit a renewal application in accordance with paragraph (h)(4) of this section at the time of the acquisition in order to qualify for the HCFC-141b exemption allowances.

(7) A formulator for, or an agency, department, or instrumentality of the U.S., or a non-governmental space vehicle entity that has previously petitioned for and been granted HCFC–141bexemption allowances under paragraphs (h)(1) through (4) of this sectionis granted, on January 1 of each control period beginning January 1, 2007, HCFC–141b exemption allowancesequivalent to 10% more than the highest amount previously granted under paragraphs (h)(1) through (4) of thissection to that petitioner for space vehicle uses or defense applications.

(8) A formulator for, or an agency, department, or instrumentality of theU.S.; or a non-governmental space vehicle entity that has previously petitioned for and been granted HCFC–141bexemption allowances under paragraphs (h)(1) through (4) of this section but now seeks to obtain allowances inaddition to those granted under paragraph (h)(7) of this section must submita new petition in accordance with paragraph (h)(1) of this section.

[68 FR 2848, Jan. 21, 2003, as amended at 71 FR 41171, July 20, 2006]

§ 82.17 Apportionment of baseline production allowances for class II controlled substances.
Effective January 1, 2003, the following persons are apportioned baseline production allowances for HCFC141b, HCFC-22, or HCFC-142b as set forth in the following table:

Person Controlled substance Allowances(kg.)

AlliedSignal (Honeywell) .................................................................... HCFC-22 ............................ ........................... 37,378,252 HCFC-141b ................................................... 28,705,200 HCFC-142b ................................................... 2,417,534 Ausimont USA ................................................................................... HCFC-142b ....................... ............................ 6,541,764 DuPont Company .............................................................................. HCFC-22 ............................ ........................... 42,638,049 Elf Atochem (ATOFINA) .................................................................... HCFC-22 ............................... ........................ 28,219,223 HCFC-141b ................................................... 24,647,925 HCFC-142b ................................................... 16,131,096 LaRoche Industries ........................................................................... HCFC-141b ......................... .......................... 17,756,508 MDA Manufacturing ........................................................................... HCFC-22 ............................ ........................... 2,383,835

[68 FR 2848, Jan. 21, 2003]

§ 82.18 Availability of production inaddition to baseline production allowances for class II controlled substances. (a) Article 5 allowances. (1) Effective January 1, 2003, a person apportioned baseline production allowances 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, 2014, to be used for the production of the specified


## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 99 of 139

# 40 C.F.R. § 82.19 (2003)

USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 100 of 139

### 367 Environmental Protection Agency § 82.19

(A) The unexpended production allowances, unexpended export production allowances or unexpended Article 5 allowances held by the trade or minus the quantity traded; or

(B) The unexpended production allowances held by the trader minus theamount by which the U.S. average annual production of the class II controlled substance being traded for the three years prior to the trade is less than the total allowable production of that class II controlled substance under this subpart minus the amount traded; or

(C) The total U.S. allowable production of the class II controlled substancebeing traded minus the three-year average of the actual annual U.S. production of the class II controlled substance prior to the control period of the trade.

(6) Revised notices of production limits for subsequent traders. If after one person obtains approval of a trade ofallowable production of a class II controlled substance to a Party and other persons obtain approval for trades of the same class II controlled substanceduring the same control period, the Administrator will issue revised notices. The notices will revise the production limits for each of the other persons trading to equal the lesser of:

(i) The unexpended production allowances, unexpended export productionallowances or unexpended Article 5 allowances held by the trader under this subpart minus the quantity traded; or

(ii) The result of the following set of calculations:

(A) The total U.S. allowable production of the class II controlled substanceminus the three-year average of the actual annual U.S. production of the class II controlled substance prior to the control period of the trade;

(B) The quantity traded divided by the total quantity traded by all the other persons trading the same class IIcontrolled substance in the same control period;

(C) The result of paragraph (c)(6)(ii)(A) of this section multiplied by the result of paragraph (c)(6)(ii)(B) of this section;

(D) The quantity derived in paragraph (c)(6)(i) of this section, minus the result of paragraph (c)(6)(ii)(C) of this section;

(7) Production limit for previous traders. The Administrator will also issue a notice revising the production limit for each trader who previously obtained approval of a trade of the class II controlled substance to a Party in the same control period to equal theresult of the following set of calculations:

(i) The total U.S. allowable production of the class II controlled substanceminus the three-year average of the actual annual U.S. production of the class II controlled substance prior to the control period of the trade;

(ii) The quantity traded by the person divided by the quantity traded by all the persons who have traded that class II controlled substance in that control period;

(iii) The result of paragraph (c)(7)(i) of this section multiplied by the result of paragraph (c)(7)(ii) of this section.

(iv) The unexpended production allowances, unexpended export production allowances or unexpended Article 5 allowances held by the person plus the result of paragraph (c)(7)(iii) of this section;

(8) Effective date of revised production limits. The change in productionallowances, export production allowances or Article 5 allowances will be effective on the date that the notice is issued.

[68 FR 2848, Jan. 21, 2003]

§ 82.19 Apportionment of baseline consumption allowances for class II controlled substances.(a) Effective January 1, 2003, the following persons are apportioned baseline consumption allowances for HCFC– 141b, HCFC–22, or HCFC–142b as set forth in the following table:

Person Controlled substance Allowances (kg)

ABCO Refrigeration Supply .............................................................. HCFC–22 ................................. ...................... 279,366 Air Systems ....................................................................................... HCFC–22 ...................... ................................. 13,514 Allied (Honeywell) .............................................................................. HCFC–22 ........................ ............................... 35,392,492 HCFC–141b ................................................... 20,749,489


## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 101 of 139

### 368 40 CFR Ch. I (7–1–03 Edition) § 82.20

Person Controlled substance Allowances (kg)

HCFC–142b ................................................... 1,315,819 Altair Industries .................................................................................. HCFC–22 ..................... .................................. 279,935 Ausimont USA ................................................................................... HCFC–22 ......................... .............................. 99,643 HCFC–142b ................................................... 3,047,386 Automatic Equipment Sales of VA .................................................... HCFC–22 ..................................... .................. 54,088 Condor Products ............................................................................... HCFC–22 .......................... ............................. 666,171 Continental ........................................................................................ HCFC–141b ................................................... 20,315 Discount Refrigerants ........................................................................ HCFC–22 ........................... ............................ 375,328 HCFC–141b ................................................... 994 DuPont Company .............................................................................. HCFC–22 ............................ ........................... 38,814,862 HCFC–141b ................................................... 9,049 HCFC–142b ................................................... 52,797 Elf Atochem (ATOFINA) .................................................................... HCFC–22 ............................... ........................ 29,524,481 HCFC–141b ................................................... 25,405,570 HCFC–142b ................................................... 16,672,675 Full Circle .......................................................................................... HCFC–22 ................... .................................... 14,865 HG Refrigeration Supply ................................................................... HCFC–22 .............................. ......................... 40,068 ICC Chemical Corp. .......................................................................... HCFC–141b .......................... ......................... 81,225 ICI Americas (INEOS) ....................................................................... HCFC–22 ............................. .......................... 2,546,305 Kivlan & Co. (Dynatemp) .................................................................. HCFC–22 ............................... ........................ 2,028,980 Klomar Ship Supply ........................................................................... HCFC–22 ........................... ............................ 8,585 LaRoche Industries ........................................................................... HCFC–141b ......................... .......................... 16,097,869 MDA Manufacturing ........................................................................... HCFC–22 ............................ ........................... 2,541,545 Mondy-Global .................................................................................... HCFC–22 ....................................................... 281,824 National Refrigerants ......................................................................... HCFC–22 .......................... ............................. 5,480,315 Refricenter of Miami .......................................................................... HCFC–22 .......................... ............................. 381,293 Refricentro ......................................................................................... HCFC–22 ....................................................... 45,979 Rhone-Poulenc .................................................................................. HCFC–22 ....................................................... 52,090 R-Lines .............................................................................................. HCFC–22 ....................................................... 63,172 Saez .................................................................................................. HCFC–22 ....................................................... 37,936 Solvay Fluorides ................................................................................ HCFC–22 ........................ ............................... 313,966 HCFC–141b ................................................... 3,940,115 TESCO Distributors ........................................................................... HCFC–22 ........................... ............................ 48,049 Tulstar Products ................................................................................ HCFC–141b ...................... ............................. 89,913

[68 FR 2848, Jan. 21, 2003]
§ 82.20 Availability of consumption allowances in addition to baseline consumption allowances for class II controlled substances. (a) A person may obtain at any timeduring the control period, in accordance with the provisions of this section, consumption allowances equivalent to the quantity of class II controlled substances that the person exported from the U.S. and its territories to a foreign state, in accordance with this section, when that quantity ofclass II controlled substance was produced in the U.S. with expended consumption allowances.

(1) The exporter must submit to theAdministrator a request for consumption allowances setting forth the following:

(i) The identities and addresses of theexporter and the recipient of the exports;

(ii) The exporter’s Employer Identification Number; (iii) The names and telephone numbers of contact persons for the exporter and the recipient;

(iv) The quantity (in kilograms) and type of class II controlled substances reported;

(v) The source of the class II controlled substances and the date purchased;

(vi) The date on which, and the portfrom which, the class II controlled substances were exported from the U.S. or its territories;

(vii) The country to which the class II controlled substances were exported;

(viii) A copy of the bill of lading and the invoice indicating the net quantity (in kilograms) of class II controlled substances shipped and documentingthe sale of the class II controlled substances to the purchaser;

(ix) The commodity codes of the class II controlled substances reported; and

(x) A written statement from the producer that the class II controlled substances were produced with expended allowances.


## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 102 of 139

# 40 C.F.R. § 82.19 (2009)

USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 103 of 139

### 499 Environmental Protection Agency § 82.19

(C) The result of paragraph (c)(6)(ii)(A) of this section multiplied by the result of paragraph (c)(6)(ii)(B) of this section;

(D) The quantity derived in paragraph (c)(6)(i) of this section, minus the result of paragraph (c)(6)(ii)(C) of this section;

(7) Production limit for previous traders. The Administrator will also issue a notice revising the production limit for each trader who previously obtained approval of a trade of the class II controlled substance to a Party in the same control period to equal theresult of the following set of calculations:

(i) The total U.S. allowable production of the class II controlled substanceminus the three-year average of the actual annual U.S. production of the class II controlled substance prior to the control period of the trade;

(ii) The quantity traded by the person divided by the quantity traded by all the persons who have traded that class II controlled substance in that control period;

(iii) The result of paragraph (c)(7)(i) of this section multiplied by the result of paragraph (c)(7)(ii) of this section.

(iv) The unexpended production allowances, unexpended export production allowances or unexpended Article 5 allowances held by the person plus the result of paragraph (c)(7)(iii) of this section;

(8) Effective date of revised production limits. The change in productionallowances, export production allowances or Article 5 allowances will be effective on the date that the notice is issued.

[68 FR 2848, Jan. 21, 2003]
§ 82.19 Apportionment of baseline consumption allowances for class II controlled substances.(a) Effective January 1, 2003, the following persons are apportioned baseline consumption allowances for HCFC141b, HCFC-22, or HCFC-142b as set forth in the following table:

Person Controlled substance Allowances (kg)

ABCO Refrigeration Supply .............................................................. HCFC-22 ................................. ...................... 279,366 Air Systems ....................................................................................... HCFC-22 ...................... ................................. 13,514 Allied (Honeywell) .............................................................................. HCFC-22 ........................ ............................... 35,392,492 HCFC-141b ................................................... 20,749,489 HCFC-142b ................................................... 1,315,819 Altair Industries .................................................................................. HCFC-22 ..................... .................................. 279,935 Ausimont USA ................................................................................... HCFC-22 ......................... .............................. 99,643 HCFC-142b ................................................... 3,047,386 Automatic Equipment Sales of VA .................................................... HCFC-22 ..................................... .................. 54,088 Condor Products ............................................................................... HCFC-22 .......................... ............................. 666,171 Continental ........................................................................................ HCFC-141b ................................................... 20,315 Discount Refrigerants ........................................................................ HCFC-22 ........................... ............................ 375,328 HCFC-141b ................................................... 994 DuPont Company .............................................................................. HCFC-22 ............................ ........................... 38,814,862 HCFC-141b ................................................... 9,049 HCFC-142b ................................................... 52,797 Elf Atochem (ATOFINA) .................................................................... HCFC-22 ............................... ........................ 29,524,481 HCFC-141b ................................................... 25,405,570 HCFC-142b ................................................... 16,672,675 Full Circle .......................................................................................... HCFC-22 ................... .................................... 14,865 HG Refrigeration Supply ................................................................... HCFC-22 .............................. ......................... 40,068 ICC Chemical Corp. .......................................................................... HCFC-141b .......................... ......................... 81,225 ICI Americas (INEOS) ....................................................................... HCFC-22 ............................. .......................... 2,546,305 Kivlan & Co. (Dynatemp) .................................................................. HCFC-22 ............................... ........................ 2,028,980 Klomar Ship Supply ........................................................................... HCFC-22 ........................... ............................ 8,585 LaRoche Industries ........................................................................... HCFC-141b ......................... .......................... 16,097,869 MDA Manufacturing ........................................................................... HCFC-22 ............................ ........................... 2,541,545 Mondy-Global .................................................................................... HCFC-22 ....................................................... 281,824 National Refrigerants ......................................................................... HCFC-22 .......................... ............................. 5,480,315 Refricenter of Miami .......................................................................... HCFC-22 .......................... ............................. 381,293 Refricentro ......................................................................................... HCFC-22 ....................................................... 45,979 Rhone-Poulenc .................................................................................. HCFC-22 ....................................................... 52,090 R-Lines .............................................................................................. HCFC-22 ....................................................... 63,172 Saez .................................................................................................. HCFC-22 ....................................................... 37,936 Solvay Fluorides ................................................................................ HCFC-22 ........................ ............................... 313,966 HCFC-141b ................................................... 3,940,115 TESCO Distributors ........................................................................... HCFC-22 ........................... ............................ 48,049


## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 104 of 139

### 500 40 CFR Ch. I (7–1–09 Edition) § 82.20

Person Controlled substance Allowances (kg)

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

[68 FR 2848, Jan. 21, 2003]

§ 82.20 Availability of consumption allowances in addition to baseline consumption allowances for class II controlled substances. (a) A person may obtain at any timeduring the control period, in accordance with the provisions of this section, consumption allowances equivalent to the quantity of class II controlled substances that the person exported from the U.S. and its territories to a foreign state, in accordance with this section, when that quantity ofclass II controlled substance was produced in the U.S. or imported into theU.S. with expended consumption allowances.

(1) The exporter must submit to theAdministrator a request for consumption allowances setting forth the following:

(i) The identities and addresses of theexporter and the recipient of the exports;

(ii) The exporter’s Employer Identification Number;

(iii) The names and telephone numbers of contact persons for the exporter and the recipient;

(iv) The quantity (in kilograms) and type of class II controlled substances reported;

(v) The source of the class II controlled substances and the date purchased;

(vi) The date on which, and the portfrom which, the class II controlled substances were exported from the U.S. or its territories;

(vii) The country to which the class II controlled substances were exported;

(viii) A copy of the bill of lading and the invoice indicating the net quantity (in kilograms) of class II controlled substances shipped and documentingthe sale of the class II controlled substances to the purchaser;

(ix) The commodity codes of the class II controlled substances reported; and

(x) A written statement from the producer that the class II controlled substances were produced with expended allowances or a written statementfrom the importer that the class II controlled substances were imported with expended allowances.

(2) The Administrator will review theinformation and documentation submitted under paragraph (a)(1) of this section and will issue a notice.

(i) The Administrator will determinethe quantity of class II controlled substances that the documentationverifies was exported and issue consumption allowances equivalent to thequantity of class II controlled substances that were exported.

(A) The grant of the consumption allowances will be effective on the date the notice is issued.

(B) The consumption allowances will be granted to the person the exporter indicates, whether it is the producer, the importer, or the exporter.

(ii) The Administrator will issue anotice that the consumption allowances are not granted if the Administrator determines that the informationand documentation do not satisfactorily substantiate the exporter’s claims.

(b) International trades of consumption allowances. (1) A person may increaseits consumption allowances for a specified control period through trades with another Party to the Protocol as set forth in this paragraph (b). A person may only receive consumption from Poland or Norway, or both, and only ifthe nation agrees to trade to the person for the current control period somequantity of consumption that the nation is permitted under the Montreal Protocol.

(2) Trade from a Party—Information requirements. A person must submitthe following information to the Administrator:

(i) A signed document from the principal diplomatic representative in the Polish or Norwegian embassy in theU.S. stating that the appropriate authority within that nation will establish or revise consumption limits for


## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 105 of 139

# 40 C.F.R. § 82.23 (2010)

USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 106 of 139

### 626 40 CFR Ch. I (7–1–10 Edition) §§ 82.21–82.22

prior to the trade minus the consumption traded.

(ii) A person requesting a consumption trade from Poland or Norway must also submit to the Administrator a true copy of the document that sets forth the following:

(A) The identity and address of the
person;

(B) The identity of the Party;(C) The names and telephone numbers of contact persons for the person and for the Party;

(D) The chemical type and quantity (in kilograms) of consumption being traded;

(E) Documentation that the Partypossesses the necessary quantity of unexpended consumption rights;

(F) The control period(s) to which the trade applies; and

(3) Notice of trade. If the request meets the requirement of paragraph (b)(2) of this section for trades from Parties, the Administrator will issue the person a notice. The notice will grant consumption allowances and specify the control period to which the trade applies. The Administrator may disapprove the trade request if it doesnot meet the requirements of paragraph (b)(2) of this section.

(4) Trade from a Party. The Administrator will issue a notice revising the allowances held by the recipient of thetrade to equal the unexpended consumption allowances held by the recipient of the trade under this subpartplus the quantity of allowable consumption traded from the Party.

(5) Effective date of revised consumption limits. The change in consumption allowances will be effective on the date that the notice is issued.

[68 FR 2848, Jan. 21, 2003, as amended at 71 FR 41172, July 20, 2006]

§§ 82.21–82.22 [Reserved]

§ 82.23 Transfers of allowances of class II controlled substances.
(a) Inter-company transfers. Effective January 1, 2003, a person (‘‘transferor’’) may transfer to any other person (‘‘transferee’’) any quantity of thetransferor’s class II consumption allowances, production allowances, export production allowances, or Article 5 allowances for the same type of allowance as follows:

(i) The transferor must submit to the Administrator a transfer claim setting forth the following:

(A) The identities and addresses of the transferor and the transferee;

(B) The name and telephone numbers of contact persons for the transferor and the transferee;

(C) The type of allowances being transferred, including the names of the class II controlled substances for which allowances are to be transferred;

(D) The quantity (in kilograms) of allowances being transferred;

(E) The control period(s) for which the allowances are being transferred;

(F) The quantity of unexpended allowances of the type and for the control period being transferred that the transferor holds under authority of this subpart on the date the claim is submitted to EPA; and

(G) For trades of consumption allowances, production allowances, exportproduction allowances, or Article 5 allowances, the quantity of the 0.1 percent offset applied to the unweighted quantity traded that will be deductedfrom the transferor’s allowance balance.

(ii) The Administrator will determine whether the records maintained byEPA indicate that the transferor possesses unexpended allowances sufficient to cover the transfer claim on the date the transfer claim is processed. The transfer claim is the quantity (in kilograms) to be transferred plus, in the case of transfers of production or consumption allowances, 0.1 percent of that quantity. The Administrator willtake into account any previous transfers, any production, and allowable imports and exports of class II controlled substances reported by the transferor. Within three working days of receivinga complete transfer claim, the Administrator will take action to notify the transferor and transferee as follows:

(A) The Administrator will issue a notice indicating that EPA does not object to the transfer if EPA’s records show that the transferor has sufficient unexpended allowances to cover the transfer claim. In the case of transfersof production or consumption allowances, EPA will reduce the transferor’s


## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 107 of 139

### 627 Environmental Protection Agency § 82.23

balance of unexpended allowances by the quantity to be transferred plus 0.1 percent of that quantity. In the case oftransfers of export production or Article 5 allowances, EPA will reduce thetransferor’s balance of unexpended allowances, respectively, by the quantity to be transferred. The transferor and the transferee may proceed with thetransfer when EPA issues a no objection notice. However, if EPA ultimately finds that the transferor didnot have sufficient unexpended allowances to cover the claim, the transferor and transferee, where applicable, willbe held liable for any knowing violations of the regulations of this subpartthat occur as a result of, or in conjunction with, the improper transfer.

(B) The Administrator will issue a notice disallowing the transfer if EPA’s records show that the transferor has insufficient unexpended allowances to cover the transfer claim, or that the transferor has failed to respond to oneor more Agency requests to supply information needed to make a determination. Either party may file a notice of appeal, with supporting reasons,with the Administrator within 10 working days after receipt of notification.The Administrator may affirm or vacate the disallowance. If no appeal is taken by the tenth working day after notification, the disallowance shall be final on that day.

(iii) The transferor and transferee may proceed with the transfer if the Administrator does not respond to atransfer claim within the three working days specified in paragraph (a)(1)(ii) of this section. In the case of transfers of production or consumptionallowances, EPA will reduce the transferor’s balance of unexpended allowances by the quantity to be transferred plus 0.1 percent of that quantity. In the case of transfers of export production allowances or Article 5 allowances,EPA will reduce the transferor’s balance of unexpended allowances by thequantity to be transferred plus 0.1 percent of that quantity. If EPA ultimately finds that the transferor didnot have sufficient unexpended allowances to cover the claim, the transferor and/or the transferee, where applicable,will be held liable for any knowing violations of the regulations of this subpart that occur as a result of, or inconjunction with, the improper transfer.

(b) Inter-pollutant transfers. (1) Effective January 1, 2003, a person (transferor) may convert consumption allowances or production allowances for one class II controlled substance to the same type of allowance for another class II controlled substance listed in Appendix B of this subpart, following the procedures described in paragraph (b)(3) of this section.

(2) Inter-pollutant transfers will bepermitted at any time during the control period and during the 30 days after the end of a control period.

(3) The transferor must submit to theAdministrator a transfer claim that includes the following:

(i) The identity and address of the transferor;

(ii) The name and telephone number of a contact person for the transferor;

(iii) The type of allowances being converted, including the names of the class II controlled substances for which allowances are to be converted;

(iv) The quantity (in kilograms) and type of allowances to be converted;

(v) The quantity (in kilograms) of allowances to be subtracted from the transferor’s unexpended allowances for the first class II controlled substance,to be equal to 100.1 percent of the quantity of allowances converted;

(vi) The quantity (in kilograms) ofallowances to be added to the transferee’s unexpended allowances for the second class II controlled substance, to be equal to the quantity (in kilograms)of allowances for the first class II controlled substance being converted multiplied by the quotient of the ozone depletion potential of the first class II controlled substance divided by the ozone depletion potential of the second class II controlled substance, as listed in Appendix B to this subpart;

(vii) The control period(s) for which the allowances are being converted; and

(viii) The quantity (in kilograms) of unexpended allowances of the type and for the control period being convertedthat the transferor holds under authority of this subpart as of the date the claim is submitted to EPA.


## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 108 of 139

### 628 40 CFR Ch. I (7–1–10 Edition) § 82.24

(4) The Administrator will determine whether the records maintained byEPA indicate that the convertor possesses unexpended allowances sufficient to cover the transfer claim on the date the transfer claim is processed ( i.e., the quantity (in kilograms) to beconverted plus 0.1 percent of that quantity (in kilograms)). EPA will take into account any previous transfers, and any production, imports (not includingtransshipments or used class II controlled substances), or exports (not including transhipments or used class IIcontrolled substances) of class II controlled substances reported by the convertor. Within three working days of receiving a complete transfer claim, the Administrator will take action to notify the convertor as follows:

(i) The Administrator will issue a notice indicating that EPA does not object to the transfer if EPA’s records show that the convertor has sufficient unexpended allowances to cover the transfer claim. EPA will reduce thetransferor’s balance of unexpended allowances by the quantity to be converted plus 0.1 percent of that quantity (in kilograms). When EPA issues a no objection notice, the transferor may proceed with the transfer. However, ifEPA ultimately finds that the transferor did not have sufficient unexpended allowances to cover the claim, the transferor will be held liable for any violations of the regulations of this subpart that occur as a result of, or in conjunction with, the improper transfer.

(ii) The Administrator will issue a notice disallowing the transfer if EPA’s records show that the transferor has insufficient unexpended allowances to cover the transfer claim, or that the transferor has failed to respond to oneor more Agency requests to supply information needed to make a determination. The transferor may file a notice of appeal, with supporting reasons,with the Administrator within 10 working days after receipt of notification.The Administrator may affirm or vacate the disallowance. If no appeal is taken by the tenth working day after notification, the disallowance shall be final on that day.

(iii) The transferor may proceed with the transfer if the Administrator does not respond to a transfer claim within the three working days specified in paragraph (b)(4) of this section. EPA will reduce the transferor’s balance of unexpended allowances by the quantity (in kilograms) to be converted plus 0.1percent of that quantity (in kilograms). The transferor will be held liable for any violations of the regulations of this subpart that occur as a result of, or in conjunction with, the improper transfer if EPA ultimately findsthat the transferor did not have sufficient unexpended allowances or credits to cover the claim.

(c) Inter-company transfers and Interpollutant transfers. If a person requests an inter-company transfer and aninter-pollutant transfer simultaneously, the quantity (in kilograms)subtracted from the transferor’s unexpended production or consumption allowances for the first class II controlled substance will be equal to 100.1 percent of the quantity (in kilograms) of allowances that are being converted and transferred.

(d) A person receiving a permanenttransfer of baseline production allowances or baseline consumption allowances (the transferee) for a specific class II controlled substance will be theperson who has their baseline allowances adjusted in accordance with phaseout schedules in this section.

[68 FR 2848, Jan. 21, 2003]
§ 82.24 Recordkeeping and reporting requirements for class II controlled substances. (a) Recordkeeping and reporting. Any person who produces, imports, exports,transforms, or destroys class II controlled substances must comply withthe following recordkeeping and reporting requirements:

(1) Reports required by this section must be mailed to the Administratorwithin 30 days of the end of the applicable reporting period, unless otherwise specified.

(2) Revisions of reports that are required by this section must be mailed to the Administrator within 180 days ofthe end of the applicable reporting period, unless otherwise specified.

(3) Records and copies of reports required by this section must be retained for three years.


## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 109 of 139

# APPENDIX B

Declarations USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 110 of 139

# Declaration of David Diggs

USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 111 of 139USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 112 of 139USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 113 of 139USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 114 of 139USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 115 of 139USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 116 of 139USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 117 of 139USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 118 of 139USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 119 of 139

# Declaration of Jane Austin

USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 120 of 139USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 121 of 139USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 122 of 139USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 123 of 139USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 124 of 139USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 125 of 139

# EXHIBIT 1

USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 126 of 139

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 127 of 139

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 128 of 139

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 129 of 139

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 130 of 139

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 131 of 139

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 132 of 139

# EXHIBIT 2

USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 133 of 139

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 134 of 139

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 135 of 139

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 136 of 139

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 137 of 139

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 138 of 139

## USCA Case #10-1347 Document #1345222 Filed: 12/01/2011 Page 139 of 139