N EW Y ORK W ASHINGTON P ARIS L ONDON M ILAN R OME F RANKFURT B RUSSELS

in alliance with Dickson Minto W.S., London and Edinburgh 1875 K Street, N.W. Washington, DC 20006-1238

Tel: 202 303 1000 Fax: 202 303 2000 Environmental Protection Agency EPA Docket Center (EPA/DC) Mailcode 6102T Attention Docket ID No . EPA-HQ-OAR-2008-0664 1200 Pennsylvania Avenue, N.W. Washington, D.C. 20460 By electronic delivery to: a-and-r-Docket@epa.gov Request to Reopen the Record and Make Price Information Available for Public Comment Re: Proposed Rule, Protection of Stratosp heric Ozone: New Substitute in the Motor Vehicle Air Conditioning Sector Under the Significant New Alternatives Policy Program Docket ID No. EPA-HQ-OAR-2008-0664

Contact Information

E. Donald Elliott Attorney for Arkema Willkie Farr & Gallagher LLP 1875 K St. NW Washington, DC 20006 202-303-1120 delliott@willkie.com

Arkema 1 submits that the record current ly before EPA in Docket ID No. EPA-HQ-OAR2008-0664 is inadequate to enable EPA to make the required stat utory findings that HFO-1234yf

“reduces the overall risk to huma n health and the environment” and is “currently or potentially

1 Arkema and its North American subsidiary Arkema Inc. (collecti vely, “Arkema”) are world-class producers of industrial chemicals. www.arkema.com and www.arkema-inc.com . Among other products, Arkema manufactures HFC-134a and its sales would be affected by the approval of HFO-1234yf, so its standing to ra ise a denial of statutory proc edural rights is clear. Mass. v

. EPA , 549 U.S. 497, 518 (2007) (“When a litigant is vested with a procedural right, that litigant has standing if there is some possibility that the requested relief will prompt the injury-causing party to reconsider the decision that allegedly harmed the litigant.” ); Honeywell Int’nl, Inc. v. EPA , 374 F.3d 1363, 1369 (D.C. Cir. 2004) rehearing granted and opinion partially withdrawn on other grounds , No. 02-1294, 2005 U.S. App. LEXIS 298 (D.C. Cir. Jan. 7, 2005 ).Docket ID No. EPA-HQ-OAR-2008-0664 Page 2

1841776.1 available” by comparison to other alternatives that are already available. 2 In addition, because of the deficiencies in the record, the proposal’s impact on small businesses and State, local and tribal governments is inadequate ly addressed under the Regulato ry Flexibility Act 3 and the

Unfunded Mandates Reform Act. 4 Therefore, Arkema respectfully requests EPA to: (1) Re-open the record for further consider ation of the price, terms upon which the material would be available, market sh are and resulting environmental effects. (2) Determine that HFO-1234yf is not “curre ntly or potentially available” unless Honeywell commits to sell the material at a cost that is not disproportionate to the net environmental benefit; (3) Subpoena necessary missing information from Honeywell; (4) Keep the comment period open until at least 30 days after EPA determines, and notifies the public, that it believes that it has obtained and made available in the docket “sufficient information” as direct ed by Congress to adequately assess the probable effects of approvin g HFO-1234yf as a substitute. 5 (5) Analyze the impacts on small businesse s and State, local and tribal governments as required by law.

2 CAA §612(c)(1) and (c)(2). 3 5 U.S.C. § 601 et seq. 4 2 U.S.C. § 1501 et seq. 5 See CAA §612(d)(“ Any petition un der this subsection shall inc lude a showing by the petitioner that there are data on the substanc e adequate to support the petition . If the Administrator determines that informat ion on the substance is not sufficient to make a determination under this sub-section, the Administrator shall use any authority available t o the Administrator, under any law administered by the Administrator, to acquire such info rmation.” (emphases supplied). It is not clear whether Honeywe ll was behind EPA’s proposal to approve HFO-1234yf and thus is “the petitioner.” But regardle ss, this language reflects a cle ar Congressional policy that EPA should not take unnecessary risks or make guesses about the env ironmental effects of substitutes, but rather must hav e “adequate ... data” and “suff icient information” before it approves a substitute.Docket ID No. EPA-HQ-OAR-2008-0664 Page 3

1841776.1 Acting to correct the deficiencie s in the present record will s ave time in the long run. Final action

could still be taken in time for the 2012 model year, and will reduce the risks of judicial review and further delays in the long run. I. The Current Record Is Not Adequate to Assess Whether Approval Would Reduce Overall Risks to Human Health and the Environment. The current record is inadequate on costs, terms of availabilit y and anticipated market

share. This is an issue of centr al relevance because, as EPA h as repeatedly recognized, whether

there will be net benefits for hu man health and environment fro m approving HFO-1234yf depends not just on its chemical properties but also on how it will be used or misused, to what extent and by whom. 6 Usage patterns are, in turn dep endent upon price, availabilit y and the

terms on which the material will be made available; therefore, from the beginning of the Significant New Alternatives Pol icy (SNAP) program, EPA has wis ely and consistently “required” detailed data on availability, p rice and anticipated market sha re as “necessary” prior to SNAP approval so that EPA can adequately assess anticipated environm ental effects. EPA’s SNAP regulations could not be more sp ecific about what data is “requ ired” before approval: § 82.178 Information required to be submitted. (a) Persons whose substitutes are subject to reporting requirem ents pursuant to §82.176 must provide the following information: . . . (14) Cost of substitute. Data on the expected average cost of t he alternative. In addition, information is needed on the expected equipment lifetime for an alternative technology. Other critical cost considerations should be identified, as app ropriate. (15) Availability of substitute. If the substitute is not curre ntly available, the timing of availability of a substitu te should be provided. (16) Anticipated market share. D ata on the anticipated near-ter m and long-term nationwide substitute sales. 7

6 74 Fed. Reg. 53445 (Oct. 19, 2009). 7 40 C.F.R. § 82.178.Docket ID No. EPA-HQ-OAR-2008-0664 Page 4

1841776.1 When proposing the SNAP rule in 1994, EPA explained why this in formation is “required” in order to approve a proposed substitute: In the section that follows, the Agency presents information required by the SNAP program to evaluate class I and II substitutes. . . . B. Information Required

. . . 14. Cost of Substitute The Agency requires data on the expected average cost of the alternative. The cost of the substitute can be expressed, for example, in terms of $/pou nd (for a chemical substitute) or as incremental ca pital and operating costs assoc iated with a retrofit or new equipment. In addition, information is needed on the expec ted equipment life for an alternative technology. Other critical cost considerations should be identified, as appropriate. For example, it is important to understand the in cremental costs associated with losses or gains in energy efficiency associated with use of a substitute relative to current experienc e with existing substances. 15. Availability of Substitute The Agency needs to understand the extent to which a substitute is already commercially available or the date on which it is expected to become available. The timing of availability is an important fa ctor in assessing the overall health and environmental effects of the substitute. 16. Anticipated Market Share Data on the anticipated near -term and long-term (over the next ten years) nationwide substitute sales are also required. This information can be presented in several ways, for example: a percentage of exi sting nationwide use of class I or II chemicals that would be replaced in a particula r end-use; number of units/prod ucts to be produced; or pounds of substitute to be sold. This information is required to assess the potential effects of a substitute related to total consumption and enviro nmental releases. 8 Nonetheless, this “required” information is not available in th e current docket. That fact alone precludes an approval at this tim e under the governing Supreme Court case. Allentown Mack

Sales and Service Inc. v. NLRB , 522 U.S. 359, 376 (1998)(“It is hard to imagine a more violen t

8 Protection of Stratospheric Ozone, 59 Fed. Reg. 13044, 13054-5 5 (Mar. 18, 1994) (emphases supplied). See also Honeywell Int'l, Inc. v. EPA , 374 F.3d 1363 (D.C. Cir. 2004) rehearing granted and opinion partially withdrawn on other grounds , No. 02-1294, 2005 U.S. App. LEXIS 298 (D.C. Cir., Jan. 7, 2005).Docket ID No. EPA-HQ-OAR-2008-0664 Page 5

1841776.1 breach of [the requirement of reasoned decision-making] than ap plying a rule of primary

conduct ... which is in fact different than the rule or standard formally announced.”). Despite EPA’s specifically fla gging in its October 2009 proposa l that “[d]efinitive costs for the refrigerant have not been shared with the Agency,” 9 and despite the established EPA regulation quoted above that cle arly requires this information as “necessary” for approval, Honeywell refused to submit any concrete information on cost, a vailability or anticipated market

share. 10 Instead, EPA has attempted to c obble together its own estimat e of price based solely on a single conclusory sentence in a news story in the trade press : “DuPont and Honeywell representatives have informally estimated the initial price at $40-60/lb (€55-80/kg).” 11 This article merely parrots a conclus ory “informal” estimate by unna med persons using unspecified methodologies and undisclosed assumptions; in addition the rang e of price is not reliable as such with a spread of more than 50%. Finally, it was not in the do cket until after the close of the comment period. This single refer ence to a single conclusory s entence in an article in the trade press without any indication of how the estimate was actually m ade does not satisfy EPA’s obligation to provide an opportunity for meaningful comment by disclosing the underlying

9 74 Fed. Reg. 53448, 53450 (Oct. 19, 2009). 10 Honeywell and DuPont have announ ced a joint venture to produce HFO-1234yf, but neither has provided adequate price information. Honeywell merely asse rted the naked conclusion, without any supporting documentat ion, that the availability cri terion is "unquestionably satisfied." Honeywell Internatio nal Inc., Comments on EPA Prop osed Rule Protection of Stratospheric Ozone: New Substit ute in the Motor Vehicle Air Co nditioning Sector Under the Significant New Alternatives Policy (SNAP) Program, p. 2 (Feb. 24, 2010). 11 Weissler, P., 2008. Consensus Building on Refrigerant Type. A utomotive Engineering International. 9: 30–32., cited by EPA at 74 Fed. Reg. at p. 53 450.Docket ID No. EPA-HQ-OAR-2008-0664 Page 6

1841776.1 technical basis for its analysis of anticipated environmental e ffects. 12 In addition, recent actions by Honeywell have materially cha nged the landscape regarding pr ice and availability from what was assumed by everyone, includi ng EPA, during the comment peri od. During the EPA comment period Honeywell was simultaneously seek ing approval of HFO1234yf for incorporation into tec hnical standards issued by the Society of Automotive Engineers (“SAE”), which was considering w hich refrigerant to endorse as the consensus industry standard to replace 134a. 13 SAE policy requires that patent holders disclose any patents or patent applicants that may become essent ial to the standards under dev elopment, and further requires that patent holders license thei r essential technology to all a pplicants free of charge or on fair,

reasonable and non-discrim inatory terms (“FRAND”). 14 However, Honeywell did not disclose to the SAE its patents covering HF O-1234yf until April 9, 2010, an d has now made clear that it does not consider itself as having any obligation to license its pat ents on FRAND terms. 15 Indeed, it

has refused to issue a license to Arkema on FRAND terms. Honey well claims that its patents on

12 U.S. v. Nova Scotia Food Products Corp ., 568 F.2d 240 (2d Cir. 1977)("To suppress meaningful comment by failure to disclose the basic data relied upon is ak in to rejecting comment altogether."); accord Portland Cement Assn. v. Ruckelshaus , 486 F.2d 375, 387 (D.C. Cir. 1973). 13 EPA referred specifically to th e SAE standards development in the proposal, and proposed that HFO-1234yf be permitted for use in automobile air conditioning standards subject to compliance with SAE standards. 74 Fed. Reg . at p. 53450. That these stan dards have now been placed on hold is an independent reason th at EPA should re-open the comme nt period to re-assess the current situation. 14 SAE International, Technical Standards Board Governance Policy , 1.14.1.1 (10th Rev. Nov. 2008) (“(a) a license will be mad e available without compensati on to the applicants desiring to utilize the license for the purp ose of implementing the standar d; or(b) a license will be made available to applicants under reasonable terms and conditions t hat are demonstrably free of any unfair discrimination for the purpose of complying with the sta ndard.”)(Copy attached as Exhibit 1 and requested to be ma de part of the record). 15 Letter from Honeywell to Mr. Jac k Pokrzywa, SAE Ground Vehicle Standards Manager (April 9, 2010) (“grant[ing] no rights with respect to these inventions [ related to HFO-1234yf] or any other invention or intellectual property in which Honeywell has rights.”) (attached as Exhibit 2).Docket ID No. EPA-HQ-OAR-2008-0664 Page 7

1841776.1 1234yf would not be infringed by implementation of SAE standard s: it pretends it does not hold “any invention claimed in a pate nt the use of which would be re quired for compliance with [SAE standards] and that Honeywell does not believe that [its] inven tions are subject to the SAE policy.” Arkema does not share this view as Honeywell’s patent covers any use of 1234yf as a refrigerant in MVAC. Based on these facts, and a need for the SAE Internal Climate Control Standards Committee to resolve certain technical issues, the SA E Motor Vehicle Committee is currently delaying indefinitely the approval of 1234yf standard s, upon which EPA repeatedly relies in the course of its proposal. 16 The delay of the SAE standards is an independent ground upon which EPA should re-open the record. As a result of its position on i ts patents, Honeywell feels fre e in both the United States and Europe to charge whatever it wishes for HFO-1234yf—a position t hat it never disclosed in its

comments to this docket. Nor did EPA conduct any sensitivity a nalysis of the anticipated

environmental effects of HFO- 1234yf if Honeywell charged a pric e of five, ten or even a hundred times more than the $40-$60 per pound that EPA had assumed in i ts prior analysis. Honeywell’s recently-announced po sition that it will not licens e its patents on FRAND terms, combined with its refusal to disclose the price at which it intends to market HFO-1234yf, materially alters the assumption s underlying EPA’s analysis of price, availability and

environmental effects in the doc ket. EPA has simply not analyz ed whether HFO-1234yf will produce net environmental benefits in a situation in which Hone ywell is artificially restricting supply and charging monopoly pric es for the material. Nor have Arkema and other interested parties, including Greenpeace an d MACS (who previously expresse d concerns about the adverse

16 Letter from SAE Motor Vehicle C ommittee to SAE Internal Climat e Control Standards Committee (June 14, 2010).Docket ID No. EPA-HQ-OAR-2008-0664 Page 8

1841776.1 environmental effects from misus e even at the lower price level s EPA was then assuming 17 ) been provided an opportunity to submi t analysis and comments to the Agency on the anticipated environmental effects of approv ing HFO-1234yf in the “new world order” in which Honeywell claims to be the sole legal manu facturer and may charge an as y et undisclosed monopoly rents for the product for many y ears into the future.

Under these new conditions of su pply, prices could be much, muc h higher than the $40-60 price assumed by EPA during the c omment period. That assumed p rice was based on a single, one sentence conclusion by unname d sources using unspecified me thods in a trade press article published in 2008. That “informal estimate” from unnamed sourc es did not, and could not, take into account Honeywell’s current position that it may legally c harge monopoly prices. Similarly, EPA’s analysis in the proposal also apparently assumed competit ive prices and derived its cost estimates from assumptions about the additional cost to produce the material, a methodology which implicitly assumes competitive pricing ( i.e. marginal price equals marginal cost in a competitive market but not under a monopoly). The complete dis cussion of costs by EPA in the proposal is as follows:

Definitive costs for t he refrigerant have not been shared with the Agency. Based on estimates from Honeywell and Du Pont, the cost of HFO-1234yf wil l be, at least initially, approximately $40-60/pound (Wei ssler, 2008). The cost of the r efrigerant will depend on several factors, including, b ut not limited to, how much ref rigerant will be available for sale, the quality of the refrigerant, and where the refrigerant is manufactured. The cost of HFO-1234yf will likely be more tha n HFC-134a because the HFO-12 34yf manufacturing process requires more energy and more steps than HFC-134a. 18

17 Mobile Air Conditioning Society, Comments for Docket ID No. EP A-HQ-OAR-2008-0664, p. 3 (Dec. 18, 2009) (“With the anticipated substantially higher cos t of HFO-1234yf compared to HFC134a, the chance for conversion to other refrigerants—including hydrocarbons—is likely to occur unless it is prohibited.”). 18 74 Fed. Reg. at p. 53450.Docket ID No. EPA-HQ-OAR-2008-0664 Page 9

1841776.1 Neither Weissler nor EPA took int o account the possibility of t he details of these costs and the likely impact of either a refusa l to license on FRAND terms. A much higher price would obviously completely change usage patterns, the frequency of misuse, and the resulting balance of

environmental effects.

Because EPA’s entire environment al analysis is based on price a ssumptions that were not disclosed, and in any event are now no longer valid, EPA has no choice but to re-open the record to consider the implications of this sea change in the underlyi ng assumptions about price and availability that underlie EPA’s previous analysis of net envir onmental effects. Re-opening would clearly be required by usu al principles of administrative law where a material factual premise for the agency’s approval has changed after the close o f the comment period, 19 but in the SNAP context in particular, Congr ess has been crystal-clear tha t the Agency is not to take unnecessary risks with our atmosphere by approving a substitute based on inadequate data. Against a historical background in which many new chemicals ori ginally thought to be “green” at the time of their introduction later produced unintended conseq uences, Congress specifically legislated that (1) the proponent of a substitute has a specifi c obligation to provide “data on the substance adequate to support” approval and (2) if there is not “sufficient information” in the record, EPA “shall” use its subpo ena authority to obtain the ne cessary data before granting or denying approval. 20

19 Ober v. EPA , 84 F.3d 304, 315 (9th Cir. 1996) ("Petitioners were prejudice d when they did not have notice of or an opportunity to comment on the post-comment period justifications which ... were critical to the EPA's approval decision."). 20 CAA §612(d), quoted in full at footnote 5 supra . EPA’s authority to obtai n records necessary to carryout the provisions of the CAA is in CAA §114, among other places.Docket ID No. EPA-HQ-OAR-2008-0664 Page 10

1841776.1 We respectfully request EPA to fol low Congress’s specific inten t by withholding approval until Honeywell provides complete price, availability and marke t share information as required under EPA’s 1994 SNAP policy. Sub mitting the proper “required” data will enable EPA to

reassess environmental effects un der the new conditions of a Ho neywell monopoly. If Honeywell is unwilling to supply the information voluntarily, C AA §612(d) commands that EPA “shall” subpoena the necessary information before granting or d enying approval for a substitute. II. EPA Must Re-Open the Record When the SNUR Becomes Final in Any Event. There is also a second, independent but related reason why EPA has no choice but to delay approval and to re-open th e docket for additional comment s. EPA appears to be relying on a proposed Significant New Use Restriction (SNUR) under the Tox ic Substances Control Act to

reduce risks to human health from exposure to HFO-1234yf. 21 But the terms of the SNUR were not yet final at the time that t he comment period in this SNAP proceeding closed February 24,

2010. The two rules are intertwin ed. EPA has already recogniz ed the inter-relationship by extending the SNAP comment period to allow for consideration of the initial SNUR proposal published under direct final rulemaking procedures. 22 However, an objection was received to direct final, and as a result, t he SNUR went out for comment an d had not yet been finalized when

21 75 Fed. Reg. 16706, 16708-09 (April 2, 2010) ("For the use sce nario described in the PMN, significant industrial or commercial worker exposure is unlikel y due to the use of CAA section 609 certified refrigerant handling equipment and other protecti ve measures. .. . Further, ‘‘do-ityourself’’ consumer exposures are not expected because the PMN substance only will be sold or distributed in 20–pound containers or larger. . . . EPA has det ermined, however, that . . . sale or distribution of the PMN substanc e in containers smaller than 20 -pounds (net weight) may cause serious health effects in accord ance with 40 CFR 721.170(b)(3)( i)."). 22 http://www.epa.gov/Ozone/snap/regulations.html (“The comment period has been extended through Wednesday, February 24, 2010. The additional time was provided to allow the public to consider the newly-issued Signif icant New Use Rule. Comments o n the SNAP rule may be submitted through www.regulations.gov under the docket EPA-HQ-OAR-2008-0664.”).Docket ID No. EPA-HQ-OAR-2008-0664 Page 11

1841776.1 the comment period closed in the present SNAP proceeding. It w ould clearly be capricious and arbitrary for EPA to require pot ential commenters in these SNAP proceedings to anticipate what

final form the SNUR would take l ong before the comment period o n the SNUR had even begun. EPA must therefore re-open the S NAP comment period so that comm enters may reassess anticipated environmental effects in light of the final version of additional restrictions added by

the SNUR. Here again, accurate economic da ta regarding the new price leve ls and limited availability if Honeywell is able to enforce its patent claims is crucial to assessing how effective the SNUR may be in limiting adverse effec ts. Predicting human behavior under new price conditions is key to assessing the likely environme ntal effects. For example, EP A appears to rely heavily on a requirement that HFO-1234yf would not be sold in containers sma ller than 20 pounds. However, CAA §609(e) has in the p ast imposed that same requirem ent on other refrigerants, with mixed results, depending upon price and other factors. On ce the SNUR become s final, and a new price level under a Honeywel l monopoly can be estimated, EP A should re-open the proceedings to re-assess the extent to which the SNUR will be e ffective at limiting adverse

human health effects. III. HFO-1234yf Is Not “Currently or Potent ially Available” Unless Honeywell Commits To Sell at a Price That Is Not Disproportionate to the Environmental Benefit. Honeywell’s April announcement t hat it is refusing to grant FRA ND licenses to others to produce HFO-1234yf as required by SAE rules, in combination wit h its prior refusal to make any disclosure whatsoever to EPA rega rding the price at which Honey well itself will sell the material, presents EPA with an important qu estion of law and policy that it has not previously decided: whether a substitute material is “currently or potentially available ” under CAA §612(c)(2) if itDocket ID No. EPA-HQ-OAR-2008-0664 Page 12

1841776.1 can be purchased only at a very high price that is disproportio nate to the environmental benefit. This is a question that was noted, but not decided, by the D.C. Circuit in Honeywell International,

Inc. v. EPA , 374 F.3d 1363 (D.C. Cir. 2004). In that case, the D.C. Circu it vacated EPA’s reliance upon economic factors, but only on the narrow ground that EPA h ad not officially adopted an interpretation of the term “avai lable” in CAA §612(c)(2) as enc ompassing economic factors; instead that position had merely been advanced by EPA’s counsel in argument:

EPA's reliance on economic const raints requires reversal of its rule. As stated, EPA does not justify the rule on the ground that CAA section 612(c) allows it to consider economic factors in approving a given substitute as acceptable or unacceptable. Nevertheless, EPA's counsel at o ral argument said that EPA's po sition is that it may consider costs, and it is at least facially plausible to read t he term "available" in section 612(c) to permit consideration of "economic or practicality" co ncerns. Such a justification cannot pass muster in this Court, however, as the agency did no t offer that construction of the statute below. Under Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc. , 467 U.S. 837, 81 L. Ed. 2d 694, 1 04 S. Ct. 2778 (1984), whether the CAA section 612(c), a statute EPA is charged to administer, permits EPA to consider c osts is a matter on which we defer to the agency's expert judgment, unless its interpreta tion is unreasonable or if the plain terms of the statute say otherwise. Id. at 843-44. In such matters, in which the a gency's rule “is valid only as a determination of policy or judgment which the age ncy alone is authorized to make and which it has not made, a judicial judgment cannot be made to do service for an a dministrative judgment.” SEC v. Chenery Corp. , 318 U.S. 80, 88, 87 L. Ed. 626, 63 S. Ct. 454 (1943). Whethe r the agency's construction of the sta tute is reasonable under Chevro n step two is one such issue, given that the issue requires agency expertise. See Kansas City v. HUD , 287 U.S. App. D.C. 365, 923 F.2d 188, 192 (D.C. Cir. 1991). Therefore, even assuming, without deciding, that the text of section 612(c) p ermits EPA to interpret the st atute to consider costs, we must still reverse EPA's decision and remand to the agency. Wit hout knowing the agency's interpretation of the s tatute, we simply have no way o f evaluating whether its interpretation is reasonable. 23 Without deciding the issue becaus e it had not been properly pre sented, the court strongly implied that an interpretation of “available” as including cons ideration of economic factors would be a permissible interpretation under Chevron step II. However, the court stated that

23 Honeywell , 374 F.3d at 1373.Docket ID No. EPA-HQ-OAR-2008-0664 Page 13

1841776.1 since this interpretation had not been addressed one way or the other by EPA in a form and at a

level that receives Chevron deference, 24 the court would not rule on such an interpretation unless and until EPA actually ado pts it. But by referring to t he issue as “determination of policy or judgment which the agency alone is authorized to make,” the D.C. Circuit strongly implied in

the 2004 Honeywell case was that EPA could interpret the broad statu tory term “available” to consider “economic factors.” The conclusion that EPA may inter pret the “availability” criterion in CAA §612 to encompass consideratio ns of cost subsequently recei ved strong validation by the U.S. Supreme Court in Entergy Corp. v. Riverkeeper, Inc. , No. 07-588, 2009 U.S. LEXIS 2498, (April 1, 2009). Riverkeeper held that unless Congress has m ade a specific policy decision to exclude the consideration of economics – which it clearly has not done in CAA §612 – then whether and

how to consider economic factors is a discretionary decision fo r the agency to which the courts will defer provided that the agency’s decision is “reasonable.” Arkema recommends that EPA proceed on a step-by-step basis to consider what role cost factors should play in approving substitutes under CAA §612. T he first step should be to obtain information as to the anticipated cost of HFO-1234yf if Honeywe ll does not grant FRAND

licenses. This information shou ld be obtained voluntarily if p ossible, but under subpoena if necessary. Then, once data is available on estimated pricing u nder conditions of a Honeywell monopoly, EPA should re-open the comment period to seek public comment on whether approval of a substitute at that level of price should be consi dered “available” in view of the

extent of environmental benefit involved. Re-opening the recor d should not result in a delay of the use of HFO-1234yf for the 20 12 model year. To the contrary , re-opening the record will

24 See generally United States v. Mead Corp., 533 U. S. 218 (2001).Docket ID No. EPA-HQ-OAR-2008-0664 Page 14

1841776.1 reduce potential delay by making the approval less susceptible to judicial challenge. This important policy decision regarding the role of economic costs under CAA §612 should be made in the context of a specific reco rd, rather than in the abstrac t. IV. EPA Has Not Met the Requirements of the Regulatory Flexibility Act or the Unfunded

Mandates Reform Act of 1995. Due to the pricing uncertainties, EPA was not able to adequate ly consider the regulation’s

effect on small businesses or whe ther it would result in the ex penditure of more than $100 million by the private sector. Under the Regulatory Flexibilit y Act, an agency must assess the effect of its regulations on sma ll businesses as a key part of the process for issuing regulations,

and must use less burdensome a lternatives whenever possible. 25 In performing its analysis on the effects of the proposed rule , the EPA only considered its e ffect on car manufacturers and car air conditioning system manufacturers, concluding that those do not qualify as small businesses. However, these regulations will clearly affect countless small businesses including service and repair shops, end-of-life vehicl e recyclers, and automobile dea lerships. In fact, roughly 90% of all HFO-1234yf will be used by businesses other than car manufa cturers. The potential effect of this ru le on small businesses is evide nced by the wide range of comments submitted by these vario us entities. For example, the comments submitted by the National Automobile Dealers Association emphasized that a signi ficant number of dealers are

small businesses and that “all de alership service departments a nd some dealership auto body shops engage in MVAC service and repair.” 26 The Institute of Scrap Recycling Industries, Inc.

25 See 5 U.S.C. § 604. 26 National Automobile Dealers Association, Comments re Protectio n of Stratospheric Ozone: New Substitute in the Motor Vehi cle Air Conditioning Sector Und er the Significant NewDocket ID No. EPA-HQ-OAR-2008-0664 Page 15

1841776.1 (“ISRI”)which “represents more than 1,550 companies, a majority of which are small and

medium-sized” 27 submitted comments regarding the occupational and regulatory r isks involved with the handling of 1234yf in e nd-of-life vehicles. In order to determine the effect of the proposed rule on these, and othe r small businesses, EPA should determine if a significant change in price and supply expectations would affect the way that thes e businesses handle and deal with automobile repairs and recycling . For example, if 1234yf is ap proved and widely adopted then facilities dealing with end-of-l ife vehicles will have to devel op procedures and methods for removing it from the vehicles. According to ISRI, whether 1234 yf is reclaimed or disposed affects how it is regulated, and whether it is reclaimed or dis posed of is likely affected by 1234yf’s cost. In addition, the Unfunded Man dates Reform Act of 1995 requires that, before promulgating a rule that could p otentially result in the expend iture of $100 million by the private sector, an agency must p rovide a written statement whic h must include “a qualitative and quantitative assessment of the ant icipated costs and benefits o f the Federal mandate.” 28 Without knowing the anticipated cost a nd supply of 1234yf it is impossi ble for EPA to make the necessary

determination that this rule w ill not exceed the $100 million t hreshold and therefore does not require such a written statement . Therefore, EPA must obtain m ore information on pricing and the affect of Honeywell’s patent s and FRAND position before it can determine whether the rule will exceed the $100 million threshold. Alternative Policy (SNAP) Progra m; 40 CFR Part 82; EPA -HQ-OAR- 2008-0664, p. 1 (Dec. 18, 2009). 27 ISRI, Comments re: Docket ID No. EPA-HQ-OAR-2008-0664 - Protec tion of Stratospheric Ozone: New Substitute in the Mot or Vehicle Air Conditioning Sec tor Under the Significant New Alternative Policy (SNAP) Pr ogram., p. 1 (Feb. 24, 2010). 28 2 U.S.C. § 1532.Docket ID No. EPA-HQ-OAR-2008-0664 Page 16

1841776.1 * * * *

It is understandable that EPA mi ght be reluctant to extend the comment period a third time. However, it should be not ed that the material change in circumstances is entirely Honeywell’s doing. If Honeywell had been more forthcoming duri ng the original comment period regarding its intentions as to price and availability—as required by long-standing EPA regulations and specifically flagged by EPA as missing in the O ctober 2009 Federal Register notice—EPA and interested parties could have taken those factor s into account from the beginning in conducting their ana lysis of the overall risk to h uman health and the environment. However, that did not occur, and Honeywell is now attempting to fundamentally change the ground-rules 29 that were assumed by everyone du ring the prior comment period, and that underlie the only price projectio n in the record of $40-$60 per pound, which is the foundation for all of EPA’s analysis of anti cipated environmental effects. As a consequence, there is no choice now but to defer approval and to re-open the record to o btain the missing data and conduct a revised analysis. Respectfully submitted,

E. Donald Elliott Bret C. Cohen Willkie Farr & Gallagher LLP Attorneys for Arkema and Arkema Inc.

29 Arkema does not concede the val idity of Honeywell’s patent cla ims and has challenged them in court. However, the results of t hat litigation may not be fina l for some time. In considering whether to approve HFO-1234yf, EPA is under an obligation to co nsider the scenario in which the Honeywell patents are held t o be valid, and Honeywell is pe rmitted to limit supply and charge monopoly rents for the life of the patents.Docket ID No. EPA-HQ-OAR-2008-0664 Page 17

1841776.1 We attach two documents reference d but not easily available and request that they be made part of the record.

Enclosures: Exhibit 1 - SAE International, Technical Standards Board Governance Policy , 1.14.1.1 (10th Rev. Nov. 2008). Exhibit 2 - Letter from Honeywe ll to Mr. Jack Pokrzywa, SAE Gro und Vehicle Standards Manager (April 9, 2010).

cc: Margaret Sheppard, Stratospheric Protection Division, Offi ce of Atmospheric Programs, U.S. Environmental Protection Agency Jan Tierney, Office of General Counsel, U.S. Environmental Pro tection Agency

# TECHNICAL STANDARDS BOARD

GOVERNANCE POLICY

7 th Revision – Approved May 14, 2004 ANSI Essential Requirements Changes – March 2, 2006 8 th Revision – June 2007 9 th Revision – March 2008 10 th Revision – November 2008- 14 - Technical Standards Board Governance Policy - 10th Revision – November 2008

POLICY TYPE GOVERNANCE PROCESS

1.13 Performance Levels The Technical Standards Board and Counc ils are responsible for developing specific policies concerning the advisability of the Technical Committees developing perfo rmance levels for specific procedures or subject areas. Such policies will direct development of performanc e levels for Technical Reports involving dimensional requirements or grade, class or type identification and differentiation. W hen Technical Reports concern major systems or complete machines or vehicles, the nece ssity and desirability of developing performance levels are to be directed and accepted by the appropriate Council bef ore development work is commenced by a Technical Committee. If a Council concludes that performanc e levels are appropriate, the rationale used by the Technical Committee or group in selecting the applicability and limits must be cl early defined for consideration by and submitted for approval by its Council. The Technical Committee's rationale shall include information giving reasons for identified differences between the submitted Technica l Report and other existing st andards or regulations. Levels, which exceed the state- of-the-art, are to be avoided.

1.14 Patents, Copyrights and Trademarks 1.14.1 Patent Disclosure and Inclusion of Patents in SAE Technical Reports There is no objection in principle to drafti ng a proposed SAE Technical Reports in terms that include the use of a patented inventi on, if it is considered that technical reasons justify this approach. Each SAE Technical Committee or SAE working group member would be required to disclose at specified times during a development process a ll patents and patent applicat ions that are owned, controlled or licensed by the member, member’s employer or third party and that the member believes may become essential to the draft spec ification under development. The member would make this disclosure based on the me mber’s good faith and reasonable inquiry. If SAE International receives a notice that a proposed SAE Technical Report may require the use of an invention claimed in a patent, the procedures in this clause shall be followed. 1.14.1.1 Statement from Patent Holder Prior to approval of such a proposed SAE Technical Report, SAE International shall receive from a party identified as a patent holder or the patent holder (in a form approved by SAE International) either: 1) assurance in the form of a general disclaimer to the effect that such party does not hold and does not currently intend holding any invention claimed in a patent the use of which woul d be required for compliance with the proposed SAE Standard or 2) assurance that: a) a license will be made available without compensation to the applicants desiring to utilize the license for the purpose of implementing the standard; or b) a license will be made available to applicants under reasonable terms and conditions that are demonstrably free of any unfair discrim ination for the purpose of complying with the standard.- 15 - Technical Standards Board Governance Policy - 10th Revision – November 2008

POLICY TYPE GOVERNANCE PROCESS

1.14 Patents, Copyrights and Trademarks (Continued) 1.14.1.2 Record of statement A record of the patent holder’s statement shall be placed and retained in the files of SAE International. 1.14.1.3 Notice When SAE International receives from a patent holder the assurance set forth in a) or b) above, the standard shall include a note as follows: NOTE – The user’s attention is called to the possibility that compliance with this standard may require use of an inventi on covered by patent rights. By publication of this standard, no position is taken with respect to the validity of this claim or of any patent rights in connection therewith. The patent holder has, however, filed a statement of willingness to grant a license under these rights on reasonable and nondiscriminatory terms and conditions to applic ants desiring to obtain such a license for the purpose of complying with the standard. Details may be obtained from SAE International. 1.14.1.4 No Responsibility for identifying patents SAE International shall not be responsible for identifying patents for which a license may be required by an SAE Technical Report or for conducting inquiries into the legal validity or scope of those patents that are brought to its attention. 1.14.2 Copyrights If the Technical Committee is aware of any c opyrights applicable to published material, then such material shall not be used in a Technical Report. 1.14.3 Trademarks No proprietary names or trademarks shall be used in Technical Reports without written permission of the owner together with a generic description of the product sufficient to enable a user to conform to the Technical Report without resort to such proprietary product. 1.15 Notice on All Technical Reports Every approved Technical Report shall carry the following statement: "This report is published by SAE to advance the state of technical and engineering sciences. The use of this Technical Report is entirely voluntary, and its applicab ility and suitability for any particular use, including any patent infringement arising therefrom, is the sole responsibility of the user."