# Mandatory Greenhouse Gas Reporting Rule: EPA’s Response to Public Comments

Subpart QQ: Importers and Exporters of Fluorinated GHGs Inside Pre-charged Equipment

or Closed-cell Foams

November 2010 1November 2010 2 FOREWORD

This document provides responses to public comments on the U.S. Environmental Protection Agency’s (EPA’s) Proposed Mandatory Greenhouse Gas Reporting Rule: Additional Source s of Fluorinated GHGs: Subpart QQ: Imports and exports of fluorinated in side pre-charged products and closed-cell foams. EPA published a Notice of Propos ed Rulemaking in the Federal Register (FR) on April 12, 2010 (75 FR 18652). EPA received comments on this proposed rule via mail, e-mail, and at a public hear ing held in Washington D.C. on April 20, 2010. Copies of all comments submitted are available at the EPA Docket Center Public Reading Room. Comments letters and transcripts of the public hearings are also available electronically through http://www.regulations.gov by searching
Docket ID EPA-HQ-OAR-2009-0927.

EPA prepared this document in multiple sections, with each section focusing on a different broad category of comments on the rule. In light of the large number of

comments received and the si gnificant overlap between many comments, this document does not respond to each comment individually. Rather, EPA summarized and provided a single response to each significant argument, assertion, and question contained within th e totality of comments. Within each comment summary, EPA provides in parentheses one or more lists of Docket ID numbers for commenters who raised particu lar issues; however, these lists are not meant to be exhaustive, and EPA does not individually identify each and every commenter who made a certain point in all instances, particularly in cases where multiple commenters expressed essentially identical arguments.

EPA’s responses to comments are genera lly provided immediately following each comment summary. In some cases, EPA provided responses to specific comments or groups of simila r comments in the preamble to the final rulemaking. Rather than repeating those responses in this document, EPA has referenced the preamble.

Comments were assigned to specific section of this document based on an assessment of the principal subject of the comment; however, some comments inevitably overlap multiple subject areas.Table of Contents

Table of Contents

1. General Comments ................................................................................................. 4

2. Definition of Source Category ................................................................................. 5

3. Reporting Threshold ................................................................................................ 7

4. GHGs to Report ...................................................................................................... 9

5. GHG Emission Calcul ation Procedures .................................................................10

6. Data Reporting Requirements ................................................................................11

6.1 ...................................................................11 Confidential Business Information

November 8, 2010 3

Subpart QQ: Importers and Exporters of Fluorinated GHGs Inside Pre-charged Equipm ent or Closed-cell FoamsNovember 8, 2010

Subpart QQ: Importers and Exporters of Fluorinated GHGs Inside Pre-charged Equipm ent or Closed-cell Foams 4 1. General Comments

Comment Summary 1-b: Three commenters (0085, 0128, DC-03) supported EPA’s proposal to require reporting of imports and exports of fluorinated GHGs contained in pre-charged equipment and closed-cell foams. One commenter (0 128) asserted that pre-charged equipment and foams contain a signifi cant amount of stored GHGs, in total accounting for 29 million metric tons CO 2 e.

Response 1-b : EPA has finalized the reporting require ments for imports and exports of fluorinated GHGs in pre-char ged equipment and closed-cell foam s. As discussed in the preamble of the proposed and final rule, this subpart represents a significant source of

fluorinated GHGs. EPA estimates that approximately 22 MMTCO2e of fluorinated GHGs are imported annually into the U.S., making it the eleventh most significant source of GHGs (when weighted by car bon dioxide equivalent) covered under the Mandatory Reporting of Greenhous e Gases Rule. Imports of fluorinated GHGs from entities subject to this subpart account for se ven to ten percent of the U.S. fluorinated GHG supply. In addition, EPA estimates th at the number of importers and exporters are relatively small and that the costs associated with t he reporting requirements are reasonably modest.November 8, 2010

Subpart QQ: Importers and Exporters of Fluorinated GHGs Inside Pre-charged Equipm ent or Closed-cell Foams 5 2. Definition of Source Category

Comment Summary 2-a: One commenter (0119) recomm ended excluding closed-cell foams from this subpart. This commenter st ated that most facilit ies operate regionally and do not ship closed-cell foams long distan ces due to economic considerations. This

commenter also observed that EPA’s Techni cal Support Document estimated that GHGs imported in closed-cell foams are equal to the amount exported, creating a “net effect of zero on GHG supply.”

Response 2-a : EPA did not exclude closed-cell f oams from this subpart. There may be specific closed-cell foam products or par ticular circumstances where the closed-cell foams are not shipped long dist ances. However, imports of closed-cell foams are, in fact, a significant source of fluorinated GH Gs. EPA estimates that currently over 13 percent of fluorinated GHGs (in carbon diox ide equivalent terms) imported under this subpart are contained withi n closed-cell foams.

EPA subsequently obtained more detailed info rmation regarding this sector and has updated the “Technical Support Document for Importers and Exporters of Fluorinated GHGs Inside Pre-charged Equipment and Close d-cell Foams.” EPA found that imports of closed-cell foams exceed export s by a factor of 5. This results in a net increase in the U.S. supply of fluorinated GHGs and warr ants inclusion of closed-cell foams under this subpart. See the “Technical Support Do cument for Importers and Exporters of

Fluorinated GHGs Inside Pr e-charged Equipment and Closed- cell Foams” for detailed estimates of U,S, imports and ex ports of closed-cell foams.

Note that this ration of closed-cell foam impo rts to exports is likel y to change over time. Even if imports of closed-cell foams woul d equal the exports of closed cell foams (resulting in no net change in supply), EPA w ould still need to collect information on this

source of fluorinated GHGs. EPA is collect ing this information in order to understand this source category and to support analysis of policy options in regard to these

sources.

Comment Summary 2.b: One commenter (0091) stat ed that EPA had not proposed the specific regulatory text that would add importers and exporters of fluorinated GHGs in pre-charged equipment or cl osed-cell foams as a supplier source category at 40 CFR 98.2(a)(4). This commenter st ated that although EPA states it s intention to make this addition, EPA has not provided the actual text nor notice and an opportunity for affected entities to comment on the proposed revisi on which will directly impact them.

Response 2.b : On April 12, 2010, EPA published the Mandatory Reporting of

Greenhouse Gases: Additional Source of Fluorinated GHGs- Proposes Rule (75 FR 18653) to provide notice of the addition of th is subpart and the opportu nity to comment. Specifically, under Section II.F of the preamble, titled Subpart A Revisions , (75 FR 18689) EPA stated that “importers and expo rters of pre-charged equipment or closedcell foam products containing fluorinated GH Gs . . . would be added to the list ofNovember 8, 2010

Subpart QQ: Importers and Exporters of Fluorinated GHGs Inside Pre-charged Equipm ent or Closed-cell Foams 6 suppliers referenced in 40 CFR 98.2(a)(4).” The Notice of Proposed Rulemaking in its entirety and this particular statement prov ided notice of EPA’s proposed amendments to Part 98 and an opportunity to affected entities to s ubmit comments on the proposed

amendments. EPA received comments on the iss ue of whether the rule should cover suppliers; therefore, the notice given appear s to be adequate. EPA is not required to provide draft regulatory text to accompany a Notice of Proposed Rulemaking.November 8, 2010

Subpart QQ: Importers and Exporters of Fluorinated GHGs Inside Pre-charged Equipm ent or Closed-cell Foams 7 3. Reporting Threshold

Comment Summary 3-a: Two commenters (0091 and 0116) stated that the proposed rule was contradictory and t hat EPA should therefore clarify whether the reporting threshold “was greater than and equal to” or just “greater than” 25,000 metric tons

CO 2 e. The commenters stated that the proposed rule is vague for facilities that are potentially covered under subpart C and subpart QQ and whether a supplier should

consider combustion emissions when dete rmining the applicability under subpart QQ.

Response 3-a : Subpart QQ has been added as a supplier source category under 40 CFR 98.2(a)(4). As stated in the final rule, the reporting threshold for importers and exporters is an annual quantity of fluori nated GHGs contained in pre-charged equipment or closed-ce ll foams that is greater than or equi valent to 25,000 metric tons CO2e. Importers and export ers should calculate the amount of fluorinated GHGs imported or exported withi n pre-charged equipment and closed-cell foams and determine if this amount is greater than or equivalent to 25,000 metr ic tons CO2e. If their imports and/or exports equal or exceed this threshold, they are required to report under this subpart. Because this is a supplier source category under 40 CFR 98.2(a)(4), suppliers should not consi der subpart C combustion emissions when analyzing whether the supplier meets the reporting threshold under this subpart.

Comment Summary 3-b: One commenter (0085) expre ssed concern about importers segregating shipments into segments under the 25,000 metric tons CO 2 e threshold and thus avoiding reporting.

Response 3-a: As stated in the final rule, importers and exporters of an annual quantity of fluorinated greenhouse gases contained in pre-charged equipment or closed-cell foams that is greater than or equivalent to 25,000 metric t ons CO2e must report under this subpart. The amount of fluorinated GHGs contained within an individual shipment does not impact whether importers or exporte rs must report under this subpart. The total quantity importer or exporte d within the calendar year must be evaluated in order to determine if an importer or export er must report under this subpart.

Importers and exporters who meet the repor ting threshold must report all imports and exports of fluorinated greenhous e gases contained in pre- charged equipment or closedcell foams regardless of t he size of each shipment.November 8, 2010

Subpart QQ: Importers and Exporters of Fluorinated GHGs Inside Pre-charged Equipm ent or Closed-cell Foams 8 Comment Summary 3-c: One commenter (0085) stated that the thre shold calculation method at 40 CFR 98.2(f) is inappropriate as it only includes those fluorinated GHGs with global warming potentials listed in Table A-1. Th e commenter st ated that the threshold analysis should not be limited to Table A-1 fluorinated GHGs when the market is rapidly transitions to new products with new flourinated GHGs. This commenter further stated that excluding fluorinated GHGs that are not listed on Table A-1 would provide EPA with an incomple te accounting of fluorinated GHGs.

Response 3-c : In this action, EPA did not propose and is not finalizing revisions to the methods used to determine if an entity meets the reporting thresholds described at 40 CFR 98.2. EPA included Table A-1 to ease the burden when analyzing if an entity would meet the reporting threshold for a particular subpart. Those who meet the reporting threshold must report imports and exports of all fluorinated GHGs contained in pre-charged equipment and closed-cell f oams. EPA anticipates that it will update

Table A-1 when the scientific community evaluates and re-evaluates the global warming potential of particular fluorinated GHGs. See the preamble to the Final Mandatory Reporting of Greenhouse Gases Rule fo r a discussion of the definition of the

fluorinated GHGs and Tabl e A-1 (74 FR 56260).November 8, 2010

Subpart QQ: Importers and Exporters of Fluorinated GHGs Inside Pre-charged Equipm ent or Closed-cell Foams 9 4. GHGs to Report

Comment Summary 4-a: Three commenters (79, 90,113) stated that EPA should limit the reporting requirements to fluorinated GHGs with a gl obal warming potential (GWP) of 150 or higher. Commenters stated that this would provide an incentive to

manufacturers to transition out of fluorinated GHGs with high GWPs. In addition,

commenters stated that this would provide consistency with European Union regulations.

Response 4-a : In this action, EPA did not propose and is not finalizing revisions to the

definition of fluorinated GHGs. As discuss ed in the preamble to the Final Mandatory Reporting Rule (74 FR 56348) and the asso ciated response to comment document (Volume No.: 2 "Selection of Reporting Thresholds, Greenhouses Gases, and De Minimis Provisions,” page 15) reporting of all fluorinated GHGs imported and exported will provide valuable information on the fu ll range of fluorinated GHGs entering U.S. commerce. This information can be used to assess the overall volume and importance of particular compounds. Ultimately, all of this information can be used to inform policy decisions regarding the appropr iate type and scope of emission reduction measures for these gases. Considering the modest cost of reporting import and export of these compounds, the potential value of this info rmation justifies a co mprehensive definition

of fluorinated GHG. EPA stresses that the final rule intends to collect data of sufficient accuracy and quality to inform future clim ate policy development, thus it would be premature at this time to include such a threshold level fo r GHGs. Changing the behavior of firms by encouraging substitu tion is beyond the scope of this rule.November 8, 2010

Subpart QQ: Importers and Exporters of Fluorinated GHGs Inside Pre-charged Equipm ent or Closed-cell Foams 10 5. GHG Emission Calculation Procedures

Comment Summary 5-a: One commenter (0085) sugg ested that EPA provide flexibility in the calculation procedures for closed-cell foams. This commenter noted that appliance manufacturers often blow foam into appliance cavities. In such instances, it may be difficult to determine the cubic feet of foam contain in the appliance. Reporters may wish to calculate the mass of fluorinat ed GHGs contained in the closed-cell foam within each unit and then multiply this mass by the number of units imported or exported.

Response 5-a : EPA notes that the proposal and th is final rule include different calculation procedures and r eporting requirements for clos ed-cell foams contained in appliances and for closed-cell foams not contained in appliances.

For closed-cell foams that are imported insi de of appliances, the rule states that importers and exporters must report the identity of the fl uorinated GHG contained in the foam, the quantity of fluorinat ed GHG contained in the foam in each appliance, and the number of appliances im ported for each type of applianc e. Thus, reporters are not required to calculate the cubic feet of foam contained in the appliance.

For closed cell-foams that are not inside of appliances, t he final rule states that importers and exporters must report the identity of the fl uorinated GHG, the density of the fluorinated GHG in the foam (kg fluori nated GHG/cubic foot), and the quantity of foam imported (cubic feet) for each type of closed-cell foam.

EPA notes that an additional calculation met hod was added to the final rule for closedcell foams where the identit y and density of the fluorinated GHG within the closed-cell

foam is unknown. See section II.G.3 of the preamble for more information.November 8, 2010

Subpart QQ: Importers and Exporters of Fluorinated GHGs Inside Pre-charged Equipm ent or Closed-cell Foams 11 6. Data Reporting Requirements.

Comment Summary 6-a: One commenter (0085) sugg ested that EPA require reporters to submit broker information. This commenter stated that importers often act through brokers and expressed concern over an entity avoiding r eporting by separating shipments among multiple brokers. This co mmenter suggested t hat brokers identify their clients and vice versa in their reports. The commenter also suggested that EPA

utilize Dun and Bradstreet numbers to identify unique entities.

Response 6-a : EPA does not have reason to believe that the risk of entities avoiding reporting under this particular subpart is si gnificant enough to justify the addition of these reporting requirements. In addition, EPA notes that the number of brokers used by an importer or exporter does not impact t he information that the importer or exporter must report to EPA. This rule requires t hat importers and exporters must submit

information on an annual quantity of fluorinated greenho use gases imported and exported in pre-charged equipment or closed- cell foams. The range or number of brokers used to coordinate particular ship ments does not impact the information that must be submitted by a particu lar importer or exporter. Fo r more information on the definition of importers and t he relationship to brokers see the Response to Comment document for the Final Mandatory Reporti ng Rule (Volume No.: 14 "Subpart A: Definitions, Incorporation by Referenc e, and Other Subpart A Comments,” page 12)

Regarding the comment on Dun and Bradstreet numbers, on Septem ber 16, 2010, EPA amended subpart A to require facilities and suppl iers reporting GHGs to also report their corporate parent company (s), the North American I ndustry Classification System (NAICS) code(s) that apply to the facilit y/supplier, and whether or not reported emissions include emissions from a cogener ation unit (75 FR 57669, September 22, 2010). In that rule, EPA considered requiring each facility and supplier to report a corporate identifier, such as a Dun and Bradsteet number. For numerous reasons, EPA decided not to require such reporting; please refer to the preamble to that action for a full discussion of and response to comments on corporate identifiers.

6.1 Confidential Business Information

Comment Summary 6.1-a: Four commenters (0085, 0091, 0116, 0119) stated that EPA should protect data submitted under subpar t QQ as CBI. Commenters stated that data reported under this subpart would reveal key business information such as production information and market share. Comm enters stated that re leasing this data would harm the competitive position of reporting companies. Commenters also

discussed whether the data r eported under this subpart coul d be considered emissions

data.

Response 6.1-a : For a response to comments about confidential business information (CBI), see the Preambl e section II.B.