[Federal Register Volume 69, Number 189 (Thursday, September 30, 2004)]
[Rules and Regulations]
[Pages 58269-58280]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-21809]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[OAR-2003-0228, FRL-7821-6]
RIN 2060-AG12


Protection of Stratospheric Ozone; Listing of Substitutes in the 
Foam Sector

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: Today the Environmental Protection Agency (EPA) is taking 
final action to change the listing of HCFC-141b from acceptable to 
unacceptable for use as a foam blowing agent under the Significant New 
Alternatives Policy (SNAP) Program under section 612 of the Clean Air 
Act. The SNAP program reviews alternatives to Class I and Class II 
ozone depleting substances and approves use of alternatives which 
reduce the overall risk to public health and the environment. On July 
11, 2000 EPA issued a proposed rule concerning the use of several 
hydrochlorofluorocarbons (HCFCs) in foam blowing applications. On July 
22, 2002, EPA took final action with respect to a number of the HCFCs, 
but deferred its decision on changing the list for HCFC-141b in foam 
blowing applications due to the pending production and import ban of 
HCFC-141b (effective as of January 1, 2003) and incomplete information 
regarding the technical viability of alternatives. Since the 
publication of that final rule, EPA received information from outside 
parties through letters, meetings, and the HCFC-141b Exemption 
Allowance Petition process (68 FR 2819) that addresses the use of HCFC-
141b in foam blowing applications. On March 10, 2004, EPA issued a 
Notice of Data Availability (NODA) which contained the new information 
mentioned above and sought comment on its completeness and accuracy. 
Today, based on the information contained in the NODA and the comments 
received on the NODA, EPA is making its final decision to change the 
listing for use of HCFC-141b as a foam blowing agent from acceptable to 
unacceptable.

DATES: This rule is effective on November 29, 2004.

ADDRESSES: EPA has established an official public docket for this 
action under Docket ID No. OAR-2003-0228 (continuation of Docket A-
2000-18). All documents in the docket are listed in the EDOCKET index 
at http://www.epa.gov/edocket. Although listed in the index, 
confidential business information (CBI) or other information whose 
disclosure is restricted by statute is not publically available. 
Certain other material, such as copyrighted material, is also listed in 
the index but not placed on the Internet. This material will be 
publicly available only in hard copy form. Publicly available docket 
materials are available electronically in EDOCKET. The official public 
docket is the collection of materials that is available for public 
viewing at the Air and Radiation Docket in the EPA Docket Center, (EPA/
DC) EPA West, Room B102, 1301 Constitution Ave., NW., Washington, DC. 
The EPA Docket Center Public Reading Room is open from 8:30 a.m. to 
4:30 p.m., Monday through Friday, excluding legal holidays. The 
telephone number for the Reading Room is (202) 566-1742, and the 
telephone number for the Air and Radiation Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Suzie Kocchi, Stratospheric Protection 
Division, Office of Atmospheric Programs (6205J), Environmental 
Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460; 
telephone number: (202) 343-9387; fax number: (202) 343-2363; e-mail 
address: <a href="/cdn-cgi/l/email-protection#b6ddd9d5d5dedf98c5c3ccd7d8d8d3f6d3c6d798d1d9c0"><span class="__cf_email__" data-cfemail="02696d61616a6b2c717778636c6c67426772632c656d74">[email protected]</span></a>. The published versions of notices and 
rulemakings under the SNAP program are available on EPA's Stratospheric 
Ozone Web site at http://www.epa.gov/ozone/snap/regs.

SUPPLEMENTARY INFORMATION: 

    Table of Contents: This action is divided into seven sections:
I. Regulated Entities
II. Section 612 Program
    A. Statutory Requirements
    B. Regulatory History
    C. Listing Decisions
III. Listing Decision on HCFC-141b in the Foam Sector
    A. Background
    B. Decision
IV. Response to Comments
V. Summary
VI. Statutory and Executive Order Reviews
VII. Additional Information

I. Regulated Entities

    Today's rule regulates the use of HCFC-141b as a foam blowing agent 
used in the manufacture of rigid polyurethane/polyisocyanurate foam 
products. Businesses that currently might be using HCFC-141b, or might 
want to use it in the future, include:

--Businesses that manufacture polyurethane/polyisocyanurate foam 
systems.
--Businesses that use polyurethane/polyisocyanurate systems to apply 
insulation to buildings, roofs, pipes, etc.


[[Page 58270]]


    Table 1 lists potentially regulated entities:

 Table 1.--Potentially Regulated Entities, by North American Industrial
             Classification System (NAICS) Code or Subsector
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                                 NAICS code or  Description of regulated
           Category                subsector            entities
------------------------------------------------------------------------
Industry......................          326150  Urethane and Other Foam
                                                 Product (except
                                                 Polystyrene)
                                                 Manufacturing.
------------------------------------------------------------------------

    This table is not intended to be exhaustive, but rather a guide 
regarding entities likely to be regulated by this action. If you have 
any questions about whether this action applies to a particular entity, 
consult the person listed in the preceding section, FOR FURTHER 
INFORMATION.

II. Section 612 Program

A. Statutory Requirements

    Section 612 of the Clean Air Act (CAA) requires EPA to develop a 
program for evaluating alternatives to ozone depleting substances 
(ODS). EPA refers to this program as the Significant New Alternatives 
Policy (SNAP) program. The major provisions of section 612 are:
    <bullet> Rulemaking--Section 612(c) requires EPA to promulgate 
rules making it unlawful to replace any class I (chlorofluorocarbon, 
halon, carbon tetrachloride, methyl chloroform, methyl bromide, and 
hydrobromofluorocarbon) or class II (hydrochlorofluorocarbon) substance 
with any substitute that the Administrator determines may present 
adverse effects to human health or the environment where the 
Administrator has identified an alternative that (1) reduces the 
overall risk to human health and the environment, and (2) is currently 
or potentially available.
    <bullet> Listing of Unacceptable/Acceptable Substitutes--Section 
612(c) also requires EPA to publish a list of the substitutes 
unacceptable for specific uses. EPA must publish a corresponding list 
of acceptable alternatives for specific uses.
    <bullet> Petition Process--Section 612(d) grants the right to any 
person to petition EPA to add a substitute to or delete a substitute 
from the lists published in accordance with section 612(c). The Agency 
has 90 days to grant or deny a petition. When the Agency grants a 
petition, EPA must publish the revised lists within an additional six 
months.
    <bullet> 90-day Notification--Section 612(e) directs EPA to require 
any person who produces a chemical substitute for a class I substance 
to notify EPA not less than 90 days before new or existing chemicals 
are introduced into interstate commerce for significant new uses as 
substitutes for a class I substance. The producer must also provide EPA 
with the producer's health and safety studies on such substitutes.
    <bullet> Outreach--Section 612(b)(1) states that the Administrator 
shall seek to maximize the use of federal research facilities and 
resources to assist users of class I and II substances in identifying 
and developing alternatives to the use of such substances in key 
commercial applications.
    <bullet> Clearinghouse--Section 612(b)(4) requires the Agency to 
set up a public clearinghouse of alternative chemicals, product 
substitutes, and alternative manufacturing processes that are available 
for products and manufacturing processes which use class I and II 
substances.

B. Regulatory History

    On March 18, 1994, EPA published a rule (59 FR 13044) which 
described the process for administering the SNAP program and issued 
EPA's first acceptability lists for substitutes in the major industrial 
use sectors. These sectors include: Refrigeration and air conditioning, 
foam manufacturing, solvents cleaning, fire suppression and explosion 
protection, sterilants; aerosols, adhesives, coatings and inks; and 
tobacco expansion. These sectors comprise the principal industrial 
sectors that historically consumed large volumes of ozone-depleting 
compounds.
    EPA defines a ``substitute'' as any chemical, product substitute, 
or alternative manufacturing process, whether existing or new, that 
could replace a class I or class II substance (40 CFR 82.172). Anyone 
who produces a substitute must provide EPA with health and safety 
studies on the substitute at least 90 days before introducing it into 
interstate commerce for significant new use as an alternative (40 CFR 
82.174(a)). This requirement applies to chemical manufacturers, but may 
include importers, formulators, or end-users when they are responsible 
for introducing a substitute into commerce.

C. Listing Decisions

    Under section 612, EPA has considerable discretion in the risk 
management decisions it can make under the SNAP program. In the SNAP 
rule, the Agency identified four possible decision categories: 
acceptable; acceptable subject to use conditions; acceptable subject to 
narrowed use limits; and unacceptable (40 CFR 82.180(b)). Fully 
acceptable substitutes, i.e., those with no restrictions, can be used 
for all applications within the relevant sector end-use.
    After reviewing a substitute, EPA may make a determination that a 
substitute is acceptable only if certain conditions of use are met to 
minimize risk to human health and the environment. Such substitutes are 
described as ``acceptable subject to use conditions.''
    Even though EPA can restrict the use of a substitute based on the 
potential for adverse effects, it may be necessary to permit a narrowed 
range of use within a sector end-use because of the lack of 
alternatives for specialized applications. Users intending to adopt a 
substitute acceptable with narrowed use limits must first ascertain 
that other acceptable alternatives are not technically feasible. 
Companies must document the results of their evaluation, and retain the 
results on file for the purpose of demonstrating compliance. This 
documentation must include descriptions of substitutes examined and 
rejected, processes or products in which the substitute is needed, 
reason for rejection of other alternatives, e.g., performance, 
technical or safety standards, and the anticipated date other 
substitutes will be available and projected time for switching to other 
available substitutes.
    It is a violation of the CAA and EPA's SNAP regulations to replace 
an ODS with a substitute listed as unacceptable or to use of substitute 
in contravention of the limits set by a use condition or the narrowed 
use limits (40 CFR 82.174).
    EPA does not believe that notice and comment rulemaking procedures 
are required to list alternatives as acceptable with no restrictions. 
Such listings do not impose any sanction, nor

[[Page 58271]]

do they remove any prior license to use a substitute. Consequently, EPA 
adds substitutes to the list of acceptable alternatives without first 
requesting comment on new listings (59 FR 13044). Updates to the 
acceptable lists are published as separate Notices of Acceptability in 
the Federal Register.
    As described in the original March 18, 1994 rule for the SNAP 
program (59 FR 13044), EPA believes that notice-and-comment rulemaking 
is required to place any alternative on the list of prohibited 
substitutes, to list a substitute as acceptable only under certain use 
conditions or narrowed use limits, or to remove an alternative from 
either the list of prohibited or acceptable substitutes. In this final 
rule, EPA is revising its determination regarding the acceptability of 
HCFC-141b as a substitute in the foams blowing sector. Today's rule 
finalizes and incorporates decisions that were proposed on July 11, 
2000 at 65 FR 42653 (referred to hereinafter as ``the proposal''). The 
section below presents a detailed discussion of the determination that 
is made final in today's Final Rule.

III. Listing Decision on HCFC-141b in the Foam Sector

A. Background

    A major goal of the SNAP program is to facilitate the transition 
away from ODS. In 1994, EPA listed several HCFCs as acceptable 
replacements for CFCs because the Agency believed that HCFCs provided a 
temporary bridge to alternatives that do not deplete stratospheric 
ozone (``ozone-friendly''). At that time, EPA believed that HCFCs were 
necessary transitional alternatives to CFC blowing agents in thermal 
insulating foam (59 FR 13083). As a result, HCFC-141b became one of the 
most common foam blowing agents in place of CFC-11. Pursuant to the CAA 
and the Montreal Protocol on Substances that Deplete the Ozone Layer 
HCFC-141b was phased out of production and import on January 1, 
2003.\1\ Since the time EPA initially listed HCFC-141b as acceptable in 
certain foam blowing uses, the Agency has listed several other non-ODS 
alternative blowing agents, including hydrofluorocarbons (HFCs), 
hydrocarbons, carbon dioxide, and other compounds as acceptable 
substitutes in foam blowing.\2\ As of 2003, the vast majority of the 
foam industry has implemented alternatives other than HCFC-141b.\3\ 
Finished products containing these alternatives are commercially 
available today. Spray foam is the only significant foam end use that 
has not completed the transition away from ODS. However, some spray 
foam companies have implemented non-ODS alternatives and are marketing 
foam systems containing non-ODS alternatives today. Others have 
identified non-ODS alternatives, overcome technical constraints and are 
working on the final implementation of non-ODS alternatives, such as 
acquiring final building code approvals before offering foam systems in 
the market by the end of 2004.
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    \1\ The phaseout schedule was established on December 10, 1993 
(58 FR 65018) as authorized under section 606 of the Clean Air Act.
    \2\ These listings are published in the following Federal 
Register notices: 61 FR 47012, 62FR 10700, 62 FR 30275, 63 FR 9151, 
64 FR 30410, 64 FR 68039, 65 FR 19327, 65 FR 37900, 65 FR 78977 and 
68 FR 50533.
    \3\ Within the context of this rule, the word alternative refers 
to a technically viable SNAP approved alternative that presents a 
lower overall risk to human health and the environment.
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    The spray foam sector operates differently than many other end 
users regulated under SNAP. Rather than the end user directly buying 
and using an alternative, the alternative is first processed by a 
formulator. The formulators purchase raw materials, including the 
blowing agent (e.g. HCFC-141b), isocyanates, surfactants, fire 
retardants, etc. from suppliers and blend the materials into a spray 
foam system. Because the re-formulating and testing is done by the 
formulators, they are relied upon for much of the technical expertise 
and support provided to the ultimate end user--on-site contractors. The 
contractors purchase these systems from the formulators in order to 
produce the actual foam product (e.g., roof or wall insulation). Thus, 
in the spray foam sector, the formulators are responsible for 
implementing alternatives to HCFC-141b and providing the contractors 
with systems that produce foam meeting the necessary technical and code 
requirements. However, both the formulators and contractors are subject 
to SNAP regulations because both use the blowing agent (e.g. HCFC-
141b). In the former case this entails blending the blowing agent in a 
foam formulation and in the latter case this involves producing the 
foam with aid of the blowing agent.
    On July 11, 2000, EPA published a proposal that addressed the use 
of various HCFCs in foam end-uses (65 FR 42653). Part of that proposed 
rule was a proposal to list HCFC-141b as unacceptable in all foam end-
uses upon finalization of the rule, with existing users allowed to 
continue use (i.e., grandfathered) until January 1, 2005. EPA believed 
that this time period was sufficient for these end-users to transition 
to alternative foam blowing agents, considering the production phaseout 
of HCFC-141b on January 1, 2003. The Agency allowed 60 days for public 
comment and received 45 responses to the proposal by the close of the 
comment period (September 11, 2000). EPA received comments from 
chemical manufacturers, appliance manufacturers, spray foam 
manufacturers, associations, and others. Copies of the comments can be 
obtained through the Air Docket by referencing A-2000-18, IV-D-1 
through 45 (see ADDRESSES section above for docket contact 
information). Specifically, the comments to the proposal on HCFC-141b 
detailed issues surrounding the technical viability and availability of 
non-ODS alternatives in the spray foam sector. On July 22, 2002, EPA 
took final action on other aspects of the July 11, 2000 proposed rule. 
In response to the comments regarding the technical viability and 
availability of alternatives in the spray foam sector, EPA deferred 
final action on the proposal to list HCFC-141b as unacceptable in order 
to monitor the progress of the spray foam sector in implementing 
technically viable alternatives (67 FR 47703).
    Since EPA's deferral on the decision to find the use HCFC-141b in 
foam blowing applications unacceptable, the Agency has undertaken a 
number of initiatives to address the concerns of spray foam formulators 
that non-ODS alternatives were not technically and economically viable. 
There are approximately 15-20 companies in the U.S. that formulate 
spray foam for thousands of customers, including roofing contractors 
and others. Several of these formulators are larger businesses, but 
many are small businesses. In comments on the SNAP proposal and on a 
separate but related rulemaking (the HCFC Allowance Allocation 
proposal, July 20, 2001, 66 FR 38063), some small businesses that used 
HCFC-141b requested an industry wide exemption from the HCFC-141b 
production phaseout of January 1, 2003 (the phaseout date established 
in 1993). Based on their view of the technical viability and 
availability of alternatives, the formulators explained that access to 
HCFC-141b beyond the phaseout would allow them to complete all the 
tests and qualifications necessary to implement alternative blowing 
agents (see Air Docket A-98-33: IV-D-35 to IV-D-66 and IV-G-06 to IV-G-
09). Upon review of these comments, EPA concluded that allowing 
production of HCFC-141b for the entire spray foam sector would

[[Page 58272]]

unfairly penalize companies who had invested in the transition from 
HCFC-141b. Additionally, hundreds if not thousands of companies had 
been relying on the HCFC-141b phaseout for ten years and had made 
investments according to the phaseout date established in 1993. EPA did 
not believe an industry wide exemption from the production ban would 
provide any small businesses that were experiencing technical 
constraints access to HCFC-141b produced after January 1, 2003, because 
they would be forced to compete with other companies for a limited 
supply of HCFC-141b (68 FR 2827). Therefore, in an immediate effort to 
address the concerns of small businesses, EPA funded a three-year grant 
(2001-2004) to the Spray Polyurethane Foam Alliance (SPFA). This grant 
assisted the SPFA to investigate and test non-ODS alternatives as well 
as provide guidance to the spray foam sector on implementation of those 
alternatives. EPA also provided outreach and assistance through various 
meetings, presentations and guidance directed at the spray foam sector 
from 2001 to 2004 (Air Docket OAR-2003-0228-30 and 31 and http://www.epa.gov/ozone/snap/foams/index.html).
    More importantly, in response to the small businesses' requests for 
an extension of the production phaseout of HCFC-141b, EPA created the 
HCFC-141b Exemption Allowance Petition process in the final HCFC 
Allowance Allocation rule (January 21, 2003, 68 FR 2819). This process 
allowed formulators of HCFC-141b to individually petition EPA (on an 
annual basis) for new production of HCFC-141b beyond the phaseout date. 
The petitions must detail the technical viability of alternatives, 
access to stockpiled HCFC-141b and efforts to implement alternatives as 
well as the other information required under 40 CFR 82.16(h). Over the 
past two years, EPA has received approximately 25 petitions from 
formulators for a variety of applications, the majority of which were 
spray foam roofing and wall insulation.
    The switch to alternatives has been slowed in the spray foam market 
because of the continued availability of HCFC-141b. Although stockpiled 
HCFC-141b will be depleted by the end of 2004, that is not the only 
source of HCFC-141b being used for spray foam applications. ``Blended'' 
polyurethane foam systems \4\ containing HCFC-141b as the blowing agent 
are being imported to the U.S. under this scenario, HCFC-141b is newly 
produced and blended with the isocyanates, surfactants, fire 
retardants, etc. into a system in a country that is not subject to the 
production phaseout in the Montreal Protocol. Then, that ``blended'' 
system is imported into the U.S. for use in spray foam applications.
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    \4\ A foam system typically consists of two transfer pumps that 
deliver ingredients (polyisocyanate from one side and a mixture 
including the blowing agent and stabilizers from the other side) to 
a metering/mixing device which allows the components to be delivered 
in the appropriate proportions. The components are then sent to a 
mixing gun and dispensed as foam directly to a surface such as a 
roof or tank. The ``blended'' foam systems being imported to the 
U.S. are complete systems, containing all the ingredients including 
the polyisocyanate and the blowing agent.
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    EPA has been monitoring this situation since the production 
phaseout on January 1, 2003 in order to determine whether this vehicle 
for obtaining HCFC-141b beyond the phaseout date would be exploited. As 
explained in the 2002 final foam rule, `` * * * if this activity 
becomes widespread and compromises or undermines the intent of the U.S. 
HCFC-141b phaseout, disadvantages companies that have made good faith 
investments in developing and implementing non-ODS alternative 
technologies, EPA could consider establishing a SNAP use restriction * 
* *'' (67 FR 47708). Given the information EPA has received since HCFC-
141b production was phased out, it is apparent that the continued 
availability of HCFC-141b through these ``blended'' systems is not only 
delaying the transition to alternatives in the spray foam sector but 
threatens to reverse the transition by penalizing companies that have 
either transitioned to alternatives, or are technically capable of 
transitioning to alternatives but choose not to because of the 
widespread availability of foam systems containing HCFC-141b.
    Based on the information from the HCFC-141b Exemption Allowance 
Petitions and other information provided by the industry, on March 10, 
2004, EPA published a NODA (69 FR 11358) pertaining to the 
availability, including the technical viability, of alternatives, and 
the import of ``blended'' HCFC-141b polyurethane foam systems. EPA 
allowed 30 days for comment and received 16 comments on the information 
by the close of the comment period (April 9, 2004). The Agency received 
information on the technical viability of alternatives from chemical 
manufacturers, spray foam manufacturers, contractors, industry 
associations, and others. Copies can be obtained through the Air Docket 
by referencing OAR-2003-0228, Reference Numbers 14-29 (see ADDRESSES 
section above for docket contact info). Of the 16 comments received, 5 
were from small businesses raising some concerns about the use of 
stockpiled HCFC-141b and the ability for all businesses to transition 
to alternatives by January 1, 2005. EPA addressed these and other 
issues the commenters raised below. In addition, EPA addressed any 
comments received to the 2004 NODA after the comment period closed on 
April 9, 2004 in a document titled ``Response To Late Comments'' found 
in Air Docket OAR-2003-0228. Today, EPA is making its final decision 
regarding the acceptability of HCFC-141b in the foam sector. EPA's 
decisions are based on the technical viability of alternatives, timing 
and availability of alternatives, the need for products that maintain 
thermal efficiency, structural integrity, safety, and the potential 
economic implications of this action.

B. Decision

    Based on the comments received on the proposal and NODA, EPA is 
taking the following final actions: (1) Changing the listing decision 
for HCFC-141b so that it is unacceptable for all foam blowing end uses 
(other than those applications specifically exempted) as of January 1, 
2005, (2) exempting the use of HCFC-141b for space vehicle, nuclear and 
defense foam applications from the unacceptability determination, (3) 
exempting the use of HCFC-141b for laboratory research and development 
applications from the unacceptability determination and (4) allowing 
the use of fully formulated HCFC-141b foam systems in inventory before 
January 1, 2005 until July 1, 2005.
    The majority of the HCFC-141b users in the foam industry 
transitioned to alternatives on or before January 1, 2003. The 
remaining portion of the industry, specifically the spray foam sector, 
required additional time to implement alternatives to HCFC-141b. This 
sector includes small businesses at both the formulator level and the 
contractor level. Of the 15-20 formulators in the U.S. some are small 
businesses. Equally, of the thousands of contractors many are small 
businesses. Both the formulators and contractors use the blowing agent 
(e.g. HCFC-141b) in the manufacture of foam. The formulators use the 
blowing agent by blending it into the foam formulations found in the 
spray foam systems. The contractors use the blowing agent by spraying 
the foam system containing the blowing agent to create the actual foam 
product (e.g. roof, wall, pipe insulation). Over the past three years, 
EPA has been working extensively with this sector in order to ensure a 
safe and timely

[[Page 58273]]

transition to less harmful alternatives, through the SPFA grant, the 
HCFC-141b Exemption Allowance Petition process and through the outreach 
efforts cited above.
    In 2000, before the phaseout of HCFC-141b, small business 
formulators requested an extension of the HCFC-141b phaseout date in 
order to complete testing, qualification and code approvals of their 
alternative systems. EPA's technical expert, Caleb Management Services, 
surveyed the foam industry through a review of technical data and 
industry interviews and concluded that due to the field testing and 
approval process necessary for spray foam, commercial products 
containing alternatives would not be widely available until the 
beginning of 2005 (Air Docket A-2000-18, IV-D-78). The formulators 
supported this assessment and urged EPA to take action consistent with 
the Caleb Report. EPA agreed with the formulators and Caleb's 
assessment and established the HCFC-141b Exemption Allowance Petition 
process to provide relief to any business that did not have access to 
HCFC-141b while they were developing alternatives.
    Suppliers of HCFC-141b and the majority of spray foam formulators 
(which hold the stockpiled HCFC-141b) provided key information to EPA 
through the two years of the HCFC-141b Exemption Allowance Petition 
process. This information included the quantity of stockpiled HCFC-141b 
available to the industry and the progress of formulators in 
implementing alternatives across the industry. EPA's analysis of that 
information determined that stockpiled HCFC-141b will be depleted by 
the end of 2004, the majority of technical constraints limiting the use 
of other acceptable alternatives have been overcome and alternatives 
will be implemented by the end of 2004 (Air Docket OAR-2003-0228-0009).
    In the second half of 2002 the suppliers produced a large quantity 
of stockpiled HCFC-141b, including approximately 6.5 million pounds of 
uncommitted HCFC-141b. As a result, the majority of formulators 
purchased stockpiled HCFC-141b to meet their needs as they transitioned 
to non-ODS alternatives. Those formulators that did not purchase 
stockpiled HCFC-141b in 2002 before the phaseout, did so in both 2003 
and 2004. As a result, the spray foam sector primarily relied on 
stockpiled HCFC-141b. During this period, EPA did not authorize new 
production of HCFC-141b through the HCFC-141b Exemption Allowance 
Petition process, with the exception of small quantities for 
specialized space vehicle applications (Air Docket A-98-33, IV-G-26-
30).
    Some formulators have made significant progress to transition away 
from HCFC-141b since their 2000 extension request. These firms now 
offer on the market foam systems containing non-ODS alternatives and 
others will be doing the same throughout 2004 (Air Docket OAR-2003-
0228-0009). As EPA stated when establishing the HCFC-141b Exemption 
Allowance Petition process in January 2003, ``EPA believes all or 
almost all formulators can have fully-approved commercially available 
foam systems using alternatives by the end of 2004.'' (68 FR 2828). The 
information gathered through the HCFC-141b Exemption Allowance Petition 
process supports EPA's belief that alternatives to HCFC-141b are 
technically and economically viable for foam applications.
    Although alternatives are technically and economically viable for 
the majority of end uses in the foam industry, a few exceptions exist 
for space, nuclear and defense applications. EPA received information 
from the National Aeronautics and Space Administration (NASA), the 
National Nuclear Security Administration (NNSA) of the U.S. Department 
of Energy (DOE) and their contractors about specific foam applications 
that require continued use of HCFC-141b. These applications which 
include the use of HCFC-141b to insulate the external tank of the space 
shuttle and space launch vehicles in order to meet rigorous technical 
and human health and safety requirements. Alternatives to these uses 
have not proved technically viable to date (Air Docket OAR-2003-18, 20, 
14 and 33). Those entities project their use of HCFC-141b will continue 
to at least 2010 when either the projects will be complete or 
alternatives will be qualified. Based on the highly specialized safety 
and technical requirements, EPA is allowing the continued use of HCFC-
141b in space vehicle, nuclear and defense foam applications beyond 
January 1, 2005.
    Additionally, suppliers of blowing agents, isocyanates, 
surfactants, fire retardants, etc. in the foam industry use small 
quantities of stockpiled HCFC-141b in laboratory-scale research and 
development for users outside the US.\5\ This use includes various 
research and development activities such as preparing control samples, 
blending formulations, analyzing samples, etc. Given the fact that this 
is a small use that does not develop HCFC-141b foam products for the 
U.S., EPA is allowing the continued use of HCFC-141b in laboratory 
research and development applications beyond January 1, 2005.
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    \5\ Although raw material suppliers are currently relying on 
stockpiled HCFC-141b for their research and development needs they 
may require additional production or import of de minimis quantities 
of HCFC-141b in the future. In a 2002 final rule, EPA defined de 
minimis quantities of class I controlled substances as 5 pounds or 
less (December 31, 2002, 67 FR 79861). EPA regulations exempt import 
and production of de minimis quantities of class I (CFCs) controlled 
substances for laboratory use from the phaseout of those substances 
with specific restrictions outlined in Appendix G in accordance with 
the Montreal Protocol (66 FR 14760). The issue of an HCFC-141b 
laboratory exemption including commercial research and development 
will be addressed in a separate rulemaking at a later date.
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    Finally, EPA received comments from spray foam formulators and 
contractors requesting the use of inventoried HCFC-141b spray foam 
systems beyond January 1, 2005. Since 2000, EPA has provided continual 
updates on the status of the proposal through regulatory actions every 
year.\6\ EPA believes that the spray foam sector has had sufficient 
notice to prepare and plan for the use restriction. This includes the 
prudent management of their inventories of stockpiled HCFC-141b and 
fully formulated systems containing HCFC-141b.
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    \6\ These actions are as follows:
    <bullet> SNAP Foam NPRM, July 11, 2000, 65 FR 42653,
    <bullet> SNAP Foam NODA, May 23, 2001, 66 FR 28408,
    <bullet> SNAP Foam Final rule, July 22, 2002, 67 FR 47703,
    <bullet> HCFC Allowance Allocation Final rule, January 21, 2003, 
68 FR 2819,
    <bullet> SNAP Foam NODA, March 10, 2004, 69 FR 11385.
---------------------------------------------------------------------------

    On the other hand, EPA recognizes that the actual application of 
spray foam is weather dependent, especially in the winter months where 
spray foam jobs are scheduled and delayed because of uncontrollable 
weather events. Additionally, EPA understands that a fully formulated 
spray foam system typically has a shelf life of approximately six 
months. In other words, if a spray foam system was formulated in 
December for a roofing application but that application was delayed due 
to weather, that formulated system has to be used by the end of June in 
order to maintain the foam's high quality and performance 
characteristics (after six months, the formulation could degrade and 
thus produce lower quality foam that does not meet all of the required 
performance standards). The total inventory of fully formulated spray 
foam systems is low in the winter because it is historically the 
slowest time of the year with relatively few spray foam applications 
scheduled. Thus, EPA is allowing the application of existing stock of 
fully formulated

[[Page 58274]]

systems containing HCFC-141b until July 1, 2005.
    In order to accommodate users who may have some remaining systems 
in inventory at the end of 2004, EPA is granting a one-time exception. 
Any fully formulated spray foam system containing HCFC-141b that is on-
site and in the company's physical inventory, as of December 31, 2004 
can be used through June 30, 2005, pursuant to this one time exception. 
However, effective July 1, 2005, it will be illegal to use an 
inventoried fully formulated system containing HCFC-141b for the 
purpose of foam application. As explained above, a fully formulated 
spray foam system typically has a finite shelf life of approximately 
six months before the reactivity of the system slows down and it will 
not perform to specification. Therefore, once blended the fully 
formulated spray foam systems needs to be applied within that limited 
period.
    In order to comply with this exception, the spray foam systems 
containing HCFC-141b must be fully formulated and in existing stock 
with the formulator or contractor before January 1, 2005. Existing 
stock is defined as the total number of fully formulated systems 
containing HCFC-141b physically on-site at the company's facility on 
December 31, 2004 and listed on the inventory list. An inventory list 
must be created reflecting the total number of fully formulated systems 
containing HCFC-141b, on-site, at the facility. The inventory list must 
identify the name, address (not a Post Office Box), city, state, zip 
code, of the facility where the fully formulated systems are stored, 
and a signature attesting that the total number of fully formulated 
systems is true and accurate as of December 31, 2004. The facility must 
keep a copy of the inventory list at the facility site which stores the 
fully formulated systems list for three years.
    Fully formulated systems that meet these conditions must be applied 
before July 1, 2005. Any user who knowingly applies an inventoried 
fully formulated system containing HCFC-141b on or after July 1, 2005 
may be fined up to $27,500 per kilogram of HCFC-141b.

IV. Response to Comments

    EPA received 45 comments during the comment period to the 2000 
proposal. Those comments referred to all provisions in the proposal, 
including those related to the use of HCFC-22 and HCFC-142b, and were 
addressed in the 2002 final foam rule (67 FR 477703). The comments 
received on the 2000 proposal and the 2001 NODA regarding HCFC-141b 
were responded to in the final HCFC Allowance Allocation rule (28 FR 
6819) which created the HCFC-141b Exemption Allowance Petition process. 
In addition, EPA received 16 comments during the comment period on the 
2004 NODA. EPA addressed any late comments received to the 2004 NODA 
after the comment period closed on April 9, 2004 in a document titled 
``Response To Late Comments'' found in Air Docket OAR-2003-0228. The 
comments EPA received within the comment period related to the use of 
HCFC-141b are summarized in the following 6 topics which are addressed 
in detail below:
    1. Technical Availability of Alternatives.
    2. Quantity of Stockpiled HCFC-141b.
    3. Import into the U.S. of ``Blended'' Polyurethane Foam Systems.
    4. Clean Air Act.
    5. North American Free Trade Agreement.
    6. De-listing HCFC-141b and Grandfathering under SNAP.

Technical Viability of Alternatives

    Some commenters said that not all spray foam formulators will have 
qualified non-ODS alternatives available to them at the end of 2004. 
EPA's decision to list HCFC-141b as unacceptable in foam blowing is 
based on the fact that alternatives that provide a lower risk to human 
health and the environment are technically viable and commercially 
available. The commenters did not suggest or provide evidence why 
alternatives are not available to spray foam formulators. EPA's 
analysis of the information gathered from the HCFC-141b Exemption 
Allowance Petitions indicates that some formulators are already 
offering commercial products using non-ODS alternative blowing agents 
and the majority of formulators will be able to offer such products by 
the end of 2004 (Air Docket OAR-2003-0228-0009). As EPA stated when 
establishing the HCFC-141b Exemption Allowance Petition process, ``EPA 
believes the spray and pour foam industries have had access to 
sufficient quantities of HFC-245fa [the alternative of choice for most 
formulators] for research, development and testing purposes since early 
2001 and in many cases before. Therefore, by 2004, EPA believes that 
most, if not all, formulators in this sector will have had sufficient 
time to test and implement alternatives.'' (68 FR 2828).
    Moreover, the formulators that petitioned EPA for newly produced 
HCFC-141b had to provide detailed information about the status of their 
implementation of alternatives. That information demonstrated that, 
overall, any remaining technical constraints were being addressed and 
alternatives would be implemented by the end of 2004 (Air Docket OAR-
2003-0228-0009). It is important to note that these findings correspond 
and are consistent with the assessment in the Caleb Report of the spray 
foam sector and the formulators' support of that assessment. The Caleb 
Report stated that after completing field testing and achieving code 
approvals, the spray foam sector would be able to offer commercial 
products containing alternatives by 2005. Due to the progress in 
development, field testing and qualification in the sector, EPA 
believes by the beginning of 2005, the spray foam demand can be met 
with non-ODS alternatives. HCFC-141b will not be required to maintain 
technical requirements, such as structural integrity or thermal 
efficiency, in foam applications. However, as discussed in the previous 
section there are certain specialized space vehicle, nuclear and 
defense applications that do require HCFC-141b to meet rigorous 
technical, human health and safety requirements (i.e. space shuttle 
flight safety). For those limited applications, EPA is allowing the 
continued use of HCFC-141b.

Quantity of Stockpiled HCFC-141b

    Some commenters recommended that EPA allow the use of any remaining 
stockpiled HCFC-141b in 2005. Before the phaseout of HCFC-141b, EPA 
encouraged stockpiling HCFC-141b for use during the transition to 
alternatives, especially for formulators that were experiencing 
technical constraints. According to EPA's analysis of data received 
from formulators and HCFC-141b suppliers, the remaining stockpiled 
HCFC-141b will be depleted by the end of 2004. In fact, petitioners in 
the HCFC-141b Exemption Allowance Petition process provided EPA with 
the quantity of stockpiled HCFC-141b they currently held and then 
demonstrated they did not have access to additional stockpiled HCFC-
141b. Morever, the foam industry has been aware of the need to plan for 
its transition from HCFC-141b since 1993, which includes the use and 
management of a finite quantity of HCFC-141b. It is unlikely any 
company would be holding a large stockpile of HCFC-141b two years 
beyond the phaseout date. EPA is confident its analysis accurately 
reflects the quantity of stockpiled HCFC-141b available for use in the 
foam industry because it is based on data from the same industry that 
has requested to use stockpiles in

[[Page 58275]]

2005. EPA has been provided with no evidence that large stockpiles of 
HCFC-141b will exist in the spray foam sector beyond January 1, 2005. 
Therefore, EPA has determined that it is not necessary to allow 
stockpiled HCFC-141b to be used in 2005.
    In a related issue, EPA acknowledges that some formulators and 
contractors could have HCFC-141b systems formulated and purchased in 
2004 held in inventory at the beginning of 2005 due to weather delays. 
Given the fact that the production of HCFC-141b has been phased out 
since January 1, 2003 and that the use restriction was proposed in 
2000, the foam industry has been on notice and should be making every 
effort to use HCFC-141b systems and transition to alternative based 
systems as soon as possible. However, as discussed in the previous 
section, in order to allow for the uncertainty of the winter months, 
EPA is allowing the use of fully formulated HCFC-141b foam systems that 
are in inventory before January 1, 2005 until July 1, 2005. This 
allowance will accommodate any formulators and contractors holding 
fully formulated HCFC-141b systems at the end of 2004 and ensure that 
HCFC-141b produced before the phaseout is consumed without a loss to 
the purchaser.

Import Into the U.S. of ``Blended'' Polyurethane Foam Systems

    EPA received comments suggesting that restricting the use HCFC-141b 
would unfairly impact Mexico because such a restriction would preclude 
the use of ``blended'' foam systems containing HCFC-141b that are 
manufactured in and imported from Mexico. Restricting the use of HCFC-
141b in foam applications in the U.S. does not restrict Mexico's 
ability to obtain HCFCs or use HCFCs. Under the Montreal Protocol, as 
an Article 5 country (a developing country), Mexico is allowed to 
produce and import HCFCs until 2040 in accordance with their baseline 
(which will be established in 2015). Equally, this use restriction does 
not prevent the use of or import into the U.S. of refrigerators or 
metal panels, for example, that contain HCFC-141b. Those products can 
continue to be manufactured in Mexico (or any other country) and 
imported into the U.S.
    The commenters did not provide the quantity of HCFC-141b they were 
importing into the U.S. via these ``blended'' foam systems but another 
commenter stated that as much as 8-9 million pounds of HCFC-141b could 
be imported into the U.S. in this manner (Air Docket OAR-2003-0019).
    <bullet> Some of the commenters contend that they are relying on 
the revenue from the sale of these ``blended'' foam systems for use in 
the U.S. to fund their research and development into alternatives in 
Mexico. This issue is beyond scope of this rulemaking because the SNAP 
program focuses on the transition to alternatives in the U.S. rather 
than other countries.

Clean Air Act

    Another commenter stated that Section 610 of the CAA prevents EPA 
from restricting the use of HCFC-141b in foam applications. Under 
Section 610, EPA promulgated regulations prohibiting the sale and 
distribution and the offer for sale and distribution of nonessential 
products containing Class I and Class II controlled substances as of 
January 1994 (58 FR 4768 and 58 FR 69638). In Section 610, Congress 
provided a list of products manufactured with those controlled 
substances that it considered nonessential and that should be banned 
from sale and distribution in the U.S. However, in the language of CAA 
Section 610(d)--the Class II Nonessential Ban, Congress did not provide 
a list of products it considered essential. It listed exceptions to the 
self-effectuating ban for certain products (including ``foam insulation 
products'' containing Class II controlled substances), stating that 
those products should not be banned from sale and distribution in the 
U.S. at that time. Additionally, Section 610(d) provides the criteria 
that EPA should use to determine if additional products should be 
exempted from the ban. During the initial rulemaking to implement the 
Class II Nonessential Ban, EPA promulgated a definition for ``foam 
insulation products'' because the Agency determined that the use of the 
term ``insulation'' in the statute was ambiguous.\7\ EPA used its 
authority to reach a reasonable interpretation in developing a 
definition of foam insulation.
---------------------------------------------------------------------------

    \7\ Foam insulation products are defined as a product containing 
or consisting of the following foam types: Closed cell rigid 
polyurethane foam; closed cell rigid polystyrene boardstock foam; 
closed cell rigid phenolic foam; and closed cell rigid polyethylene 
foam when such foam is suitable in shape, thickness and design to be 
used as a product that provides thermal insulation around pipes used 
in heating, plumbing, refrigeration, or industrial process systems 
(40 CFR 82.62). Any use of acceptable HCFC substitutes listed under 
the Section 612 SNAP program must comply with these restrictions.
---------------------------------------------------------------------------

    Specifically, the commenter stated because Section 610 identifies 
foam insulation products as excluded from the nonessential product ban, 
EPA ``has no authority to restrict HCFC use in foam insulation products 
based on the availability of substitutes.'' EPA agrees that under 
Section 610 it cannot ban the sale of foam insulation products made 
with ODS. However, the regulatory authority under Section 610 does not 
address EPA's ability to regulate the transition from the use of ODS to 
alternatives in the manufacturing of products such as foam. EPA has 
consistently interpreted the relationship between Section 610 and 612 
as being independent, in that, Section 612 can restrict the use of a 
substitute in a product regardless of whether or not that product is 
considered nonessential under Section 610 (58 FR 69646).
    Additionally, that same commenter states that EPA cannot prevent 
the use of ``blended'' foam systems containing HCFC-141b because 
Sections 604, 605 and 606 of the CAA are limited to controlled 
substances rather than products. Sections 604 and 605 mandate EPA to 
phaseout consumption (production + import - export) of Class I and 
Class II controlled substances. Section 606 gives EPA the power to 
accelerate the phaseout schedule of Class I and Class II controlled 
substances based on new scientific or technological information or in 
accordance with changes in the Montreal Protocol. In 1993, EPA 
promulgated a regulation phasing out the production and import of Class 
I and Class II controlled substances (58 FR 65018). As with Section 
610, regulations promulgated under Sections 604, 605 and 606 do not 
limit the ability of EPA to address the transition from ODS to 
alternatives under Section 612, in particular whether an ODS is an 
acceptable substitute for another ODS in light of the availability of 
less harmful substitutes. While Sections 604, 605, and 606 regulate the 
production of HCFC-141b, this rule under Section 612 only restricts the 
use of HCFC-141b as a foam blowing agent substitute. The rule does not 
prohibit the production and import of HCFC-141b or products containing 
HCFC-141b (both of these issues are addressed in the separate EPA 
rulemakings discussed above).

North American Free Trade Agreement (NAFTA)

    The commenter also states that if EPA prevents the use of HCFC-141b 
in foam applications the Agency would violate NAFTA because EPA's 
action would exempt grandfathered domestic use of HCFC-141b while 
restricting the import of similar products from Mexico. EPA has 
considered this argument and does not believe that the final rule is 
inconsistent with U.S. obligations under

[[Page 58276]]

the NAFTA (or any other international trade agreement to which the 
United States is a signatory), including Article 301 (national 
treatment) or Chapter 11. This rule does not regulate trade in HCFC-
141b.\8\ In terms of the use restriction on HCFC-141b, this rule does 
not distinguish where the HCFC-141b or the foam system containing HCFC-
141b comes from. Rather, the use restriction applies to the use of 
HCFC-141b in certain foam blowing applications in the United States in 
the end uses covered by the SNAP regulations, including the use of foam 
systems containing HCFC-141b, regardless of the point of origin 
(domestic or foreign) of the HCFC-141b or how it is packaged. EPA is 
unaware of any other uses of foam systems containing HCFC-141b other 
than the uses covered by this rule. Thus, after December 31, 2004, it 
is unlikely that there will be a market for HCFC-141b systems in the 
United States. Although this rule does not restrict the import of HCFC-
141b systems, we do not anticipate that these systems will continue to 
be imported after that date.
---------------------------------------------------------------------------

    \8\ This rule applies to the use of HCFC-141b, in the U.S., in 
foam applications covered by SNAP regulations. This rule does not 
apply to the production and import of ozone depleting substances 
(ODS). For information about trade of bulk ozone depleting 
substances, including HCFC-141b, between Parties of the Montreal 
Protocol please refer to the Direct Final rule EPA published on June 
17, 2004 (69 FR 34024).
---------------------------------------------------------------------------

De-Listing HCFC-141b and Grandfathering Under SNAP

    The same commenter argues that EPA does not have the authority to 
``de-list'' HCFC-141b once it has found it unacceptable unless 
petitioned to do so under Section 612(d). EPA found HCFC-141b 
acceptable in foam applications in 1994, but stated it was doing so as 
an interim measure (59 FR 13044). In the proposal, EPA was following 
its mandate to review ODS alternatives and make determinations on their 
acceptability in order to ensure that substitutes for ODSs that are 
determined acceptable present a lower risk to human health and the 
environment than the ODS they replace and as compared with other 
potential substitutes. EPA disagrees, and as the Agency explained in 
the 2000 proposal, it has the authority to amend its regulations and 
change SNAP determinations independent of any petitions (65 FR 42659). 
Nothing in the statute bans such action and EPA believes that inherent 
in our authority to promulgate regulations initially is the authority 
to review and revise those regulations as the state of science 
advances.
    Because one goal of the SNAP program is to expedite the transition 
from ODS to alternatives, the basis for EPA's proposal in 2000 was that 
the Agency believed alternatives were technically and economically 
viable in all foam applications. EPA deferred final action in 2002 
because of insufficient information regarding the availability 
substitutes that presented a lower risk to human health and the 
environment. Because of concerns that the spray foam sector was 
experiencing technical constraints in implementing alternatives, in a 
separate rulemaking under Sections 605 and 606, EPA established the 
HCFC-141b Exemption Allowance Petition process as a mechanism to ensure 
formulators had access to HCFC-141b after the phaseout date. EPA also 
funded a three year grant to assist SPFA to develop and test 
alternatives. Today, considering the information generated by the above 
efforts, EPA believes alternatives are technically and economically 
viable and that the continued use of HCFC-141b contravenes the purpose 
and goal of Section 612, which is to ensure the use of alternatives 
that pose a lower risk to human health and the environment when such 
alternatives are technically and economically viable.
    The commenter also claims that restricting the use of HCFC-141b 
would violate EPA's grandfathering practice. As explained in the 
proposal, ``in the original SNAP rulemaking, EPA recognized that, where 
appropriate, EPA can grandfather the use of a substitute by setting the 
effective date of its unacceptability listing for one or more specific 
parties in the future.'' (65 FR 42658). In addition, the U.S. District 
Court for the District of Columbia established a four part test to 
judge the appropriateness of grandfathering which includes: (1) Is the 
new rule an abrupt departure from Agency practice, (2) what is the 
extent the interested parties relied on the previous rule, (3) what is 
the burden of the new rule on the interested parties and (4) what is 
the statutory interest in making the new rule effective immediately, as 
opposed to grandfathering interested parties (59 FR 13057). EPA 
disagrees with the commenter that grandfathering is appropriate here.
    Grandfathering is designed to avoid penalizing users who have made 
good faith investments in alternatives. The foam industry has been on 
notice since 1993 (when the production phaseout date for HCFC-141b was 
published) about the need to find alternatives to HCFC-141b. 
Furthermore, in 1994 in the initial SNAP rulemaking, EPA stated that 
the Agency was finding HCFC-141b acceptable as a substitute for CFC-11 
in foam blowing as an interim measure (59 FR 13083). Additionally, in 
2000, EPA proposed to change the listing for HCFC-141b from acceptable 
to unacceptable effective January 1, 2005. Therefore, listing HCFC-141b 
as unacceptable is not an ``abrupt departure'' of EPA policy. 
Acknowledging the production phaseout of HCFC-141b, the majority of the 
foam industry made considerable investments and successfully 
transitioned to a variety of alternatives for a broad set of 
applications. The spray foam sector used stockpiled HCFC-141b for the 
remaining applications for an additional two years beyond the phaseout 
date in order to overcome any technical issues and qualify 
alternatives. That stockpile is expected to be depleted by the end of 
2004 and the spray foam sector now has technically and economically 
viable alternatives to HCFC-141b (Air Docket OAR-2003-0228-0009).
    However, despite the technical and commercial availability of 
alternatives, the transition from HCFC-141b in the spray foam 
applications is delayed by the continued availability of HCFC-141b in 
the U.S. The alternatives which are technically and economically 
available pose a lower overall risk to human health and the 
environment. There is no technical reason why the transition to 
alternatives should not be completed in the foam industry. Thus, EPA is 
finding HCFC-141b unacceptable in foam applications as of January 1, 
2005.

V. Summary

    A major objective of the SNAP program is to facilitate the 
transition from ozone-depleting chemicals by promoting the use of 
substitutes which present a lower risk to human health and the 
environment (40 CFR 82.170(a)). In this light, a key policy interest of 
the SNAP program is promoting the shift from ODSs to alternatives 
posing lower overall risk and that are currently or potentially 
available (59 FR 13044). Today's decision to list HCFC-141b as 
unacceptable in foam applications is based on EPA's finding that the 
continued use of HCFC-141b in applications where non-ozone depleting 
alternatives are technically and economically available, would 
contribute to the continued depletion of the ozone layer, and will 
perpetually delay the transition to alternatives that pose lower 
overall risk to the health and the environment.

[[Page 58277]]

VI. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866, (58 FR 51735; October 4, 1993) the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to the Office of Management and Budget (OMB) 
review and the requirements of the Executive Order. The Order defines 
``significant regulatory action'' as one that is likely to result in a 
rule that may: (1) Have an annual effect on the economy of $100 million 
or more or adversely affect in a material way the economy, a sector of 
the economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities; (2) create a serious inconsistency or otherwise interfere 
with an action taken or planned by another agency; (3) materially alter 
the budgetary impact of entitlement, grants, user fees, or loan 
programs or the rights and obligations of recipients thereof; or (4) 
raise novel legal or policy issues arising out of legal mandates, the 
President's priorities, or the principles set forth in the Executive 
Order.
    Pursuant to the terms of Executive Order 12866, OMB has notified 
EPA that it considers this a ``significant regulatory action'' within 
the meaning of the Executive Order. EPA has submitted this action to 
OMB for review. Changes made in response to OMB suggestions or 
recommendations will be documented in the public record.

B. Paperwork Reduction Act

    The Office of Management and Budget (OMB) has approved the 
information collection requirements contained in this rule under the 
provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and 
has assigned OMB control number 2060-0226.
    This action does not impose any new information collection burden. 
Today's final rule is an Agency determination. OMB has previously 
approved the information collection requirements contained in the 
existing regulations in subpart G of 40 CFR part 82 under the 
provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and 
has assigned OMB control number 2060-0226 (EPA ICR No. 1596.05). This 
Information Collection Request (ICR) included five types of respondent 
reporting and record-keeping activities pursuant to SNAP regulations: 
submission of a SNAP petition, filing a SNAP/Toxic Substances Control 
Act (TSCA) Addendum, notification for test marketing activity, record-
keeping for substitutes acceptable subject to use restrictions, and 
record-keeping for small volume uses.
    Copies of the ICR document(s) may be obtained from Susan Auby, by 
mail at the Office of Environmental Information, Office of Information 
Collection, Collection Strategies Division; U.S. Environmental 
Protection Agency (2822T); 1200 Pennsylvania Ave., NW., Washington, DC 
20460, by email at <a href="/cdn-cgi/l/email-protection#036276617a2d707670626d436673622d646c75"><span class="__cf_email__" data-cfemail="fa9b8f9883d4898f899b94ba9f8a9bd49d958c">[email protected]</span></a>, or by calling (202) 566-1672. A 
copy may also be downloaded off the Internet at http://www.epa.gov/icr. 
Include the ICR and/or OMB number in any correspondence.
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information.
    An Agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15.

C. Regulatory Flexibility Act (RFA), as Amended by the Small Business 
Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 et 
seq.

    The RFA generally requires an agency to prepare a regulatory 
flexibility analysis of any rule subject to notice and comment 
rulemaking requirements under the Administrative Procedure Act (APA) or 
any other statute unless the agency certifies that the rule will not 
have a significant economic impact on a substantial number of small 
entities. Small entities include small businesses, small organizations, 
and small governmental jurisdictions. For purposes of assessing the 
impacts of today's rule on small entities, small entity is defined as:
    (1) A small business that has fewer than 500 employees;
    (2) A small governmental jurisdiction that is a government of a 
city, county, town, school district or special district with a 
population of less than 50,000; and
    (3) A small organization that is any not-for-profit enterprise 
which is independently owned and operated and is not dominant in its 
field.
    Types of businesses that are subject to today's final rule include:
    <bullet> Businesses that manufacture polyurethane/polyisocyanurate 
foam systems (NAICS 326150).
    <bullet> Businesses that use polyurethane/polyisocyanurate systems 
to apply insulation to buildings, roofs, pipes, etc. (NAICS 326150).
    The proposal preceding this final rule contained provisions related 
to HCFC-141b, HCFC-22 and HCFC-142b. As explained in the 2001 NODA and 
the 2002 final rule (66 FR 28408, 67 FR 47703), there were many small 
users of HCFC-22 and HCFC-142b that EPA was unaware of at the time of 
the proposal. The Agency hired a technical expert to investigate the 
concerns of the small businesses using HCFC-22 and HCFC-142b and 
published the findings in the 2001 NODA mentioned above. Subsequently, 
EPA addressed those concerns in the 2002 final rule mentioned above.
    Furthermore, as described in the preamble to this rule, EPA 
deferred its decision on the use of HCFC-141b in the 2002 final rule in 
order to address the concerns of the small businesses using HCFC-141b. 
Through a separate process, those small businesses in the spray foam 
sector requested an extension of the January 1, 2003 production 
phaseout of HCFC-141b in order to complete the field testing and 
approvals necessary to transition to other alternatives. In response to 
the request, EPA established the HCFC-141b Exemption Allowance Petition 
process in the HCFC Allowance Allocation final rule (January 21, 2003, 
68 FR 2819). This process allows formulators to petition EPA for new 
production of HCFC-141b if they do not have access to stockpiled HCFC-
141b and meet the other criteria in 40 CFR 82.16(h).
    After two years of development and field testing in the spray foam 
sector, alternatives are technically and economically viable and 
products containing those alternatives are commercially available. The 
majority of the spray foam sector has overcome the technical 
constraints and will be able to meet the demand in 2005 with 
alternatives. The spray foam sector consists of approximately 15-20 
formulators and thousands of

[[Page 58278]]

contractors, both groups include small businesses. The spray foam 
sector operates differently than many other end users regulated under 
SNAP, in that the contractors purchase the spray foam systems from the 
formulators and thus rely heavily on those formulators to provide 
technical expertise and qualified spray foam systems.
    EPA's analysis, found at Air Docket OAR-2003-0228, discusses the 
impact on formulators and contractors in the spray foam industry. This 
analysis indicates that due to the availability of multiple 
alternatives and the depletion of stockpiled HCFC-141b any economic 
impact on small businesses will be insignificant. Furthermore, 
virtually all those potential economic impacts result from the 
production and import phaseout of HCFC-141b in 2003. Because the 
production and import of HCFC-141b was phased out in the U.S. in 2003 
and stockpiles of HCFC-141b will be depleted at the end of this year, 
spray foam formulators are transitioning to non-ODP blowing agents. 
Moreover, as explained in the analysis, EPA believes that the 
formulators that have completed the transition to alternatives have the 
capacity to meet the contractors demand in 2005. Finally, as described 
earlier in the preamble, in order to account for any remaining 
inventory of fully formulated systems containing HCFC-141b and to 
minimize any potential impact on contractors, EPA is allowing spray 
foam contractors to use those HCFC-141b systems in inventory at the end 
of the year until July 1, 2005.
    As noted above, there are numerous alternatives available and some 
users have independently transitioned away from the substances listed 
as unacceptable. The actions herein may well provide benefits to small 
businesses who have transitioned to alternatives and made good faith 
efforts and investments in the transition. After considering the 
economic impacts of today's rule on small entities, EPA has concluded 
that this rule will not have a significant economic impact on a 
substantial number of small entities.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
one year. Before promulgating an EPA rule for which a written statement 
is needed, section 205 of the UMRA generally requires EPA to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, most cost-effective or least burdensome alternative 
that achieves the objectives of the rule. The provisions of section 205 
do not apply when they are inconsistent with applicable law. Moreover, 
section 205 allows EPA to adopt an alternative other than the least 
costly, most cost-effective or least burdensome alternative if the 
Administrator publishes with the final rule an explanation why that 
alternative was not adopted. Before EPA establishes any regulatory 
requirements that may significantly or uniquely affect small 
governments, including tribal governments, it must have developed under 
section 203 of the UMRA a small government agency plan. The plan must 
provide for notifying potentially affected small governments, enabling 
officials of affected small governments to have meaningful and timely 
input in the development of EPA regulatory proposals with significant 
Federal intergovernmental mandates, and informing, educating, and 
advising small governments on compliance with the regulatory 
requirements. EPA has determined that this rule does not contain a 
Federal mandate that may result in expenditures of $100 million or more 
for State, local, and tribal governments, in the aggregate, or the 
private sector in any one year. Today's final rule does not affect 
State, local, or tribal governments. The enforceable requirements of 
the rule for the private sector affect only a small number of foam 
manufacturers using HCFC-141b in the United States, and there are 
technically viable alternatives for those manufacturers. The impact of 
this rule on the private sector is less than $100 million per year. 
Thus, today's rule is not subject to the requirements of sections 202 
and 205 of the UMRA. EPA has determined that this rule contains no 
regulatory requirements that might significantly or uniquely affect 
small governments. This regulation applies directly to facilities that 
use these substances and not to governmental entities.

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.''
    This final rule does not have federalism implications. It will not 
have substantial direct effects on the States, on the relationship 
between the national government and the States, or on the distribution 
of power and responsibilities among the various levels of government, 
as specified in Executive Order 13132. This regulation applies directly 
to facilities that use these substances and not to governmental 
entities. Thus, Executive Order 13132 does not apply to this rule.

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

    Executive Order 13175, entitled ``Consultation and Coordination 
With Indian Tribal Governments'' (65 FR 67249, November 6, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' ``Policies that have tribal 
implications'' is defined in the Executive Order to include regulations 
that have ``substantial direct effects on one or more Indian tribes, on 
the relationship between the Federal government and the Indian tribes, 
or on the distribution of power and responsibilities between the 
Federal government and Indian tribes.''
    This final rule does not have tribal implications. It will not have 
substantial direct effects on tribal governments, on the relationship 
between the Federal government and Indian tribes, or on the 
distribution of power and responsibilities between the Federal 
government and Indian tribes, as specified in Executive Order 13175.
    Today's final rule does not significantly or uniquely affect the 
communities of Indian tribal governments, because this regulation 
applies directly to facilities that use these substances and not to 
governmental entities. Thus, Executive Order 13175 does not apply to 
this final rule.

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

    Executive Order 13045: ``Protection of Children From Environmental 
Health

[[Page 58279]]

Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies to any 
rule that: (1) Is determined to be ``economically significant'' as 
defined under Executive Order 12866, and (2) concerns an environmental 
health or safety risk that EPA has reason to believe may have a 
disproportionate effect on children. If the regulatory action meets 
both criteria, the Agency must evaluate the environmental health or 
safety effects of the planned rule on children, and explain why the 
planned regulation is preferable to other potentially effective and 
reasonably feasible alternatives considered by the Agency.
    This final rule is not subject to the Executive Order because it is 
not economically significant as defined in Executive Order 12866, and 
because the Agency does not have reason to believe the environmental 
health or safety risks addressed by this action present a 
disproportionate risk to children. The use of HCFC-141b in foam 
manufacture occurs in the workplace where we expect adults are more 
likely to be present than children, and thus, the agents do not put 
children at risk disproportionately.

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

    This rule is not a ``significant energy action'' as defined in 
Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355 
(May 22, 2001)) because it is not likely to have a significant adverse 
effect on the supply, distribution, or use of energy. This action would 
impact the manufacture of foam using HCFC-141b. Further, we have 
concluded that this rule is not likely to have any adverse energy 
effects.

I. National Technology Transfer and Advancement Act

    As noted in the proposed rule, Section 12(d) of the National 
Technology Transfer and Advancement Act of 1995 (``NTTAA''), Public Law 
104-113, Sec.  12(d) (15 U.S.C. 272 note) directs EPA to use voluntary 
consensus standards in its regulatory activities unless to do so would 
be inconsistent with applicable law or otherwise impractical. Voluntary 
consensus standards are technical standards (e.g., materials 
specifications, test methods, sampling procedures, and business 
practices) that are developed or adopted by voluntary consensus 
standards bodies. The NTTAA directs EPA to provide Congress, through 
OMB, explanations when the Agency decides not to use available and 
applicable voluntary consensus standards. This action does not involve 
technical standards. Therefore, EPA did not consider the use of any 
voluntary consensus standards.

J. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A Major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2). This rule will be effective November 29, 2004.

VII. Additional Information

    For more information on EPA's process for administering the SNAP 
program or criteria for evaluation of substitutes, refer to the SNAP 
final rulemaking published in the Federal Register on March 18, 1994 
(59 FR 13044). Notices and rulemakings under the SNAP program, as well 
as EPA publications on protection of stratospheric ozone, are available 
from EPA's Ozone Depletion Web site at http://www.epa.gov/ozone/ and 
from the Stratospheric Protection Hotline number at (800) 296-1996.

List of Subjects in 40 CFR Part 82

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Reporting and recordkeeping requirements.

    Dated: September 23, 2004.
Michael O. Leavitt,
Administrator.

0
For the reasons set out in the preamble, 40 CFR part 82 is amended as 
follows:

PART 82--PROTECTION OF STRATOSPHERIC OZONE

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

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

Subpart G--Significant New Alternatives Policy Program

0
2. Subpart G is amended by adding Appendix M to read as follows:

Appendix M to Subpart G--Unacceptable Substitutes Listed in the 
September 30, 2004 Final Rule, Effective November 29, 2004

[[Page 58280]]



                                     Foam Blowing--Unacceptable Substitutes
----------------------------------------------------------------------------------------------------------------
               End-use                        Substitute                Decision                 Comments
----------------------------------------------------------------------------------------------------------------
All foam end-uses:                     HCFC-141b..............  Unacceptable...........  Alternatives exist with
                                                                                          lower or zero = ODP.
    --Rigid polyurethane and
     polyisocyanurate laminated
     boardstock
    --Rigid polyurethane appliance
    --Rigid polyurethane spray and
     commercial refrigeration, and
     sandwich panels
    --Rigid polyurethane slabstock
     and other foams
    --Polystyrene extruded insulation
     boardstock and billet
    --Phenolic insulation board and
     bunstock
    --Flexible polyurethane
    --Polystyrene extruded sheet
Except for: \1\
    --Space vehicle
    --Nuclear
    --Defense
    --Research and development for
     foreign customers
----------------------------------------------------------------------------------------------------------------
\1\ Exemptions for specific applications are identified in the list of acceptable substitutes.

[FR Doc. 04-21809 Filed 9-29-04; 8:45 am]
BILLING CODE 6560-50-P


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