### March 2010 

# Economic Impact Analysis for the

Mandatory Reporting of Greenhouse Gas Emissions F - Gases: Subparts I, L, QQ, SS

Draft Repor ti 

### CONTENTS Section 1 Introduction and Background ................................ ................................ ................ 1 - 1 1.1 Background ................................ ................................ ................................ .......... 1 - 1 1.2 Proposed Rule: F - Gas Subparts ................................ ................................ ........... 1 - 2 1.2.1 Subpart I: Electronics Manufacturing ................................ ..................... 1 - 2 1.2.2 Subpart L:Fluorinated Gas Production ................................ .................... 1 - 3 1.2.3 Subpart

QQ : Imports and Exports of Fluorinated GHGs in Pre Charged Equipment and Closed - Cell Foams ................................ ........... 1 - 3 1.2.4 Subpart SS: Electrical Equipment Manufacture or Refurbishment and Manufacturing of Electrical Components ................................ ......... 1 - 3 1.3 Economic Impact Analysis for F - Gas Subparts ................................ ................... 1 - 4 Section 2 Regulatory Background ................................ ................................ ......................... 2 - 1 2.1 EPA’s Overall Rulemaking Approach ................................ ................................ . 2 - 1 2.1.1 Stakeholder Outreach to Identify Reporting Issues ................................ . 2 - 1 2.1.2 Analysis of Emissions by Sector ................................ .............................. 2 - 3 2.2 Existing Reporting Programs ................................ ................................ ............... 2 - 4 Section 3 Development of Subparts ................................ ................................ ....................... 3 - 1 3.1 Subpart I

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Electronics Manufacturing ................................ ................................ 3 - 1 3.1.1 Definition of Affected Entities ................................ ................................ . 3 - 1 3.1.2 Summary of Initial Proposal ................................ ................................ .... 3 - 2 3.1.3 Summary of Major Changes Since Initital Proposal ................................ 3 - 3 3.1.4 Selection of Reporting Threshold ................................ ............................ 3 - 4ii 3.1.5 Selection of Proposed Monitoring Methods ................................ ............ 3 - 5 3.1.6 Selection of Procedures for Estimating Missing Data ............................. 3 - 9 3.1.7 Selection of Data Reporting Requirements ................................ .............. 3 - 9 3.1.8 Selection of Recordkeeping Requirements ................................ ............ 3 - 10 3.2 Subpart L

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Fluorinated GHG Producers ................................ ........................... 3 - 11 3.2.1 Definition of Affected Entities ................................ ............................... 3 - 11 3.2.2 Summary of Initial Proposal ................................ ................................ .. 3 - 11 3.2.3 Summary of Changes Since the Initial Proposal ................................ .... 3 - 12 3.2.4 Selection of Reporting Threshold ................................ .......................... 3 - 12 3.2.5 Selection of Proposed Monitoring Methods ................................ .......... 3 - 12 3.2.6 Selection of Procedures for Estimating Missing Data ........................... 3 - 15 3.2.7 Selection of Data Reporting Requirements ................................ ............ 3 - 15 3.2.8 Selection of Recordkeeping Requirements ................................ ............ 3 - 16 3.3 Subpart

QQ

– Importing/Exporting of Pre - charged Equipment and Foams ...... 3 - 16 3.3.1 Definition of Affected Entities ................................ ............................... 3 - 16 3.3.2 Summary of Initial Proposal ................................ ................................ .. 3 - 16 3.3.3 Summary of Current Proposal ................................ ............................... 3 - 17 3.3.4 Selection of Reporting Threshold ................................ .......................... 3 - 17 3.3.5 Selection of Proposed Monitoring Methods and QA/QC Requirements ................................ ................................ ......................... 3 - 17 3.3.6 Selection of Procedures for Estimating Missing Data ........................... 3 - 17 3.3.7 Selection of Data Reporting Requirements ................................ ............ 3 - 17 3.3.8 Selection of Recordkeeping Requirements ................................ ............ 3 - 18 3.4 Subpart SS

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Electrical Equipment and Components Manufacturing ............... 3 - 19 3.4.1 Definition of Affected Entities ................................ ............................... 3 - 19 3.4.2 Selection of Reporting Threshold ................................ .......................... 3 - 20iii 3.4.3 Selection of Proposed Monitoring Methods and QA/QC Requirements ................................ ................................ ......................... 3 - 20 3.4.4 Selection of Procedures for Estimating Missing Data ........................... 3 - 21 3.4.5 Selection of Data Reporting Requirements ................................ ............ 3 - 21 3.4.6 Selection of Recordkeeping Requirements ................................ ............ 3 - 21 Section 4 Engineering Cost Analysis ................................ ................................ ................... 4 - 22 4.1 Introduction ................................ ................................ ................................ ........ 4 - 22 4.2 Overview of Cost Analysis ................................ ................................ ................ 4 - 22 4.2.1 Baseline Reporting ................................ ................................ ................. 4 - 22 4.2.2 Reporting Costs ................................ ................................ ...................... 4 - 23 4.3 Cost Analysis for Subpart I

– Electronic Manufacturers ................................ ... 4 - 25 4.3.1 Model Facility Development ................................ ................................ . 4 - 25 4.3.2 Determination of Cost Elements ................................ ............................ 4 - 26 4.3.3 Proportion of Facilities in the Different Model Facility Levels ............ 4 - 28 4.3.4 Assigning Costs to Cost Elements ................................ ......................... 4 - 29 4.3.5 Estimation of Facility Costs for Each Threshold Level ......................... 4 - 33 4.4 Cost Analysis for Subpart L

—Fluorinated Gas Production .............................. 4 - 34 4.4.1 Model Facility Development ................................ ................................ . 4 - 34 4.4.2 Cost Analysis for Mass Balance Approach - Option 1 .......................... 4 - 35 4.4.3 Cost Analysis for Option 2 - Process Vent Testing ................................ 4 - 38 4.5 Cost Analysis for Subpart QQ

—Imports and Exports of Fluorinated GHGs .... 4 - 41 4.5.1 Model Facility Development ................................ ................................ . 4 - 41 4.5.2 Determine Cost Elements ................................ ................................ ...... 4 - 42 4.5.3 Analyze Proportion of Facilities in the Different Model Facility Categories ................................ ................................ .............................. 4 - 43iv 4.5.4 Assigning Costs to Cost Elements ................................ ......................... 4 - 44 4.5.5 Estimate per Facility Costs for Each Threshold Level .......................... 4 - 45 4.5.6 Subpart SS

—Electrical Equipment Manufacturing ............................... 4 - 46 4.5.7 Other Costs ................................ ................................ ............................. 4 - 50 4.6 Public Sector Burden ................................ ................................ ......................... 4 - 50 Section 5 Economic Impact Analysis ................................ ................................ .................. 5 - 51 5.1 Selection of Reporting Thresholds ................................ ................................ ..... 5 - 51 5.1.1 Subpart I - Electronics Manufacturing ................................ .................... 5 - 51 5.1.2 Subpart L - Fluorinated Gas Production ................................ ................. 5 - 53 5.1.3 Subpart

QQ - Imports and Exports of Fluorinated GHGs in Pre Charged Equipment and Closed - Cell Foams ................................ ......... 5 - 55 5.1.4 Subpart SS - Electrical Equipment Manufacture or Refurbishment and Manufacturing of Electrical Components ................................ ....... 5 - 56 5.1.5 National Emissions Covered Under Sele cted Thresholds ..................... 5 - 57 5.2 National Cost Estimates ................................ ................................ ..................... 5 - 57 5.2.1 Additional National Cost Analysis ................................ ........................ 5 - 58 5.3 Economic Impact Analysis ................................ ................................ ................ 5 - 60 5.3.1 Assessing Economic Impacts on Small Entities ................................ .... 5 - 60 Section 6 Statutory and Executive Order Reviews ................................ ................................ 6 - 1 6.1 Executive Order 12866: Regulatory Planning and Review ................................ . 6 - 1 6.2 Paperwork Reduction Act ................................ ................................ .................... 6 - 1 6.3 Regulatory Flexibility Act ................................ ................................ ................... 6 - 3 6.3.1 Identify Affected Sectors and Entities ................................ ..................... 6 - 3 6.3.2 Develop Small Entity Economic Impact Measures ................................ . 6 - 4v 6.3.3 Results of Screening Analysis ................................ ................................ . 6 - 4 6.4 Unfunded Mandates Reform Act ................................ ................................ ......... 6 - 5 6.5 Executive Order 13132: Federalism ................................ ................................ .... 6 - 6 6.6 Executive Order 13175: Consultation and Coordination withIndian Tribal Governments ................................ ................................ ................................ ........ 6 - 6 6.7 Executive Order 13045: Protection of Children from Environmental Health and Safety Risks ................................ ................................ ....................... 6 - 7 6.8 Exec utive Order 13211: Actions that Significantly Affect Energy Supply, Distribution, or Use ................................ ................................ ............................. 6 - 7 6.9 National Technology Transfer Advancement Act ................................ ............... 6 - 8 6.10 Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low - Income Populations ................................ ....... 6 - 8 Section 7 Conclusions ................................ ................................ ................................ ............ 7 - 1 7.1 Summary of Sectors Covered ................................ ................................ .............. 7 - 1 7.1.1 Subpart I

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Electronics Manufacturing ................................ .................... 7 - 1 7.1.2 Subpart L

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Fluorinated GHG Producers ................................ ................. 7 - 1 7.1.3 Subpart

QQ

– Importing/Exporting of Pre - charged Equipment and Foams ................................ ................................ ................................ ....... 7 - 2 7.1.4 Subpart SS

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Electrical Equipment and Components Manufacturing ................................ ................................ .......................... 7 - 3 7.2 Estimated Costs and Impacts of the Mandatory GHG Reporting Program ......... 7 - 3 Section 8 References ................................ ................................ ................................ .............. 8 - 1vi 

### LIST OF TABLES Table 4 - 1. Labor Categories and Hourly Rates ................................ ................................ ........ 4 - 24 Table 4 - 2. Number of Representative Affected Entities Used in the Cost Analysis ................ 4 - 29 Table 4 - 3. Labor Categories and Hourly Rates ................................ ................................ ........ 4 - 29 Table 4 - 4. Responsibilities for Regulation Compliance by Labor Category Per Facility ......... 4 - 31 Table 4 - 5. Subpart L

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F - Gas Mass Balance Approach: Labor Costs (2006$) ........................ 4 - 37 Table 4 - 6. Subpart L

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F - Gas Mass Balance Method: Capital and O&M Costs (2006$) ........ 4 - 37 Table 4 - 7. Subpart L

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F - Gas Process Vent (Avg. per plant basis): Labor Costs (2006$ ) ....... 4 - 40 Table 4 - 8. Subpart L

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F - Gas Process Vent Method: Capital and O&M Costs (2006$) ......... 4 - 41 Table 4 - 9. Number of Representative Affected Entities Used in the Cost Analysis ................ 4 - 42 Table 4 - 10. Allocation of Facilities to Model Types ................................ ................................ 4 - 43 Table 4 - 11. Labor Categories and Hourly Rates ................................ ................................ ...... 4 - 44 Table 4 - 12. Responsibilities for Regulation Compliance by Labor Category .......................... 4 - 45 Table 4 - 13. Number of Representative Affected Entities Used in the Cost Analysis .............. 4 - 46 Table 4 - 14. Labor Categories and Hourly Rates ................................ ................................ ...... 4 - 48 Table 4 - 15 . Responsibilities for Regulation Compliance by Labor Category Per Facility ...... 4 - 49 Table 4 - 16. Other Costs Associated with Reporting and Recordkeeping ................................ 4 - 50 Table 5 - 1. Threshold Analysis for Subpart I

– Electronics Manufacturing Industry ............... 5 - 52 Table 5 - 2. Summary of Rule Applicability under the Proposed Capacity - Based Thresholds fo r Subpart I

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Electronics Manufacturing Industry ................................ ................................ ........ 5 - 52 Table 5 - 3 Threshold Analysis for Fluorinated GHG Emissions from Production of HFCs, PFCs, SF6, NF3, CFCs, and HCFCs (Uncontrolled Emissions) ................................ .......................... 5 - 54 Table 5 - 4 . Threshold Analysis for Fluorinated GHG Emissions from Production of HFCs, PFCs, SF6, NF3, CFCs, and HCFCs (Controlled Emissions) ................................ .............................. 5 - 55 Table 5 - 5. Threshold Analysis for Subpart QQ

–Imports of Fluorinated GHGs in Pre - Charged Equipment and Closed - Cell Foams ................................ ................................ ........................... 5 - 56vii

Table 5 - 6. Threshold Analysis for Subpart QQ

–Exports o f Fluorinated GHGs in Pre - Charged Equipment and Closed - Cell Foams ................................ ................................ ........................... 5 - 56 Table 5 - 7. Threshold Analysis for Subpart SS

– Electrical Equipment Manufacture or Refurbishment and Manufacturing of Electri cal Components ................................ .................. 5 - 57 Table 5 - 8. Estimates of Emissions (MtCO 2 e) Reported in 2008 Under the Selected Option .. 5 - 57 Table 5 - 9. National Cost Estimates by Subpart: Selected Option ................................ ............ 5 - 58 Table 5 - 10. Additional Subpart I Private Cost Estimates: Validating the DRE of Abatement Devices ................................ ................................ ................................ ................................ ....... 5 - 60 Table 5 - 11. Number of Establishments by Affected Industry and Enterprise aSize: 2002 ....... 5 - 62 Table 5 - 12. Receipts by Affected Industry and Enterprise aSize ($2002 Million) ................... 5 - 64 Table 5 - 13. Establishment Sales Tests by Industry and Enterprise aSize: First Year Costs ..... 5 - 67 Table 5 - 14. Establishment Sales Tests by Industry and Enterprise aSize: Subsequent Years Costs

................................ ................................ ................................ ................................ .................... 5 - 691 - 1 SECTION 1 INTRODUCTION AND BAC KGROUND 1.1 Background On December 26, 2007, President Bush signed the FY2008 Consolidated Appropriations Act which authorized funding for EPA to “develop and publish a draft rule not later than 9 months after the date of enactment of this Act, and a final rule not later than 18 months after the date of enactment of this Act, to require mandatory reporting of GHG emissions above appropriate thresholds in all sectors of the economy of the United State s.” (Consolidated Appropriations Act, 2008, Pub. L. No.110 - 161, 121 Stat 1844, 2128 (2008)). An accompanying joint explanatory statement directed EPA to "use its existing authority under the Clean Air Act" to develop a mandatory GHG reporting rule. The Fi nalMandatory Reporting of Greenhouse Gases Rule was signed on September 22, 2009 by Administrator Lisa Jackson; and published in the Federal Register on October 30 , 2009 . The Final MRR which is effective on December 29, 2009 included reporting of GHGs from the facilities and suppliers that EPA determined appropriately responded to the direction in the 2008 Consolidated Appropriations Act 1 . These source categories capture approximately 85 percent of U.S. GHG emissions through reporting by direct emitters as well as suppliers of fossil fuels and industrial gases. In the April 2009 proposed mandatory GHG reporting rule, the electronics, fluorinated GHG production, and use of electrical equipment source categories were included as subparts I, L, and DD. In addition, EPA requested comment on requiring reporting under subpart OO of the quantities of fluorinated GHGs imported and exported inside pre - charged equipment and foams. EPA received numerous comments on these subparts related to reporting costs and technical feasibility of implementing subparts I and L; requests for clarification of how “facility” should be interpreted in subpart DD, and comments both in favor and opposed to a requirement to report imports of F - GHGs contained in imported and exported pre - charged equipment and closed - cell foams.

1 Consolidated Appropriations Act, 2008, Public Law 110

– 161, 121 Stat. 1844, 2128.1 - 2

EPA recognized the concerns raised by stakeholders, and decided not to finalize subparts I, L, and DD with the Final MRR, but instead to re - propose significant pieces of these subparts. This supplemental proposal incorporates a number of changes including, but not limited to, different methodologies that provide improved emissions coverage at a lower cost burden to facilities th an would have been covered under the initial proposal. In addition, EPA is proposing requirements to report emissions from manufacture of electrical equipment and to report the quantities of fluorinated GHGs imported and exported inside pre - charged equipment and foams. EPA believes the monitoring approaches proposed in this action, which combine direct measurement and facility - specific calculations, effectively balance accuracy and costs, and that they are warranted even though the rule does not contain any emissions reduction requirements. As stated in the Final Rule, the data collected by the rule are expected to be used in analyzing and developing a range of potential CAA GHG policies and programs. A consistent and accurate data set is crucial to serve this intended purpose. 1.2 Proposed Rule: Fluorinated Greenhouse Gas Subparts This proposal requires reporting of fluorinated greenhouse gas (F - GHG) emissions from electronics manufacturing, production o f fluorinated gases, and use of electrical equipment. EPA is also proposing to require such reporting from manufacturers of electrical equipment, import and export of pre - charged equipment, and closed cell foams. These F - GHG source categories are coveredunder Subparts I, L, QQ, and SS of the rule. This section provides a brief introduction to the industries covered by each subpart and details which subparts were included in the initial proposal and which subparts are new additions to the original MRR. 1.2.1 Subpart I: Electronics Manufacturing Electronics manufacturing includes but is not limited to the manufacturing of semiconductors, liquid crystal displays (LCD), microelectromechanical systems (MEMs), and photovoltaic (PV) cells. The electronics industry uses multiple long - lived F - GHGs suchas perfluorocarbons (PFCs), Hydrofluorocarbons ( HFCs ) , sulfur hexafluoride ( SF 6 ), and nitrogen trifluoride (NF 3 ), as well as nitrous oxide (N 2 O). The proposed rule applies to electronics manufacturing facilities that emit GHGs from electronics manufacturing processes such as plasma etching, chemical vapor deposition , chamber cleaning, and heat transfer fluid use. Subpart I was included in the initial MRR proposal but omitted from the final rule. EPA received comments from entiti es within the covered industries regarding the requirements put1 - 3

forth in the initial proposal. EPA took these comments into consideration and is proposing a revised version of the MRR for entities covered under this subpart. 1.2.2 S ubpart L:Fluorinated Gas Production The fluorinated gas production source category consists of facilities that produce fluorinated gases. Under the proposed rule, these facilities would be required to report their fluorinated GHG emissions from fluorinated gas production, transformation, and destruction, as well as combustion - related CO 2, CH4, and nitrous oxide (N 2 O) emissions from stationary fuel combustion. Fluorinated gases include fluorinated GHGs (HFCs, PFCs, SF6, NF3, HFEs, etc.), CFCs, and HCFCs. However, emissions of HFC - 23 from HCFC - 22 production are addressed under subpart O and are therefore excluded from this subpart. Similarly, emissions of CFCs and HCFCs are addressed under the regulations implementing Title VI of the Clean Air Act and are therefore excluded from this subpart. Like Subpart I, Subpart L was included in the initial MRR proposal but omitted from the final rule. After receiving comments on the proposed regulation in the initial proposal, EPA has modified the rule with respect to entities under this subpart and is proposing the revised version. 1.2.3 Subpart QQ: Imports and Exports of Fluorinated GHGs in Pre- Charged Equipment and Closed

- Cell Foams The source category, importers and exporters of fluorinated GHGs contained in pre charged equipment or closed - cell foams, consists of any entity that is importing or exporting pre charged equipment that contains a fluorinated GHG such as air - conditioning and refrigeration equipment. This subpart also covers any entity that i mports or exports closed - cell foams that contain a fluorinated GHG. Today’s proposal introduces Subpart QQ as a new addition to the MRR. This source category was not included in the initial rule. 1.2.4 Subpart SS: Electrical Equipmen t Manufacture or Refurbishment and Manufacturing of Electrical Components The electrical equipment manufacturing category includes facilities that manufacture gas insulated substations, circuit breakers, other switchgear, gas - ins ulated lines, or power transformers containing sulfur- hexafluoride (SF 6 ) or perfluorocarbons (PFCs).1 - 4

This is the initial proposal for Subpart SS. This source category was not covered under the initial MRR. 1.3 Economic Impact Analysi s for F - Gas Subparts As part of the regulatory process of proposing these rules , EPA is required to develop an economic impact analysis (EIA). This report documents the EIA methods and results and proceeds as follows: Section 2 describes the current regulatory context into which the new proposals will be integrated. Section 3 explains the development process for each of the four subparts, and Section 4 details the individual cost analyses methodology used to evaluate each regulation. Section 5 presents the results of the economic impact analysis. A review of executive orders is provided in Section 6, which is followed by a brief EIA summary and conclusion in Se ction 7.2 - 1 SECTION 2 REGULATORY BACKGROUND The intent of this rule is to collect accurate and timely GHG emissions data that can be used to inform f

uture policies. Although the mandatory GHG rule is unique, EPA carefully considered other federal and state programs during development of the rule. The reporting program will supplement rather than duplicate other U.S. government GHG programs. We outline EPA’s overall rulemaking approach, sources considered, and summarize our review of GHG monitoring protocols below. For example, the monitoring and GHG calculation methodologies for many source categories are the same as, or similar to, the methodologies co ntained in state reporting programs. The remainder of the section provides an overview of related existing programs and discusses their relevance in the development of this rule. 2.1 EPA’s Overall Rulemaking Approach The mandatory reporting program will provide comprehensive and accurate data which will inform future climate change policies. Potential future climate policies include research and development initiatives, economic incentives, new or expanded voluntary programs, adaptation strategies, emission standards, a carbon tax, or a cap - and - trade program. Because we do not know at this time the specific policies that will be adopted, the data reported through the mandatory reportin g system should be of sufficient quality to support a range of approaches. To these ends, we identified the following goals of the mandatory reporting system:

 Obtain data that is of sufficient quality that it can be used to support a range of future climate change policies and regulations.

 Balance the rule coverage to maximize the amount of emissions reported while excluding small emitters.

 Create reporting requirements that are consistent with existing GHG reporting programs by using existing GHG emissio n estimation and reporting methodologies to reduce reporting burden, where feasible. 2.1.1 Stakeholder Outreach to Identify Reporting Issues Early in the development process, we conducted a proactive communications outreach program to inform the public about the rule development effort. We solicited input and2 - 2

maintained an open door policy for those interested in discussing the rulemaking. Sinc e January 2008, EPA staff has held more than 100meetings with stakeholders, including the following:

 trade associations and firms in potentially affected industries/sectors;

 state, local, and tribal environmental control agencies and regional air quality planning organizations;

 state and regional organizations already involved in GHG emissions reporting, such as TCR, CARB, and Western Climate Initiative (WCI); and

 environmental groups and other nongovernmental organizations.

 We also met with U.S. Department of Energy (DOE) and U.S. Department of Agriculture (USDA), which have programs relevant to GHG emissions. During the meetings, we shared information about the statutory requirements and timetable for developing a rule. Stakeholders were encouraged to pro vide input on key issues. Examples of topics discussed included existing GHG monitoring and reporting programs and lessons learned, thresholds for reporting, schedules for reporting, scope of reporting, handling of confidential data, data verification, andthe role of states in administering the program. As needed, the EPA technical workgroups followed up with these stakeholder groups on a variety of methodological, technical, and policy issues. EPA staff also provided information to tribes through conferen ce calls with different Indian tribal working groups and organizations at EPA and through individual calls with tribal board members of TCR. For a full list of organizations EPA met with when developing this rule please see the memo found at EPA - HQ - OAR - 20 08 - 0508 - 055. On April 10, 2009 (74 FR 16448), EPA proposed the GHG reporting rule. EPA held two public hearings, and received over 16,000 written public comments. The public comment period ended on June 9, 2009. In addition to the public hearings, EPA hadan open door policy, similar to the outreach conducted during the development of the proposal. As a result, EPA met with over 4,000 people and 135 groups between proposal signature (March 10, 2009) and the close of the comment period (June 9, 2009). Detai ls of these meetings are available in the docket (EPA - HQ - OAR 2008 - 0508) . EPA also visited two fluorinated gas production facilities and conducted multiple meetings and conference calls with fluorinated gas producers in order to better understand the2 - 3

current practices and issues associated with measuring emissions of fluorinated GHGs from fluorinated gas production facilities. In the April 2009 proposed mandatory GHG reporting rule, the electronics, fluorinated GHG production, and use of electrical equipment source categories were included as subparts I, L, and DD. In addition, EPA requested comment on requiring reporting under subpart OO of the quantities of fluorinated GHGs imported and exported inside pre - charged equipment and foams. EPA received a numb er of lengthy, detailed comments regarding proposed subparts I and L, several comments regarding the definition of “facility” under subpart DD, and several comments regarding a reporting requirement for imports and exports of F - GHGs contained inside pre ch arged equipment and foams. These comments, which are described in more detail in the discussions of the individual source categories in the proposed rule , raised concerns about the costs and technical feasibility of implementing subparts I and L as initially proposed, requested clarification of how “facility” should be interpreted under subpart DD, and both favored and opposed a requirement to report imports of F - GHGs contained in imported and exported pre charged equipment and closed - cell foams. EPA reco gnized the concerns raised by stakeholders, and decided not to finalize subparts I, L, and DD with the Final MRR, but instead to re - propose significant pieces of these subparts. Theproposed rule incorporates a number of changes including, but not limitedto, different methodologies that provide improved emissions coverage at a lower cost burden to facilities than would have been covered under the initial proposed rule. In addition, EPA is proposing requirements to report emissions from manufacture of ele ctrical equipment and to report the quantities of fluorinated GHGs imported and exported inside pre charged equipment and foams. 2.1.2 Analysis of Emissions by Sector For each o f

the source categories considered in this proposal, EPA compiled information on current conditions in the category, including information about existing monitoring equipment or reporting frameworks, estimated emissions of GHGs, and estimated productive cap acity or throughput. Incremental costs of measuring GHG emissions and conducting reporting activities were estimated under multiples scenario s . The cost estimates and analysis methodologies are detailed in Sections 4 and 5 of this report.2 - 4

2.2 Existing Reporting Programs In addition to the mandatory reporting program, a number of voluntary and mandatory GHG programs already exist or are being developed at the State, regional, and Federal levels. These programs have different scopes and purposes. Many focus on GHG emission reduction, whereas others are purely reporting programs. In addition to the GHG programs, other Federal emission reporting programs and emission inventories are relev ant to the GHG reporting rule. Several of these programs are summarized in this section. Since the 1990s, EPA has operated a number of non - CO2 voluntary partnership programs aimed at reducing emissions from GHGs such as methane, SF6, and PFCs . There are two sectorspecific partnerships to reduce SF6 emissions: the SF6 Emission Reduction Partnership for Electric Power Systems, with over 80 participating utilities, and the SF6 Emission Reduction Partnership for the Magnesium Industry. Partners in these programs implement practices to reduce SF6 emissions and prepare corporate - wide annual inventories of SF6 emissions using protocols and reporting tools developed by EPA. There are also two partnerships focused on PFCs: The Voluntary Aluminum Industrial Partners hip (VAIP) promotes technically feasible and cost - effective actions to reduce PFC emissions; industry partners track and report PFC emissions reductions. Similarly, the Semiconductor Industry Association and EPA formed a partnership to reduce PFC emissions in which a third party compiles data from participating semiconductor companies and submits an aggregate (not company - specific) annual PFC emissions report. In developing the rule, we carefully reviewed the existing reporting programs, particularly with respect to emissions sources covered, thresholds, monitoring methods, frequency of reporting and verification. States may have, or intend to develop, reporting programs that are broader in scope or are more aggressive in implementation because those programs are either components of established reduction programs (e.g., cap and trade) or being used to design and inform measures that reduced GHGs indirectly (e.g., energy efficiency). Where possible, we built upon concepts in existing Federal and State programs in developing the mandatory GHG reporting rule. For a full summary of the reporting programs reviewed in the development of the mandatory reporting rule please see the Regulatory Impact Analysis for the Mandatory Reporting of Greenhouse Gas Emissions EPA - HQ - OAR - 2008 - 0508 .3 - 1 SECTION 3 DEVELOPMENT OF SUBPA RTS The four F - Gas source categories included in this supplemental proposal are  Subpart I - Electronics Manufacturing;  Subpart L - Fluorinated Gas Production ;  Subpart

QQ - Imports and Exports of Fluorinated GHGs in Pre - Charged Equipment and Closed - Cell Foams ; and  Subpart SS - Electrical Equipment Manufacture or Refurbishment and Manufacturing of Electrical Components . This section provides additional details about the development of these subparts (e.g., which were included in the initial proposal and which subparts are new additions to the original MRR). For each subpart, this section also provides a brief description of proposed monitoring methods; procedures for estimating missing data; as well as data reporting and recordkeeping requirements. 3.1 Sub part I –

Electronics Manufacturing 3.1.1 Definition of Affected Entities Electronics manufacturing includes, but is not limited to, the manufacture of semiconductors, liquid crystal displays (LCDs), microelectro mechanical (MEMS), and photovoltaic cells (PV). The electronics industry uses multiple long - lived F - GHGs such as perfluorocarbons (PFCs), Hydrofluorocarbons (HFCs), sulfur hexafluoride (SF6 ), and nitrogen trifluoride (NF 3 ), as well as nitrous oxide (N 2 O). This proposed rule would apply to electronics manufacturing facilities that emit equal to or greater than 25,000 metric tons of CO 2 e per year 2 from electronics manufacturing processes such as plasma etching, chemical vapor deposition, chamber cleaning, and heat transfer fluid use. In this action, EPA is proposing methods to estimate emissions from cleaning and etch processes for semiconductor, LCD, MEMS, and PV manufacture and also methods for estimating N 2 O emissions from deposition and other manufacturing processes such as chamber cleaning. EPA is also clarifying methods for estimating emissions from heat transfer fluids. Finally, EPA is proposing methods for reporting controlled emissions from abatement systems.

2As discussed further below, EPA is proposing that uncontrolled emissions be used f or purposes of determining whether a facility’s emissions are equal to or greater than 25,000 mtCO2e.3 - 2

3.1.2 Summary of Initial Proposal The initial proposal for electronics manufacturing, EPA included the following provisions for reporting emissions from electronics manufacture: (1) a reporting threshold for semiconductors, LCDs, MEMS, and PV; (2) methods for estimating emissions from etching and cleaning; ( 3) methods for estimating N 2 O emissions during etching and cleaning ; (4) methods for verifying destruction or removal efficiency(DRE) of abatement equipment; and (5) methods for estimating emissions from heat transfer fluids. The main provisions proposed initially for reporting emissions from electronics manufacturing are briefly summarized in paragraphs below. For more detailed information on the initial proposal, see the electronics manufacturing section of EPA’s proposed rule on the Mandatory Reportin g of Greenhouse Gases (74 FR 16448). In the initial proposal, a capacity - based thresholdwas proposed , requiring those facilities with a capacity of 1,080 m2silicon or greater to report their GHG emissions. The capacity based threshold of 1,080 m2sili con, which is equivalent to 25,000 mtCO 2 e using the 2006 IPCC Tier 1 default factors and assuming no abatement, was applicable to semiconductor, MEMS, and LCD manufacturers. Due to a lack of informationon use and emissions of F - GHGs for PV manufacture , EPAproposed an emissions - based threshold of 25,000 mtCO 2 e for these facilities, in lieu of an emissions - based threshold, where possible, because EPAbelieve s that this approach willsimplif

y the applicability determination. With respect to estimating emissions from chamber cleaning and etching during semiconductor manufacturing , in our initial proposal, EPA outlined two different methods; one method for the large st semiconductor facilities , and another method for other semico nductor facilities and LCD, MEMS , and PV facilities. EPAdefined large semiconductor facilities as those facilities with annual capacities of greater than 10,500 m 2silicon (equivalent to 2 9 out of 175 total facilities). For large semiconductor facilitie s EPAproposed an approach based on the IPCC Tier 3 methodthat

require d the use of

company - specific data for (1) gas consumption, (2) gas utilization, (3) by - product formation, and (4) DREs for all emissions abatement processes at the facility. As EPAst ated in the initial proposal, ithad concludedthat largesemiconductor facilities werealready using Tier 3 methods and/or hadthe necessary data readily available either in - house or from suppliers to apply the highest Tier method . For other semiconductor facilities and LCD, MEMS , and PV facilities, EPAproposed the IPCC Tier 2b approach , which provides IPCC 2b default emissions factors for process utilization , by- product formation , and site - specific DRE measurements.3 - 3

In the initial proposal, EPA propos ed to require facilities to estimate annual N 2 O emissions using a simple mass - balance. This method assumedthat all N 2 O consumed is emitted (i.e. not converted or destroyed) . Based on comments received on EPA’ s initial proposal, EPA is now proposing two methods for estimating N 2 O emissions from electronics manufacturing: one for estimating N 2 O emissions from chemical vapor deposition and another for estimating N2 O emissions from all other manufacturing processe s such as chamber cleaning. With respect to the use of devices to abate F - GHG emissions, the emissions estimation method EPA proposed accounted for destruction by abatement systems only if facilities verified the performanceof their systems using one of two methods. In particular, EPA proposed to require that either

( 1) the DRE beverified by measurement using the methods described in EPA’s Protocol for Measuring Destruction or Removal Efficiency of Fluorinated Greenhouse Gas Abatement Equipment in Electronics Manufacturing(EPA’s DRE Protocol), or (2) purchase by the facility of abatement systems that weretested by a third partyaccording to EPA’s DRE Protocol. The proposed rule also required that facilities use the equipment within the manufacturer’s s pecified equipment lifetime, operate the equipment within the manufacturer specific limits for the gas mix and exhaust flow rate intended for the F - GHG destruction, and maintain the equipment according to the manufacturer’s guidelines. In addition, if fac ilities chose not to verify the performance of their abatement systems using the methods, only uncontrolled emissions could be reported. To estimate the emissions from heat transfer fluids, in the i nitial proposal, EPA required that electronics manufacturers use the 2006 IPCC Tier 2 approach, which is based on a mass balance method. As stated in the initial proposal, the 2006 IPCC Tier 2 approach uses company specific data and accounts for differenc es among facilities’ heat transfer fluids, leak rates, and service practices. Comments receivedon EPA’s initial proposal, notedthat theproposed method for estimating emissions from heat transfer fluids would require companies to compile a detailed inventory of all fluorinated heat transfer equipment and its nameplate capacity. Comments stated that such a mass balance approach would be overly burdensome. In evaluating the secomments, EPA believes that there was some confusion regarding the intended method. As a result, EPA is not changing the broad outlines of theinitial proposal , but does provide additional cl arifying description of the required data elements. 3.1.3 Summary of Major Changes Since Initital Proposal EPA received comments from approximately 10 entities on the proposed rule. Commenters generally opposed the proposed reporting requirements and stated that excessive3 - 4

monitoring and reporting were required . For example, commenters asserted that they do not currently collect the data required to report using an IPCC Tier 3 approach , and that to collect such data would entail significant burden and capitalcosts. In most cases, commenters provided alternati ve approaches to each of the reporting requirements. In response to those comments, EPA isrevisingits initial proposaland are proposing the following reporting provisions for electronics manufacturers : (1) a single emissions - based reporting threshol d for semiconductor, LCD, MEMS, and PV facilities; (2) modified methods for estimating emissions from cleaning and etching activities for semiconductor facilities and other electronics facilities including those that manufacture LCDs, MEMS, and PV; (3) methods for estimating facility N 2 O emissions; (4) clarified methods for estimating emissions from heat transfer fluids; and (5 ) revised methods for reporting controlled emissions from abatement equipment . 3.1.4 Selection of Reporting Threshold Under the re - proposed rule, facilities that manufacture semiconductors, LCD, MEMS, and PVwould be subject to an emissions - based threshold of 25,000 mtCO 2 e . Consistent with other sections of the Final MRR, for the purposes of determiningwhether a facility emits equal to or greater than a 25,000 mtCO 2 e, a facility must include emissions from all source categories for which methods are provided in the rule. For purposes of the threshold determination under subpart I, EPA is proposing two different methods, depending on whether the facility manufacturers semiconductors, MEMS, LCDs or PVs. It is important to note that these methods are only for determining whether a facility exceeds the threshold; methods required for monitoring and reporti ng emissions data are presented in sections 3.1.5 and 3.1.6 below. To determine whether a manufacturer falls above or below the proposed 25,000 metric tons of CO 2 e, EPA is proposing that semiconductor, MEMS, and LCD facilities use gas specific emission fac tors assuming 100% manufacturing capacity to calculate annual metric tons of emissions in CO 2equivalents . Because we understand that heat transfer fluids are widely used within semiconductor manufacturing , EPA is proposing that semiconductor manufacturer s add 10% of total clean and etch emissions at a facility to their estimate. EPA is proposing that PV facilities multiply annual fluorinated GHG purchases or consumption by the gas - appropriate 100 - year GWPs , as defined in Table A - 1 of Subpart A of Part 98, to calculate annual metric tons of emissions in CO 2equivalents .3 - 5

EPA is proposing to require an emissions estimating method that does not account for destruction by abatement equipment because actual emiss ions from facilities employing abatement equipment may exceed estimates when based on the manufacturers’ rated DREs of the equipment and may therefore exceed the 25,000 metric tons CO 2 e threshold without the knowledge of the facility operators. When abate ment equipment is used, electronics manufacturers often estimate their emissions using the manufacturer - suppliedDRE for the equipment. However, abatement equipment may fail to achieve its rated DRE either because it was not installed properly, is not bei ng properly operated and maintained , or because the DRE value itself was incorrectly measured due to a failure to properly account for the effects of dilution. EPA is proposing an emissions - based threshold in response to comments received on the initial proposal that stated the proposed capacity - based threshold created ambiguity. EPA believes an emissions - based threshold will simplify the applicability determination and that by applying the method for determining whether the threshold is met, a facilitywill be able to quickly determine whether they must report under this rule. 3.1.5 Selection of Proposed Monitoring Methods EPA is proposing methods to monitor and estimate fluorinated GHG and N 2 O emissions from semiconductor, LCD, MEM S, and PV manufacture. The proposed methods discussed below include the following: (i) estimating emissions from cleaning and etching processes; (ii) e stimating facility N 2 O emissions; (iii) estimating emissions from heat transfer fluids; and (iv) reporting controlled emis sions from abatement systems. The methods described and proposed in this section are for estimating emissions that would be required to be reported under this subpart. EPA proposes different methods for estimating fluorinated GHG emissions from etching and cleaning . One method applies to all semiconductor manufacturers and the other applies to LCD, MEMS, and PV manufacturers. 3.1.5.2 F- GHG Emissions Estimation Methods

– Semiconductor Manufacturing Under this proposal, all semiconductor manufacturers that have emissions equal to or greater than 25,000 mtCO 2 ewould be required to estimate and report emissions from etching and cleaning using one of two approaches.3 - 6

The first approach is based on: (1) gas consumption as calculated using the facility’ s purchase records, inventory, and gas - and facility - specific heel factors, (2) facility - specific methods for apportioning gas usage by process category using indicators of GHG - using activity (e.g. wafer passes), (3) emissions factors (including factors for by - products) based on refined process categories (e.g., categories with more specificity than the simpler cleaning and etching categories listed in the 2006 IPCC Guidelines), and (4) methods for reporting controlled emissions . This approach , hereinafter referred to as the “ Refined Method”, was developed in response to comments received in response to the initial proposal which called for using the 2006 Tier 3 method for estimating emissions from large semiconductor facilities. The Refined Method would apply to all semiconductor facilities, thereby removing the distinction between large and relatively smaller facilities. 3.1.5.3 F- GHG Emissions Estimation Methods

– LCD, MEMS, and PV Manufacturing In this action EPA is proposing to require an approach based on a s lightly modified 2006 IPCC Tier 2b method which would include (1) gas consumption calculated using the facility’s purchase records, inventory, and gas - and facility - specific heel factors , (2) gas consumption apportioned to 2006 IPCC Tier 2b process categories, clean and etch, (3) emissions factors consistent with 2006 IPCC Tier 2b factors, and (4) methods for reporting controlled emissions . The main difference between the method proposed in this proposal and that in the initial proposal is the addition of a gas - and facility - specific heel factor to determine overall gas consumption. The method proposed to develop the gas - and facility - specific heel for LCD, MEMS, and PV facilities is the same as proposed for semiconductor facilities including the provisions for exceptional circumstances. EPA is proposing this method based on information received in response to our initial proposal from semiconductor manufacturers regarding the development of gas - and facility - specific heel factors. Although EPA does not hav e complete information on how LCD, MEMS, and PV facilities are currently estimating their emissions from manufacture and how they are currently accounting for heels, their gas use and manufacturing processes are similar to that of semiconductor manufacturi ng. As a result, EPA concludes that these facilities have the data required to develop a gas - and facility - specific heel factors and that it can be implemented with minimal burden. 3.1.5.4 Method for Estimating N 2 O Emissions EPA is proposing that electronics manufacturers estimate N 2 O emissions from chemical vapor deposition processes and all other electronics manufacturing processes such as chamber cleaning, and that they estimate those emissions using the following proposed methods.3 - 7

To estimate N 2 O emissions from chemical vapor deposition, EPA is proposing the use of a facility - specific emission factor based on facility measurements of N 2 O utilization for chemical vapor deposition at a faci lity, using 2006 ISMI Guidelines. Under this approach, EPA is proposing to permit the facility to apply the average N 2 O utilization emission factor to all N 2 O using chemical vapor deposition recipes. In cases where a facility has not developed a facility specific N 2 O utilization factor f or chemical vapor deposition processes, EPA is proposing a default value in the range of ~0% to 40%. EPA is proposing a range due to a lack of information for N 2 O utilization rate for chemical vapor deposition processes. In comments received in response to our initial proposal, industry provided information to support a N 2 O utilization factor of 40%, primarily in 300 mm CVD processes. Taking the industry - provided 40% utilization value into account, EPA is propos ing a default value within a range of values with 40% as the upper bound and ~0% . To estimate N 2 O emissions from all other manufacturing processes (e.g., chamber cleaning), EPA is proposing either a facility - specific utilization factor based on facility measurements using 2006 ISMI Guidelines , or applying a default utilization factor of 0% which assumes N 2 O is not converted or destroyed during the manufacturing process. EPA is proposing this method due to a lack of information regarding other processes for which N2 O is used and N 2 O utilizationdata in those processes. EPA has requested information on electronics manufacturing processes that use N 2 O and N 2 O utilization during those processes. Additionally EPA is proposing that as part of determining annual facility N 2 O emissions that if a fac ility employs abatement devices and it wishes to report N 2 O emission reductions due to these devices it must adhere to the methods for reporting controlled emissions includedin this proposal. 3.1.5.5 Method for Estimating Emissions of Heat Transfer Methods To estimate the emissions of heat transfer fluids, EPA proposes that electronics manufacturers use the 2006 IPCC Tier 2b approach, which is a mass - balance approach . 3.1.5.6 Method for Reporting Controlled Emissions from Abatement Equipment For this proposed rule, EPA is defining DRE as theefficiency of a control system designed to destroy or remove fluorinated GHGs, N 2 O, or both. The DRE is equal to one minus the ratio of the mass of all relevant GHG s exiting the emission abatement system to the mass of3 - 8

GHG s enteri ng the emission abatement system. When fluorinated GHGs areformed in an abatement system, DRE is expressed as one minus the ratio of amounts of exiting GH Gs to the amounts entering the system in units of CO 2 - equivalents . In addition, EPA is clarifying that facilities may account for all abatement systems (e.g., multi - chamber POU , centraldevices ) provided that they abide by the requirements proposed. EPA is proposing to use the term destruction or removal efficiency (DRE) as opposed to “destruction effi ciency” or “destruction , ” terms that are already defined in Subpart A of the Final MRR. EPA is proposing to use DRE because it is the term generally used by the electronics manufacturing industry . Furthermore, in addition to capturing the destruction of materials in the exhaust, the term also captures materials in the exhaust that are recycled or captured for reuse. For purposes of this reporting rule, EPA is proposing that facilities that wish to document and report fluorinated GHG and N 2 O emission s refl ecting the use of abatement systems adhere to a method that would require: (1) documentation to certify that the abatement system is installed, operated , and maintained in accordance with manufacturers’ specifications , (2) accounting for the system’s uptime 3 , and (3) either certification that the abatement system is specifically designed for fluorinated GHG and N 2 O abatementand the use of an EPA default DRE value, or direct, proper DRE measurement to confirm the performance of the abatement system. Proper DRE measurement means measured in accordance with EPA’ s Protocol for Measuring Destruction or Removal Efficiency of Fluorinated Greenhouse Gas Abatement Equipment in El ectronics Manufacturing (EPA’s DRE Protocol). The proposed approach requires annual certification to ensure that abatement systems for whichcontrolled emissions are reported are installed, operating, and maintained according to manufacturers’ specifications. This approach would also require that any DRE used in reporting emissions be based on an EPA default DRE value or on recent on - site mea surements and actual uptime of the system, accounting for system redundancy. When process tools are equipped with multiple abatement systems designed for fluorinated GHGs and N 2 O, the facility may account for the combined uptime for the specific calculati on of controlled emissions. EPA anticipates this method for reporting controlled emissions will ensure that abatement systems have been properly installed, operated and maintained during each reporting period and that best available measured DRE values are used to estimate and report emissions. 3 Uptime means the total time during the reportingyearwhen the abatement system for which controlled emissions will be reported was properly installed, operated, and maintained .3 - 9

3.1.6 Selection of Procedures for Estimating Missing Data In general, it is not expected that data to estimate emissions from cleaning and etching would be missing; gas consumption data and indicators of activity data (e.g. wafer passes, finished wafers) is collected as business as usual. For this reason, EPA is not proposing procedures for estimating missing data from emissions from cleaning, etching or disposition processes. Because this prop osal includes an EPA default DRE value for estimating and reporting controlled emissions, EPApropose s that no missing data procedures would apply. When estimating heat transfer fluid emissions during semiconductor manufacture, the use of the mass - balanc e approach requires facilities to c orrect records for all inputs. Sh ould the facility be missing records for a given input, heat transfer fluid emissions may be estimated using the arithmetic average of the emission rates for the year immediately precedin g the period of missing data and the months immediately following the period of missing data. Alternatively it may be possible that the heat transfer fluid supplier has information in their records for the facility. 3.1.7 Selection of Data Reporting Requirements Owners and operators wouldbe required to report fluorinated GHG and N 2 O emissions for the facility for all plasma etching, chemical vapor deposition, chamber cleaning, and wafer cleaning processes as well as all heat transfer f luid use. In addition, facilities would be required to report the following: method used to calculate emissions; factors used for gas utilization and by - product formation rates and the source for each factor for each fluorinated GHG and N 2 O; production interms of substrate surface area (e.g., silicon, PV - cell, LCD); for each fluorinated GHG and N 2 O, annual gas consumed during the reporting year and gas - and facility - specific heel factors used; the apportioning factors used, a description of the engineeringmodel used for apportioning gas usage, and facility - wide consumption estimates based upon development of the apportioning factors, independent of the consumption value calculated using purchase records; fraction of each gas fed into each process type that is fed into tools with abatement systems; descriptions and information about abatement systems through which fluorinated GHGs and N2 O flow; inputs in the mass - balance equation (for heat transfer fluid emissions); and example calculations. Where process categories defined in the Refined Method and/or default gas utilization and by - product formation rates are not used, facilities would be required to provide descriptions of individual processes or processes categories used to estimate emissions.3 - 10

For each abatement system for which a facility is reporting controlled emissions, the following would be required: certification that the abatement device is installed, operated, and maintained according to manufacturers’ specifications; the uptime and the calculations to determine uptime for that reporting year; the DRE used (i.e. either the EPA default DRE value or a properly measured DRE); and required documentation to use the EPA default DRE value or a properly measure d DRE. These data form the basis of the calculations and are needed for EPAto understand the reported emissions and verify their reasonableness. 3.1.8 Selection of Recordkeeping Requirements EPA propose s that facilities keep records of data used to estimate emissions, records supporting values used to estimate emissions, purchase records, and invoices for gas purchases and sales. For those facilities that use facility - specific, recipe - specific gas utili zation and by production formation rates, EPA proposes that the following records be maintained: documentation that the rates were measured using the 2006 ISMI Guidelines, documentation that the measurements made are representative of fluorinated GHG and N 2 O emitting processes at the facility, and the date and results of the initial and any subsequent tests to determine process tool gas utilization and by - product formation rates. For those facilities that are reporting controlled emissions, EPApropose s th at the following records be kept: documentation to certify that each abatement device used at the facility is installed, maintained, and operated in accordance with manufacturers’ specifications; records of the uptime and the calculations to determine upti me; abatement system calibration and maintenance records; required documentation to use either the EPA default DRE value or a properly measured DRE. These records consist of values that are directly used to calculate the emissions that are reported and a

re necessary to enable verification that the GHG emissions monitoring and calculations are done correctly.3 - 11

3.2 Subpart L –

Fluorinated GHG Producers 3.2.1 Definition of Affected Entities Affected entities under subpart L are defined as any facility that produces a fluorinated gas from any raw material or feedstock chemical. Fluorinated gas production includes the production of fluorinated GHGs (including HFCs, PFCs, SF 6 , NF3, and HFEs) and chlorofluoroc arbons (CFCs) or hydrochlorofluorocarbons (HCFCs). EPA stipulates that production of fluorinated gases does not include the reuse or recycling of fluorinated GHG or the generation of HFC - 23 during the production of HCFC - 22. Facilities that produce fluori nated gases will be required to report their fluorinated GHG emissions from fluorinated gas production, transformation, and destruction, as well as combustion - related CO 2, CH4, and nitrous oxide (N 2 O) emissions from stationary fuel combustion. Fluorinatedgases include fluorinated GHGs (HFCs, PFCs, SF6, NF3, HFEs, etc.), CFCs, and HCFCs. However, emissions of HFC - 23 from HCFC - 22 production are addressed under subpart O and are therefore excluded from this subpart. Similarly, emissions of CFCs and HCFCs are addressed under the regulations implementing Title VI of the Clean Air Act and are therefore excluded from this subpart. 3.2.2 Summary of Initial Proposal In the April 2009 proposed mandatory GHG reporting rule (74 FR 16448; April 10 , 2009), the fluorinated GHG production subcategory was included as proposed subpart L. In the initial proposal for fluorinated GHG production, EPA proposed to require reporting from facilities emitting more than 25,000 mtCO2e from fluorinated GHG production and other source categories. EPA proposed monitoring based on a daily mass balance or yield approach that included measurements of the reactants and the fluorinated GHG product and byproducts. Under this approach, facilities would have had to calculate the difference between the expected production of each fluorinated GHG based on the consumption of reactants and the measured production of that fluorinated GHG, accounting for yield losses related to byproducts and wastes and accounting for streams that were recaptured and destroyed. Measurements of the various inputs and outputs were to be conducted with scales and flow meters meeting an accuracy and precision of 0.2 percent of full scale, and measured concentrations in streams were to meet an accurac y and precision of 5 percent. EPA received a number of detailed comments regarding the subpart L proposal. Commenters focused on the applicability of the rule; the potential difficulty, expense, and3 - 12

inaccuracy that would be associated with applying the proposed mass - balance approach to many facilities; and the need for inclusion of other monitoring approaches in the rule. EPA recognizes the concerns that stakeholders have raised and decided not to finalize the April 2009 proposed subpart L but instead to issue a new proposal for emissions from fluorinated gas production. This proposal includes revisions to several of the provisions in the initial proposed subpart L. 3.2.3 Summary of Changes Since the Initial Proposal Today’s proposed subpart L rule incorporates a number of changes since the original proposal including, but not limited to, inclusion of fluorinated GHGs emitted from fluorinated gas production processes that are not producing fluorinated GHGs (i.e., production of CFCs and HCFCs), inclusion of transformation processes that produce products that are not F - GHGs (when those transformation processes are co - located with fluorinated gas production processes), inclusion of additional emission estimation methodologies that provide flexibility to facilities to estimate emissions using methods that may already be in place, and revision of the mass - balance approach. 3.2.4 Selection of Reporting Threshold Under the re - proposed rule, owners and operators of fluorinated gas production facilities would be required to estimate and report GHG emissions if they are equal to or greater than 25,000 mtCO2e in the absence of control technology (e.g., thermal oxidation). As is true for the other source categories covered by the Mandatory GHG Reporting Rule, EPA is proposing that fluorinated gas production facilities could cease reporting if their emissions were less than 25,000 mtCO2e per year for five consecutive years or less t han 15,000 mtCO2e per year for three consecutive years. A full discussion of the threshold selection analysis is available in the revised Fluorinated Gas Production TSD (EPA - HQ - OAR - 2009 - 0927). For specific information on costs, including unamortized f

irst year capital expenditures, please refer to section 4. 3.2.5 Selection of Proposed Monitoring Methods EPA is proposing to allow facilities to use either a mass - balance approach or a site specific, process - vent - specific emission factor (PSEF) approach to estimate their fluorinated GHG emissions. The mass - balance approach is similar to that proposed in April, 2009, but has3 - 13

been modified in some details in response to comments. Facilities using either approach would be required to perform a one - time survey to identify the F - GHGs in certain emitted streams and to verify the destruction efficiency (DE) of any destruction devices every five years. EPA is proposing that facilities that produce fluorinated gases perform an initial survey of the F - GHGs present in emissions from processes that would emit more than two metric tons per year of F - GHGs before the imposition of control technologies. Under this requirement, which would be one - time for any given process, facilities would be required to sample the vent(s) or stream(s) that, alone or together, would be expected to contain all the F - GHG by products of the process. Facilities would be required to use EPA Method 18 (GC/ECD, GC/MS) or EPA Method 320 (FTIR) to identify F - GHGs. 3.2.5.1 Mass Balan ce Approach In this action, EPA is proposing that facilities producing F - GHGs have the option of monitoring emissions using the mass balance approach. In this approach, facilities would calculate the difference between the expected production of each fluorinated GHG based on the consumption of reactants and the measured production of that fluorinated GHG, accounting for yield losses related to byproducts (including intermediates permanently removed from the process) and wastes. Yield losses that could not be accounted for would be attributed to emissions of the fluorinated GHG product. This calculation could be performed for either/any reactant (e.g., hydrocarbon or HF) to estimate emissions of the fluorinated GHG product for that reactant (i.e., the mass balance may be based on a carbon balance or a fluorine balance). If fluorinated GHG byproducts were produced and were not completely recaptured or completely destroyed, facilities would also estimate emissions of each fluorinated GHG byproduct. Because the mass - balance approach assumes that losses from the process are emissions of the product, EPA believes that the mass - balance approach would only be appropriate for estimating emissions from F - GHG production, not production of CFCs, HCFCs, or pol ymers. To be eligible to use the mass balance approach, facilities would have to demonstrate that their planned measurements could meet a statistical error limit required in the rule. If the facility could not demonstrate that it could meet the error li mit, it would have to improve the accuracy and/or precision of its monitoring and measurement devices or opt to use another monitoring approach offered in the rule. To carry out the mass balance approach, the facility would choose a reactant for yield calc ulation purposes. The facility would then weigh or meter the mass of that reactant fed into3 - 14

the process, any primary fluorinated GHG produced by the process, the mass of the reactant permanently removed from the process (i.e., sent to the thermal oxidizer or other equipment, not immediately recycled back into the process), any fluorinated GHG byproducts generated, and any streams that contain the product or fluorinated GHG byproducts and that are recaptured or destroyed. These measurements would be tracke d on a monthly or more frequent basis and consolidated and recorded on a monthly basis. If monitored process streams included more than one component (product, byproducts, or other materials) in more than trace concentrations, 4the facility would be required to monitor concentrations of products and byproducts in these streams. Finally, the facility would be required to perform monthly mass balance calculations for each product produced. 3.2.5.2 Process Specific Emissions Factor Approach In this action, EPA is proposing an additional monitoring approach based on site - specific, process - specific emissions factors. This approach includes either calculation or measurement of process vent emissions depending on the size and fate of the emissions from the vent. Facilities would develop preliminary emissions estimates to determine the level of uncontrolled emissions from each process vent in proce sses subject to this subpart. For process vents with uncontrolled emissions of less than 10,000 mt CO2e (or less than 1 ton for emissions that include an F- GHG whose GWP does not appear in Table A - 1 of Subpart A), facilities could conduct either engineeri ng calculations or emissions testing to estimate emissions. Facilities could also conduct either engineering calculations or emissions testing to estimate emissions that were vented to a destruction device demonstrated to achieve a destruction efficiency of 99.9 percent (for fluorinated GHGs), as long as equipment or procedures 5were in place to ensure that uncontrolled emissions did not occur. For other emissions, facilities would be required to conduct emissions testing to determine the process vent emission factor. 3.2.5.3 Equipment Leak Emissions Estimation Approa ch For completeness, EPA proposes that facilities monitoring of process vents be supplemented by monitoring of equipment leaks, whose emissions would not occur through process vents. To estimateemissions from equipment leaks, facilities will be required touse EPA Method 21 and the Protocol for Equipment Leak Estimates(EPA - 453/R - 95 - 017).

4EPA is proposing to define“trace concentration” as any concentration less than 0.1 percent by mass of the process stream. 5 Such equipment or procedures could include, for example, holding tank capacity, monitoring of by - pass streams, or compulsory process shutdowns in the event the destruction device remains off line.3 - 15

3.2.6 Selection of Procedures for Estimating Missing Data In the event that a scale or flowmeter normally used to measure reactants, products, by pro ducts, or wastes fails to meet an accuracy or precision test, malfunctions, or is rendered inoperable, EPA is proposing that facilities be required to estimate these quantities using other measurements where these data are available. For example, faciliti es that ordinarily measure production by metering the flow into the day tank could use the weight of product charged into shipping containers for sale and distribution as a substitute. It is EPA’s understanding that the types of flowmeters and scales usedto measure fluorocarbon production (e.g., Coriolis meters) are generally quite reliable, and therefore that it should rarely be necessary to rely solely on secondary production measurements. In general, production facilities rely on accurate monitoring and reporting of the inputs and outputs of the production process. Nevertheless, EPA is also proposing that if a secondary mass measurement for the stream is not available, producers can use a related parameter and the historical relationship between the related parameter and the missing parameter to estimate the flow. If concentration measurements are unavailable for some period, EPA is proposing that the facility use the average of the concentration measurements from just before and just after the period o f missing data. 3.2.7 Selection of Data Reporting Requirements Under the proposed rule, owners and operators of facilities producing fluorinated GHGs would be required to report both their fluorinated GHG emissions and the quantities u sed to estimate them on a process - specific basis. For the mass - balance approach, this includes the masses of the reactants, products, by - products, and wastes, and, if applicable, the quantities of any product in the by - products and/or wastes (if that product is emitted at the facility). The chemical identities of reactants, products, and by - products would also be reported, along with the chemical equations used to estimate emissions. For the process vent approach, data to be reported includes the activity data used to calculate emissions (e.g., the quantity produced, transformed, or destroyed) and the emission factors used to estimate them. EPA is proposing that owners and operators report annual totals of these quantities. Where fluorinated gas producti on facilities have estimated missing data, the facility would be required to report the reason the data were missing, the length of time the data were missing, the method used to estimate the missing data, and the estimates of those data.3 - 16

3.2.8 S election of Recordkeeping Requirements Maintaining records of the information used to determine the reported GHG emissions is necessary to enable us to verify that the GHG emissions monitoring and calculations were done correctly. Under the p roposed rule, owners and operators of facilities producing fluorinated GHGs would be required to retain records documenting the data reported, including records of monthly emission estimation calculations, including all data that went in to the calculation s, calibration records for flowmeters, scales, and gas chromatographs, and documentation of emission factor development activities. These records are necessary to verify that the GHG emissions monitoring and calculations were performed correctly. 3.3 Subpart QQ –

Importing/Exporting of Pre - charged Equipment and Foams 3.3.1 Definition of Affected Entities Affected entities under subpart QQ are defined as any entity that is an importers an d/or exporter of pre - charged equipment or closed - cell foams that contain fluorinated GHGs. A variety of products containing fluorinated greenhouse gases (F - GHGs), nitrous oxide (N 2 O), and carbon dioxide (CO 2 ) are imported into and exported from the UnitedStates. Pre - charged equipment includes air- conditioning, refrigeration, and electrical equipment. Closed - cell foams that are imported and exported include polyurethane (PU) rigid foam used in insulation in domestic refrigerators and freezers,; commercial refrigeration foam,; PU rigid sandwich panel continuous and discontinuous foam; extruded polystryrene (XPS) sheet foam; and XPS boardstock foam. 3.3.2 Summary of Initial Proposal In the initial proposed rule EPA did not require reporting of the quantities of GHGs imported and exported inside products. EPA was concerned that it would be difficult for importers and exporters to identify and quantify the quantities of GHGs inside some products and that the number of importers and exporters would be high. However, EPA requested comment on the option of requiring reporting of imports and exports of HFCs and SF6contained in pre - charged air- conditioning, refrigeration, and electrical equipment and in closed cell foams. EPA noted that for these products, information on the size and chemical identity of the charge or blowing agent is likely to be readily available to importers and exporters (e.g., from nameplates affixed to equipment, servicing manuals, and product information for foams). Moreover, as noted above, the total quantities of imported and exported F - GHGs in pre - charged equipment and foams are significant.3 - 17

3.3.3 Summary of Current Proposal After carefully considering the comments and available information on imports and exports of F - GHGs inside pre - charged equipment and foams, EPA is proposing to require reporting of these imports and exports. Importers and exporters of pre - charged equipment and closed - cel l foams would be subject to requirements similar to those for importers and exporters of bulk GHGs. In addition, equipment importers would be required to report the types and charge sizes of equipment and the number of pieces of each type of equipment that they imported or exported, while foam importers would be required to report the volume of foam and F- GHG density of the foam that they imported. As is true for importers and exporters of bulk F- GHGs, importers and exporters of equipment and foam would o nly be required to report if their total imports or exports exceeded the 25,000 mtCO2e threshold. 3.3.4 Selection of Reporting Threshold Under the current proposal, EPA is proposing to require that importers and exporters of F - GHGs cont ained in pre - charged equipment and closed cell foams report their imports and exports if either their total imports or their total exports, in equipment, foams, and in bulk, exceed 25,000 mtCO 2 e per year. This threshold is the same as that for bulk import s and exports. 3.3.5 Selection of Proposed Monitoring Methods and QA/QC Requirements EPA proposes to require importers and exporters of equipment and foams to estimate their imports and exports of each F - GHG by multiplying the mass of the F - GHG contained in each type of equipment or foam by the number of pieces of equipment or by the volume of foam, as appropriate. EPA believes that information on F - GHG identity and charge size (or density, for foams) should be readily available to importers and exporters. 3.3.6 Selection of Procedures for Estimating Missing Data Procedures for estimating missing data are not provided for importers and exporters of fluorinated GHGs contained in pre - charged equipment or closed - cell fo ams . A complete record of all measured parameters used in tracking fluorinated GHGs contained in pre - charged equipment or closed - cell foams is required. 3.3.7 Selection of Data Reporting Requirements Under the current proposal, EPA is proposing to require importers and exporters of pre charged equipment and closed cell foams to report the following:3 - 18

(1) The total mass in metric tons of each fluorinated GHG imported or exported in pre charged equipment or closed - cell foams. (2) For each type of pre - charged equipment, the identity of the fluorinated GHG used as a refrigerant or electrical insulator, charge size (holding charge 6 , if applicable), and number imported or exported. (3) For closed - cell foams that are imported or exported inside of appliances, the identity of the fluorinated GHG contained in thefoam, the quantity of fluorinated GHG contained in the foam in each appliance, and the number of appliances imported for each type of appliance. (4) For closed cell - foams that are not inside of appliances, the identity of the fluorinated GHG, the densityof the fluorinated GHG in the foam (kg F - GHG/cubic foot), and the quantity of foam imported or exported (cubic feet) for each type of closed - cell foam. (5) Dates on which the pre - charged equipment or closed - cell foams were imported or exported. (6) Port s of entry through which the pre - charged equipment or closed - cell foams passed. (7) Countries from or to which the pre - charged equipment or closed - cell foams were imported or exported. EPA is proposing to collect this information because it is necessary either to understand the total volume of F - GHGs imported or exported inside of pre - charged equipment and foams (and thereby contributing to the U.S. supply of F - GHGs) or to verify submitted information. 3.3.8 Selection of Recordkeeping Requirements EPA is proposing to require importers and exporters of equipment and closed cell foams to retain the following records: (1) a copy of the bill of lading for the import; (2) the invoice for the import; and (3) for imports, the U.S. Customs entry form. This information is necessary to verify submitted information.

6This refers to any holding charge consisting of a fluorinated GHG. Holdin g charges consisting of other gases, such as nitrogen, are not included.3 - 19

3.4 Subpart SS –

Electrical Equipment and Components Manufacturing 3.4.1 Definition of Affected Entities Affected entities under subpart SS are defined as electrical equipment manufacturers of SF 6 - insulated closed - pressure system equipment and sealed - pressure system equipment including gas - insulated substations, circuit breakers, other switchgear, gas - insulated lines, or power transformers containing sulfur- hexafluoride (SF 6 ) or perfluorocarbons (PFCs). Electrical equipment manufacturers purchase bulk SF 6gas to (1) install a nominal charge in high - voltage closed - pressure equipment, (2) ship alongside closed - pressure equipment for topping off at installation site, (3) fill sealed - pressure equipment with its intended lifetime supply of SF6, and (4) develop and test equipment. Fugitive emissions of SF 6from equipment manufacturers typically occur during the manufacturing of equipment but can also occur during the other uses of SF 6at manufacturing facilities. While EPA believes that SF 6represents the majority of emissions from this source category, manufacturers may also use PFCs as dielectrics and heat trans fer fluids in power transformers. For example the PFC perfluorohexane (C 6 F 14 ) is used for retrofitting CFC - 113 cooled transformers. According to the U.S. Inventory of Greenhouse Gas Emissions and Sinks: 1990 - 2007 (U.S. Environmental Protection Agency, 2009), total U.S. estimated emissions of SF 6from electrical equipment manufacturers was estimated to be 0.81 million metric tons CO 2 e in 2006. EPA is proposing to require reporting from electrical equipment manufacture and refurbishment facilities becaus e these operations represent a significant source, approximately 5% of SF 6 emissions. It is estimated that ten equipment manufacturers were responsible for these emissions. EPA is proposing to include emissions of PFCs emitted during the manufacture or ref urbishment of PFC - containing power transformers because the National Inventory has no information on this source and because use of transformers is expected to grow in the future. This source category comprises electrical equipment manufacturers and refurb ishers of SF6 or PFC - insulated closed - pressure system equipment and sealed - pressure system equipment including gas - insulated substations, circuit breakers, other switchgear, gas - insulated lines, or power transformers containing sulfur- hexafluoride (SF 6 ) or perfluorocarbons (PFCs).3 - 20

3.4.2 Selection of Reporting Threshold EPA is proposing requiring electrical equipment manufacturers to report their SF 6and PFC emissions if their total annual purchases of SF 6and PFCs exceed 23,000 lbs. This consumption - based threshold is equivalent to an emissions - based threshold of 25,000 mtCO 2 e, assuming an average manufacturer emission rate of 10%. 3.4.3 Selection of Proposed Monitoring Methods and QA/QC Requirements In developing the proposed approach, EPAreviewed the 2006 IPCC Guidelines, the U.S. GHG Inventory, DOE 1605(b), EPA’s Climate Leaders Program, and The Climate Registry. In the IPCC Guidelines, Tiers 1 and 2 are based on default and country - specific SF6 and PFC emissionfactors, but Tier 3 is based on a mass - balance approach for estimating SF6 and PFC emissions at each life - cycle stage of the equipment. The proposed monitoring methods for calculating SF 6and PFC emissions from electrical equipment manufacturing and refur bishment are similar to the methodologies described in the 2006 IPCC Guidelines Tier 3 methods for emissions from electrical equipment manufacturing. EPA propose s that all SF 6and PFC emissions be reported, including those from equipment testing, manufacturing, decommissioning and disposal, refurbishing, and from storage cylinders, as well as combustion - related CO 2 , CH4 , and nitrous oxide (N 2 O) emissions from stationary fuel combustion. This requirement would apply only to electrical equipment manufacturer s where SF6 and PFC purchases exceed 23,061 lbs per year. The Tier 3 approach is being proposed because it is the most accurate and it is feasible for all equipment manufacturers to conduct the mass balance analysis for SF 6and PFCs using readily availableinformation. A comparable mass - balance approach has also been proposed for subpart DD Sulfur Hexafluoride (SF 6) and Perfluorocarbons (PFCs) from Electrical Equipment at an Electric Power System . The mass - balance approach works by tracking and systematically accounting for all facility uses of SF 6and PFCs during the reporting year. The quantities of SF 6and PFCs that cannot be accounted for are assumed to have been emitted to the atmosphere. Theemissions of SF 6and PFCs would be estimated and reported separately . In addition, EPA proposes that electrical equipment manufacturers be required to keep records for the QA/QC requirements including check- out sheets and weigh - in procedures for cylinders , residual gas amounts in cylinders sent back to suppliers, invoices for gas and3 - 21

equipment purchases or sales, and documentation of recycling and destruction. The records that are being proposed are the minimum needed to reproduce and confirm emission calculations. 3.4.4 Selection of Procedures for Estimating Missing Data It is expected that equipment manufacturers should be able to obtain 100 percent of the data needed to perform the m ass balance calculations for both SF 6and PFCs. The use of the mass - balance approach requires correct records for all inputs. However, if needed, missing data can be replaced using data from similar manufacturing operations, and from similar equipment testing and decomissioning activities for which data is available. 3.4.5 Selection of Data Reporting Requirements EPA proposes annual reporting for the electrical equipment manufacturing and refurbishing industry. Equipment m anufacturers would report all SF 6and PFC emissions, including those from equipment testing, equipment manufacturing, and bulk SF 6and PFC handling. However, the emissions would not need to be broken down and reported separately for testing, manufacturing, or bulk SF 6and PFC handling. Along with their emissions, electrical equipment manufacturers would be required to submit the following supplemental data: SF 6and PFCs with or inside equipment delivered to customers, SF 6and PFCs returned by customers with or inside equipment, bulk SF 6and PFC purchases, SF 6and PFCs sent off - site for destruction or to be recycled, SF 6and PFC returned from offsite after recycling, SF 6and PFCs stored in containers at the beginning and end of the year, SF 6and PFCs returne d to suppliers. If applicable, combustion - related CO 2, CH4, and nitrous oxide (N 2 O) emissions from stationary fuel combustion. These data would be submitted because they are the minimum data that are needed to understand and reproduce the emission calculations that are the basis of the reported emissions. 3.4.6 Selection of Recordkeeping Requirements In this action, EPA is proposing that electrical equipment manufacturers be required to keep records documenting (1) their adherence to the QA/QC requirements specified in the proposed rule, and (2) the data that would be included in their emission reports, as specified above.4 - 22 SECTION 4 ENGINEERING COST ANA LYSIS 4.1 Introduction EPA estimated costs of complying with the rule for process emissions of GHGs in each affected industrial facility. EPA used available industry and EPA data to charac terize conditions at affected sources. Incremental monitoring, recordkeeping, and reporting activities were then identified for each type of facility, and the associated costs were estimated. 4.2 Overview of Cost Analysis The costs of complying with the rule will vary from one facility to another, depending on the types of emissions, the number of affected sources at the facility, existing monitoring, recordkeeping, and reporting activities at the facility, etc. The costs include labor costs for performing the monitoring, recordkeeping , and reporting activities necessary to comply with the rule. For affected facilities, costs include monitoring, recording, and reporting of GHG emissions from production processes and from stationary combustion units. All costs referred to in this section are reported in 2006 dollars. For each source category, we first provide a general o verview of baseline reporting (if data are available); two costs components associated with this information collection; labor costs (i.e., the cost of labor by facility staff to meet the information collection requirements of the rule); and capital and op erating and maintenance costs (e.g., the cost of purchasing and installing monitoring equipment or contractor costs associated with providing the required information). Additional details of the data, methods, and assumptions underlying the costs are documented in a separate cost appendix and in accompanying Technical Support Documents (TSDs). The TSDs also include information on the assumptions and methods used to identify representative entities or groups of entities used to develop the cost analysis for each subpart. 4.2.1 Baseline Reporting When data are available to determine how many companies are currently implementing approache s consistent with the methods at the facility level to meet internal GHG management programs or state or voluntary reporting programs at the domestic or international level, we include a discussion of the baseline reporting practices. When data are not available, EPA is assuming that none of the facilities in these source categories are currently reporting emissions and that many of the requirements will result in “new” or “full” costs to meet reporting requirements. Specifically, EPA is assuming that therewill be additional costs for any sampling4 - 23

and testing in the requirements in methods (i.e., carbon contents of process inputs, such coke, coal, carbonate composition, or actual emissions). EPA is also assuming that additional costs will be incurred for preparing monitoring and QA/QC plans, performing the calculations, reporting the results, and maintaining records. 4.2.2 Reporting Costs To ensure consistency in the development of cost estimates across all sources, EPA developed a cost spreadsheet template that each subpart used to compile, document, and calculate per unit reporting costs. Please refer back to Section 3 for informatio n on the subpart process for source categories. Detailed instructions were provided along with the cost spreadsheet template that clearly explained the data to be compiled and calculated. The template included three tables; analysis of reporting thresholds , analysis of monitoring and reporting options, and unit costs for monitoring and reporting. Key variables and data fields were clearly defined to ensure that each sub group developed costs around a standard set of methods and assumptions (e.g., method for annualization of capital costs, interest rate to be applied to capital). Labor Costs . The costs of complying with and administering this rule include the time of managers, technical, and administrative staff in both the private sector and the public sector. Staff hours are estimated for activities including :

 monitoring (private): staff hours to operate and maintain emissions monitoring systems;  reporting (private): staff hours to gather and process available data and reporting it to EPA through electronic systems; and
 assuring and releasing data (public): staff hours to quality assure, analyze, and release reports. Staff activities and associated labor costs may vary over time. Thus, cost estimates are developed for start - up, first - time reporting, and subse quent reporting. Loaded hourly labor rates (also referred to as “wage rates”) were developed for several labor categories to represent the employer costs to use an hour of employees’ time in each of the manufacturing sector labor categories used in this an alysis. The labor categories correspond to the job responsibilities of the personnel that are likely to be involved in GHG emissions monitoring activities at the manufacturing facility level to comply with the rulemaking. For purposes of this study, EPA adopted the methodology used by Cody Rice (2002 ) to calculate the wage rates for the EPA’s Toxics Release Inventory (TRI) Program. Thus, the wage4 - 24

ratescalculated for different labor categories included the employer costs for employee compensation(comprising the basic wages and the corresponding benefits) and the overhead costs to the employer . 7 For each labor category, the following formula was used to calculate the wage rates:

Loaded Hourly Labor Rate ($/hr.) = Basic Wages ($/hr.) * (1 + Benefits Loading Factor + Overhead Loading Factor). Thebenefits loading factor corresponds to the relative share of benefits compensation in the total employee compensation (comprising basic wages and benefits). Although the benefits factor tends to vary by labor category and by industry (0.37 to 0.50), for purposes of this analysis, we have assumed the benefits loading factor (1.7 ) to remain the same for each labor category across all industries within the manufacturing sector due to a lack of availability of necessary industry - specific data on benefits paid to employees. The overhead loading factor corresponds to the share of overhead costs to the employer relative to the total employee compensation. For purposes of this analysis, we have also adopted the same overhead loading factor that Cody Rice (2002) use d in her wage rate calculations. Thus the overhead loading factor that we used in the wage rate calculations remains the same for all labor categories and across all industry types within the manufacturing sector. The overhead loading factor was assumed tobe 0.17. The loaded labor rates for the four labor categories that areused in the cost analysis for each subpart covered under this rule and are also reported in the appropriate sectors labor cost ta bles in the following sections. Table 4 - 1 . Labor Categories and Hourly Rates

Labor Category Description Loaded Hourly Rate ($/hour) Legal Oversees legal aspects of company $101.00/hour
7For each employee, the employer also incurs overhead costs ( comprising the rental costs of the office space, computer hardware and software, telecommunication and other equipments, organizational support, etc. ) required for and used b y the employee to effectively fulfill his/her job responsibilities. These costs are over and above the employee compensation costs.4 - 25 reports and data - reporting forms. Managerial Oversees work at a high level and is the final authority on all reporting requirements. $71.03/hour Technical Conducts monitoring of emissions sources, checks fo r accuracy, performs measurements. $55.20/hour Clerical Assists with documentation and recording information $29.65/hour Capital and O&M Costs . This includes the cost of purchasing and installing monitoring equipment or contractor costs associated with providing the required information. Selected subparts do not require capital expenditures because the selected monitoring option does not requirecapital equipment or the reporter already owns the necessary monitoring equipment. Equipment costs include both the initial purchase price of monitoring equipment and any facility/process modification that may be required. For example, the cost estimationmethod for mobile sources involves upstream measurement by the vehicle manufacturers. This may require an upgrade to their test equipment and facility. Based on expert judgment, the engineering costs analyses annualized capital equipment costs with the appropriate lifetime and interest rate assumptions. Cost recovery periods vary by industry (5 to 15 years) with one - time capital costs are amortized at a rate of 7%. Other Recordkeeping and Reporting. Additional reporting ($500) costs was added to all subpa rts . Cost Analysis by Subpart. The balance of section 4 provides the cost data by subpart. The data are the basis for the economic impact analysis described in detail in Section 5 of this document. This chapter provides these data, as well as background information needed to understand the engineering costs analysis conducted for each source and the reporting option selection. 4.3 Cost Analysis for Subpart I – Electronic Manufacturers 4.3.1 Model Facility Developm ent This analysis is based on the costs of monitoring fluorinated greenhouse gas emissions from semiconductor manufacturing facilities. Semiconductor facilities constitute the majority of the electronics facilities likely to report under therule, and EPA has improved its understanding4 - 26

of semiconductor facilities and their emissions through the PFC Reduction/Climate Partnership for Semiconductors, which has been in place since 1995. In the proposed rule, semiconductor facilities annual costs differ from those for other electronics manufacturing facilities (i.e., facilities that manufacture microelectromechanical systems, liquid crystal displays, and photovoltaics) because they are subject to different reporting requirements, as detailed below under “Monitoring Costs”. In addition, microelectromechanical systems (MEMS), liquid crystal display (LCD), and photovoltaics (PV) manufacturing use fewer types of F - GHGs than semiconductor manufacturing facilities. Therefore, cost estimates for these other types of electronics facilities were developed using cost estimates from EPA’s initial proposal for other semiconductor facilities and scaling these costs to account for the use of a smaller set of gases. 8 4.3.2 Determination of Cost Elements The total costs associated with complying with the proposed rulemaking were broken into four elements, which are described below. Monitoring costs. The following types of monitoring costs were identified: Collection of activity data for estimating F - GHG emissions . In the proposed rule, costs for collecting activity data differ depending on type of facility (semiconductor or MEMS, LCD, and PV). In the proposed rule, semiconductor facilities would be required to use an approach for estimating emissions which includes (1) gas consumption as calculated using the facility’s purchase records, inventory, and gas - and facility - specific heel factors , (2) facility specific methods for apportioning gas usage by process category, (3) emissions factors (including factors for by - products) based on refined process categories, and (4) either EPA published default destruction or removal efficiency (DRE) value or properly measured DRE. This approach is referred to as the “Refined Method.” Facilities could either useemissions factors provided by EPA or facilities would develop or acquire the emissions factors from process equip ment manufacturers. The costs presented in this analysis reflect the first approach. In addition, facilities that have monitoring infrastructure or the necessary data to estimate emissions obtained through 8In its initial proposal for electronics manuf acture, EPA proposed different requirements for the largest semiconductor facilities (those with annual capacities greater than 10,500 m2silicon) and all other semiconductor facilities. In the initial proposal all other semiconductor facilities were requ ired to estimate their emissions using an approach based on the IPCC Tier 2b method.4 - 27

recipe - specific measurements would be permitted to do so. Those costs are not included in this analysis because it is optional. EPA also considered another approach for estimating emissions from semiconductor facilities which includes (1) gas consumption as calculated using the facility’s purchase rec ords, inventory, and gas - and facility - specific heel factors , (2) facility specific methods for apportioning gas usage by IPCC’s Tier 2b two process categories (clean and etch), (3) IPCC Tier 2b default emissions factors, and (4) either EPA published default DRE value or properly measured DRE . This approach is referred to as the “Modified Tier 2b Method.” Other electronics manufacture facilities (i.e. MEMS, LCD, PV facilities) also would also be required to estimate emissions using the Modified Tier 2b Method. Annual costs to report controlled emissions from abatement systems. Under the proposed rule, any facility that wishes to reflect abatement of fluorinated GHGs in its emissions estimates would be required to certify that the abatement system is installed, operated , and maintained in accordance with manufacturers’ specifications and either use EPA published DRE default value or properly measured DRE . Properly measured DRE costs were estimated assuming that only the 23 “large” semiconductor facili ties that participate in EPA’s PFC Reduction/Climate Partnership for the Semiconductor Industry use abatement devices and would incur costs for verifying the DREs of these systems. This assumption likely provides a conservative overestimate of cost as not all EPA Partners use F - GHG emissions abatement systems . Also, those facilities that have abatement systems and choose to use EPA published default DRE value are assumed to incur only the cost of assuring their abatement systemis properly installed, operated, and maintained, and accounting for uptime and no cost for measurement of DREs. Facilities that manufacture electronic devices other than semiconductors (PVs, MEMS, etc.) and semiconductor facilities that do not participate in EPA’s PFC Reduction Partnership (119 semiconductor facilities) and small er semiconductor facilities that participate in EPA’s PFC Reduction/Climate Partnership (33 semiconductor facilities) are assumed to incur no costs to validate DREs. The 23 “large” semiconductor facilities that participate in EPA’s PFC Reduction/Climate Partnership for the Semiconductor Industry using abatement systems and opt to reflect abatement of F - GHG emissions through DRE measurements are assumed, on average, to make ten DRE measurements per year. Coll ection of data for estimating heat transfer fluid (HTF) emissions. In the proposed rule, electronics manufacturing facilities that use heat transfer fluids would be required to account for emissions from use of heat transfer fluids using a mass - balance approach.4 - 28

Our understanding is that heat transfer fluids are widely u sed within semiconductor manufacturing; EPA is uncertain about heat transfer fluid use in other electronics manufacturing facilities. For this reason, we did not account for heat transfer fluid use in other electronics manufacturing facilities. The mass - b alance approach uses company specific data and accounts for differences among facilities’ HTFs (which vary in their global warming potentials), leak rates, and service practices. Record keeping costs. Additional recordkeeping ($1,700 per entity) were added to each facility. Reporting costs. The following types of reporting costs were identified: Reporting F - GHG emissionestimate . In the proposed rule, electronics manufacturing facilities would be required to complete and submit company - specific annual reports. For purposes of the proposal, facilities that employ abatement systems and wish to reflect the emission reductions due to these systems in their emissions estimates, certification that the system is installed, operated, and maintained in accordanc e with manufacturers’ specifications would be required to be included in the company - specific annual reports, and for facilities that choose to reflect emissions reductions through direct measurement of DRE at the facility, performance confirmed through direct DRE measurement (i.e., consistent with EPA ’s DRE Protocol ) would be required. Reporting heat transfer fluid emissions estimate . In the proposed rule, electronics manufacturing facilities would be required to complete and submit data- reporting forms. Because EPA is uncertain about whether other electronics manufacturing facilities (i.e. electronics manufacturing facilities other than semiconductor manufacturing facilities), we only included costs for reporting emissions from heat transfer fluids f or semiconductor manufacturing facilities. 4.3.3 Proportion of Facilities in the Different Model Facility Levels Semiconductor, MEMS, and LCD facilities would determine whether they exceed the emissions - based threshold using IPCC Tier 1 emission factors and assuming no abatement. Because we understand that heat transfer fluids are widely used within semiconductor manufacturing , semiconductor manufacturers would also add 10% of total clean and etch emissions at a facility to their esti mate. For PV facilities, annual emissions would be estimated by multiplying annual F - GHG consumption by the appropriate GWP factor. For semiconductor facilities, 91 entities out of 175 entities exceed the 25,000 mtCO 2 e threshold which includes 96%4 - 29

of tot al semiconductor emissions. For MEMS facilities, the 25,000 mtCO 2 e threshold includes two entities out of 12 entities and includes 66% of total MEMS emissions. For LCD facilities, no entities exceed the 25,000 mtCO 2 e threshold. Only one PV facility is i ncluded in the 25,000 mtCO 2 e threshold which includes 47% of total PV emissions. The number of each type of facility that EPA estimates will meet the threshold 25,000 mtCO 2 e threshold and required to report is identified in Table 4 - 2. Table 4 - 2 . Number of Representative Affected Entities Used in the Cost Analysis Threshold Number of Representative Entities

Semiconductors (All) MEMS Liquid Crystal Display Photovoltaics 1,000 134 10 5 16 10,000 108 4 1 1 25,000 91 2 0 1 100,000 55 0 0 0 4.3.4 Assigning Costs to Cost Elements Assigning costs to each of the cost elements was completed using the four labor categories and associated labor rates presented in Table 4 - 1. EPA assigns responsibilities to each labor category to estimate labor hours. Finally, EPA estimates the annualiz ed capital costs and operation & maintenance (O&M) costs for each of the cost elements Determining Labor Categories. To evaluate labor costs, it was not only necessary to determine the amount of time required for all of the tasks associated with monitorin g, but also to determine who will perform each task. The four labor categories used in this analysis for this subpart are presented in Table 4 - 3 and include legal, managerial, technical and clerical. Table 4 - 3 . Labor Categories and Hourly Rates

Labor Category Description Loaded Hourly Rate ($/hour) Legal Oversees legal aspects of company reports and data - reporting forms. $101.00/hour Managerial Oversees work at a high level and is the final authority on all reporting requirements. $71.03/hour4 - 30

Technical Conducts monitoring of emissions sources, checks for accuracy, performs measurements. $55.20/hour Clerical Assists with document ation and recording information $29.65/hour Allocate Responsibilities and Estimate Labor Hours . The burden hours and costs borne by semiconductor facilities using the Refined Method were estimated using IPCC’ s Tier 2b method from our initial proposed method for other semiconductor facilities and also using information received from industry. EPA also estimated the burden hours and costs for using the Modified Tier 2b Method using IPCC’s Tier 2b method from o ur initial proposed method for other semiconductor facilities and also using information received from industry for estimating gas - and facility - specific heel factors. The burden hours and costs borne by other electronics manufacturers, MEMS, LCD, and PV, were estimated using cost estimates from EPA’s initial proposal for other semiconductor facilities and scaling these costs down to account for the use of a smaller set of gases, as these facilities use fewer types of F - GHGs than the semiconductor manufacturing facilities. In addition, information received from industry on burden hour estimates for technical staff to measure gas - and facility - specific heel factors were included for MEMS, LCD, and PV manufacturers. Table 4 - 4 presents the burden hours allocated to each labor category across all affected facility types covered under subpart I. The hours and costs for estimating emissions of heat transfer fluids were based on the ICR for EPA’s SF 6Emission Reduction Partnership for Electric Power Systems. Under the SF 6 Partnership, electric power systems report emissions using a mass - balance method that is essentially identical to that proposed for heat transfer fluids in semiconductor facilities. Finally, the costs of proper

DRE measurements were estimated bas ed on EPA’s experience in conducting multiple DRE measurements in semiconductor facilities.4 - 31

Table 4 - 4 . Responsibilities for Regulation Compliance by Labor CategoryP er Facility Responsibilities and Hours by Labor Category Legal Managerial Technical Clerical Cost Element Responsibilities Hours Responsibilities Hours Responsibilities Hours Responsibilities Hours Semiconductors—Refined Method Monitoring Collection of activity data for F- GHGemission estimate Provide quality assurance of analyses and authorize completeness of the checks. 7.2 Collect data on gas consumption, gas utilization, and by - product formation. Perform

calculation for nine process categories using default factors provided by EPA. 454 Assist in recording and maintaining data collected on gas consumption, gas utilization and by - product formation Collect data for mass balance calculation of Heat Transfer Fluids Provide quality assurance of analyses and authorize completeness of the checks. 4 Collect activity data related to HTF emissions 17 Assist in recording and maintaining data on collected activity data related to HTF emissions 11 Reporting Complete and submit company - specific annual report Oversee legal aspects of annual report submission 0.3 Provide quality assurance of annual report. 10.8 Complete and submit company specific annual report 25.3 Assist with completing and submitting the company specific annual report 8.4 Complete and submit data reporting forms for mass balance calculation of Heat Transfer Fluids Review and submit data reporting form. 3.5 Review instructions and complete the form for data reporting 3.5 Maintain data reporting records. 1.7 MEM S Monitoring Collection of activity data for F- GHGemission estimate Provide quality assurance of analyses and authorize completeness of the checks. 2.2 Collect data on gas consumption. Perform calculations using IPCC Tier 2b default emission factors. 30.4 Assist in recording and maintaining data collected on gas consumptio n, gas utilization and by - product formation Reporting Completion of company specific annual report Oversee legal aspects of annual report submission 0.1 Provide quality assurance of annual report. 3.2 Complete and submit company specific annual report 7.6 Assist with completing and submitting the company specific annual report 2.54 - 32 Responsibilities and Hours by Labor Category Legal Managerial Technical Clerical Cost Element Responsibilities Hours Responsibilities Hours Responsibilities Hours Responsibilities Hours Liquid Crystal Display Monitoring Collection of activity data for F- GHGemission estimate Provide quality assurance of analyses and authorize completeness of the checks. 3.6 Collect data on gas consumption. Perform calculations using IPCC Tier 2b default emission factors. 50.6 Assist in recording and maintaining data collected on gas consumption, gas utilization and by - product formation Reporting Completion of company specific annual report Oversee legal aspects of annual report submission 0.1 Provide quality assurance of annual report. 5.4 Complete and submit company specific annual report 12.7 Assist with completing and submitting the company spe cific annual report 4.2 Photovoltaics Monitoring Collection of activity data for F- GHGemission estimate Provide quality assurance of analyses and authorize completeness of the checks. 4.3 Collect data on gas consumption. Perform calculations using IPCC Tier 2b default emission factors. 60.8 Assist in recording and maintaining data collected on gas consumption, gas utilization and by - product formation Reporting Completion of company specific annual report Oversee legal aspects of annual report submission 0.2 Provide quality assurance of annual report. 6.5 Complete and submit company specific annual report 15.2 Assist with completing and submitting the company spe cific annual report 5.14 - 33

Capital Cost Annualization and O&M Costs There are no associated capital or O&M costs. Other Costs EPA estimates that the per- facility optional cost of validating, documenting, and reporting DREs of abatement devices is $1,766 if a facility uses EPA published DRE value, and $71,766 if a facility properly measures the DREs in accordance with EPA’s DRE Protocol . Since all facilities must certify their abatement systems areproperly installed, maintained, and operated, the associated cost of $1,766 applies to all options for reporting DREs. The cost of certifying that the abatement systems are properly in stalled, maintained, and operated was based an assumption that such a process would require 32 hours of a technician’s time. This certification process also includes an annual assessment of the equipment uptime. It is assumed there are no other costs ass ociated with using default DRE value. The cost for two weeks of testing for facilities that measure DREs as opposed to using EPA published default value is estimated to be $70,000. The cost estimate is based on an assumption that only the 23 large facil ities that participate in EPA’s PFC Reduction/Climate Partnership for the Semiconductor Industry use abatement devices and would incur costs for properly measuringthe DREs of these systems and that the average large facility has fifty etch tools, all of which have F - GHG abatement systems . Because 20% of these fifty systems are required to be tested annually, we assume testing of ten devices per year and two weeks to test these ten systems . The cost for two weeks’ worth of testing was based on industry e stimate and EPA’s experience conducting DRE testing. While ninety percent of this cost is related to labor and ten percent is related to freight shipments and measurement study supplies, it is assumed that the facilities outsource the DRE measurement and thus this cost is not considered a labor cost for the facility. 4.3.5 Estimation of Facility Costs for Each Threshold Level Once the labor hours were calculated, by category, for each of the cost elements, they were multiplied by the as sociated labor rates to estimate labor costs per facility for each type of facility (semiconductor facilities, MEMS facilities, liquid crystal display facilities, and photovoltaic facilities). Additional costs as stated under “Other Costs” are added for those facilities that employ abatement devices and wish to reflect the emission reductions due to these devices in their emissions estimates. Finally, the unit cost per facility was multiplied by the number of facilities that exceed the reporting thresholdfor each type of facility, resulting in the total national costs per year for this sector.4 - 34

4.4 Cost Analysis for Subpart L—Fluorinated Gas Production 4.4.1 Model Facility Development For the Fluorinated Gas Production subpart, model facilities were developed based on the number of products at a single facility using known data for Fluorinated Gas facilities. Facilities were then categorized as producing one, three or six products usin g either continuous or batch processes. Facilities that were assumed to use continuous processes to produce their products were assumed to employ two processes per product and two vents per process. Facilities that were assumed to use batch processes to produce their products were assumed to employ five processes per product and five vents per process. Option 1, the Mass Balance Approach, would require that a monthly fluorine or carbon balance of all inputs and outputs be performed using measurements of the masses of the inputs and outputs and of the fluorine or carbon content of the inputs and outputs. Fluorinated greenhouse gas (GHG) emissions would be calculated from the difference between fluorine - or carbon - in and fluorine - or carbon - out. Option2, the Process Vent Method, would require the development of emission factors for each process vent. For vents whose pre - control GHG emissions exceeded 10,000 mtCO 2 e/year and were not vented to a destruction device with a destruction efficiency of at lea st 99.9 percent, facilities would be required to use emissions testing to establish the emission factor. For other vents, facilities could use engineering calculations to establish the emission factor. For the purpose of this evaluation it was assumed th at half of the process vents had pre control GHG emissions over 10,000 mtCO2e per year, and that half of these were not vented to destruction devices with destruction efficiencies of at least 99.9 percent. Thus, for the “average” facility, it was assumed that 25 percent of vents would be measured by emission testing and the other 75 percent would be evaluated using engineering calculations. Under the proposed rule, facilities would be required to develop emission factors in the first year and to update them every five years thereafter. In addition, facilities would be required to estimate their emissions from equipment leaks every year. When calculating the cost impact for the Process Vent Method, it was apparent that a single “outlier” facility was disto rting the average cost per facility. This outlier is comprised of many more processes than the average facility, and also consists of processes that are very complicated and require many steps. Thus, the cost for this particular outlier is not at all representative of the cost that the “average” facility will see. Thus, the outlier was excluded for4 - 35

purposes of summarizing the typical cost to a facility. However, the outlier cost was still included for the nationwide impact analysis. Under both Option 1 and Option 2, facilities would be required to perform a scoping study to identify potentially emitted F - GHGs in their process streams. It was estimated that two thirds of the processes at facilities would have F - GHG emissions that exceeded the one - ton threshold for performing the study. Facilities would also be required to measure the destruction efficiency of their destruction device (e.g., thermal oxidizer) initially and every five years thereafter. 4.4.2 Cost Analysis for Mass Balance Approach - Option 1 This section identifies the costs associated with complying with the rulemaking using Option 1, the Mass Balance approach. Compliance costs for this option include both labor and non - labor (capital and O&M) costs and both startup and recurring costs. The “average” plant that utilized the mass balance approach was estimated to have a total of 4.67 processes. The total first year cost for the mass balance method is $127,440 in labor costs and $14,933 in capital costs. Tables 4 - 5 and4 - 6 summarize the labor and non - labor costs respectively. Initial planning costswere estimated for the time needed to review the rule and prepare required initial notifications and records. These planning hours include resolving questions, reviewing draw ings, conducting source inspections, defining constraints, writing the engineering report and onetime costs for equipment leak measurement, such as walk- down and field verification, populating software and initial monitoring setup costs. For the mass bal ance approach, the planning hours total to 6.4 management hours, 12.5 administrative hours and 124.9 hours for the industrial engineer/technician. Quality assurance/quality control costs for planning, meetings, sample analysis certification and annual revi ew total 4.6 hours for the industrial manager, 92.9 industrial engineer/technician hours and 37.1 administrative hours. Sampling, analysis, monitoring and calculation costswere estimated on a percontinuous - process basis. Existing facilities have indicated that the mass balance method is not practical for batch processes, due to higher cost and the nature of the batch processes, so costs for batch processes have not been calculated. For the mass balance approach, stream sampling and analysis costs include 1798 hours for the industrial engineer/technician, 179.8 administrative hours and 89.9 management hours.4 - 36

This includes 165 engineer/technician hours, 8.25 management hours and 16.5 administrative hours to perform the mass balance measurements and calcula tions for each of the 4.67 processes. It also includes 330 engineer/technician hours, 16.5 management hours and 33 administrative hours to complete the scoping study on each of the 3.1 processes above the one - ton threshold. Recordkeeping and reporting cos tswere estimated to include 24.7 industrial engineer/technician hours, 5.7 management hours and 2.4 administrative hours to compile and store data annually. Labor requirements for preparing the annual report include 7.3 industrial engineer/technician hour s, 0.7 management hours, and 1.7 administrative hours to prepare the annual report. Capital costsincluded include $14,933 to hire a consultant to perform Destruction Efficiency Testing.4 - 37

Table 4 - 5 . Subpart

L – F - Gas Mass Balance Approach : Labor Costs ( 2006$ ) Labor Rates (per hour) Legal Managerial Technical Clerical $101.00 $71.03 $55.20 $29.65 Labor Cost per Year per Reporting Unit/Facility Activity First

Year Subseq. Year First Year Subseq.

Year First

Year Subseq.

Year First

Year Subseq.

Year First

Year Subseq.

Year Planning 6.4 0.0 124.9 0.0 12.5 0.0 $7,719 $0 QA/QC 4.6 1.2 92.9 23.2 37.1 9.3 $6,555 $1,638 Recordkeeping 2.4 2.4 24.7 24.7 5.7 5.7 $1,702 $1,702 Sampling and analysis (calculations) 89.9 1798.0 179.8 $110,960 $0 Reporting 0.7 0.7 7.3 7.3 1.7 1.7 $503 $503 Total 0 0 103.99 4.24 2,047.80 55.20 236.80 16.70 $127,440 $3,844 Note: All costs are in constant 2006$s. Table 4 - 6 . Subpart L – F - Gas Mass Balance Method : Capital and O&M Costs (2006$ )
Cost Categories Total Reporting Cost per Unit/Facility Activity Capital Cost Equipment Lifetime (years) Annualized

Capital Cost (per year) O&M Costs

(per year) First

Year Subseq.

Year Equipment (selection, purchase, installation) Performance testing $ 14,993 10 $1,046 $ 1,046 $0 Recordkeepingand Reporting Travel Sampling costs Total $ 14,993 $1,046 $0 $1,046 $0 Note: All costs are in constant 2006$s. Annualization uses 7% interest rate.4 - 38

4.4.3 Cost Analysis for Option 2 - Process Vent Testing Following are all costs associated with complying with the rulemaking using Option 2, Process Vent Testing. These include both labor and non - labor (capital and O&M) costs and both startup and recurring costs. The “average” plant that utilized the process vent approach was assumed to have a total of 5 processes. An average of 2.5 process vents were assumed to be evaluated by testing. The remaining vents, accounting for 75% of the total vents at a facility, were assumed to be evaluated using the engineeri ng calculation approach. In effect, this was assumed to require engineering calculations for each of the 5 processes at the average facility complying with the Process Vent approach. In each of the following paragraphs, the costs are broken out between the process vent emissions estimates and the equipment leak assessment. For the average facility, the total first year labor cost for the process vent method is $99,350, and the total firs t year labor cost for the equipment leak measurements is $50,650. A capital cost of $22,120 per average facility is also estimated. Initial p lanning costswere estimated for the time needed to review the rule and prepare required initial notifications andrecords. These planning hours include resolving questions, reviewing drawings, conducting source inspections, defining constraints, writing the engineering report and onetime costs for equipment leak measurement, such as walk- down and field verification, populating software and initial monitoring setup costs. For the process vent measurements and calculations, the planning hours total to 1.8 management hours, 19 administrative hours and 37.6 hours for the industrial engineer/technician. Quality assurance/quality control costs for planning, meetings, sample analysis certification and annual review total 3.4 hours for the industrial manager, 67.8 technician hours and 34 administrative hours. For the equipment leak assessment, the planning hours total to 50 administrative hours and 35 hours for the industrial engineer/technician. Sampling, analysis, monitoring and calculation costswere on a per- vent basis for the process vent testing and a per- process basis for process vent calculations and for equipment le aks. For the process vent measurements and calculations, the emissions sampling and analysis costs (including the scoping study) include 1,448.3 hours for the industrial engineer/technician,4 - 39

144.8 administrative hours and 72.4 management hours. This includes 236 engineer/technician hours per process vent to perform testing on 2.5 process vents. In addition, it includes 5 engineer/technician hours for each of the 5 processes at the average facility to model the process and perform the calculations. Finally, it includes 250 engineer/technician hours, 12.5 management hours and 25 administrative hours to complete the scoping study on each of the 3.34 processes above the one - ton threshold. For the equipment leak assessment, these costs include 800.5 indu strial engineer/technician hours for the combined first year cost of the emissions test and the engineering calculations. It was assumed that facilities were already assessing leaks on half of the processes; thus, costs are incurred under the rule for the other half. A total of 307.88 engineer/technician hours per process would be required for each of the 2.6 processes required to commence leak testing under the rule. (The total number of processes assessed for equipment leaks at the average facility, 5. 2, is higher than the number of processes evaluated under the process vent approach due to the slightly higher number of processes at the facilities required to assess leaks.). Recordkeeping and reporting costswere estimated were estimated on an annual b asis, requiring 24.7 industrial engineer/technician hours, 5.7 management hours and 2.4 administrative hours to compile and store data. Labor requirements for preparing the annual report included 7.3 industrial engineer/technician hours, 0.7 management hours, and 1.7 administrative hours to prepare the annual report. For the equipment leak assessment, first year recordkeeping costs totaled 32.5 technical hours and 42.5 administrative hours to document the monitoring process, maintain records and perform administrative tasks. First year reporting costs totaled 32.5 technical hours and 42.5 administrative hours for all annual reporting associated with equipment leaks. For both recordkeeping and reporting, these costs remained constant for the second and subsequent years. These costs are halved in the table because, as noted above, half of the processes were assumed to already be monitored. Capital costs included equipment for leak detection such as the monitoring device and data collection system. It was assumed that half of the facilities already possess monitoring and data collections systems, and that half of the facilities would be required to complete Destruction Efficiency Testing.4 - 40

Capital costs for the mass balance approach included $11,200 for Destru ction Efficiency Testing equipment. Capital costs for the average facility totaled $11,340 in equipment and O&M costs associated with the equipment leaks. Table 4 - 7 . Subpart L – F - Gas Proce ss Vent (Avg. per plant basis) : Labor Costs (2006$ ) Labor Rates (per hour) Legal Managerial Technical Clerical $101.00 $71.03 $55.20 $29.65 Labor Cost per Year per Reporting Unit/Facility Activity First

Year Subseq.

Year First

Year Subseq.

Year First

Year Subse

q. Year First Year Subseq.

Year First

Year Subseq.

Year Planning 1.8 72.6 69.0 $6,181 $0 QA/QC 3.4 0.9 67.8 17.0 34.0 8.5 $4,992 $1,251 Recordkeeping 2.4 2.4 41.0 41.0 27.0 27.0 $3,230 $3,230 Sampling and analysis (calculations) 72.4 2248.8 138.6 144.8 $133,565 $7,649 Reporting 0.7 0.7 23.6 23.6 23.0 23.0 $2,031 $2,031 Total 0 0 80.73 3.96 2,453.73 220.08 297.73 58.40 $149,999 $14,161 Note: All costs are in constant 2006$s.4 - 41

Table 4 - 8 . Subpart L – F - Gas Process Vent Method : Capital and O&M Costs (2006$ )
Cost Categories Total Reporting Cost per Unit/Facility Activity Capital Cost Equipment Lifetime (years) Annualized

Capital Cost (per year) O&M Costs

(per year) First

Year Subseq.

Year Equipment (selection, purchase, installation) $ 10 , 920 10 $765 $765 $0 Performance testing $11,200 10 $784 $784 $0 Recordkeepingand Reporting Travel Sampling costs $0 $2,560 Total $22,120 $1,549 $0 $1,549 $2,560 Note: All costs are in constant 2006$s. Annualization uses 7% interest rate. 4.5 Cost Analysis for Subpart QQ—Imports and Exports of Fluorinated GHGs 4.5.1 Model Facility Development Importers and exporters of products containing fluorinated GHGs include manufacturers, distributors, and retailers of these products. Such products include several types of refrigeration and air- conditioning equipment and foams containing HFCs and elec trical equipment containing SF 6. This analysis does not consider the costs of CO 2and N 2 O contained in importe d and exported products. Although EPA does not have data on the amount of CO 2or N 2 O imported and exported in products (e.g., carbonated sodas and cans of whipped cream), the relatively small quantities of CO2 or N2O contained in each unit and the relativ ely low GWPs of these gases (compared to those of the fluorinated GHGs) imply that the CO 2 - equivalent quantities imported are likely to be small both nationally and per importer. There is one model entity that represents importers/exporters of products c ontaining fluorinated GHGs and the specific reporting activities and costs.
 Importers/Exporters of fluorinated GHG -- containing products: An entity that imports or exports products or foam containing fluorinated GHGs or equipment containing SF 6 .4 - 42

This entity is assumed to import or export 15 equipment types (with distinct charge sizes and possibly chemicals) in 20 shipments each year. The proposed monitoring method for fluorinated GHGs - containing products and equipment requires the identification of the total amount of each fluorinated GHG imported/exported inside the products and/or the quantity of products imported/exported (e.g., number of pieces of equipment) along with information on the identity and quantity of the fluorinated GHG in each unit or piece. Persons importing equipment that contain both a fluorinated GHG refrigerant and a foam blown with a fluorinated GHG (e.g., household refrigerators) would separately report these GHGs (which are generally different). Similarly, total exports of chemical actually contained in exported equipment, foams, or other products would be reported by exporters, by chemical in metric tons or metric tCO2e. Trans - shipments (i.e., products containing GHGs that originate in a foreign country and enter the United States en route to an ultimate destination in another foreign country) would be exempt from reporting. Importers/exports of products containing fluorinated GHGs would report their imports/exports on the corporate level. Table 4 - 9 presents the number of affected entities that would be subject to the rule based on alternative emission thresholds. Table 4 - 9 . Number of Representative Affected Entities Used in the Cost Analysis Number of Representative Entities a All HFC Equipment All Foam Products All SF 6Equipment Threshold Importers Exporters Importers Exporters Importers Exporters 1,000 50 25 50 25 8 10 10,000 50 25 50 25 8 5 25,000 50 25 50 25 8 0 100,000 50 25 50 25 8 0 aWhi le listed separately in the table above to illustrate the number of importers and number of exporters, importers and exporters are the same entities for SF 6equipment, and in some cases, the same entities for HFC equipment and foam products. As such, theper - facilities costs will increase

—to reflect activities associated with both importing and exporting, and the overall number of respondents will decrease given the overlap. 4.5.2 Determine Cost Elements The total costs associated withcomplying with the proposed rulemaking can be broken into 4 elements, each of which is described below.4 - 43

Monitoring Costs. Costs for tracking quantities of products imported and the quantity of fluorinated GHGs in these products include first- year costs to establish a system such as a spreadsheet or database to track charge sizes for different types of equipment and the numbers of pieces of that type of equipment that are imported. Subsequent year costs include maintaining this system. Reporting Costs. The reporting costs associated with complying include annual labor hours for reporting the quantities of products or foam imported and/or exported; and the name and quantity of fluorinated GHG within each product or foam imported and/or exported. Record Keeping Costs . Additional and reporting ($500) costs were also added to each facility. 4.5.3 Analyze Proportion of Facilities in the Different Model Facility Categories To classify facilities into different groups, the activities undertaken at each model facility type were evaluated. The activities conducted by each model facility are listed in the model facility development section for this subpart. Table 4 - 10 indicate s the number of facilities that fall into each model facility category. Table 4 - 10 . Allocation of Facilities to Model Types

Segment Number of Facilities Importer of HFC - containing equipment 50 Exporters of HFC - containing equipment 25 Importer of HFC - containing foams 50 Exporter of HFC - containing foams 25 Importers of SF 6 - containing equipment 8 Exporters of SF 6 - containing equipment 104 - 44

4.5.4 Assigning Costs to Cost Elements Determining Labor Categories To evaluate labor costs, it was not only necessary to determine the amount of time required for all of the tasks associated with monitoring, but also to determine who will perform each task. For this analysis, two labor categories were used as shown in Table 4 - 11. Table 4 - 11 . Labor Categories and Hourly Rates

Labor Category Description Loaded Hourly Rate (2006$/hour) Managerial Oversees work at a high level and is the final authority o n all reporting requirements. $71.03/hour Technical Conducts monitoring of emissions sources, checks for accuracy, performs measurements. $55.20/hour Allocating Responsibilities and Estimate Labor Hours Assigning labor hours for all cost elements was based on the following approach. To determine hours for the first year, the time to assemble relevant paperwork for the first year was taken into account, as well as the time to develop a listing of equipment types and foam products, and the time to enter in the data for all equipment types across all shipments. To determine hours for subsequent years, the time to maintain the ongoing, relevant paperwork was taken into account as well as the time to enter in the data for all equipment types across all shipments. Management time in both the first and subsequent years was assumed to represent 10 percent of total time for both the first and subsequent years. . Table 4 - 12summarizes the allocation of hours and responsibilities by labor category. The reporting labor hours shown in this table represent the time estimated to complete the cost element for all activities applicable to the entity (i.e., import, export).4 - 45

Table 4 - 12 . Responsibilities for Regulation Compliance by Labor Category Responsibilities and Hours by Labor Category Managerial Technical Per Facility/ Per Company* Cost Element Responsibilities Hours Responsibilities Hours Importer/Exporter of Fluorinated GHG - containing Product (including foams and SF 6 - containing equipment) Registration Compliance Data None Estimated Monitoring First Year: Tracking System To oversee the design of a database or spreadsheet to track imports/exports 4 To establish a database or spreadsheet to track imports/exports 40 Per Company Subsequent Years: Tracking System To review maintained tracking system 3 To update and maintain tracking system 31 Per Company Reporting Report Data To review the data 1 To collect data records already measured by an instrument 3 Per Company Record Keeping None Estimated Once the labor hours were calculated, by category, for each of the cost elements, they were multiplied by the associated labor rates to estimate labor costs per facility. No additional costs are assumed. Capital Cost Annualization and O&M Costs There are no assumed capital costs related to monitoring emissions and archiving of information, and therefore there are no associated O&M costs. 4.5.5 Estimate per Facility Costs for Each Threshold Level Once the labor hours were cal culated, by category, for each of the cost elements (as shown in Table 4 - 12, they were multiplied by the associated labor rates (as shown in Table 4 - 11) to estimate labor costs per facility. The unit cost per entity was multiplied by the number of4 - 46

facilities that exceed the reporting threshold (as shown in Table 4 - 10), to determine the total national costs per year for this sector. 4.5.6 Subpart SS—Electrical Equipment Manufacturing 4.5.6.1 Mo del Facility Development The model facility for electrical equipment manufacture or refurbishment and manufacturing of electrical components is a manufacturer that produces an average amount (nameplate capacity) of SF 6 - containing transmission and distribution equipment. Costs are not expected to vary widely among electrical equipment manufacturers because all manufacturers would track the same set of quantities (SF 6stored, acquired, and disbursed), and the costs of tracking and reporting these quantities are relatively modest. The model facility is assumed to already have the capital and technical capability to monitor and report emissions of SF 6using a mass - balance formula. To use the formula, facilities must track their SF 6inventory in cylinders, SF 6acquisitions, and SF 6disbursements. These data are already tracked by electrical equipment manufacturers, but not necessarily as closely and comprehensively as required to develop all manufacturer- level mass - balance inputs. Thus, as discussed below, themodel facility is assumed to incur some costs for tracking and reporting SF 6 emissions. Table 4 - 13 presents the number of affected entities that would be subject to the rule based on alternative emission thresholds under subpart SS. Table 4 - 13 . Number of Representative Affected Entities Used in the Cost Analysis Threshold Number of Representative Entities 1,000 10 10,000 10 25,000 10 100,000 5 4.5.6.2 Determine Cost Elements The total costs associated with the proposed rulemaking for electrical equipment manufacturers were estimated using labor hours from an Information Collection Request (ICR)4 - 47

performed for EPA’s SF 6Emission Reduction Partnership. 9 , 10The labor hours were multiplied by current labor costs to calculate the reporting costs under the proposed reporting rule. All labor costs are considered on an annu al basis and are divided into the following four categories: Regulation Compliance Determination Costs . Recurring costs consist of reviewing the instructions of the mass - balance reporting form and associated materials to ensure the proper procedures are inplace to obtain technically accurate inputs. Monitoring Costs . Recurring costs consist of gathering information for the mass balance reporting form and associated materials. The information gathered represents the movement of SF 6throughout the system. Reporting Costs . Recurring costs consist of completing and reviewing the information requested by the mass - balance reporting form and associated materials as well as submitting all materials. Recordkeeping Costs. Recurring costs consist of maintaining a re cord of the emissions inventory and documentation. 4.5.6.3 Analyze Proportion of Facilities in the Different Model Facility Categories There is only one model facility for electrical equipment manufacture or refurbishment and manufacturing of electrical components . 4.5.6.4 Assigning Costs to Cost Elements Determining Labor Categories To evaluate labor costs, it was not only necessary to determine the amount of time required for all of the tasks associated with monitoring, but also to determine who will perform each task . For this analysis, two labor categories were used as shown in Table 4 - 14.

9EPA. (2000). Supporting s tatement for EPA Information Collection Request number 1933.01 “Information collection activities associated with EPA’s SF 6Emission Reduction Partnership for Electric Power Systems” 10 Although the ICR was focused on the costs of reporting SF 6emissions from electric utilities rather than electrical equipment manufacturers, the inputs required to calculate emissions and the activities involv ed with reporting are similar forboth sectors. Therefore, the costs incurred for electrical equipment manufacturers are assumed to be the same as the costs incurred forelectric power systems.4 - 48

Table 4 - 14 . Labor Categories and Hourly Rates

Labor Category Description Loaded Hourly Rate ($/hour) Managerial Oversees work at a high level and is the final authority on all reporting requirements. Reviews reporting forms to ensure accuracy and consistency $71.03/hour

Technical Compiles data to develop mass balance inputs. Performs emission calculations on reporting form $55.20/hour Clerical Assists with documentation and recording information $29.65/hour Allocating Responsibilities Labor hours for all cost elements were esti mated based on consultation between EPA and SF 6Emission Reduction Partners conducted for the 2000 Partnership ICR. Table 4 - 15 summarizes the allocation of hours and responsibilities by labor category.4 - 49

Table 4 - 15 . Responsibilities for Regulation Compliance by Labor Category Per Facility Responsibilities and Hours by Labor Category Managerial Technical Clerical Cost Element Responsibilities Hours Responsibilities Hours Responsibilities Hours Regulation Compliance Determination Costs Review the instructions, SF 6 mass balance reporting form, and associated materials Review the instructions to the level required to perform oversight responsibilities 1 Review the instructions to the level required to compile data and perform necessary calculations 1.5 0 Monitoring Costs Gather information for the SF 6 mass balance reporting form and associated materials Institute and oversee proper data collection procedures that account for all SF 6within the system 4 Compile SF 6data and sort data into appropriate input categories for the mass - balance formula 17 Perform measurements and collect documentation that track

SF 6gas movements 11 Reporting Costs Complete and review the information requested by the SF 6 mass - balance reporting form and associated materials Review reporting forms to ensure accuracy and consistency 3.5 Calculate inputs for the mass balance reporting form. Perform facility - wide SF 6emission calculations 3.5 Provide data and supporting documentation to technical and managerial staff 1.5 Submit the SF

6 mass - balance reporting form and associated materials 0 0 Combine the mass - balance reporting form with all necessary materials and submit 0.2 Recordkeeping Costs Maintain a record of the emissions inventory and documentation 0 0 File the mass - balance reporting form and associated materials into the recordkeeping system 0.24 - 50

4.5.7 Other Costs Other costs consist of postage costs

—for submitting materials in a one ounce package, and photocopying costs

—for maintaining records of the reporting form and associated materials. These costs were gathered by EPA in the SF 6Emission Reduction Partnership ICR and are presented in Table 4 - 16. Table 4 - 16 . Other Costs Associated with Reporting and Recordkeeping Element Description Costs ($) Postage Costs Postage costs for submitting the reporting form and associated materials $0.38 Photocopying Costs Photocopying costs for maintaining a record of the emissions inventory and associated materials $11.66 4.5.7.1 Estimate per Facility Costs for Each Threshold Level Once the labor hours were calculated, by category, for each of the cost elements, they were multiplied by the associated labor rates to estimate labor costs per facility. Other costs, consisting of postage and photocopying, were then added to the labor cos ts to calculate the total cost per facility. For calculating national costs, the total cost per facility was multiplied by 10, which is the number of facilities that exceed the reporting threshold. 4.6 Public Sector Burden EPA estimates the public sector burden to be $383,582 per year; $72,000 per year is for verification activities, and remaining costs are for program implementation and developing and maintaining the data collection system. Program implement ation activities include, but are not limited to, developing guidance and training materials to assist the regulated community, responding to inquires from affected facilities on monitoring and applicability requirements, and developing tools to assist in determining applicability.5 - 51 SECTION 5 ECONOMIC IMPACT ANAL YSIS EPA has prepare dan EIA to provide decision makers with a measure of the social costs of using resources to comply with the proposed GHG reporting requirements. As noted in EPA’s (2000) Guidelines for Preparing Economic Analyses , several tools are available to estimate social costs and range from simple direct compliance cost methods to the development of a more complex market analysis that estimates market changes (e.g., price and consumption) and economic welfare changes (e.g., changes in consumer and producer surplus ). Given data limitations and the size scope of the proposed rule, EPA has used the direct compliance cost method as a measure of social costs. 5.1 Selection of Reporting Thresholds 5.1.1 Subpart I

- Electronics Manufacturing In the initial proposal, EPA proposed capacity - based thresholds equivalent to 25,000 metric tons of CO 2 efor manufacture of semiconductors, LCDs, and MEMS, and an emissions based threshold of 25,000 metric tons of CO 2 e for manufacture of PV. As stated in the initial proposal, EPA proposed to use a capacity - based threshold based on the publi shed capacities of facilities, as opposed to an emissions - based threshold, where possible, because EPA believed that it simplified the applicability determination. In comments received in response to the initial proposed rule, several comments indicated that the proposed capacity - based threshold created ambiguity. In response to the comments received on the initial proposed capacity - based threshold, EPA is now proposing an emissions - based threshold of 25,000 mtCO 2 efor manufacture of semiconductor s , LCD, MEMS, and PV . In theanalysis, EPAconsidered emission thresholds of 1,000 metric tons CO 2 e, 10,000 metric tons CO 2 e, 25,000 metric tons CO 2 e, and 100,000 metric tons CO 2 e per year. This analysis used IPCC Tier 1 emission factors and assumed no abatement . Table 5 - 1 presents the emissions and facilities that would be captured by the respective emissions thresholds.5 - 52

Table 5 - 1 . Threshold Analysis for Subpart I – Electronics Manufacturing Industry Emissions Covered Facilities Covered Emission Threshold Level ( metric tons CO 2 e/yr) Total

National Emissions ( metric tons CO 2 e/yr) Total

Number of Facilities metric tons

CO 2 e/yr Percent Facilities Percent 1,000 5,984,463 216 5,962,091 99.6% 165 76 % 10,000 5,984,463 216 5,813,200 97% 114 53 % 25,000 5,984,463 216 5,622,570 94% 94 44 % 100,000 5,984,463 216 4,737,622 79% 55 2 6 % EPAselected the 25,000 metric tons CO 2 e per year threshold because this threshold maximizes emissions reporting, while excluding small facilities that do not contribute significantly to the overall GHG emissions. The proposed emissions - based thresholds are estimated to include approximately 5 0 percent of semiconductor facilities and between approximately 0 percent and 17 percent of the facilities manufacturing MEMS and PV respectively (see Table 5 - 2). At the same time, the thresholds are expected to cover nearly 9 6percent of fluorinatedGHGemissions from semiconductor facilities, 66 percent of fluorinated GHG emissions from facilities manufacturing MEMS, and 47 percent of fluorinatedGHG emissions from facilities manufacturingPV. Table 5 - 2 . Summary of Rule Applicability under the Proposed Emission - Based Thresholds

for Subpart I –

ElectronicsManufacturingIndustry Emissions Covered Facilities Covered Emission Threshold Level ( metric tons CO 2 e/yr) Total

National Emissions ( metric tons CO 2 e/yr) Total

Number of Facilities Total Emissions of

Source (metric tons CO 2 e) metric tons

CO 2 e/yr Percent Facilities Percent Semicon duc tors 25,000 175 5,741,676 5,492,066 96% 91 52% MEMS 25,000 12 146,115 96,164 66% 2 17% LCD 25,000 9 23,632 0 0% 0 0% PV 25,000 20 73,039 34,340 47% 1 5% Combined these emissions are estimated to account for close to 9 4percent of fluorinated GHG emissions from the electronics industry as a whole. Facilities manufacturing LCDs are not5 - 53

expected to be covered by the proposed threshold. To determine whether a manufacturer falls above or below the proposed 25,000 metric tons of CO 2 e, EPA is proposing that semiconductor, MEMS, and LCD facilities use gas specific 2006IPCCTier 1 emission factors assuming 100% manufacturing capacity to calculate annual metric tons of emissions in CO 2equivalents . For PV facilities, EPA is proposing that they facilities multiply annual fluorinated GHG purchases or consumption by the gas - appropriate100 - year GWPs , as defined in Table A - 1 to Subpart A of Part 98, to calculate annual metric tons of emissions in CO 2equivalents . None of these calculations shall account for emission abatement technologi es. When abatement equipment is used, electronics manufacturers often estimate their emissions using the manufacturer- suppliedDRE for the equipment. However, abatement equipment may fail to achieve its rated DRE either because it was not installed properly, is not being properly operated and maintained , or because the DRE value itself was incorrectly measured due to a failure to properly account for the effects of dilution. For example, reported DREs for CF4can be overstatedby as much as a factor of 20 to 50 , and the corresponding figure for C 2F 6can be overstatedby a factor of up to 10 because of failure to properly account for dilution ( Burton, 2007) . Regardless of the reason, actual emissions from facilities employing abatement equipment may exceed estimates when based on the manufacturers’ rated DREs of this equipment and may therefore exceed the 25,000 metric tons CO 2 e threshold without the knowledge of the facility operators. For additional background information on thethreshold analysis , refer to the Electronics Manufacturing TSD (EPA - HQ - OAR - 200 9 - 0927 ) . For specific information on costs, including unamortized first year capital expenditures, please refer to section 4.3 . 5.1.2 Subpart L- Fluorinated Gas Production Under the proposed rule, owners and operators of fluorinated gas production facilities would be required to estimate and report GHG emissions if those emissions, including both combustion and fluorinated GHG emissions, would exceed 25,000 mtCO2e in the abs ence of control technology (e.g., thermal oxidation) 11 .

11 Following the precedents set by other Clean Air Act regulations, EPA is using the term “uncontrolled” to describe such emissions. Specifically, EPA is pr oposing to define “uncontrolled fluorinated GHG emissions” as a gas stream containing fluorinated GHG which has exited the process (or process condenser, where applicable), but which has not yet been introduced into an air pollution control device to reduc e the mass of fluorinated GHG s in5 - 54

In developing the threshold, we considered multiple controlled and uncontrolled emissions thresholds, including 1,000, 10,000, 25,000, and 100,000 metric tons CO 2 e. For fluorinated GHG production processes (including fluorinated anesthetics production processes), uncontrolled (pre - control) emissions were estimated by multiplying a factor of 3 percent by the estimated production at each facility. For CFC and HCFC production processes (except for HCFC - 22 production processes), uncontrolled emissions were estimated by multiplying a factor of 2 percent by the estimated production at each facility. Uncontrolled emissions are strongly influenced by by - product generation rates, which are known to vary between zero and several percent for fluorinated gas production processes; thus, these estimates are uncertain. Controlled emissions were assumed to behalf of uncontrolled emissions at each facility. Because EPA has little information on combustion - related emissions at fluorinated gas production facilities, these emissions were not included in the analysis. The results of the analysis for production o f HFCs, PFCs, SF 6 , NF 3 , CFCs, and HCFCs are shown in Tables L - 1 and L - 2. Table 5 - 3Threshold Analysis for Fluorinated GHG Emissions from Production of HFCs, PFCs,

SF6, NF3, CFCs, and HCFCs (Unc ontrolled Emissions) Emissions Covered Facilities Covered Threshold Level (metric tons CO 2 e/r) Total National

Emissions (metric tons CO 2 e) Number of

Facilities Metric tons

CO2e Percent Number Percent 1,000 10,600,000 14 10,600,000 100% 14 100% 10,000 10,600,000 14 10,600,000 100% 14 100% 25,000 10,600,000 14 10,600,000 100% 14 100% 100,000 10,600,000 14 10,600,000 100% 13 93%

the stream. The term does not imply that the emissions are never controlled, but is synonymous with “pre control emissions.”5 - 55

Table 5 - 4 . Threshold Analysis for Fluorinated GHG Emissions from Production of HFCs,

PFCs, SF6, NF3, CFCs, and HCFCs (Controlled Emissions) Emissions Covered Facilities Covered Threshold Level (metric tons CO 2 e/r) Total National

Emissions (metric tons CO 2 e) Number of

Facilities Metric tons

CO2e Percent Number Percent 1,000 10,600,000 14 10,600,000 100% 14 100% 10,000 10,600,000 14 10,600,000 100% 14 100% 25,000 10,600,000 14 10,600,000 100% 14 100% 100,000 10,600,000 14 10,300,000 97% 10 71% As can be seen from the tables, most HFC, PFC, SF 6 , NF 3 , CFC, and HCFC production facilities would be covered by all the thresholds considered. Although we do not have facility specific production information for producers of fluorinated anesthetics, we believe that few or none of these facilities are likely to have uncontrolled emissions above the proposed threshold. However, it is possible that EPA has underestimated total pre - control emissions from anesthetics. In its threshold analysis for fluorinated GHG production, EPA has assumed that emissions have GWPs similar to those of the product produced. However, fluorinated anesthetics are hydrofluoroethers, and other HFE production proce sses of which EPA is aware generate by products with higher GWPs than the product. 5.1.3 A full discussion of the threshold selection analysis is available in the revised Fluorinated GHG Production TSD (EPA - HQ- OAR -2009- 0927 - 012). For specific information on c osts, including unamortized first year capital expenditures, please refer to Economic Analysis (EA) for this rulemaking. Subpart QQ- Imports and Exports of Fluorinated

GHGs in Pre - Charged Equipment and Closed - Cell Foams Under the current proposal, EPA is proposing to require that importers and exporters of F - GHGs contained in pre - charged equipment and closed cell foams report their imports and exports if either their total imports or their total exports, in equipment, foams, and inbulk, exceed 25,000 mtCO 2 e per year. This threshold is the same as that for bulk imports and exports.5 - 56

Table 5 - 5 . Threshold Analysis forSubpart QQ–Imports of FluorinatedGHGs in Pre Charged Equ ipment and Closed - Cell Foams HFC Refrigeration/AC Equipment SF 6Electrical Equipment Closed - cell Foams Threshold Level Imports

Covered Importers

Covered Imports

Covered Importers

Covered Imports

Covered Importers

Covered 1,000 15,733,523 50 1,888,932 8 3,025,285 50 10,000 15,733,523 50 1,888,932 8 3,025,285 50 25,000 15,733,523 50 1,888,932 8 3,025,285 50 100,000 15,733,523 50 1,888,932 8 0 50 Table 5 - 6 . Threshold Analysis forSubpart QQ–Exports of FluorinatedGHGs in Pre Charged Equipment and Closed - Cell Foams HFC Refrigeration/AC Equipment SF 6Electrical Equipment Closed - cell Foams Threshold Level Exports

Covered Exporters

Covered Exports

Covered Exporters

Covered Exports

Covered Exporters

Covered 1,000 5,247,905 25 153,323 10 3,025,285 25 10,000 5,247,905 25 107,326 5 3,025,285 25 25,000 5,247,905 25 0 0 3,025,285 25 100,000 5,247,905 25 0 0 3,025,285 25 5.1.4 Subpart SS- Electrical Equipment Manufacture or Refurbishment and Manufacturing of Electrical Components EPA is proposing to require electrical equipment manufacturers to report their SF 6and PFC emissions if their total annual purchases of SF 6or PFCs exceed 23,06 1 lbs. This consumption - based threshold is equivalent to an emissions - based threshold of 25,000 mtCO 2 e, assuming an average manufacturer emission rate of 10%. EPA chose the consumption - based threshold, as it is believed to allow equipment manufacturers toquickly determine if they are subject to reporting requirements by referencing their SF 6purchase records.5 - 57

Table 5 - 7 . Threshold Analysis forSubpart SS – ElectricalEquipment Manufacture or

Refurbishment and Manufacturing of Electrical Components Emission Threshold (Mt CO 2Eq) 1,000 10,000 25,000 100,000 Consumption Threshold (lbs. of SF 6 ) 922 9,220 23,061 92,244 Number of Facilities Above 10 10 10 5 Percent of Facilities Above 100% 100% 100% 50% Total Emissions of Facilities Above (Mt CO 2Eq) 814,128 814,128 814,128 569,890 Percent of Emissions Above 100% 100% 100% 70% 5.1.5 National Emissions Covered Under Selected Thresholds The total national emissions covered under the selected option s are 46 MtCO 2 e(Table 5 - 8) . The majority of these covered emissions are from the importers and exporters of fluorinated GHGs covered by Subpart QQ (2 8.9 MtC O 2 e). Although the majority of cost and emissions information reported in this economic and small entity analysis is organized by subpart, EPA also mapped each subpart to an industry included in the North American Industry Class ification System (NAICS); th e mapping allows the cost data to be used in conjunction with other economic census data. Table 5 - 8 . Estimates of Emissions (MtCO 2 e) Reported in 200 8Under the Selected Option Subpart Emissions Coverage (MtCO 2e) Subpart I - Electronics Industry 5.6 Subpart L - Fluorinated Gas Production 10 . 6 Subpart QQ - Imports and Exports of Fluorinated GHGs 28.9 Subpart SS - Electrical Equipment Manufacture or Refurbishment and Manufacturing of Electrical Components 0.8 Total 4 6 . 0 5.2 National Cost Estimates As shown in Table 5 - 10 , the total national costs for the select ed option are estimated to be $6.1 million in the first year and $3.9 million in subsequent years ( $2006 ). This includes a public sector burden estimate of $384,000 for program implementation and verification5 - 58

activi ties. Subpart s bearing the greatest share of the ongoing private costs of the rule are the electronics industry (67%) fluorinated gas producers ( 23 %). In addition to total national costs by subpart under the selected option, we also report average cost p er ton to support additional analysis of the mandatory reporting programs. The average ongoing(subsequent year) private cost per metric ton varies by subpart ; me asures range from less than $0.01 per ton ( Subpart SS ) to $ 0 . 45 per ton ( Subpart I).

Table 5 - 9 . National Cost Estimates by S ubpart : Selected Option First Year Subsequent Years Subpart 2007 NAICS Millions

2006$ $/ton Share Millions 2006$ $/ton Share Subpart I - Electronics Industry 334111, 334413, 334119 $2. 9 $0.51 4 7 % $2. 6 $0.45 67 % Subpart L - Fluorinated Gas Production 325120 $ 2.1 $0. 20 35 % $0. 3 $0.0 3 7 % Subpart QQ - Imports and Exports of Fluorinated GHGs 326140, 326150, 333415, 335313, 336391, 423610, 423620, 423720, 421730, 421740, 443111, 443112, 42 4 610 $0.7 $0.02 1 2 % $0.6 $0.02 1 6 % Subpart SS - Electrical Equipment Manufacture and Refurbishment and Manufacturing of Electrical Components 33361, 33531 $0.02 $0.01 0. 4 % $0.02 $0.01 1% Private Sector, Total $ 5.7 94 % $ 3.5 90 % Public Sector , Total $0.4 6 % $0.4 10 % Total $ 6.1 100% $ 3.9 100% 5.2.1 Additional National Cost Analysis 5.2.1.1 Subpart I: Validating the DRE of Abatement Devices Under the proposed rule, any facility that wishes to reflect abatement of fluorinated GHGs in its emissions estimates would be required to assure proper equipment installation,5 - 59

operation, and maintenance and either use EPA published DRE default values or obtain verified class - specific DRE measurements to quantify the emission reductions. EPA developed a cost estimate based on an assumption that only the 23 large facilities that participate in EPA’s PFC Reduction/Climate Partnership for the Semiconductor In dustry use abatement devices and would incur costs for verifying the DREs of thesedevices. Table 5 - 10 illustrates the range of incremental total private costs assuming the facilities report abatement activities.5 - 60

Table 5 - 10 . Additional Subpart I Private Cost Estimates : Validating the DRE of

Abatement Devices

DRE Option DRE Option

Costs ($/entity): First and Subsequent Ye ar Number of

Affected Entities Reporting Abatement Activitie s Additional

Private Cost ($/entity): First and Subsequent Ye ar National Cost

Estimate with DRE Option First Year (Millions $2006) National Cost

Estimate with DRE Option Subsequent Years (Millions $2006) Semi conductors (DRE Default Value Option) $1,766 23 $ 40,618 $7.2 $ 4.0 Semi conductors (DRE Measurement Option) $71,766 23 $ 1,650,618 $ 8.9 $ 5.7 5.3 Economic Impact Analysis EPA assessed how the regulatory program may influence the profitability of companies by comparing the monitoring program costs to total sales (i.e., a “sales” test). The techniques and data we use are identical to the MRR rule and focus on small entities. We provide additional details of the analysis below. 5.3.1 Assessing Economic Impacts on Small Entities The first step in this assessment was to determine whether the rule will have a significant impact on a substantial number of small entities (SISNOSE). To make this determination, EPA used a screening analysis that allows us to indicate whether EPA can certify the rule as not having a SISNOSE. The elements of this analysis included

 identifying affected subparts and entities,
 selecting and describing the measures and economic impact thresholds used in the analysis, and
 determining SISNOSE certification category. 5.3.1.1 Identify Affected Subpartsand Entities The industry subpart s covered by the rule were identified during the development of the cost analysis for the reporting rule. The SUSB data provide national information on the5 - 61

distribution of economic variables by industry and size. These data were developed in cooperation with, and partially funded by, the Office of Advocacy of the Small Business Administration (SBA) (SBA, 2008a). The data include the number of establishments (Table 5 - 11 ), and receipts (Table 5 - 12 ) and present information on allentities in an industry covered by the rule; however, many of these entities would not be expected to report under the preferred option because they would fall below the 25,000 hybrid threshold. SUSB also provides this data by enterprise employment size. The census definitions in this data set are as follows:

 establishment : An establishment is a single physical location where business is conducted or where services or industrial operations are performed.

 employment : Paid employment consists of full - and part - time employees, including salaried officers and executives of corporations, who were on the payroll in the pay period including March 12, 2002. Included are employees on sick leave, holidays, and vacations; not included are proprietors and partners of unincorporated businesses.

 receipts : Receipts (net of taxes) are defined as the revenue for goods produced, distributed, or services provided, including revenue earned from premiums, commissions and fees, rents, interest, dividends, and royalties. Receipts exclude all revenue collected for local, state, and federal taxes.

 enterprise : An enterprise is a business organization consisting of o ne or more domestic establishments that were specified under common ownership or control. The enterprise and the establishment are the same for single - establishment firms. Each multi - establishment company forms one enterprise

—the enterprise employment and annual payroll are summed from the associated establishments. Enterprise size designations are determined by the summed employment of all associated establishments. Because the SBA’s busi ness size definitions (SBA, 2009 c) apply to an establishment’s “ultim ate parent company,” we assume in this analysis that the “enterprise” definition above is consistent with the concept of ultimate parent company that is typically used for Small Business Regulatory Enforcement Fairness Act (SBREFA) screening analyses and the terms are used interchangeably. We also report the SBA size standard(s) for each industry group in order to facilitate comparisons and different thresholds.5 - 62 Table 5 - 11 . Number of Establishments by Affected Industry and Enterprise aSize: 2002 Owned by Enterprises with: 2007 NAICS NAICS Description Subpart SBA Size Standard (effective August 22 , 20 0 8 ) Total

Estab lishments 1 to 20

Employees 20 to 99

Employees 100 to 499

Employees 500 to 749

Employees 750 to 999

Employees 1,000 to

1,499 Employees 334111 Electronic Computer

Manufacturing I 1,000 486 257 84 36 3 2 3 334413 Semiconductor and

Related Device Manufacturing I 1,000 1,098 458 220 138 19 19 16 334119 Other Computer

Peripheral Equipment Manufacturing I 1,000 815 411 169 85 17 7 11 325120 Industrial Gas

Manufacturing L 1,000 551 45 20 20 NA 30 55 326140 Polystyrene Foam

Product Manufacturing Q Q 500 551 176 123 85 16 1 20 326150 Urethane and Other Foam

Product (except Polystyrene) Manufacturing QQ 500 610 192 133 73 19 8 3

333415 Air - Conditioning and

Warm Air Heating Equipment and Commercial and Industrial Refrigeration

Equipment Manufacturing QQ 750 840 303 187 87 10 25 20 335313 Switchgear and

Switchboard Apparatus Manufacturing QQ 750 563 273 105 46 6 NA 10 336391 Motor Vehicle Air Conditioning Manufacturing QQ 750 72 34 17 8 NA 1 1

423610 Electrical Apparatus and

Equipment, Wiring

Supplies, and Related Equipment Merchant Wholesalers QQ 100 14,337 7,458 1,679 1,016 248 113 87

423620 Electrical and Electronic

Appliance, Television,

and Radio Set Merchant Wholesalers QQ 100 3,510 2,156 554 189 19 39 725 - 63 423720 Plumbing and Heating Equipment and Supplies (Hydronics) Merchant Wholesalers QQ 100 5,144 2,871 720 455 134 21 16

423730 Warm Air Heating and

Air - Conditioning Equipment and Supplies Merchant

Wholesalers QQ 100 5,598 2,394 929 654 213 52 355 423740 Refrigeration Equipment

and Supplies Merchant

Wholesalers QQ 100 1,482 724 271 193 4 28 29 443111 Household Appliance Stores QQ $9 M 10,002 7,628 806 312 NA 73 1 443112 Radio, Television and

Other Electronics Stores QQ $9 M 24,226 11,181 1,760 1,230 38 75 328 42 4 610 b Plastics Materials and

Basic Forms and Shapes Merchant Wholesalers QQ 100 3,717 2,238 518 281 26 20 58 33361 Engine, Turbine, and

Power Transmission Equipment Manufacturing SS 500 - 1,000 922 375 208 94 14 11 12 a The Census Bureau defines an enterprise as a business organization consisting of one or more domestic establishments that were specif ied under common ownership or control. The enterprise and the establishment are the same for single - establishment firms. Each multi - establishment company forms one enterprise

—the enterprise employment and annual payroll are summed from the associated estab lishments. Enterprise size designations are determined by the summed employment of all associated establishments. Since the SBA’s business size definitions (http://www.sba.gov/size) apply to an establishment’s ultimate parent company, we assume in this ana lysis that the enterprise definition above is consistent with the concept of ultimate parent company that is typically used for Small Business Regulatory Enforcement Fairness Act (SBREFA) screening analyses. b The 2002 SUSB data uses 1997 NAICS codes. For this industry, the relevant code is NAICS 422610.5 - 64 Table 5 - 12 . Receiptsby Affected Industry an d Enterprise aSize ($ 2002Million) Owned by Enterprises with:

NAICS NAICS Description Subpart SBA Size Standard (effective August 22 , 200 9 ) Total Estab lishments 1 to 20

Employees 20 to 99

Employees 100 to 499

Employees 500 to 749

Employees 750 to 999

Employees 1,000 to

1,499 Employees 334111 Electronic Computer

Manufacturing I 1,000 47,806 272 766 1,271 NA NA NA 334413 Semiconductor and

Related Device Manufacturing I 1,000 63,779 701 1,755 3,711 775 2,593 1,434 334119 Other Computer

Peripheral Equipment Manufacturing I 1,000 18,135 642 1,680 2,712 1,405 247 1,372 325120 Industrial Gas

Manufacturing L 1,000 5,780 22 292 71 NA NA NA 326140 Polystyrene Foam

Product Manufacturing QQ 500 6,330 209 623 689 NA NA 539 326150 Urethane and Other

Foam Product (except Polystyrene) Manufacturing QQ 500 7,170 307 772 1,063 288 NA NA

333415 Air - Conditioning and

Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing QQ 750 24,699 409 1,460 1,813 348 980 803 335313 Switchgear and

Switchboard Apparatus Manufacturing QQ 750 8,593 347 641 826 NA NA NA 336391 Motor Vehicle Air Conditioning Manufacturing QQ 750 3,396 31 72 NA NA NA NA

423610 Electrical Apparatus and

Equipment, Wiring Supplies, and Related Equipment Merchant Wholesalers QQ 100 93,524 21,850 16,229 9,690 1,648 1,339 7665 - 65 423620 Electrical and Electronic Appliance, Television, and Radio Set Merchant Wholesalers QQ 100 68,255 9,640 10,388 10,577 2,418 1,805 4,291 423720 Plumbing and Heating

Equipment and Supplies (Hydronics) Merchant Wholesalers QQ 100 31,668 8,304 12,322 4,156 686 247 51

423730 Warm Air Heating and

Air - Conditioning Equipment and Supplies Merchant Wholesalers QQ 100 25,599 5,426 5,075 3,551 613 526 NA 423740 Refrigeration Equipment

and Supplies Merchant Wholesalers QQ 100 5,014 1,333 1,791 581 14 187 NA 443111 Household Appliance

Stores QQ $9 M 12,619 5,432 2,801 1,354 NA NA NA 443112 Radio, Television and

Other Electronics Stores QQ $9 M 53,557 6,325 3,510 1,612 NA NA NA 42 4 610 b Plastics Materials and

Basic Forms and Shapes Merchant Wholesalers QQ 100 32,648 7,345 5,785 4,091 614 687 338 33361 Engine, Turbine, and

Power Transmission Equipment Manufacturing SS 500 - 1,000 37,701 429 1,326 2,067 309 333 304 a The Census Bureau defines an enterprise as a business organization consisting of one or more domestic establishments that were specified under common ownership or control. The enterprise and the establishment are the same for single - establishment firms. Each multi - establishment company forms one enterprise

—the enterprise employment and annual payroll are summed from the associated establishments. Enterprise size designations are determined by the summed employment of all associated establishments. Since theSBA’s business size definitions (http://www.sba.gov/size) apply to an establishment’s ultimate parent company, we assume in this analysis that the enterprise definition above is consistent with the concept of ultimate parent company that is typically usedfor Small Business Regulatory Enforcement Fairness Act (SBREFA) screening analyses. b The 2002 SUSB data uses 1997 NAICS codes. For this industry, the relevant code is NAICS 422610.5 - 66

5.3.1.2 Develop Small Entity Economic Impact Measures Because the rule covers a large number of subpart s and primarily covers businesses, the analysis generated a set of sales tests (represented as cost- to - receipt ratios) 12for NAICS codes associated w ith the affected subpart s. Although the appropriate SBA size definition should be applied at the parent company (enterprise) level, data limitations allowed us only to compute and compare ratios for a model establishment for six enterprise sizeranges (i.e ., all categories, enterprises with 1 to 20 employees, 20 to 99 employees, 100 to 499 employees, 500 to 999 employees, and 1,000 to 1,499 employees. This approach allows us to account for differences in establishment receipts between large and small enterprises and differences in small business definitions across affected industries. It is also a conservative approach, because an establishment’s parent company (the “enterprise”) may have other economic resources that could be used to cover the costs of the reporting program. These sales tests examine the average establishment’s total annualized mandatory reporting costs to the average establishment receipts for enterprises within several employment categories 13 (first year costs: Table 5 - 13 ; subsequent year costs: Table 5 - 14 ). The average entity costs used to compute the sales test are the same across all of these enterprise size categories. As a result, the sales - test will overstate the cost - to - receipt ratio for establishments owned by small businesses, because the reporting costs are likely lower than average entity estimates provided by the engineering cost analys is.

12The following metrics for other small entity economic impact measures (if applicable) would potentially include  Small governments (if ap plicable): “Revenue” test; annualized compliance cost as a percentage of annual government revenues  Small non - profits (if applicable): “Expenditure” test; annualized compliance cost as a percentage of annual operating expenses 13 For the one to 20 employee category, we exclude SUSB data for enterprises with zero employees. These enterprises did not operate the entire year.5 - 67 Table 5 - 13 . Establishment Sales Tests by Industry and Enterprise aSize: First Year Costs Owned by Enterprises with:

2007 NAICS NAICS Description Sub - part SBA Size Standard (effective August 22 , 200 8 ) Average

Cost Per Entity ($/entity) All

Enter prises 1 to 20

Employee s 20 to 99

Employees 100 to 499

Employees 500 to 749

Employees 750 to 999

Employees 1,000 to

1,499 Employees 334111 Electronic Computer Manufacturing I 500 $31,748 0.03% 2.67% 0.31% 0.08% NA NA NA 334413 Semiconductor and Related Device

Manufacturing I (Semis) 500 $31,748 0.05% 1.85% 0.36% 0.11% 0.07% 0.02% 0.03% 334413 Semiconductor and Related Device

Manufacturing I (Photovoltaics) 1,000 $8,777 0.01% 0.51% 0.10% 0.03% 0.02% 0.01% 0.01% 334119 Other Computer Peripheral Equipment

Manufacturing I (LCD) 500 $7,598 0.03% 0.43% 0.07% 0.02% 0.01% 0.02% 0.01% 334119 Other Computer Peripheral Equipment

Manufacturing I (MEMS) 500 $5,239 0.02% 0.30% 0.05% 0.01% 0.01% 0.01% 0.00% 325120 Industrial Gas Manufacturing L 1,000 $151,045 1.28% 27.68% 0.92% 3.80% NA NA NA 326140 Polystyrene Foam Product

Manufacturing QQ 500 $3,364 0.03% 0.25% 0.06% 0.04% NA NA 0.01% 326150 Urethane and Other Foam Product

(except Polystyrene) Manufacturing QQ 500 $3,364 0.03% 0.19% 0.05% 0.02% 0.02% NA NA

333415 Air- Conditioning and Warm Air

Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing QQ 750 $3,364 0.01% 0.22% 0.04% 0.01% 0.01% 0.01% 0.01% 335313 Switchgear and Switchboard Apparatus

Manufacturing QQ 750 $3,364 0.02% 0.24% 0.05% 0.02% NA NA NA 336391 Motor Vehicle Air - Conditioning

Manufacturing QQ 750 $3,364 0.01% 0.33% 0.07% NA NA NA NA 423610 Electrical Apparatus and Equipment,

Wiring Supplies, and Related Equipment Merchant Wholesalers QQ 100 $3,364 0.05% 0.10% 0.03% 0.03% 0.05% 0.03% 0.03% 423620 Electrical and Electronic Appliance,

Television, and Radio Set Merchant Wholesalers QQ 100 $3,364 0.02% 0.07% 0.02% 0.01% 0.00% 0.01% 0.01% 423720 Plumbing and Heating Equipment and

Supplies (Hydronics) Merchant Wholesalers QQ 100 $3,364 0.05% 0.10% 0.02% 0.03% 0.06% 0.03% 0.09% 423730 Warm Air Heating and Air Conditioning Equipment and Supplies Merchant Wholesalers QQ 100 $3,364 0.07% 0.13% 0.05% 0.06% 0.10% 0.03% NA5 - 68 423740 Refrigeration Equipment and Supplies Merchant Wholesalers QQ 100 $3,364 0.09% 0.16% 0.05% 0.10% 0.08% 0.04% NA 443111 Household Appliance Stores QQ $9 M $3,364 0.24% 0.42% 0.09% 0.07% NA NA NA 443112 Radio, Television and Other

Electronics Stores QQ $9 M $3,364 0.14% 0.53% 0.15% 0.23% NA NA NA 424 610 b Plastics Materials and Basic Forms and

Shapes Merchant Wholesalers QQ 100 $3,364 0.03% 0.09% 0.03% 0.02% 0.01% 0.01% 0.05% 33361 Engine, Turbine, and Power

Transmission Equipment Manufacturing SS 500 - 1,000 $2,213 0.00% 0.17% 0.03% 0.01% 0.01% 0.01% 0.01% 33531 Electrical Equipment Manufacturing SS 750 - 1,000 $2,213 0.02% 0.19% 0.04% 0.01% 0.01% 0.00% 0.01% aThe Census Bureau defines an enterprise as a business organization consisting of one or more domestic establishments that were specified under common ownership or control. The enterprise and the establishment are the same for single - establishment firms. E ach multi - establishment company forms one enterprise

—the enterprise employment and annual payroll are summed from the associated establishments. Enterprise size designations are determined by the summed employment of all associated establishments. Since th e SBA’s business size definitions (http://www.sba.gov/size) apply to an establishment’s ultimate parent company, we assume in this analysis that the enterprise definition above is consistent with the concept of ultimate parent company that is typically use d for Small Business Regulatory Enforcement Fairness Act (SBREFA) screening analyses. Note: Receipt data in Table 5 - 7 has been adjusted to 2006$ using the latest GDP implicit price deflator reported by the U.S. Bureau of Economic Analysis (103.257/92.118= 1.121) http://www.bea.gov/national/nipaweb/Index.asp (accessed December 21, 2009). b The 2002 SUSB data uses 1997 NAICS codes. For this industry, the relevant code is NAICS 422610.5 - 69 Table 5 - 14 . Establishment Sales Tests by Industry and Enterprise aSize: SubsequentYearsCosts Owned by Enterprises with: 2007 NAICS NAICS Description Sub - part SBA Size Standard (effective August 22 , 200 8 ) Average

Cost Per Entity ($/entity) All

Enter prises 1 to 20

Employees b 20 to 99

Employees 100 to 499

Employees 500 to 749

Employees 750 to 999

Employees 1,000 to

1,499 Employees 334111 Electronic Computer Manufacturing I 500 $31,748 0.03% 2.67% 0.31% 0.08% NA NA NA 334413 Semiconductor and Related Device

Manufacturing I (Semis) 500 $31,748 0.05% 1.85% 0.36% 0.11% 0.07% 0.02% 0.03% 334413 Semiconductor and Related Device

Manufacturing I (Photovoltaics) 1,000 $8,777 0.01% 0.51% 0.10% 0.03% 0.02% 0.01% 0.01% 334119 Other Computer Peripheral Equipment

Manufacturing I (LCD) 500 $7,598 0.03% 0.43% 0.07% 0.02% 0.01% 0.02% 0.01% 334119 Other Computer Peripheral Equipment

Manufacturing I (MEMS) 500 $5,239 0.02% 0.30% 0.05% 0.01% 0.01% 0.01% 0.00% 325120 Industrial Gas Manufacturing L 1,000 $19,109 0.16% 3.50% 0.12% 0.48% NA NA NA 326140 Polystyrene Foam Product Manufacturing QQ 500 $2,933 0.02% 0.22% 0.05% 0.03% NA NA 0.01% 326150 Urethane and Other Foam Product (except

Polystyrene) Manufacturing QQ 500 $2,933 0.02% 0.16% 0.05% 0.02% 0.02% NA NA

333415 Air- Conditioning and Warm Air Heating

Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing QQ 750 $2,933 0.01% 0.19% 0.03% 0.01% 0.01% 0.01% 0.01% 335313 Switchgear and Switchboard Apparatus

Manufacturing QQ 750 $2,933 0.02% 0.21% 0.04% 0.01% NA NA NA 336391 Motor Vehicle Air - Conditioning

Manufacturing QQ 750 $2,933 0.01% 0.29% 0.06% NA NA NA NA 423610 Electrical Apparatus and Equipment,

Wiring Supplies, and Related Equipment Merchant Wholesalers QQ 100 $2,933 0.04% 0.09% 0.03% 0.03% 0.04% 0.02% 0.03% 423620 Electrical and Electronic Appliance,

Television, and Radio Set Merchant Wholesalers QQ 100 $2,933 0.01% 0.06% 0.01% 0.00% 0.00% 0.01% 0.00% 423720 Plumbing and Heating Equipment and

Supplies (Hydronics) Merchant Wholesalers QQ 100 $2,933 0.04% 0.09% 0.02% 0.03% 0.05% 0.02% 0.08% 423730 Warm Air Heating and Air - Conditioning

Equipment and Supplies Merchant Wholesalers QQ 100 $2,933 0.06% 0.12% 0.05% 0.05% 0.09% 0.03% NA5 - 70 423740 Refrigeration Equipment and Supplies Merchant Wholesalers QQ 100 $2,933 0.08% 0.14% 0.04% 0.09% 0.07% 0.04% NA 443111 Household Appliance Stores QQ $9 M $2,933 0.21% 0.37% 0.08% 0.06% NA NA NA 443112 Radio, Television and Other Electronics

Stores QQ $9 M $2,933 0.12% 0.46% 0.13% 0.20% NA NA NA 424 610 Plastics Materials and Basic Forms and

Shapes Merchant Wholesalers QQ 100 $2,933 0.03% 0.08% 0.02% 0.02% 0.01% 0.01% 0.04% 33361 Engine, Turbine, and Power Transmission

Equipment Manufacturing SS 500 - 1,000 $2,213 0.00% 0.17% 0.03% 0.01% 0.01% 0.01% 0.01% 33531 Electrical Equipment Manufacturing SS 750 - 1,000 $2,213 0.02% 0.19% 0.04% 0.01% 0.01% 0.00% 0.01% aThe Census Bureau defines an enterprise as a business organization consisting of one or more domestic establishments that were specified under common ownership or control. The enterprise and the establishment are thesame for single - establishment firms. Each multi - establishment company forms one enterprise

—the enterprise employment and annual payroll are summed from the associated establishments. Enterprise size designations are determined by the summed employment of all associated establishments. Since the SBA’s business size definitions (http://www.sba.gov/size) apply to an establishment’s ultimate parent company, we assume in this analysis that the enterprise definition above is consistent with the concept of ultimate parent company that is typically used for Small Business Regulatory Enforcement Fairness Act (SBREFA) screening analyses. Note: Receipt data in Table 5 - 7 has been adjusted to 2006$ using the latest GDP implicit price deflator reported by the U.S. Bureau of Economic Analysis (103.257/92.118=1.121) http://www.bea.gov/national/nipaweb/Index.asp (accessed December 21, 2009). b The 2002 SUSB data uses 1997 NAICS codes. For this industry, the relev ant code is NAICS 422610.5 - 71

5.3.1.3 Results of Screening Analysis The Regulatory Flexibility Act generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute , unless theagency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small governmental jurisdictions, and small not- for- profit enterprises. For the purposes of asse ssing the impacts of the rule on small entities, we defined a small entity as (1) a small business, as defined by SBA’s regulations at 13 CFR Part 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district, or special district with a population of less than 50,000; or (3) a small organization that is any not for- profit enterprise that is independently owned and operated and is not dominant in its field. After considering the economic impact of the rule on sm all entities, EPA has concluded that this action will not have a significant economic impact on a substantial number of small entities. As shown in Tables 5 - 13 and 5 - 14 , the average ratio of annualized reporting program costs to receipts of establishments owned by model small enterprises was less than 1% for industries presumed likely to have small businesses covered by the reporting program. We acknowledge that several enterprise categories have ratios that exceed this threshold (e.g., enterprise with oneto 20 employees). The Industrial Gas Manufacturing industry (NAICS 325120) ha s sales test results over 1% for all enterprises. The following enterprise categories have sales test results over 1% and for entities with less than 20 employees: Industrial Gas Manufacturing ( 325120) and Semiconductor and Related Device Manufacturing (334413). Below we take a more detailed look at the categories noted above as having sales test ratios above 1%. EPA collected information on the entities likely to be covered by th e rule as part of the expert sub - group process. Threshold- based Analysis of Categories Having Sales Test Ratios Above 1% Industrial Gas Manufacturing (325120) Subpart L covers facilities included in NAICS codes for Industrial Gas Manufacturing (NAICS 3251 20). Within this subpart, EPA identified 13 ultimate parent company names covered by the proposed rule. Using publicly available sources (e.g. , H oovers.com), we collected parent company sales and employment data and found that only one company could be cl assified5 - 72

as a small entity. Using the cost data for a representative entity (see Section 4 ) , EPA determined the small entity's cost - to - sales ratio is below one percent. Electronic Computer Manufacturing (334111) and Semiconductor and Related Device Manufacturing (334413) Data on the number of electronics facilities comes from the World Fab Watch and the Flat Panel Display Fabs on Disk datasets. The census data categories cover more establishments than just those faci lities covered in the rule. Subpart I covers facilities included in NAICS codes for Semiconductor and Related Device Manufacturing (334413) and Other Computer Peripheral Equipment Manufacturing (334119). The World Fab Watch dataset includes 216 facilitie s (94 of which exceed the 25,000 ton threshold), while the sum of the two NAICS codes include 1,903 establishments. Covered facilities with emissions greater than 25,000 MtCO2e per year are unlikely to be included in the 1 to 20 employees size category. Emissions are roughly proportional to production, and establishments with 1 to 20 employees total only 1.6% of total receipts, while the proposed threshold excludes 6% of industry emissions from the least- emitting facilities. Although this rule would not h ave a significant economic impact on a substantial number of small entities, the Agency nonetheless tried to reduce the impact of this rule on small entities, including seeking input from a wide range of private - and public - sector stakeholders. When developing the rule, the Agency took special steps to ensure that the burdens imposed on small entities were minimal. The Agency conducted several meetings with industry trade associations to discuss regulatory options and the corresponding burden on industry, s uch as recordkeeping and reporting. The Agency investigated alternative thresholds and analyzed the marginal costs associated with requiring smaller entities with lower emissions to report. The Agency also selected a hybrid method for reporting, which provides flexibility to entities and helps minimize reporting costs.6 - 1 SECTION 6 STATUTORY AND EXECUT IVE ORDER REVIEWS This section describes EPA’s compliance with sev eral applicable executive orders and statutes during the development of the proposed F - GHG reporting rule, under subparts I, L, QQ, and SS of the Mandatory Reporting Rule. 6.1 Executive Order 12866: Regulatory Planning and Review Under Section 3(f)(1) of Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not by itself an “economically signi ficant regulatory action” because it is unlikely to have an annual economic effect of less than$100 million. EPA’s cost analysis, presented in Section 4, estimates that for the minimum reporting under the recommended regulatory option, the total annualize d cost of the rule will be approximately $ 6.1 million(in $2006) during the first year of the program and $ 3.9 million in subsequent years (including $ 0.4million of programmatic costs to the Agency). However, this action adds Subparts I, L, QQ, and SS to the mandatory GHG reporting rule, which was a significant regulatory action. Thus, EPA has chosen to analyze the impacts of Subparts I, L, QQ, and SS as if their impacts were significant. EPA submitted this action to the Office of Management and Budget (OM B) for review under Executive Order 12866, and any changes made in response to OMB recommendations have been documented in the docket for this action. In addition, EPA prepared this EIA , including an analysis of the potential costs associated with this action. In this report, EPA has identified the regulatory options considered, their costs, the emissions that would likely be reported under each option, and explained the selection of the option chosen for the rule. The costs of the rul e are reported in Section 4, and the economic impacts and qualitative benefits assessment are reported in Section 5. Overall, EPA has concluded that the costs of the F - GHG Reporting Ruleare outweighed by the potential benefits of more comprehensive i nformation about CO 2emissi ons. 6.2 Paperwork Reduction Act The information collection requirements in this proposed rulehave been submitted for approval to the Office of Management and Budget (OMB) under the Paperwork Reduction Act , 44 U.S.C. 3501 et seq . The Information Collection Request (ICR) document prepared by EPA has been assigned EPA ICR number [XXXX.XX].6 - 2

EPA has i dentified the following goals of the mandatory GHG reporting system:

 Obtain data that is of sufficient quality that it can be used to analyze and inform the development of a range of future climate change policies and potential regulations.

 Balance the rule’s coverage to maximize the amount of emissions reported while excluding small emitters.

 Create reporting requirements that are, to the extent possible and appropriate, consistent with existing GHG reporting programs in order to reduce reporting burden for all parties involved. The information from F - GHG facilities will allow EPA to make well - informed decisions about whether and how to use the CAA to regulate these facilities and encourage voluntary reductions. Because EPA does not yet know the sp ecific policies that will be adopted, the data reported through the mandatory reporting system should be of sufficient quality to inform policy and program development. Also, consistent with the Appropriations Act, the reporting rule covers a broad range o f sectors of the economy. This information collection is mandatory and will be carried out under CAA Sections 114. Information identified and marked as Confidential Business Information (CBI) will not be disclosed except in accordance with procedures set forth in 40 CFR Part 2. However, emissions information collected under CAA Sections 114 generally cannot be claimed as CBI and will be made public. 14 The projected cost and hour respondent burden in the ICR , averaged over the first three years after promulgation, is $ 4.51 million and 81,500hours per year. The estimated averag e burden per response is 272hours; the frequency of response is annualfor all respondents that must comply with the rule’s reporting requirements ; and the estimated average number of likely respondents per year

is 276 . The cost burden to respondents resulting from the collection of information includes the total capital and start - up cost annualized over the equipment’s expected useful life (averaging $ 44,000per year) a total operation and maintenance component (averaging $ 24,000per year), and a labor co st component (averaging $ 4.44million per year). Burden is defined at 5 CFR Part 1320.3(b).

14 Although CBI determinations are usually made on a case - by - case basis, EPA has issued guidance in an earlier Federal Register notice on what constitutes emissions data that cannot be considered CBI (956 FR 7042

– 7043, February 21, 1991). As discussed in Section II.R of the preamble to the rule, EPA will be initiating a separate notice and comment process to make CBI determinations for the data collected under this proposed rulemaking.6 - 3

These cost numbers differ from those shown elsewhere in the EIAbecause ICR costs represent the average cost over the first three years of the rule, but costs are reported elsewhere in the EIAfor the first year of the rule. Also, the total cost estimate of the rule in the EIA includes the cost to the Agency to administer the program. The ICR differentiates between respondent burden and cost to the Agency , estimatedto be $384,000 . 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 in 40 CFR are listed in 40CFR Part 9. When this ICR is approved by OMB, the Agency will publish a technical amendment to 40 CFR part 9 in the Federal Register to display the OMB control number for the approved information collection requirements contained in the final rule. 6.3 Regulatory Flexibility Act The Regulatory Flexibility Act generally requires an agency to prepare a regul atory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute, unless the agency certifies that the rule will not have a significant economic impact on a substantialnumber of small entities. Small entities include small businesses, small governmental jurisdictions, and small not- for- profit enterprises. The first step in this assessment was to determine whether the rule will have a significant impact on a substantial number of small entities (SISNOSE). To make this determination, EPA used a screening analysis that allows us to indicate whether EPA can certify the rule as not having a SISNOSE. The elements of this analysis included

 identifying affected sectors and entities,
 selecting and describing the measures and economic impact thresholds used in the analysis, and
 determining SISNOSE certification category. 6.3.1 Identify Affected Sectors and Entities For the purposes of assessing the impacts of the rule on small entities, we defined a small entity as (1) a small business, as defined by SBA’s regulations at 13 CFR Part 121.201; (2) a small governmental jurisdiction that is a government of a city, c ounty, town, school district, or special district with a population of less than 50,000; or (3) a small organization that is any not for- profit enterprise that is independently owned and operated and is not dominant in its field.6 - 4

For the F - GHG Reporting Ru le, small entityis defined as a small business as defined by the Small Business Administration’s regulations at 13 CFR 121.201; according to these size standards, criteria for determining if ultimate parent companies owning affected facilities are categorized as small vary by NAICS. Small entity criteria range from total number of employe es at the firm fewer than 100 to number of employees fewer than 1000; one affected NAICS, 44311, defines small entities as those with sales below $9 million. Tables 5
- 6 an d 5 - 7 present small business criteria and enterprise size distribution data for affected NAICS. 6.3.2 Develop Small Entity Economic Impact Measures The ratio of total annualized compliance costs to firm sales (or sales test) is the selected impact measure. Details are provided in section 5.3, and results are presented in Table 5 - 8 for first - year costs and in Table 5 - 9 for subsequent year costs. Thesesales tests examine the average establishment’s total annualized mandatory reporting costs to the average establishment receipts for enterprises within several employment categories 15 . The average entity costs used to compute the sales test are the same across all of these enterprise size categories. As a result, the sales - test will overstate the cost - to - receipt ratio for establishments owned by small businesses, because the reporting costs are likely lower than average entity estimates provided by the engineering cost analysis 6.3.3 Results of Screening Analysis After considering the economic impact of the rule on small entities, EPA has concluded that this action will not have a significant economic impact on a substantial number of small entities . As shown in Table5 - 8 , the average ratio of annualized reporting program costs to revenues for F - GHG firms owned by model small enterprises and likely to be affected by the proposed rulewas generally less than 1%. For two NAICS, however, some size categories (especially thosewith 1 - 20 employees) show costs exceeding 1% of sales. These sectors are Industrial Gas Manufacturing ( NAICS 325120) and Semiconductor and Related Device Manufacturing (NAICS 334413). A more careful examination of impacts on small firms in these NAICS cod es was conducted. Analysis of firms in NAICS 334413 shows that firms with fewer than 20 employees produce less than 2% of output; firms below the 25,000 Mt CO 2 e threshold release approximately 6% of emis sions. Because emissions and production levels are highly correlated, firms fewer than 20 employees are generally not expected to be affected by the proposed rule; if

15 For the one to 20 employee category, we exclude SUSB data for enterprise s with zero employees. These enterprises did not operate the entire year.6 - 5

they are, their costs are likely to be lower than the overall average costs used in the s creening analysis. Thus, EPA does not expect the proposed rule to impose significant costs to a substantial number of small entities in NAICS 334413. Subpart L covers facilities included in NAICS codes for Industrial Gas Manufacturing (NAICS 325120). Within this subpart, EPA identified 13 ultimate parent company names covered by the proposed rule. Using publicly available sources (e.g. , H oovers.com), we collected parent company sales and employment data and found that only one company could be classified a s a small entity. Using the cost data for a representative entity (see Section 4 of the EA), EPA determined the small entity's cost - to - sales ratio is below one percent. Although this rule would not have a significant economic impact on a substantial number of small entities, the Agency nonetheless tried to reduce the impact of this rule on small entities, including seeking input from a wide range of private - and public - sector stakeholders. When developing the rule, the Agency took special steps to ensure th at the burdens imposed on small entities were minimal. The Agency conducted several meetings with industry trade associations to discuss regulatory options and the corresponding burden on industry, such as recordkeeping and reporting. The Agency investigat ed alternative thresholds and analyzed the marginal costs associated with requiring smaller entities with lower emissions to report. The Agency also selected a hybrid method for reporting, which provides flexibility to entities and helps minimize reportingcosts. In addition to the public hearing that EPA plans to hold, EPA has an open door policy, similar to the outreach conducted during the development of the proposed and final Mandatory GHG Reporting Rule. Details of these meetings are available in the d ocket (EPA - HQ - OAR 2008 - 0508). 6.4 Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), P.L. 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, fo r 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. This proposed ruledoes 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 private6 - 6

sector in any one year . Overall, EPA estimates that the total annualized costs of this proposed rule are approximately $6.1 million for the first year, and $3.9 million for subsequent years ($2006). Thus, this proposed ruleis not subject to the requirements of sections 202 or 205 of UMRA. This proposed ruleis also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments . Facilities subject to the proposed rule include manufacturers, wholesalers, and retailers. None of the faci lities currently known to undertake these activities are owned by small governments. 6.5 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 havefederalism implications” is defined in the executive order to include regulations that have “substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.” This proposed ruledoes 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 pow er and responsibilities among the various levels of government, as specified in Executive Order 13132. This regulation applies to manufacturers, wholesalers, and retailers . Fewgovernment facilities would be affected. This regulation also does not limit the power of states or localities to collect GHG data and/or regulate GHG emissions. Thus, Executive Order 13132 does not apply to this proposed rule . In the spirit of Executive Order 13132, and consistent with EPA policy to promote communications between EPA and State and local governments, EPA specifically solicits comment on this proposed actionfrom State and local officials. 6.6 Executive Order 13175: Consultation and Coordinationwith Indian Tribal Governments Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (59 FR 22951, November 6, 2000), requires EPA to develop an accountable6 - 7

process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” This proposed ruleis not expected to have tribal implications, as specified in Executive Order 13175. This regulation applies to facilities that directly emit GHGs. Few facilities expected to be affected by the rule are likely to be owned by tribal governments. Thus, Executive Order 13175 does not apply to this proposed rule . Although Executive Order 13175 does not apply to this proposed rule , EPA sought opportunities to provide information to tribal governments and representatives during development of the MRR rule. In consultation with EPA’s American Indian Environment Office, EPA’s outreach pl an for the MRR included tribes. For a complete list of tribal contacts, see the “Summary of EPA Outreach Activities for Developing the Greenhouse Gas Reporting Rule,” in the Docket for this proposed rulemaking (EPA - HQ - OAR - 2008 - 0508 - 055). In addition to the consultation activities supporting the MRR, EPA continues to provide information to tribal governments and representatives during development of the Track II rules such as this proposed rulemaking. EPA specifically solicits additional co mment on this proposed action from tribal officials. 6.7 Executive Order 13045: Protection of Children from Environmental Health and Safety Risks EPA interprets Executive Order 13045 (62 F.R. 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under Section 5 - 501 of the ex ecutive order has the potential to influence the regulation. This action is not subject to Executive Order 13045 because it does not establish an environmental standard intended to mitigate health or safety risks. 6.8 Executive Order 13211: Actions that Significantly Affect Energy Supply, Distribution, or Use This proposed ruleis not a “significant energy a ction” as defined in Executive Order 13211 (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. Further, we have concluded that this proposed rule is not likely to have anyadverse energy effects. This proposal relates to monitoring, reporting, and recordkeeping at facilities that manufacture, sell, import, or export F - GHG related products ; it does not adversely affect energy6 - 8

supply, distribution or use. Therefore, we conclude that this proposed ruleis not likely to have any adverse effects on energy supply, distribution, or use. 6.9 National Technology Transfer Advancement Act Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law No. 104 - 113 (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 developedor adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through OMB, with explanations when the Agency decides not to use available and applicable voluntary consensus standards. This proposed rulemaking involves technic al standards. EPA proposes to use voluntary consensus standards from threedifferent voluntary consensus standards bodies: American Society for Testing and Material (ASTM), American Society of Mechanical Engineers (ASME), and International SEMATECH Manufac turing Initiative . These voluntary consensus standards will help facilities monitor, report, and keep records of F - GHG emissions associated with their manufacturing or sales activities . No new test methods were developed for this proposed rule . Instead, from existing rules for source categories and voluntary GHG programs, EPA identified existing means of monitoring, reporting, and keeping records. The existing methods (voluntary consensus standards) include a broad range of measurement techniques, methods to measure gas or liquid flow, and methods to gauge and measure petroleum and petroleum products. The test methods are incorporated by reference into the rule and are available as specified in Section 98.6 of subpart A. By incorporating voluntary consensus standards into this proposed rule , EPA is both meeting the requirements of the NTTAA and presenting multiple options and flexibility for complying with the proposed rule. EPA welcomes comments on this aspect of the proposed rulemaking and, specifically, invites the public to identify potentially - applicable voluntary consensus standards and to explain why such standards should be used in this proposed regulation. 6.10 Executive Order 12 898: Federal Actions to Address Environmental Justice in Minority Populations and Low - Income Populations Executive Order 12898 (59 FR 7629, February 16, 1994) establishes federalexecutive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent6 - 9

practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproporti onately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low income populations in the United States. EPA has determined that this proposedrule will not have disproportionatelyhigh and adverse human health or environmental effects on minority or low - income populations because it does not affect the level of protection provided to human health or the environment. This proposedrule does not affect the level of protection provided to human health or the environment because it is a rule addressing information collection and reporting procedures.7 - 1 SECTION 7 CONCLUSIONS The supplemental proposal requires reportin g of fluorinated greenhouse gas (F - GHG) emissions from electronics manufacturing, production of fluorinated gases, and use of electrical equipment. EPA is also proposing to require such reporting from manufacturers of electrical equipment, import and export of pre - charged equipment, and closed cell foams. These F - GHG source categories are covered under Subparts I, L, QQ, and SS of the rule. 7.1 S ummary of Sectors Covered 7.1.1 Subpart I
– Electronics Manufacturing Electronics manufacturing includes, but is not limited to, the manufacture of semiconductors, liquid crystal displays (LCDs), microelectricomechanical (MEMS), and photovoltaic cells (PV ). The electronics industry uses multiple long - lived F - GHGs such as perfluorocarbons (PFCs), Hydrofluorocarbons (HFCs), sulfur hexafluoride (SF6 ), and nitrogen trifluoride (NF 3 ), as well as nitrous oxide (N 2 O). This proposed rule would apply to electroni cs manufacturing facilities that emit equal to or greater than 25,000 metric tons of CO 2 e per year 16 from electronics manufacturing processes such as plasma etching, thin film deposition, chamber cleaning, and heat transfer fluid use. EPA is also proposing methods to estimate emissions from cleani ng and etchprocesses for semiconductor, LCD, MEMS, and PV manufacture and also methods for estimating N 2 O emissions from deposition and other manufacturing processes such as chamber cleaning. EPA is also clarifying methods for estimating emissions from heat transfer fluids. Finally, EPA is proposing methods for verifying destruction or removal efficiency (DRE) from abatement equipment. 7.1.2 Subpart L
– Fluorinated GHG Producers Affected entities under subpart L are defined as any facility that produces a fluorinated gas from any raw material or feedstock chemical. Fluorinated gas production includes the production of fluorinated GHG, CFC, or HCFC. EPA stipulates that production o f fluorinated

16As discussed further below, EPA is proposing that uncontrolled emissions be used for purposes of determining whether a facility’ s emissions are equal to or greater than 25,000 mtCO2e.7 - 2

gases does not include the reuse or recycling of fluorinated GHG or the generation of HFC - 23 during the production of HCFC - 22. Facilities that produce fluorinated gases will be required to report their fluorinated GHG emissions from fluorin ated gas production, transformation, and destruction, as well as combustion - related CO 2, CH4, and nitrous oxide (N 2 O) emissions from stationary fuel combustion. Fluorinated gases include fluorinated GHGs (HFCs, PFCs, SF6, NF3, HFEs, etc.), CFCs, and HCFCs . However, emissions of HFC - 23 from HCFC - 22 production are addressed under subpart O and are therefore excluded from this subpart. Similarly, emissions of CFCs and HCFCs are addressed under the regulations implementing Title VI of the Clean Air Act and are therefore excluded from this subpart. 7.1.3 Subpart QQ
– Importing/Exporting of Pre - charged Equipment and Foams Affected entities under subpart QQ are defined as any entity that is an importer and/or exporter of pre - charged equipment or closed - cell foams that contain fluorinated GHGs. A variety of products containing fluorinated greenhouse gases (F - GHGs), nitrous oxide (N 2 O), and carbon dioxide (CO 2 ) are imported into and exported from the United States. Pre - charged equipment include s air- conditioning, refrigeration, and electrical equipment. Closed - cell foams that are imported and exported include polyurethane (PU) rigid foam used in insulation in domestic refrigerators and freezers,; commercial refrigeration foam,; PU rigid sandwich panel continuous and discontinuous foam; extruded polystryrene (XPS) sheet foam; and XPS boardstock foam. EPA is proposing to require reporting of these imports and exports. Importers and exporters of pre - charged equipment and closed - cell foams would b e subject to requirements similar to those for importers and exporters of bulk GHGs. In addition, equipment importers would be required to report the types and charge sizes of equipment and the number of pieces of each type of equipment that they importedor exported, while foam importers would be required to report the volume of foam and F - GHG density of the foam that they imported. As is true for importers and exporters of bulk F - GHGs, importers and exporters of equipment and foam would only be requiredto report if their total imports or exports exceeded the 25,000 mtCO2e threshold.7 - 3

7.1.4 Subpart SS
– Electrical Equipment and Components Manufacturing Affected entities under subpart SS are defined as electrical equipment manufacturer s and refurbishers of SF 6 - insulated closed - pressure system equipment and sealed - pressure system equipment including gas - insulated substations, circuit breakers, other switchgear, gas - insulated lines, or power transformers containing sulfur- hexafluoride (SF 6 ) or perfluorocarbons (PFCs). EPA is proposing to require reporting of SF6 and PFC emission from electrical equipment manufacturing and refurbishing using a mass - balance monitoring method comparable to the approach specified for subpart DD, Sulfur Hexaflu oride (SF6) and Perfluorocarbons (PFCs) from Electrical Equipment at an Electric Power System. Facilities covered under subpart SS would be required report annual emission report all SF 6and PFC emissions, including those from equipment testing, equipment manufacturing, and bulk SF 6and PFC handling. In addition, electrical equipment manufacturers would be required to submit supplemental data that includes: SF 6and PFCs with or inside equipment delivered to customers, SF 6and PFCs returned by customers with or inside equipment, bulk SF 6and PFC purchases, SF 6and PFCs sent off - site for destruction or to be recycled, SF 6and PFC returned from offsite after recycling, SF 6and PFCs stored in containers at the beginning and end of the year, SF 6and PFCs returned to suppliers. If applicable, facilities would also be required to report combustion - related CO 2, CH4, and nitrous oxide (N 2 O) emissions from stationary fuel combustion. EPA would only require emission reporting a facility’s total annual purchases of SF 6and PFCs are greater than 23,000 lbs. This reporting threshold is equivalent an emissions based threshold of 25,000 MtCO 2 e , assuming an average manufacturer emission rate of 10%. 7.2 Estimated Costs and Impacts of the Mandatory GHG Reporting Program The total national costs for the selected option are estimated to be $6.1 million in the first year and $3.9 million i n subsequent years ( $2006 ). This includes a public sector burden estimate of $384,000 for program implementation and verification activities. Subpart s bearing the greatest share of the ongoing private costs of the rule are fluorinated gas producers ( 60 %), and electronics industry (36%) . The average ongoing(subsequent year) private cost per metric ton varies by subpart ; me asures range from less than $0.01 per ton ( Subpart SS ) to $ 0 . 45 per ton ( Subpart I). The ongoing national cost estimates increase by approximately $1.5 million per year if the 23 large electronics facilities that participate in EPA’s PFC Reduction/Climate Partnership for the Semiconductor Industry use abatement devices and incur costs for verifying the DREs of these devices. The nationalcosts are distributed to severaleconomic sectors and represent approximately less than 0.01 % of 2008 gross domestic product; overall, EPA does not believe7 - 4

the rule will have a significant macroeconomic impact on the national economy or on small entities within those sectors.8 - 1 SECTION 8 REFERENCES Burton (2007). Assessing the need for FC abatement standards, Solid State Technology, January 2007. Available at: http://sst.p ennnet.com/display_article/281422/5/ARTCL/none/none/1/Assessing - the need - for- FC - abatement - standards/ U.S. Environmental Pro tection Agency (EPA). 2000. Guidelines for Preparing Economic Analyses . EPA 240 - R - 00 - 003. Washington, DC: EPA. Available at <http://yosemite.epa.gov/ee/epa/eed.nsf/webpages/Guidelines.html>. U.S. Environmental Protection Agency. 2009. U.S. Inventory of Greenhouse Gas Emissions and Sinks: 1990 - 2 007. U.S. Small Business Administration (SBA). 2008a. Firm Size Data from the Statistics of U.S. Businesses: U.S. Detail Employment Sizes: 2002. http://www.census.gov/csd/susb/download_susb02.htm. U.S. Small Business Administration (SBA). 2008b. Firm Size Data from the Statistics of U.S. Businesses: Dynamic Data by Births, Deaths, Growth, and Decline, U.S. Industry Data: 2003 - 2005. http://www.sba.gov/advo/research/data.html. U.S. Small Bus iness Administration (SBA). 2009 c. Table of Small Business Size Standards Matched to North American Industry Classification System Codes. Effective August 22, 2008 . http://www.sba.gov/services/contractingopportunities/sizestandardstopics/ size/index.html.