*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote or Release During Review***

JulyEO 12866_F-GHG Reporting RIN 2060-AQ00 NFRM EIA 20101101

November 2010 

Economic Impact Analysis for the 

Mandatory Reporting of 

Greenhouse Gas Emissions 

F-Gases: Subparts I, L, DD, QQ, SS

Final Report

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*** E.O. 12866 Review – Revised Version – Do Not Cite, Quote or Release During Review ***

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CONTENTS

Section 1 Introduction and Background ................................................................................ 1-1

1.1 Background .......................................................................................................... 1-1

1.2 Final Rule: Fluorinated Greenhouse Gas Subparts .............................................. 1-2

1.2.1 Subpart I: Electronics Manufacturing ..................................................... 1-3

1.2.2 Subpart L:Fluorinated Gas Production .................................................... 1-3

1.2.3 Subpart DD: Electric Transmission and Distribution Equipment 

Use ........................................................................................................... 1-3

1.2.4 Subpart QQ: Imports and Exports of Fluorinated GHGs in PreCharged Equipment and Closed-Cell Foams ........................................... 1-4

1.2.5 Subpart SS: Electrical Equipment Manufacture or Refurbishment 

and Manufacturing of Electrical Components ......................................... 1-4

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 Consideration of Comments Received ..................................................... 2-3

2.1.3 Analysis of Emissions by Sector.............................................................. 2-3

2.2 Statutory Authority .............................................................................................. 2-4

2.3 Existing Reporting Programs ............................................................................... 2-4

Section 3 Development of Subparts ....................................................................................... 3-1

3.1 Subpart I – Electronics Manufacturing ................................................................ 3-1

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3.1.1 Definition of Affected Entities ................................................................. 3-1

3.1.2 Summary of Major Changes Since Proposal ........................................... 3-2

3.1.3 Selection of Reporting Threshold ............................................................ 3-3

3.1.4 Selection of Monitoring Methods ............................................................ 3-4

3.1.5 Selection of Data Reporting Requirements.............................................. 3-8

3.1.6 Selection of Recordkeeping Requirements .............................................. 3-9

3.2 Subpart L – Fluorinated GHG Producers ............................................................. 3-9

3.2.1 Definition of Affected Entities ................................................................. 3-9

3.2.2 Summary of Changes Since the Initial Proposal .................................... 3-10

3.2.3 Selection of Reporting Threshold .......................................................... 3-11

3.2.4 Selection of Monitoring Methods .......................................................... 3-11

3.2.5 Selection of Data Reporting Requirements............................................ 3-12

3.2.6 Selection of Recordkeeping Requirements ............................................ 3-12

3.3 Subpart DD--Electric Transmission and Distribution Equipment Use .............. 3-13

3.3.1 Definition of Affected Entities ............................................................... 3-13

3.3.2 Summary of Changes Since Proposal .................................................... 3-13

3.4 Subpart QQ – Importing/Exporting of Pre-charged Equipment and Foams ...... 3-14

3.4.1 Definition of Affected Entities ............................................................... 3-14

3.4.2 Summary of Proposal ............................................................................. 3-14

3.4.3 Summary of Changes Since the Proposal .............................................. 3-15

3.4.4 Selection of Reporting Threshold .......................................................... 3-16

3.4.5 Selection of Monitoring Methods and QA/QC Requirements ............... 3-16

3.4.6 Selection of Data Reporting Requirements............................................ 3-16

3.4.7 Selection of Recordkeeping Requirements ............................................ 3-17

3.5 Subpart SS – Electrical Equipment and Components Manufacturing ............... 3-18

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3.5.1 Definition of Affected Entities ............................................................... 3-18

3.5.2 Summary of Changes Since Proposal .................................................... 3-19

3.5.3 Selection of Reporting Threshold .......................................................... 3-19

3.5.4 Selection of Monitoring Methods and QA/QC Requirements ............... 3-20

3.5.5 Selection of Data Reporting Requirements............................................ 3-20

3.5.6 Selection of Recordkeeping Requirements ............................................ 3-21

Section 4 Engineering Cost Analysis ..................................................................................... 4-1

4.1 Introduction .......................................................................................................... 4-1

4.2 Overview of Cost Analysis .................................................................................. 4-1

4.2.1 Baseline Reporting ................................................................................... 4-1

4.2.2 Reporting Costs ........................................................................................ 4-2

4.3 Cost Analysis for Subpart I – Electronics Manufacturers ................................... 4-5

4.3.1 Model Facility Development ................................................................... 4-5

4.3.2 Determination of Cost Elements .............................................................. 4-6

4.3.3 Proportion of Facilities in the Different Model Facility Levels .............. 4-8

4.3.4 Assigning Costs to Cost Elements ........................................................... 4-9

4.3.5 Estimation of Facility Costs for Each Threshold Level ......................... 4-16

4.4 Cost Analysis for Subpart L—Fluorinated Gas Production .............................. 4-16

4.4.1 Model Facility Development ................................................................. 4-16

4.4.2 Cost Analysis for Mass Balance Approach - Option 1 .......................... 4-17

4.4.3 Cost Analysis for Option 2- Process Vent Testing ................................ 4-19

4.4.4 Cost Analysis for Option 3- Typical Facility, Combination of 

Process Vent and Mass Balance ............................................................ 4-23

4.5 Cost Analysis for Subpart DD—Electric Power Systems ................................. 4-25

4.5.1 Model Facility Development ................................................................. 4-25

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4.5.2 Determine Cost Elements ...................................................................... 4-26

4.5.3 Proportion of Facilities in Different Model Facility Levels .................. 4-26

4.5.4 Assigning Costs to Cost Elements ......................................................... 4-26

4.5.5 Determine Labor Categories ..................................................................4.5.5 Estimate per Facility Costs for Each Thr

4.5.6 Estimate per Facility Costs for Each Threshold Level .........................................4.6 Cost Analysis for Subpart QQ—Imports

4.6 Cost Analysis for Subpart QQ—Imports and Exports of 

Fluorinated GHGs ..................................................................................4.6.1 Model Facility Development 4-29

4.6.1 Model Facility Development .................................................................4.6.2 Determine Cost Elements 4-30

4.6.2 Determine Cost Elements ......................................................................4.6.3 Analyze Proportion of Facilities in the D

4.6.3 Analyze Proportion of Facilities in the Different Model Facility 

Categories ..............................................................................................4.6.4 Assigning Costs to Cost Elements 4-

4.6.4 Assigning Costs to Cost Elements .........................................................4.6.5 Estimate per Facility Costs for Each Thr

4.6.5 Estimate per Facility Costs for Each Threshold Level .........................................4.7 Subpart SS—Electrical Equipment Man

4.6.6 Subpart SS—Electrical Equipment Manufacturing ...............................4.7.1 Model Facility Development 4-35

4.6.7 Other Costs.............................................................................................4.7.2 Determine Cost Elements 4-35

4.7 Public Sector Burden .............................................................................4.7.3 Analyze Proportion of Facilities in the D

Section 5 Economic Impact Analysis ................................................................4.7.4 Assigning Costs to Cost Elements 4-

5.1 Selection of Reporting Thresholds.........................................................4.7.5 Other Costs 4-40

5.1.1 Subpart I- Electronics Manufacturing ....................................................4.7.6 Estimate per Facility Costs for Each Thr

5.1.2 Subpart L- Fluorinated Gas Production ................................................................4.8 Public Sector Burden 4-40

5.1.3 Subpart DD- Sulfur Hexafluoride from Electric Power SystemsSection 5 Economic Impact Analysis 5-1

5.1.4 Subpart QQ- Imports and Exports of Fluorinated GHGs in Pre-Charged 

Equipment and Closed-Cell Foams ......................................................................5.1 Selection of Reporting Thresholds 5-

5.1.51 Subpart SS- Electrical Equipment Manufacture or Refurbishment 

andI- Electronics Manufacturing of Electrical Components ................... 5-1

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5.1.6 National Emissions Covered Under Selected Thresholds .....................5.1.2 Subpart L- Fluorinated Gas Production

5.2 National Cost Estimates .........................................................................5.1.3 Subpart DD- Sulfur Hexafluoride from 

5.3 Economic Impact Analysis ....................................................................5.1.4 Subpart QQ- Imports and Exports of Flu

5.3.1 Assessing Economic Impacts on Small Entities ....................................5.1.5 Subpart SS- Electrical Equipment Manu

Section 6 Statutory and Executive Order Reviews ............................................5.1.6 National Emissions Covered Under Sele

6.1 Executive Order 12866: Regulatory Planning and Review ..................................5.2 National Cost Estimates 5-8

6.2 Paperwork Reduction Act .....................................................................................5.3 Economic Impact Analysis 5-9

6.3 Regulatory Flexibility Act .....................................................................5.3.1 Overall Method of Assessing Economic

6.3.1 Identify Affected Sectors and Entities ...................................................5.3.2 Assessing Economic Impacts on Small E

6.3.2 Develop Small Entity Economic Impact MeasuresSection 6 Statutory and Executive Order Reviews 6-1

6.3.3 Results of Screening Analysis ..............................................................................6.1 Executive Order 12866: Regulatory Plan

6.4 Unfunded Mandates Reform Act ..........................................................................6.2 Paperwork Reduction Act 6-1

6.5 Executive Order 13132: Federalism .....................................................................6.3 Regulatory Flexibility Act 6-3

6.6 Executive Order 13175: Consultation and Coordination with 

Indian Tribal Governments ....................................................................6.3.1 Identify Affected Sectors and Entities

6.7 Executive Order 13045: Protection of Children from 

Environmental Health and Safety Risks ................................................6.3.2 Develop Small Entity Economic Impact

6.8 Executive Order 13211: Actions that Significantly Affect Energy 

Supply, Distribution, or Use ..................................................................6.3.3 Results of Screening Analysis 6-4

6.9 National Technology Transfer Advancement Act ................................................6.4 Unfunded Mandates Reform Act 6-

6.105Executive Order 12898: Federal Actions to Address Environmental Justice 

in Minority Populations and Low-Income Populations ............... 13132: Federalism 6-6

Section 7 Conclusions ....................................................................................................6.6 Executive Order 13175: Consultation an

7.1 Summary of Sectors Covered ...............................................................................6.7 Executive Order 13045: Protection of C

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7.1.1 Subpart I – Electronics Manufacturing .................................................................6.8 Executive Order 13211: Actions that Sig

7.1.2 Subpart L – Fluorinated GHG Producers ..............................................................6.9 National Technology Transfer Advance

7.1.3 Subpart DD: Electric Transmission and Distribution Equipment Use ...............6.10 Executive Order 12898: Federal Action

7.1.4 Subpart QQ – Importing/Exporting of Pre-charged Equipment and FoamsSection 7 Conclusions 7-1

7.1.5 Subpart SS – Electrical Equipment and Components Manufacturing ..................7.1 Summary of Sectors Covered 7-1

7.2 Estimated Costs and Impacts of the GHG Reporting Program ..............7.1.1 Subpart I – Electronics Manufacturing

Section 8 References ..........................................................................................7.1.2 Subpart L – Fluorinated GHG Producer

7.1.3 Subpart DD: Electric Transmission and Distribution Equipment 

Use ........................................................................................................... 7-2

7.1.4 Subpart QQ – Importing/Exporting of Pre-charged Equipment and 

Foams ....................................................................................................... 7-2

7.1.5 Subpart SS – Electrical Equipment and Components 

Manufacturing .......................................................................................... 7-3

7.2 Estimated Costs and Impacts of the GHG Reporting Program ............................ 7-3

Section 8 References .............................................................................................................. 8-1

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LIST OF TABLES

Table 4-1. Labor Categories and Hourly Rates ........................................................................ 4-4

Table 4-2. Number of Representative Affected Entities Used in the Cost Analysis ................ 4-9

Table -4-3. Labor Categories and Hourly Rates ...................................................................... 4-10

Table 4-4. Responsibilities for Regulation Compliance by Labor Category Per Facility 

Category ................................................................................................................ 4-11

Table 4-5 . Subpart L – F-Gas Mass Balance Approach: Labor Costs (2006$) ...................... 4-19

Table 4-6 . Subpart L – F-Gas Mass Balance Method: Capital and O&M Costs (2006$) ...... 4-19

Table 4-7 . Subpart L – F-Gas Process Vent (Avg. per plant basis): Labor Costs (2006$) .... 4-22

Table 4-8 . Subpart L – F-Gas Process Vent Method: Capital and O&M Costs (2006$) ....... 4-22

Table 4-9 . Subpart L – F-Gas Typical Facility: Labor Costs (2006$) ................................... 4-24

Table 4-10. Subpart L – F-Gas Typical Facility: Capital and O&M Costs (2006$) ................ 4-25

Table 4-11. Labor Categories and Hourly Rates ...................................................................... 4-27

Table 4-12. Responsibilities for Regulation Compliance by Labor Category ......................... 4-27

Table 4-13. ...................................... Other Costs Associated with Reporting and Recordkeeping 4-28

Table 4-14. Number of Representative Affected Entities Used in the Cost Analysis .............. 4-30

Table 4-15. Allocation of Facilities to Model Types ............................................................... 4-31

Table 4-16. Labor Categories and Hourly Rates ...................................................................... 4-31

Table 4-17. Responsibilities for Regulation Compliance by Labor Category ......................... 4-34

Table 4-18. Number of Representative Affected Entities Used in the Cost Analysis .............. 4-35

Table 4-19. Labor Categories and Hourly Rates ...................................................................... 4-37

Table 4-20. Responsibilities for Regulation Compliance by Labor Category Per Facility ...... 4-38

Table 4-21. Other Costs Associated with Reporting and Recordkeeping ................................ 4-40

Table 5-1. Number of Establishments by Affected Industry and Enterprisea Size: 2002 Table 5-1. Threshold Analysis for Subpart I – Elec

Table 5-2. Receipts by Affected Industry and Enterprisea Size ($2002 Million) ............ Table 5-2. Summary of Rule Applicability under th

Table 5-3. Establishment Sales Tests by Industry and Enterprisea Size: First Year CostsTable 5-3. Threshold Analysis for Fluorinated GHG

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Table 5-4. Establishment Sales Tests by Industry and Enterprisea Size: Subsequent Years 

Costs ............................................................................................................. Table 5-4. Threshold Analysis for Fluorinated GHG

Table 5-5. Threshold Analysis for Subpart DD – Electric Power Systems ............................. 5-6

Table 5-6. Threshold Analysis for Subpart QQ–Imports of Fluorinated GHGs in PreCharged Equipment and Closed-Cell Foams .......................................................... 5-6

Table 5-7. Threshold Analysis for Subpart QQ–Exports of Fluorinated GHGs in PreCharged Equipment and Closed-Cell Foams .......................................................... 5-7

Table 5-8. Threshold Analysis for Subpart SS– Electrical Equipment Manufacture or 

Refurbishment and Manufacturing of Electrical Components ............................... 5-7

Table 5-9. Estimates of Emissions (MtCO2e) Reported in 2008 Under the Selected 

Option ..................................................................................................................... 5-8

Table 5-10. National Cost Estimates by Subpart: Selected Option ............................................ 5-9

Table 5-11. Number of Establishments by Affected Industry and Enterprise Size: 2002 ....... 5-12

Table 5-12. Receipts by Affected Industry and Enterprisea Size ($2002 Million) .................. 5-14

Table 5-13. Establishment Sales Tests by Industry and Enterprisea Size: First Year Costs .... 5-17

Table 5-14. Establishment Sales Tests by Industry and Enterprisea Size: Subsequent 

Years Costs ........................................................................................................... 5-19

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SECTION 1

INTRODUCTION AND BACKGROUND 

1.1 Background 

On December 26, 2007, President Bush signed the FY2008 Consolidated Appropriations 

Act authorizing funding for EPA to issue a rule requiring the mandatory reporting of greenhouse 

gas (GHG) emissions (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 Final Mandatory Reporting of Greenhouse Gases Rule (Final MRR) (40 CFR part 

98) was signed on September 22, 2009 by Administrator Lisa Jackson; and published in the 

Federal Register on October 30, 2009 (74 FR 56260). 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 

Act1

. 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. 

EPA initially proposed reporting requirements for electronics, fluorinated GHG 

production, and electrical equipment use on April 12, 2009 (74 FR 16448) as part of the larger 

rulemaking effort to establish a GHG reporting program for all sectors of the economy. In 

addition, EPA requested comment on requiring reporting of the quantities of fluorinated GHGs 

imported and exported inside pre-charged equipment and foams. However, EPA did not include 

requirements for these source categories in the Final Mandatory GHG Reporting Rule. 

EPA deferred action on these requirements because EPA received a number of lengthy, 

detailed comments regarding the proposed requirements for electronics and fluorinated GHG 

production (subparts I and L, respectively), several comments regarding the definition of 

“facility” for electric power system use (Subpart DD), and several comments regarding a 

reporting requirement for imports and exports of fluorinated GHGs contained inside pre-charged 

equipment and foams (included in today’s final rule as Subpart QQ). These comments, which 

 

1

 Consolidated Appropriations Act, 2008, Public Law 110–161, 121 Stat. 1844, 2128. 
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are described in more detail in the discussions of the individual source categories in the April 12, 

2010 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 

fluorinated GHGs contained in imported and exported pre-charged equipment and closed-cell 

foams. 

EPA recognized the concerns raised by stakeholders, and decided to re-propose 

significant pieces of these subparts. The revised proposed rule was published in the Federal 

Register on April 12, 2010. A public hearing on the proposed rule was held on April 20, 2010 in 

Washington, DC, and the 60-day public comment period ended on June 11, 2010. 

For subparts I and L this rule incorporates a number of changes including, but not limited 

to, the addition of different methodologies that provide improved emissions coverage at a lower 

cost burden to facilities as compared to the initial April 2009 proposal. Where aspects of the 

initial proposals for subparts I and L are retained in this rule, such as in the basic mass-balance 

methodology for subpart L (as an option for some facilities) and in many of the equations for 

subpart I, today’s rule adds more flexibility in how and how frequently the underlying data are 

gathered. In addition, EPA is requiring facilities to report emissions from manufacture or 

refurbishment 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 required in this rule, 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 we stated in the October 2009 Final MRR, 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 Final Rule: Fluorinated Greenhouse Gas Subparts 

This rule requires reporting of fluorinated greenhouse gas (F-GHG) emissions from 

electronics manufacturing, production of fluorinated gases, and use of electric transmission and 

distribution equipment. EPA is also requiring 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, DD, QQ, and SS of the rule. This section 
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provides a brief introduction to the industries covered by each subpart and identifies which 

subparts were included in the initial proposal. 

1.2.1 Subpart I: Electronics Manufacturing 

The electronics manufacturing source category consists of facilities that manufacture 

semiconductors, liquid crystal displays (LCDs), micro-electro-mechanical systems (MEMS), 

photovoltaic cells (PV), and light-emitting diodes (LEDs).The 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 entities within the covered industries regarding the requirements put 

forth in the initial proposal. EPA took these comments into consideration in the development of 

this final rule. 

1.2.2 Subpart L:Fluorinated Gas Production 

The fluorinated gas production source category consists of processes that manufacture a 

fluorinated gas from any raw material or feedstock chemical, except for processes that generate 

HFC-23 during the production of HCFC-222

. Under the rule, these facilities would be required 

to report their fluorinated GHG emissions from fluorinated gas production, transformation, and 

destruction, as well as combustion-related CO2, CH4, and nitrous oxide (N2O) emissions from 

stationary fuel combustion. Fluorinated gases include fluorinated GHGs (HFCs, PFCs, SF6, 

NF3, HFEs, etc.), CFCs, and HCFCs. Similarly, emissions of CFCs and HCFCs (considered 

ozone depleting substances rather than F-GHG) 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, EPA has modified the rule with 

respect to entities under this subpart. 

1.2.3 Subpart DD: Electric Transmission and Distribution Equipment Use

The electric transmission and distribution equipment use source category includes gasinsulated substations, circuit breakers, other switchgear, and gas-insulated lines containing SF6 or 

 

2

 Since HFC-23 emissions for HCFC-22 production are addressed under Subpart O, they are omitted from this 

subpart. 
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PFCs. Equipment also includes gas containers such as pressurized cylinders, gas carts, new 

equipment owned but not yet installed, or other containers. Notwithstanding the definition of 

facility in subpart A, for purposes of this subpart, “facility” means an electric transmission and 

distribution system which is the collection of SF6- and PFC insulated equipment linked through 

electric power transmission or distribution lines and operated as an integrated unit by one electric 

power entity or several entities that have a single owner. 

Regulation of Subpart DD was proposed under the initial MRR, but was excluded after 

EPA received several comments regarding the definition of “facility” as it would be covered 

under the rule. After taking these comments under consideration, EPA has clarified the 

definition for this final rule. 

1.2.4 Subpart QQ: Imports and Exports of Fluorinated GHGs in Pre-Charged Equipment and Closed-Cell 

Foams 

This source category consists of any entity that is importing or exporting pre-charged 

equipment that contains a fluorinated GHG and also includes any entity that is importing or 

exporting closed-cell foams that contain a fluorinated GHG. 

Today’s rule introduces Subpart QQ as a new addition to the MRR. This source category 

was not proposed in the initial rule. 

1.2.5 Subpart SS: Electrical Equipment Manufacture or Refurbishment and Manufacturing of Electrical 

Components 

This source category consists of electrical equipment manufacturers and refurbishers of 

SF6 or PFC-insulated closed-pressure equipment and sealed-pressure equipment including gasinsulated substations, circuit breakers and other switchgear, gas-insulated lines, or power 

transformers containing sulfur-hexafluoride (SF6) or perfluorocarbons (PFCs).Like Subpart QQ, 

this source category was not covered under the initial MRR proposal and final rule. 

1.3 Economic Impact Analysis for F-Gas Subparts 

As part of the regulatory process of developing these rules, EPA is required to conduct 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 rules 

will be integrated. Section 3 explains the development process for each of the four subparts, and 

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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 Section 7. 
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SECTION 2

REGULATORY BACKGROUND 

The intent of this rule is to collect accurate and timely GHG emissions data that can be 

used to inform future 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, statutory authority, and summarize our review of 

GHG monitoring protocols below. 

2.1 EPA’s Overall Rulemaking Approach 

The greenhouse gas 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 greenhouse gas reporting system should be of sufficient quality to support a range of 

approaches. 

To these ends, we identified the following goals of the greenhouse gas 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 emission 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 and 

maintained an open door policy for those interested in discussing the rulemaking. Since January 

2008, EPA staff has held more than 100 meetings with stakeholders, including the following: 
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 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 provide 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, and the 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 conference 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-2008-0508-055. 

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 had an 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). Details of these meetings are available in the docket (EPA-HQ-OAR2008-0508). EPA also visited two fluorinated gas production facilities and conducted multiple 

meetings and conference calls with fluorinated gas producers in order to better understand the 

current practices and issues associated with measuring emissions of fluorinated GHGs from 

fluorinated gas production facilities. 
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2.1.2 Consideration of Comments Received 

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 number 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 precharged 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 precharged equipment and closed-cell foams. EPA recognized the concerns raised by stakeholders, 

and decided not to finalize subparts I, L, and DD with the Final MRR, but chose instead to repropose significant pieces of these subparts in April, 2010..

The re-proposed rule incorporated a number of changes including, but not limited to, 

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 

proposed requirements to report the quantities of fluorinated GHGs imported and exported inside 

pre-charged equipment and foams, and to report emissions from manufacture of electrical 

equipment, which are covered under Subparts QQ and SS. This rule was published in the 

Federal Register on April 12, 2010. During the 60-day comment period following the public 

hearing for the rule, EPA received further requests from commenters for clarification and 

revisions to certain aspects of the each subpart. EPA took these comments into account while 

developing today’s final rules for the F-gas subparts. 

2.1.3 Analysis of Emissions by Sector 

For each of the source categories considered for this rule, 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 capacity or 

throughput. Incremental costs of measuring GHG emissions and conducting reporting activities 

were estimated under multiples scenarios. The cost estimates and analysis methodologies are 

detailed in Sections 4 and 5 of this report. 
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2.2 Statutory Authority 

As proposed, EPA is promulgating this rule under its existing CAA authority; 

specifically, authorities provided in CAA section 114. As discussed in detail in Sections I.C and 

II.Q of the preamble to the final rule establishing the GHG Reporting Program (74 FR 56260, 

October 30, 2009), CAA section 114 provides EPA with broad authority to require information 

mandated by this rule, because such data will inform and are relevant to EPA’s carrying out a 

wide variety of CAA provisions. Under CAA section 114(a)(1), the Administrator may require 

emissions sources, persons subject to the CAA, or persons whom the Administrator believes may 

have necessary information to monitor and report emissions and provide such other information 

as the Administrator requests for the purposes of carrying out the provisions in the CAA (except 

for a provision of title II with respect to motor vehicles). 

As discussed in greater detail in “Mandatory Reporting of Greenhouse Gases, EPA’s 

Response to Public Comment’s Section 3- Legal Issues” (EPA-HQ-OAR-2008-0508), the CAA 

provides EPA with broad authority to require the comprehensive and accurate information 

mandated in this rule because such data will inform, and are relevant to, EPA’s analyses of 

various CAA provisions. EPA may gather information for a variety of purposes, including for 

the purpose of assisting in the development of implementation plans or of emissions standards 

under CAA section 111, determining compliance with implementation plans or such standards, 

or more broadly for “carrying out any provision” of the CAA. In addition, CAA section 103 

authorizes EPA to establish a national research and development program, including nonregulatory approaches and technologies for the prevention and control of air pollution as it 

relates to GHGs and climate change. 

2.3 Existing Reporting Programs 

In addition to the greenhouse gas 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 relevant 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 

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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 Partnership (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. 
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SECTION 3

DEVELOPMENT OF SUBPARTS 

The F-Gas source categories included in this rule are: 

 Subpart I -Electronics Manufacturing; 

 Subpart L - Fluorinated Gas Production; 

 Subpart DD – Electric Transmission and Distribution Equipment Use 

 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 required monitoring 

methods and data reporting and recordkeeping requirements. 

3.1 Subpart 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), microelectromechanical (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 (NF3), as well as nitrous oxide (N2O). This rule would apply to electronics 

manufacturing facilities that emit equal to or greater than 25,000 metric tons of CO2e per year3

from electronics manufacturing processes such as plasma etching, chemical vapor deposition, 

chamber cleaning, and heat transfer fluid use. 

 

3

 As 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. 
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In this action, EPA is designating methods to estimate emissions from cleaning and 

etching processes for semiconductor, LCD, MEMS, and PV manufacture and also methods for 

estimating N2O emissions from deposition and other manufacturing processes such as chamber 

cleaning. EPA is also clarifying methods for estimating emissions from heat transfer fluids. 

EPA is also presenting methods for reporting controlled emissions from abatement systems. 

3.1.2 Summary of Major Changes Since Proposal 

The April 2010 proposal included the following reporting provisions for electronics 

manufacturers: (1) a single emissions-based reporting threshold 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 N2O emissions; (4) 

clarified methods for estimating emissions from heat transfer fluids; and (5) revised methods for 

reporting controlled emissions from abatement equipment. 

After considering comments in response to the April 2010 proposal, EPA has further 

revised and clarified the regulations on the electronics manufacturing industry for today’s final 

rule. The changes to the rule include the following: 

 EPA has revised the methodology for semiconductor manufacturing facilities to 

require affected facilities4

 to estimate and report emissions from etching and cleaning 

using five process categorizations differentiated by two wafer technologies (150/200 

mm and 300 mm wafer size). 

 EPA has added a requirement for the largest semiconductor facilities (defined as 

facilities with annual capacities of greater than 10,500 m2

 of silicon) to estimate and 

report their emissions from the plasma etching process type using directly measured 

recipe-specific emission factors. (i.e. using an approach consistent with the 2006 

IPCC Tier 3 method). 

 EPA has modified the procedures by which facilities must develop gas 

consumption apportioning factors. Facilities are required to apportion gas 

consumption using facility-specific engineering models based on quantifiable metrics 

of fluorinated GHG-using activity and to document and verify these models, as 

specified by EPA, in site GHG Monitoring Plan (as required under 40 CFR 98.3). 

EPA will permit the use of facility-specific models based on quantifiable metrics, 

such as wafer pass or wafer starts, provided a facility acceptably documents and 

verifies the model. 

 

4

 Covers facilities that have emissions equal to or greater than 25,000 mtCO2e 
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 EPA has revised the requirement to recalculate gas- and facility-specific heel 

factors by requiring facilities to recalculate these factors if the trigger point for 

change out used to establish a gas- and facility-specific heel factors differs by more 

than 5 percent from the previous trigger point.

 EPA has added methods by which to calculate uptime and the DRE for a specific 

gas/categorization set. EPA has also modified how uptime is calculated by defining 

an “operational mode” for abatement systems. 

 EPA has further defined direct recipe-specific measurements (i.e., an approach 

based on the 2006 IPCC Tier 3 method) by adding definitions for “individual recipe” 

and “similar recipes.” 

 EPA has added provisions for the largest facilities to submit extension requests 

for only specific monitoring requirements and QA/QC standards demonstrating that it 

is not reasonable feasible to implement the use of a quantifiable indicator for 

apportioning gas to all etch processes and obtain directly measured emission factors 

for all etch processes at the facility. This extension request is in addition to 

permitting the use of BAMM through March 31, 2011. EPA does not anticipate 

approving extension requests beyond December 31, 2011 except in extreme 

circumstances which include safety, a requirement being technically infeasible or 

counter to other local, State or Federal regulations. 

 EPA has added provisions for facilities that manufacture LEDs to estimate and 

report their emissions using an approach based on two process types, plasma etching 

and chamber cleaning, and default emission factors (utilization and by-product 

formation rates). 

3.1.3 Selection of Reporting Threshold 

Under this rule, facilities that manufacture semiconductors, LCD, MEMS, and PV would 

be subject to an emissions-based threshold of 25,000 mtCO2e. Consistent with other sections of 

the Final MRR, for the purposes of determining whether a facility emits equal to or greater than a 

25,000 mtCO2e, 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 

offering 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 reporting 

emissions data are presented in sections 3.1.5 and 3.1.6 below. 

To determine whether a manufacturer falls above or below the 25,000 metric tons of 

CO2e threshold, EPA is requiring that semiconductor, MEMS, and LCD facilities use gas 

specific emission factors assuming 100% manufacturing capacity to calculate annual metric tons 

of emissions in CO2 equivalents. Because we understand that heat transfer fluids are widely used 
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within semiconductor manufacturing, EPA is requiring that semiconductor manufacturers add 

10% of total clean and etch emissions at a facility to their estimate. PV facilities must 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 CO2

equivalents. 

EPA is requiring an emissions estimating method that does not account for destruction by 

abatement equipment because actual emissions 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 CO2e threshold without the knowledge of the facility 

operators. When abatement equipment is used, electronics manufacturers often estimate their 

emissions using the manufacturer-supplied DRE 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. 

EPA is imposing 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 facility will be able to 

quickly determine whether they must report under this rule. 

3.1.4 Selection of Monitoring Methods 

Today’s rule specifies methods to monitor and estimate fluorinated GHG and N2O 

emissions from semiconductor, LCD, MEMS, and PV manufacture. The methods discussed 

below include the following: 

 estimating emissions from cleaning and etching processes; 

 estimating facility N2O emissions; 

 estimating emissions from heat transfer fluids; and 

 reporting controlled emissions from abatement systems. 

The methods described in this section are for estimating emissions that are required to be 

reported under this subpart. 

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3.1.4.1 GHG Emissions Calculations and Monitoring Overview 

To calculate fluorinated GHG and N2O emissions from electronics manufacturing 

facilities, reporters (i.e. covered facilities) must use the following methods, as appropriate.5

Fluorinated GHG emissions from electronics manufacturing production processes

ToAll electronics manufacturing facilities are required to calculate fluorinated GHG 

emissions, facilities must calculate from etch and clean processes by estimating emissions of 

eachinput fluorinated GHG at the facility following methods based on (1) gas 

consumption,GHGs and (2) of by-product fluorinated GHGGHGs. This is done by applying

utilization factors and by-product formation rates (factors (collectively referred to as “emission 

factors) as discussed” below.) to the consumption of each fluorinated GHG by each process type, 

process sub-type or recipe, as appropriate. The methods prescribed for use by different types of 

electronics manufacturing facilities differ in the values of these emission factors, the level of 

aggregation to which the factors are applied (process type, process sub-type, or recipe), and 

whether defaults or facility-specific factors are applied. 

Gas Consumption

Electronics manufacturing facilities must use the following methods to calculate and 

apportion gas consumption: 

 Gas consumption as calculated using the facility’s purchase records, 

disbursements, gas cylinder/container inventories, and gas- and facility-specific heel 

factors. 

 Gas consumption apportioning factors developed using facility-specific 

engineering models based on quantifiable metrics of fluorinated GHG-using activity. 

Fluorinated GHG Utilization and By-Product Formation Rates (Emission Factors)

Electronics manufacturing facilities must use the following methods for applying 

fluorinated GHG emission factors, as appropriate.

 

5

 Covered facilities are electronics manufacturing facilities that have emissions equal to or greater than 25,000 

mtCO2e. For electronics manufacturing, EPA is requiring that uncontrolled emissions be used for purposes of 

determining whether a facility’s emissions are equal to or greater than 25,000 mt CO2e. 

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3.1.4.2 F-GHG Emissions Estimation Methods – PV, LCD, MEM, and LED 

Manufacturing 

Facilities that manufacture PV, LCDs, MEMS, and LEDS are required to estimate their 

emissions using default emissions factors for two process types,: plasma etching and chamber 

cleaning. A facility may use directly measured recipe-specific emission factors in lieu of 

defaults only if the factors are measured in accordance with the 2006 ISMI Guidelines, 

International SEMATECH #06124825A-ENG, with limited exceptions.6

 A facility must use 

only default emission factors or only recipe-specific emission factors; the combined use of 

emission factor types within the same reporting year is not permitted. 

3.1.4.3 F-GHG Emissions Estimation Methods – Semiconductor Manufacturing 

Facilities that Fabricate Devices on Wafers Measuring 300 mm or less in Diameter 

Semiconductor manufacturing facilities that fabricate devices on wafers measuring 300 

mm or less in diameter and have an annual manufacturing capacity of less than or equal to 

10,500 m2

 silicon must estimate their emissions using default emissions factors for the following 

five categorizations. 

 process type plasma etching; 

 process category in-situ plasma chamber cleaning; 

 process category remote plasma chamber cleaning; 

 process category in-situ thermal chamber cleaning; and 

 process type wafer cleaning. 

This approach is hereinafter referred to as the “Tier 2c Method.” Semiconductor 

manufacturing facilities that fabricate devices on wafers measuring 300 mm or less in diameter 

and have an annual manufacturing capacity greater than 10,500 m2

 silicon must estimate their 

emissions using the five categorizations as defined for the Tier 2c method. However, instead of 

using default emission factors for the plasma etching process type, facilities must use directly 

measured recipe-specific emission factors. These facilities must use default emission factors for 

the following: 

 

6

 EPA is permitting facilities to use emission factors measured in accordance with the 2001 ISMI Guidelines 

provided the emissions factors were measured prior to January 1, 2007. Documentation for the measurements is 

required. 
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 process category in-situ plasma chamber cleaning; 

 process category remote plasma chamber cleaning; 

 process category in-situ thermal chamber cleaning; and 

 process type wafer cleaning. 

The following hybrid methodology is hereinafter referred to as the “Tier 2d Method.” A 

facility may use directly measured recipe-specific emission factors in lieu of chamber and wafer 

cleaning defaults only if the factors are measured in accordance with the 2006 ISMI Guidelines, 

International SEMATECH #06124825A-ENG, with limited exceptions.7

 A facility must use 

only default emission factors, or only recipe-specific emission factors for chamber and wafer 

cleaning; the combined use of emission factor types within the same reporting year is not 

permitted. 

3.1.4.4 F-GHG Estimation Methods—Semiconductor Facilities that Fabricate Devices 

ofon Wafers Measuring 300 mm or more in Diameter 

Semiconductor manufacturing facilities that fabricate devices on wafers measuring 

greater than 300 mm in diameter must estimate all of their emissions from plasma etching, 

chamber cleaning, and wafer cleaning using directly measured recipe-specific emission factors. 

Emission factors must be measured in accordance with the 2006 ISMI Guidelines, International 

SEMATECH #06124825A-ENG, with limited exceptions.8

 

3.1.4.5 Method for Estimating N2O Emissions 

Electronics manufacturing facilities must calculate emissions of N2O using: 

 Requirements for calculating and apportioning gas consumption as outlined above 

for “Fluorinated GHG emissions from electronics manufacturing production 

processes” 

 Manufacturing production process emission factors for chemical vapor deposition 

and other electronics manufacturing production processes. 

3.1.4.6 Method for Estimating Emissions of Heat Transfer Methods 

Electronics manufacturing facilities must calculate emissions from heat transfer fluids 

using a mass balance approach in which disbursements are properly accounted for according to 

procedures provided in 40 CFR part 98, subpart I. 

 

7

 See footnote 5. 

8

 See footnote 5. 

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3.1.4.7 Method for Reporting Controlled Emissions from Abatement Equipment 

Electronics manufacturing facilities that wish to document and report controlled 

fluorinated GHG and N2O emissions from abatement systems must certify that that abatement 

system is installed, operated, and maintained in accordance with the manufacturers’ 

specifications, as well as account for uptime of abatement systems. Facilities must calculate 

controlled emissions using either: 

 Destruction or removal efficiencies based on a default value of 60%. Under this 

approach, certification that the abatement system is specifically designed for 

fluorinated GHG and N2O abatement is required; or 

 EPA’s Random Sampling Abatement System Testing Program (RSASTP) to 

measure destruction or removal efficiencies using EPA’s Protocol for Measuring 

Destruction or Removal Efficiency of Fluorinated Greenhouse Gas Abatement 

Equipment in Electronics Manufacturing, Version 1, EPA 430-R-10-003. 

3.1.5 Selection of Data Reporting Requirements 

Owners and operators would be required to report fluorinated GHG and N2O emissions 

for the facility for all plasma etching, chemical vapor deposition, chamber cleaning, and wafer 

cleaning processes as well as all heat transfer fluid 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 N2O; 

production in terms of substrate surface area (e.g., silicon, PV-cell, LCD); for each fluorinated 

GHG and N2O, annual gas consumed during the reporting year and gas-and facility-specific heel 

factors used; the apportioning factors used, a description of the engineering model 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 records9

; 

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 N2O 

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. 

 

9

 Note that covered facilities are required to report all F-GHG consumption, including F-GHG that are consumed in 

processes for other than those for which emissions must be reported. 
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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 measured DRE. 

These data form the basis of the calculations and are needed for EPA to understand the 

reported emissions and verify their reasonableness. 

3.1.6 Selection of Recordkeeping Requirements 

EPA is requiring 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 are reporting controlled emissions, EPA requests that 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 uptime; abatement system calibration and 

maintenance records; required documentation to use either the EPA default DRE value or a 

properly measured DRE; and dated certification by the technician who makes the measurement 

that the destruction or removal efficiency is calculated in accordance with the methods in EPA 

430-R-10-003. 

These records consist of values that are directly used to calculate the emissions that are 

reported and are necessary to enable verification that the GHG emissions monitoring and 

calculations are done correctly. 

3.2 Subpart L – Fluorinated GHG Producers 

3.2.1 Definition of Affected Entities 

An affected entity under subpart L is 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, SF6, NF3, and HFEs) and 

chlorofluorocarbons (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. 
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Facilities that produce fluorinated gases will be required to report their fluorinated GHG 

emissions from fluorinated gas production, transformation, venting, and destruction, as well as 

combustion-related CO2, CH4, and nitrous oxide (N2O) 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. 

3.2.2 Summary of Changes Since the Initial Proposal 

The proposal published in the Federal Registry in April of 2010, included revisions to 

several of the provisions in the initial proposed subpart L (April 2009). The subsequent 

comment period provided commenters an opportunity to respond to the new proposal. Today’s 

final rule reflects EPA’s consideration of the concerns raised during this comment period. 

Today’s Subpart L rule incorporates a number of changes since the previous proposal 

including, but not limited to, the following: 

 EPA has clarified when and how the scoping test must be performed. 

 EPA has added more flexibility to the mass-balance approach in order to: allow 

use of the mass-balance approach with process that do not produce fluorinated GHGs 

but may emit them (e.g., process wafers that transform fluorinated GHGs); and 

incorporate process variability into the error calculation. 

 EPA has added more flexibility to the emission factor approach by: 

– Changing the method for determining whether the emissions of a process fall 

below the 10,000 mtCO2e cutoff that allows the use of engineering calculations 

rather than stack testing. 

– Providing an additional two months to develop emission factors and emission 

calculation factors.

– Allowing use of engineering calculations or assessments with all batch 

processes, regardless of emissions, as long as a field verification of major 

emissions events are conducted. 

– Allowing emissions testing after the control device if the vent is controlled 

and annual emissions bypassing (i.e., not vented to) the control device are less 

than 10,000 mtCO2e. 

– Expanding the set of test methods that can be used for emissions testing to 

include industry standard sampling and analytical methods that have been 

validated using EPA Method 301 or other validation methods. 
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– Expanding the set of methods that can be used for quantifying emissions from 

equipment leaks. 

– For purposes of quantifying emissions from equipment leaks, defining “in 

fluorinated GHG service” as containing or contacting a feedstock, byproduct, or 

product that contains 5 percent or more total fluorinated GHG by weight. 

– AddingEPA is adding a requirement to monitor and report fluorinated GHG 

emissions from containers when the residual fluorinated GHG (heel) is vented to the 

atmosphere rather than recaptured and reused or destroyed. 

 EPA has also added a one-time requirement to report data and analysis regarding

the formation of products of incomplete combustion (PICs) that are fluorinated GHGs 

during the destruction of fluorinated gases.

 EPA is limiting the proposed BAMM provision to allow fluorinated gas 

production facilities to use BAMM through June 20, 2011 without submitting a 

request to EPA. In the proposal, facilities would have been allowed to use BAMM 

only through March 31, 2011 without submitting a request.

3.2.3 Selection of Reporting Threshold 

Under the 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 allowing 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 than 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 first year capital expenditures, please refer to section 4. 

3.2.4 Selection of Monitoring Methods 

EPA is allowing 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 of the April, 2009 proposal, as well as 

that included in the April, 2010 proposal, but has 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. 

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Facilities that produce fluorinated gases must perform an initial survey of the F-GHGs 

present in emissions from processes that would emit more than two metric tons per year of FGHGs 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. 

3.2.5 Selection of Data Reporting Requirements 

Under the rule, owners and operators of facilities producing fluorinated GHGs would be 

required to report both their fluorinated GHG emissions and the quantities used 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). For the emission factor 

and emission calculation factor approach, data to be reported includes the process activity used 

to calculate emissions (e.g., the tons of product produced or tons of reactant consumed) and the 

emission factors used to estimate them. Owners and operators must also report the mass of each 

fluorinated GHG gas emitted, including the mass of each fluorinated GHG emitted from 

equipment leaks. 

Where fluorinated gas production 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. 

3.2.6 Selection 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 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 calculations, 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. 
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3.3 Subpart DD--Electric Transmission and Distribution Equipment Use

3.3.1 Definition of Affected Entities 

The electric transmission and distribution equipment use source category includes gasinsulated substations, circuit breakers, other switchgear, and gas-insulated lines containing SF6 

or PFCs. Equipment also includes gas containers such as pressurized cylinders, gas carts, new 

equipment owned but not yet installed, or other containers. Notwithstanding the definition of 

facility in subpart A, for purposes of this subpart, “facility” means an electric transmission and 

distribution system which is the collection of SF6- and PFC insulated equipment linked through 

electric power transmission or distribution lines and operated as an integrated unit by one electric 

power entity or several entities that have a single owner. 

Reporting by the electric transmission and distribution system is comprised of the 

system-wide collection of gas-insulated equipment located between the point of generation or the 

point at which electricity is obtained from a different power entity and the point at which the 

customer or another electric power entity receives the electricity, and must be based on the 

aggregation of emissions of all servicing inventory and equipment. All individual pieces of 

equipment that are located within the system are included regardless of ownership. 

EPA defines an electric power entity as a company; an electric cooperative; a public 

electric supply corporation as the Tennessee Valley Authority; a similar Federal department or 

agency such as the Bonneville Power Administration; the Bureau of Reclamation or the Corps of 

Engineers; a municipally owned electric department offering service to the public; or an electric 

public utility district (a ‘‘PUD’’); also a jointly owned electric supply project such as the 

Keystone. 

3.3.2 Summary of Changes Since Proposal 

While Subpart DD remains largely unchanged from the initial proposal, EPA has made a 

few modifications after receiving several comments regarding the source category definition and 

the rule requirements. In the final rule, EPA is clarifying that “operators” refers to operators of 

the collection of system assets including SF6 equipment and not operators of Electric Systems, 

whose responsibility is to monitor and control electricity in that system in real time. EPA is also 

clarifying that system boundaries are specific to delivery to the customer or another electric 

power system. EPA is also requiring scale recalibration is accordance with manufacturer 
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specifications or every three years, whichever is sooner, and that the scales are required to be 

accurate with +/- 2 pounds of the scale’s capacity. Finally, EPA is including costs of reporting 

requirements ( $1,700 in reporting costs for each facility) which had inadvertently been omitted 

from the proposal RIA. 

With the exception of the updates discussed in the previous paragraph, the requirements 

for entities covered under Subpart DD are identical to those described in the proposed MRR 

((see docket # EPA-HQ-OAR-2008-0508). 

3.4 Subpart QQ – Importing/Exporting of Pre-charged Equipment and Foams 

3.4.1 Definition of Affected Entities 

This source category consists of any entity that is importing or exporting pre-charged 

equipment that contains a fluorinated GHG and also consists of any entity that that is importing 

or exporting closed-cell foams that contain a fluorinated GHG. A variety of products containing 

fluorinated greenhouse gases (F-GHGs), nitrous oxide (N2O), and carbon dioxide (CO2) are 

imported into and exported from the United States. Pre-charged equipment includes airconditioning, 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. 

3.4.2 Summary of Proposal 

In the April 2009 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 SF6 contained 

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. 
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After carefully considering the comments and available information on imports and 

exports of F-GHGs inside pre-charged equipment and foams, EPA proposed to require reporting 

of these imports and exports in the revised April 2010 proposal. Importers and exporters of precharged equipment and closed-cell 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 only be 

required to report if their total imports or exports exceeded the 25,000 mtCO2e threshold. 

3.4.3 Summary of Changes Since the Proposal 

Following the comment period on the April 2010 proposal, EPA has modified the 

regulations on Subpart QQ for today’s final rule. The definition of closed-cell foams was revised 

to only include closed-cell foams that are used to insulate equipment or other articles. EPA’s 

original analysis of this source category identified imports and exports of closed-cell foams used 

to insulate, such as foams used in refrigeration equipment, as a significant source of fluorinated 

GHGs. In conversation with industry representatives, EPA learned that closed-cell foams are 

sometimes used in general packaging. EPA never intended to include these sources. Packaging 

foams are widely used when shipping materials, and EPA anticipates it would be too 

burdensome for entities to ascertain the type of packaging foam and the blowing agent used in 

that foam when shipping materials. 

3.4.3 Summary of Changes Since the Proposal

Following the comment period on the April 2010 proposal, EPA has modified the 

regulations on Subpart QQ for today’s final rule. The changes to Subpart QQ are as follows:

 EPA has revised the reporting requirements for closed-cell foams such that, in 

cases where the importer or exporter does not know the identity and amount of 

fluorinated GHGs inside the closed-cell foam, they can report the amount of 

fluorinated GHGS imported or exported on a Co2e basis, based on information from 

the manufacturer.

 EPA has revised the definition of closed-cell foams to exclude packaging foam. 
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 EPA has revised the requirements for importers such that the port of entry and 

country of origin are no longer listed under data reporting requirements. These two 

data elements are now listed under recordkeeping requirements. 

 EPA has revised the requirement for exporters such that the port of exit and 

countries to which items were exported are no longer listed under data reporting 

requirements. These are two data elements are now listed under recordkeeping 

requirements. 

 EPA has clarified that importers and exporters must report the number of pieces 

of pre-charge equipment and closed-cell foam imported with each unique 

combination of charge size and charge type. Importers and exporters cannot report 

the average charge size or most common fluorinated GHG used for a particular type 

of equipment.

3.4.4 Selection of Reporting Threshold 

Under the final rule, EPA is requiring that importers and exporters of F-GHGs contained 

in pre-charged equipment and closed cell foams report their fluorinated GHG emissions if either 

their total imports or their total exports, in equipment, foams, and in bulk, exceed 25,000 mtCO2e 

per year. This threshold is the same as that for bulk imports and exports. 

3.4.5 Selection of Monitoring Methods and QA/QC Requirements 

EPA is requiring 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. 

3.4.6 Selection of Data Reporting Requirements 

Under the rule, EPA will require importers and exporters of pre-charged equipment and 

closed cell foams to report the following: 

(1) The total mass in metric tons of each fluorinated GHG imported or exported in precharged equipment or closed-cell foams. 
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(2) For each type of pre-charged equipment, the identity of the fluorinated GHG used as 

a refrigerant or electrical insulator, charge size (holding charge10, 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 the foam, 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 density of 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) Ports 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 collecting 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. 

3.4.7 Selection of Recordkeeping Requirements 

EPA is requiring 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 or export; 

(2) the invoice for the import or export; and 

(3) for imports, the U.S. Customs entry form. 

Persons who transship pre-charged equipment and closed cell foams containing 

fluorinated GHGs must maintain records that indicate that the pre-charged equipment or foam 

 

10 This refers to any holding charge consisting of a fluorinated GHG. Holding charges consisting of other gases, 

such as nitrogen, are not included. 
3-18 

originated in a foreign country and did not enter into commerce in the United States. This 

information is necessary to verify submitted information. 

3.5 Subpart SS – Electrical Equipment and Components Manufacturing 

3.5.1 Definition of Affected Entities 

Affected entities under subpart SS are defined as electrical equipment manufacturers of 

SF6-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 (SF6) or perfluorocarbons (PFCs). 

 Electrical equipment manufacturers purchase bulk SF6 gas 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 SF6 from equipment 

manufacturers typically occur during the manufacturing of equipment but can also occur during 

the other uses of SF6 at manufacturing facilities. 

While EPA believes that SF6 represents the majority of emissions from this source 

category, manufacturers may also use PFCs as dielectrics and heat transfer fluids in power 

transformers. For example the PFC perfluorohexane (C6F14) 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 SF6 from 

electrical equipment manufacturers was estimated to be 0.81 million metric tons CO2e in 2006. 

EPA is requiring reporting from electrical equipment manufacture and refurbishment facilities 

because these operations represent a significant source, approximately 5% of SF6 emissions. It is 

estimated that ten equipment manufacturers were responsible for these emissions. 

EPA is also including emissions of PFCs emitted during the manufacture or 

refurbishment 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 refurbishers of 

SF6 or PFC-insulated closed-pressure system equipment and sealed-pressure system equipment 
3-19 

including gas-insulated substations, circuit breakers, other switchgear, gas-insulated lines, or 

power transformers containing sulfur-hexafluoride (SF6) or perfluorocarbons (PFCs). 

3.5.2 Summary of Changes Since Proposal 

The major changes in this rule since the proposal are identified in the following list. 

 Scale recalibration is required in accordance with manufacturer specifications or 

once every three years, whichever is sooner. 

 Scales are required to be accurate within +/- 2 pounds of the scale’s capacity. 

 EPA is allowing use of a statistically representative value for emissions 

downstream of the flowmeter measuring the mass of SF6 being transferred from the 

storage container to the equipment being filled. The statistically representative value 

must be based on a statistically representative sample size for each combination of 

hose and valve of a given sized diameter. 

 To increase flexibility, EPA is providing an additional option for determining the

mass of SF6 or the PFCs disbursed to customers in new equipment. EPA is allowing 

the equipment’s nameplate capacity or, in cases where equipment is shipped with a 

partial charge, the equipment’s partial shipping charge to be assumed as equal to the 

disbursement.

 The quantity of gas charged in to delivered equipment and added during 

installation by the manufacturer must be certified by the manufacturer and expressed 

in pounds of SF6 or PFC. 

 The electrical equipment manufacturer must estimate the annual SF6 and PFC 

emissions from the equipment being installed on the electric power system’s 

premises, only when the title of the equipment has not yet been transferred, using an 

equipment installation mass balance equation. 

3.5.3 Selection of Reporting Threshold 

EPA is requiring electrical equipment manufacturers to report their SF6 and PFC 

emissions if their total annual purchases of SF6 and PFCs exceed 23,000 lbs. This consumptionbased threshold is equivalent to an emissions-based threshold of 25,000 mtCO2e, assuming an 

average manufacturer emission rate of 10%. 
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3.5.4 Selection of Monitoring Methods and QA/QC Requirements 

In developing the approach, EPA reviewed 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 emission 

factors, 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 monitoring methods for calculating SF6 and PFC emissions from electrical 

equipment manufacturing and refurbishment are similar to the methodologies described in the 

2006 IPCC Guidelines Tier 3 methods for emissions from electrical equipment manufacturing. 

EPA is requiring that all SF6 and PFC emissions be reported, including those from 

equipment testing, manufacturing, decommissioning and disposal, refurbishing, and from storage 

cylinders, as well as combustion-related CO2, CH4, and nitrous oxide (N2O) emissions from 

stationary fuel combustion. The Tier 3 approach is being used because it is the most accurate 

and it is feasible for all equipment manufacturers to conduct the mass balance analysis for SF6

and PFCs using readily available information. 

A comparable mass-balance approach is used for subpart DD Sulfur Hexafluoride (SF6) 

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 

SF6 and PFCs during the reporting year. The quantities of SF6 and PFCs that cannot be 

accounted for are assumed to have been emitted to the atmosphere. The emissions of SF6 and 

PFCs must be estimated and reported separately. All quantities required to calculate the massbalance equations for this subpart must be measured using scales or flow meters that are certified 

with an accuracy and precision within two pounds of the scale’s capacity. 

In addition, EPA will require that electrical equipment manufacturers 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 and equipment purchases or 

sales, and documentation of recycling and destruction. The records that are being requested are 

the minimum needed to reproduce and confirm emission calculations. 

3.5.5 Selection of Data Reporting Requirements 

EPA is requiring annual reporting for the electrical equipment manufacturing and 

refurbishing industry. Equipment manufacturers would report all SF6 and PFC emissions, 

including those from equipment testing, equipment manufacturing, and bulk SF6 and PFC 

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handling. However, the emissions would not need to be broken down and reported separately for 

testing, manufacturing, or bulk SF6 and PFC handling. Along with their emissions, electrical 

equipment manufacturers will be required to submit the following supplemental data: SF6 and 

PFCs with or inside equipment delivered to customers, SF6 and PFCs returned by customers with 

or inside equipment, bulk SF6 and PFC purchases, SF6 and PFCs sent off-site for destruction or 

to be recycled, SF6 and PFC returned from offsite after recycling, SF6 and PFCs stored in 

containers at the beginning and end of the year, and SF6 and PFCs returned to suppliers. 

Facilities must also report a description of the engineering methods and calculations used to 

determine emissions from hoses or other flow lines that connect the container to the equipment 

that is being filled. 

These data must 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. 

3.5.6 Selection of Recordkeeping Requirements 

In this action, EPA is requiring that electrical equipment manufacturers be required to 

keep records documenting (1) their adherence to the QA/QC requirements specified in the rule, 

and (2) the data that would be included in their emission reports, as specified above. Facilities 

must also keep check-out and weigh-in sheets and procedures for cylinders, documentation of 

residual gas amounts in cylinders sent back to suppliers, and invoices for gas purchases and 

sales.
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SECTION 4

ENGINEERING COST ANALYSIS 

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 characterize 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 overview 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 operating 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 

approaches 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 there will be additional costs for any sampling 

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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 used for each subpart used to compile, document, and 

calculate per unit reporting costs. 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 costs developed for each subpart used 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 subsequent 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 analysis. 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 wage 

rates calculated for different labor categories included the employer costs for employee 
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compensation (comprising the basic wages and the corresponding benefits) and the overhead 

costs to the employer.

11

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). 

The benefits 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) used 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 to be 0.17. 

The loaded labor rates for the four labor categories that are used in the cost analysis for 

each subpart covered under this rule and are also reported in the appropriate sectors labor cost 

tables in the following sections. 

 

1111For 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 by the 

employee to effectively fulfill his/her job responsibilities. These costs are over and above the employee compensation costs.

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Table 4-1. 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/hour 

Technical Conducts monitoring of emissions 

sources, checks for 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 

require capital 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 estimation method 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 

subparts. 

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. 

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4.3 Cost Analysis for Subpart I – Electronics Manufacturers 

4.3.1 Model Facility Development

This analysis is based on the costs of monitoring fluorinated greenhouse gas (F-GHG) 

and nitrous oxide (N2O) emissions from electronics manufacturing facilities. Electronics 

manufacturing facilities were broken into three categories; non-semiconductor electronics (3 

facilities), large semiconductor (29 facilities), and non-large semiconductor (62 facilities).12,13 

Non-semiconductor electronics includes facilities that manufacture micro-electromechanical 

systems (MEMS), liquid crystal displays (LCDs), and photovoltaics (PV). 

Through industry comments and the PFC Reduction/Climate Partnership for 

Semiconductors, the EPA has improved its understanding of semiconductor facilities and their 

emissions and has assigned a method of compliance to each electronics manufacturing facility 

category. For cost estimates, non-semiconductor facilities were assigned to use the “Tier 2b 

Method” based on IPCC’s Tier 2b two process categories (chamber cleaning and plasma etching) 

in order to comply with Subpart I. Non-large semiconductor facilities were assigned to use the 

“Tier 2c Method” defining the following five process categories and default emission factors: (1) 

chamber cleaning – in situ plasma; (2) chamber cleaning – remote plasma; (3) chamber cleaning 

– in-situ thermal; (4) plasma etching; and (5) wafer cleans. The largest semiconductor facilities 

were assigned to use the “Tier 2d Method” which is identical to the “Tier 2c Method” for all 

facility process categories except plasma etching, which requires directly measured recipespecific emission factors similar to the 2006 IPCC Tier 3 methodology.14 Annual costs differ for 

each of the three electronics manufacturing categories because they are subject to different 

requirements, as detailed below under “Monitoring Costs”. In addition, MEMS, LCD, and 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 a “small” semiconductor facility and scaling these 

costs to account for the use of a smaller set of gases.15

 

1212 Number of facilities based on Semiconductor Equipment and Materials Industry (SEMI). July 2007. World Fab Forecast. 

http://www.semi.org/en/index.htm and does not include LED facilities. 

1313 The distinction between large and small semiconductor facilities is based on the facility’s manufacturing capacity and the 

wafer size the facility manufactures. 

14 14 Plasma etching emission factors must be measured in accordance with the 2006 ISMI Guidelines, International 

SEMATECH #06124825A-ENG, with limited exemptions. 

1515 In its initial 2009 proposal for electronics manufacture, EPA defined “small” semiconductor facilities as those facilities with 

annual capacities less than 10,500 m2 silicon (147 facilities out of 175 total facilities). In the initial proposal, those facilities 

were required to estimate their emissions using an approach based on the IPCC Tier 2b method.

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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 and N2O emissions. 

As previously mentioned costs for collecting activity data differ depending on the facility 

category (large semiconductor, non-large semiconductor, or other electronics manufacturing). 

Using the “Tier 2b Method” non-semiconductor facilities are required to estimate 

emissions using (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 IPCC’s Tier 2b two process categories (clean and etch), (3) updated 

Tier 2b default emissions factors, and (4) either EPA published default DRE value or properly 

measured DRE where appropriate. 

Non-large semiconductor facilities assigned to the “Tier 2c Method” would be required to 

use an approach for estimating emissions which includes the following components: (1) gas 

consumption as calculated using the facility’s purchase records, inventory, and gas-and facilityspecific heel factors, (2) facility specific methods for apportioning gas usage by five process 

categories, (3) default emission factors (including factors for by-products) based on five process 

categories, and (4) either EPA published default destruction or removal efficiency (DRE) value 

or properly measured DRE where appropriate. Facilities could either use emission factors 

provided by EPA or develop/acquire facility-specific emissions factors from process equipment 

manufacturers. In addition, facilities that have monitoring infrastructure or the necessary data to 

estimate emissions obtained through recipe-specific measurements would be permitted to do so. 

The costs presented in this analysis reflect the use of default emission factors and EPA published 

DRE values. 

Under the “Tier 2d Method” the largest semiconductor facilities were assigned 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 five process categories (3) default emission 

factors (including factors for by-products) based on four process categories and directly 

measured emission factors for the etching process, and (4) either EPA published default 

destruction or removal efficiency (DRE) value or properly measured DRE. Similar to the “Tier 

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2c Method”, facilities can use either default emission factors or developed emission factors for 

the four non-etch processes, however the facility must measure and develop recipe-specific 

emission factors for all etch processes. The cost analysis reflects using default factors for the 

non-etch processes and the cost to measure and develop emission factors for etch processes. Due 

to the complex nature of apportioning gas in a large semiconductor facility, EPA has added 

software costs to account for the challenge of apportioning gases to etch processes. 

Annual costs to report controlled emissions from abatement systems. 

Under the final rule, any facility that wishes to reflect abatement of F-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. Facility costs incurred for assuring abatement 

systems are properly installed, operated, maintained, and reported, and accounting for uptime 

have been included for large facility categories in this cost analysis.16 However, because DRE 

measurements are optional, the EPA’s estimated costs for performing DRE testing was not 

included for any facility category in this cost analysis. 

Collection of data for estimating heat transfer fluid (HTF) emissions. 

In the proposed rule, electronics manufacturing facilities that use heat transfer fluids were 

required to account for emissions from use of heat transfer fluids using a mass-balance approach. 

EPA understands heat transfer fluids are widely used within semiconductor manufacturing; 

however, EPA is uncertain about heat transfer fluid use in other electronics manufacturing 

facilities. For this reason, costs associated with emissions from heat transfer fluids were 

conservatively included in all electronics manufacturing categories. The mass-balance 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 costs ($1,700 per entity) were added to 

each facility. These costs are in line with other source categories and include labor hours 

for technical, managerial, and administrative staff.

Reporting costs. The following types of reporting costs were identified: 

 

16 Facility costs incurred for assuring abatement systems are properly installed, operated, maintained, and reported, 

and accounting for uptime are based on 32 technical labor hours. This cost is only included for large 

semiconductor facilities based on SIA’s comments that 29 facilities would incur abatement compliance costs. 
4-8 

Reporting F-GHG emission estimate. 

Electronics manufacturing facilities will be required to complete and submit companyspecific annual reports. Costs associated with reporting activity data were included for all 

categories. Facilities that employ abatement systems and wish to reflect the emission reductions 

due to these systems in their emissions estimates will need to provide certification that the 

system is installed, operated, and maintained in accordance with manufacturers’ specifications in 

their annual reports.5

 This certification process also includes an annual assessment of the 

equipment uptime. It is assumed there are no other costs associated with using default DRE 

values. 

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. As previously stated, direct DRE measurements are 

optional, therefore reporting costs for DRE testing were not included in the cost analysis for any 

of the electronics manufacturing categories. 

Reporting heat transfer fluid emissions estimate. 

Electronics manufacturing facilities are required to complete and submit data-reporting 

forms. EPA has included costs for reporting heat transfer fluid emissions from all facilities 

because EPA is uncertain about whether LCD, PV, and MEMS manufacturing facilities use heat 

transfer fluids. 

4.3.3 Proportion of Facilities in the Different Model Facility Levels 

Semiconductor, MEMS, PV, and LCD facilities would determine whether they exceed 

the emissions-based threshold using IPCC Tier 1 emission factors and assuming no abatement. 

For PV facilities, annual emissions would be estimated by multiplying annual F-GHG 

consumption by the appropriate GWP factor. For semiconductor facilities, 91 out of 175 entities 

exceed the 25,000 mtCO2e threshold which includes 96 percent of total semiconductor 

emissions. For MEMS facilities, the 25,000 mtCO2e threshold includes two out of 12 entities 

and includes 66 percent of total MEMS emissions. For LCD facilities, no entities exceed the 

25,000 mtCO2e threshold. Only one PV facility is included in the 25,000 mtCO2e threshold 

which includes 47 percent of total PV emissions. The number of each type of facility that EPA 

estimates will meet the 25,000 mtCO2e threshold and required to report is identified in Table 4-2. 
4-9 

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 (legal, managerial, technical and clerical) and associated labor rates presented in Table 

4-3. EPA assigns responsibilities to each labor category to estimate labor hours. Finally, EPA 

estimates the annualized 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 monitoring, but also to determine who will perform 

each task. 

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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/hour 

Technical Conducts monitoring of emissions 

sources, checks for accuracy, 

performs measurements. 

$55.20/hour 

Clerical Assists with documentation and 

recording information 

$29.65/hour 

Allocate Responsibilities and Estimate Labor Hours. 

Labor hours for all categories (large and non-large semiconductor and other electronics 

facilities) were estimated using IPCC’s Tier 2b method from the initial proposed method for 

small semiconductor facilities and industry comments. EPA, drawing on its experience with 

semiconductor facilities voluntarily reporting emission via its sector Partnership, estimated the 

labor hours borne by non-large semiconductor facilities using IPCC’s Tier 2b method and 

scaling the hours to represent 5 process categories. Large semiconductor facility burden hours 

were also based on scaling IPCC’s Tier 2b method to four process categories (which account for 

70 percent of all facility processes) and adding IPCC’s Tier 3 method for the etching process (30 

percent of all facility processes). The burden hours and costs borne by other electronics 

manufacturers were estimated using cost estimates from EPA’s initial proposal for a small 

semiconductor facility and scaling these costs down to account for the use of a smaller set of 

gases, as these facilities use fewer types of PFCs 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. 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 SF6 Emission Reduction Partnership for Electric Power Systems. Under the SF6 

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. 

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Table 4-4. Responsibilities for Regulation Compliance by Labor Category Per Facility Category 

Cost Element 

Responsibilities and Hours by Labor Category 

Legal Managerial Technical Clerical 

Responsibilities Hours Responsibilities Hours Responsibilities Hours Responsibilities Hours 

Large Semiconductors—Tier 2d Method Monitoring 

Collection of activity data for F-GHG emission estimate 

 Provide quality assurance 

of analyses and authorize completeness of the checks. 

 15.7 Collect data on gas consumption, 

gas utilization, and by-product formation. Perform calculation for four process categories using default factors provided by EPA (Costs for EF Tier 3 EF Development for etch is under capital costs). 

228 Assist in recording and 

maintaining data collected on gas consumption, gas utilization and by-product formation 

3.6 

Collect data for massbalance calculation of Heat Transfer Fluids 

 Provide quality assurance 

of analyses and authorize completeness of the checks. 

2.4 Collect activity data related to 

HTF emissions 

10 Assist in recording and 

maintaining data on collected activity data related to HTF emissions 

6.7 

Reporting 

Complete and submit company-specific annual report 

Oversee legal aspects of annual report submission 

0.26 Provide quality assurance 

of annual report. 

10.8 Complete and submit companyspecific annual report 25.3 Assist with completing and submitting the companyspecific annual report 8.4 

Complete and submit data reporting forms for massbalance 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. 

1.9 

Abatement/DRE data gathering Abatement system quality assurance audit and reporting 32 

Recordkeeping 

Collect and store necessary records for compliance 

 Review and submit 

appropriate records 

2.4 Assure that appropriate records 

are kept 

24.7 Assist with recordkeeping 

and filing 

5.7 
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Cost Element 

Responsibilities and Hours by Labor Category 

Legal Managerial Technical Clerical 

Responsibilities Hours Responsibilities Hours Responsibilities Hours Responsibilities Hours 

Non-Large Semiconductor Facilities—Tier 2c Method Monitoring 

Collection of activity data for F-GHG emission 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. 

257.3 Assist in recording and 

maintaining data collected on gas consumption, gas utilization and by-product formation 

Collect data for massbalance calculation of Heat Transfer Fluids 

 Provide quality assurance 

of analyses and authorize completeness of the checks. 

2.2 Collect activity data related to 

HTF emissions 

9.4 Assist in recording and 

maintaining data on collected activity data related to HTF emissions 

6.11 

Reporting 

Completion of companyspecific annual report Oversee legal aspects of annual report 

submission 

0.26 Provide quality assurance 

of annual report. 

10.8 Complete and submit companyspecific annual report 25.3 Assist with completing and submitting the companyspecific annual report 8.4 

Complete and submit data reporting forms for massbalance 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 

Recordkeeping 

Collect and store necessary records for compliance 

 Review and submit 

appropriate records 

2.39 Assure that appropriate records 

are kept 

24.7 Assist with recordkeeping 

and filing 

5.7 
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Cost Element 

Responsibilities and Hours by Labor Category 

Legal Managerial Technical Clerical 

Responsibilities Hours Responsibilities Hours Responsibilities Hours Responsibilities Hours 

Non-Semiconductors—Tier 2b Method Monitoring 

Collection of activity data for F-GHG emission 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 five process categories using default factors provided by EPA. 

169.5 Assist in recording and 

maintaining data collected on gas consumption, gas utilization and by-product formation 

Collect data for massbalance 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 

Completion of companyspecific annual report Oversee legal aspects of annual report 

submission 

0.26 Provide quality assurance 

of annual report. 

10.8 Complete and submit companyspecific annual report 25.3 Assist with completing and submitting the companyspecific annual report 8.4 

Complete and submit data reporting forms for massbalance 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 

Recordkeeping 

Collect and store necessary records for compliance 

 Review and submit 

appropriate records 

2.4 Assure that appropriate records 

are kept 

24.7 Assist with recordkeeping 

and filing 

5.7 
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Capital and O&M Costs

Non-Large Semiconductor, LCD, PV and MEMS Facilities: The EPA estimated that 

non-large semiconductor facilities and non-semiconductor facilities using the “Tier 2b” or “Tier 

2c” method would incur no capital or O&M costs. 

Large Semiconductor Facilities: For the largest semiconductor facilities using the “Tier 

2d Method”, the EPA has estimated capital and O&M costs associated with developing both 

apportioning software and emission factors for the etch processes. Facilities were assumed to 

share software development resources if they are owned by the same company; EPA estimated 

11 companies own the 29 large semiconductor facilities. Industry apportioning software capital 

costs were based on the assumption that each of the 11 companies would pay the full software 

development cost (based on 2,000 labor hours required to develop the software at a technical 

engineer labor rate) for one of their facilities and each subsequent facility the company owned 

would pay 50 percent of the software development cost (i.e., 11 facilities pay full cost and 18 

facilities pay 50 percent). Facility software capital cost was then calculated by dividing total 

industry software capital cost by 29 facilities. Apportioning software O&M costs were based on 

a 10 year software lifetime.17 Industry capital costs for emission factor development (etch 

processes only) was assumed to be incurred per company and based on labor costs associated 

with three technical engineers (2,000 hours each) needed to develop emission factors. The EPA 

assumed that facilities will already have the necessary equipment to develop emission factors 

and therefore did not include capital cost estimates for equipment. In order to obtain facility 

capital cost for emission factor development, the total industry cost was divided by 29 facilities. 

O&M costs for emission factor development represents the cost for updating/revising emission 

factors as needed based on changes to a facility’s processes, recipes, or equipment (estimated to 

be every 7 years)18. All capital costs (for both software and emission factor development) were 

annualized with an interest rate of 7.0 percent. 

Other Costs

The EPA estimated that the per-facility optional cost of directly measuring DREs in 

accordance with EPA’s DRE Protocol is $71,766. This cost was not included in this economic 

analysis since direct measurements of DREs are optional. The cost estimate was based on the 

assumption that a large semiconductor facility would have approximately 50 etch tools, all of 

 

17 O&M cost for software is based on 500 labor hours at an industrial engineer labor rate. 

18 O&M costs were not factored into first year costs to a facility. 
4-16 

which have PFC abatement systems. The EPA estimates that 20 percent of these fifty systems 

would be required to be tested annually and that it would take two weeks to test these ten 

systems per year. The cost for two weeks worth of testing was based on industry estimates and 

EPA’s experience conducting DRE testing. While 90 percent of this cost is related to labor and 

10 percent is related to freight shipments and measurement study supplies, it was assumed that 

the facilities outsource the DRE measurement and thus this cost was 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 associated labor rates to estimate labor costs per facility for each facility 

category (large semiconductor facilities, non-large semiconductor facilities, and nonsemiconductor facilities). Finally, the unit cost per facility was multiplied by the number of 

facilities that exceed the reporting threshold for each type of facility, resulting in the total 

national costs per year for this sector. 

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 using 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. 

Option 2, 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 

mtCO2e/year and were not vented to a destruction device with a destruction efficiency of at least 

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4-17 

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 that half of the process vents had precontrol 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 distorting 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 for 

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 twothirds 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. 

Option 3 identifies the cost that the typical or average facility will incur. The costs for 

Option 3 are a combination of measurements, some using the Mass Balance Approach and others 

using the Process Vent approach. 

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 $14,93312,061 in 

capital costs. Tables 4-5 and 4-6 summarize the labor and non-labor costs respectively. 

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4-18 

Initial planning costs were estimated for the time needed to review the rule and prepare 

required initial notifications and records. 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 mass balance approach, the first year planning hours total to include 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 review total 4.6 hours for the industrial manager, 92.9 industrial 

engineer/technician hours and 37.1 administrative hours. No planning costs are incurred in 

subsequent years, and QA/QC hours drop from 135 in the first year to a total of 34 in subsequent 

years.

Sampling, analysis, monitoring and calculation costs were estimated on a per-continuousprocess 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, first year stream sampling and analysis costs include 

1798 hours for the industrial engineer/technician, 179.8 administrative hours and 89.9 

management hours. This includes 165 engineer/technician hours, 8.25 management hours and 

16.5 administrative hours to perform the mass balance measurements and calculations 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. These costs apply only to the first year. 

RecordkeepingFirst year recordkeeping and reporting costs were 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 hours, 0.7 management hours, and 1.7 administrative hours to 

prepare the annual report. These costs remain unchanged in subsequent years.

Capital costs included include $14,93312,061 to hire a consultant to perform Destruction 

Efficiency Testing. 

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Table 4-5. Subpart L – F-Gas Mass Balance Approach: Labor Costs (2006$) 

Activity 

Labor Rates (per hour) Labor Cost per Year 

per Reporting 

Unit/Facility 

Legal Managerial Technical Clerical 

$101.00 $71.03 $55.20 $29.65 

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 0 1,798.0 0 179.8 0 $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$) 

Activity 

Cost Categories 

Total Reporting Cost 

per Unit/Facility 

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$12,061 10 $1,046845 $1,046 845 $0 845

Recordkeeping and Reporting 

Travel 

Sampling costs 

Total $14,993$12,061 $1,046845 $0 $1,046 845 $0 845

Note: All costs are in constant 2006$s. Annualization uses 7% interest rate. 

4.4.3 Cost Analysis for Option 2- Process Vent Testing 

This section presents 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 

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evaluated by testing. The remaining vents, accounting for 75% of the total vents at a facility, 

were assumed to be evaluated using the engineering 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 (Table 4-7) for the process vent method is $99,350, and the total first year labor 

cost for the equipment leak measurements is $50,650124,768. A capital cost of $22,12017,521

per average facility is also estimated, as shown in Table 4-8. 

Initial planning costs were estimated for the time needed to review the rule and prepare 

required initial notifications and records. 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 calculationsOption 2, the planning hours total to 

1.8 management hours, 19 administrative hours and 37.6labor includes 1.8 hours for the 

industrial manager, 55.1 hours for the industrial engineer/technician. Quality assurance/quality 

control costs for, and 44 administrative hours, totaling $4,474. There are no planning, meetings, 

sample analysis certification and annual review total 3.4 hours for the industrial manager, 67.8 

technician hours and 34 administrative hours costs estimated in subsequent years. Quality 

assurance/quality control requires an estimated 105.2 hours during the first year ($4,992), and 

26.35 hours in subsequent years ($1,251). 

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 costs were on a per-vent basis for the 

process vent testing and a per-process basis for process vent calculations and for equipment 

leaks. 

For the process vent measurements and calculations, the emissions samplingSampling

and analysis costs (including the scoping study) include 1,448.3 hours for the industrial 

engineer/technician, 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 
4-21 

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 industrial 

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.)estimated to require 2,067.33 hours, costing $111,568, during the first year; and 

70.79 hours, costing $3,919, in subsequent years. 

Recordkeeping and reporting costs were estimated were estimated on an annual basis, 

requiring 24.732.8 industrial engineer/technician hours, 5.7 management hours and 2.4 

management hours and 16.3 administrative hours to compile and store data, and costing $2,466. 

Labor requirements for preparing the annual report included 7.315.4 industrial 

engineer/technician hours, 0.7 management hours, and 1.72.3 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, at a cost of $1,267. 

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. 
4-22 

Capital costs for the mass balance approach included $11,200 for Destruction Efficiency 

Testing equipment. average facility totaled $17,521 (annualized to $1,227) in equipment 

purchases, and an annual rental cost, in subsequent years, of $1,280 for sampling 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 Process Vent (Avg. per plant basis): Labor Costs (2006$) 

Activity 

Labor Rates (per hour) Labor Cost per Year 

per Reporting 

Unit/Facility 

Legal Managerial Technical Clerical 

$101.00 $71.03 $55.20 $29.65 

First 

Year 

Subseq. 

Year 

First 

Year 

Subseq. 

Year 

First 

Year 

Subseq. 

Year 

First 

Year 

Subseq. 

Year 

First 

Year 

Subseq. 

Year 

Planning 

 1.8 0 72.655.1 0 6944.0 0

$6,181 

$4,474 $0 

QA/QC 3.4 0.9 67.8 17.0 34.0 8.5 $4,992 $1,251 

Recordkeeping 

 2.4 2.4 41.032.8

41.032.

8

27.016.

3 27.016.3

$3,230 

$2,466

$3,230 

$2,466

Sampling and analysis 

(calculations) 

72.473

.2 0.75 

2248.81,

849.3

138.670

.0 144.8 0 

$133,565 

$111,568

$7,649 

$3,919

Reporting 

 0.7 0.7 23.615.4

23.615.

4

23.012.

3 23.012.3

$2,031 

$1,267

$2,031 

$1,267

Total 

0 0 

80.73 

81.48

3.96 

4.71

2,453.73 

2,020.48

220.08 

135.29

297.73 

251.48

58.40 

37.15

$149,999 

$124,768

$14,161 

$8,904

Note: All costs are in constant 2006$s. 

Table 4-8. Subpart L – F-Gas Process Vent Method: Capital and O&M Costs (2006$) 

Activity 

Cost Categories 

Total Reporting Cost per 

Unit/Facility 

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$5,460 10 $765 382 $765 382 $0382

Performance testing $11,200 10 $784 845 $784 845 $0 845

Recordkeeping and Reporting 

Travel 

Sampling costs $0 $2,560 $1,280

Total $22,120$17,521 $1,549227 $0 $1,549 227 $2,560 507

Note: All costs are in constant 2006$s. Annualization uses 7% interest rate. 

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4.4.4 Cost Analysis for Option 3- Typical Facility, Combination of Process Vent and Mass Balance 

This section describes costs associated with complying with the rulemaking using Option 

3, Typical Facility, Combination of Process Vent and Mass Balance. These include both labor 

and non-labor (capital and O&M) costs and both startup and recurring costs. The “average” plant 

that utilized the combination of the process vent approach and the mass balance approach was 

assumed to have an average of 4.92 processes. In this plant, approximately 21.423.1% of the 

plant is evaluated using the Mass Balance techniques, and the remainder is evaluated using the 

Process Vent techniques. For the portion of the plant that is evaluated using the Process Vent 

Option, an average of 2.5 process vents were assumed to be evaluated by testing, and the 

remaining 7.5 process vents, accounting for 75% of the total vents at a facility, were assumed to 

be evaluated using the engineering 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. The costs for each of these options were discussed in Option 1 and 

Option 2. 

Labor costs for Option 3 are summarized in Table 4-9. In each of the following 

paragraphs, the costs are broken out by labor category. For the average facility, the total first 

year labor cost for the combination of the process vent and mass balance method is 

$145,165125,384. A capital cost of $20,58017,521 per average facility is also estimated, as 

shown in Table 4-10. 

Initial planning costs were estimated for the time needed to review the rule and prepare 

required initial notifications and records. 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 average facility completing a mix of mass balance and process vent 

measurements, the first year planning hours total 2.8 9 management hours, 56.9 36.7

administrative hours and 83.8 71.2 hours for the industrial engineer/technician. First year 

planning costs are estimated at $5,223; there are no subsequent year planning costs. Quality 

assurance/quality control costs for planning, meetings, sample analysis certification and annual 

review total 3.7 hours for the industrial manager, 73.2 6 technician hours and 34.7 administrative 

hours, totaling $5,353; second year QA/QC costs fall to $1,340. 

Sampling, analysis, monitoring and calculation costs during the first year for the 

measurements and calculations, the emissions sampling and analysis costs (including the scoping 
4-24 

study and equipment leak evaluation for those vents that will be measured using the process vent 

method) include 2,152.21,837.5 hours for the industrial engineer/technician, 152.39

administrative hours and 76.277.0 management hours, costing $111,428; subsequent year 

sampling and analysis costs fall to $3,015. For a specific listing of the labor tasks involved in the 

measurements and calculations, please refer to the mass balance and process vent options 

sections above. 

Recordkeeping and reporting costs during the first year were estimated to include 

37.531.0 industrial engineer/technician hours, 2.4 management hours and 22.413.9

administrative hours to compile and store data annually. Labor requirements for preparing the 

annual report include 20.113.6 industrial engineer/technician hours, 0.7 management hours, and 

18.49.9 administrative hours to prepare the annual report. 

Capital costs during the first year include equipment for leak detection such as the 

monitoring device and data collection system and the cost of the Destruction Efficiency Testing, 

if the facility was required to complete it. Please refer to Option 1 and Option 2 for a more 

detailed breakdown of the specific costs associated with the Mass Balance and Process Vent. 

Capital costs for the average facility totaled $20,58016,261, in equipment and O&M 

costs for the first year. 

Table 4-9. Subpart L – F-Gas Typical Facility: Labor Costs (2006$) 

Activity 

Labor Rates (per hour) Labor Cost per Year 

per Reporting 

Unit/Facility 

Legal Managerial Technical Clerical 

$101.00 $71.03 $55.20 $29.65 

First 

Year 

Subseq. 

Year 

First 

Year 

Subseq. 

Year 

First 

Year 

Subseq. 

Year 

First 

Year 

Subseq. 

Year 

First 

Year 

Subseq. 

Year 

Planning 

 

2.89 0.0 83.871.2 0.0 56.936.

7

0.0 $6,511 

$5,223

$0 

QA/QC 

 

3.7 0.9 73.26 18.34 34.7 8.7 $5,327 

353

$1,334 

340

Recordkeeping 

 

2.4 2.4 37.531.0 37.531.0 22.413.

9

22.413.9 $2,903 

290

$2,903 

290

Sampling and analysis 

(calculations) 

76.277.

0

0.06 2152.21,

837.5

10853.9 152.39 0.0 $128,721 

$111,428

$6,010 

$3,015

Reporting 

 

0.7 0.7 20.113.6 20.113.6 18.49.9 18.49.9 $1,704 

091

$1,704 

091

Total 

0 0 

85.71 

86.67

4.02 60 2,366.74 

2,026.79

184.75 

116.81

284.68 

248.10

49.46 

32.43

$145,165 

$125,384

$11,950 

$7,736

Note: All costs are in constant 2006$s. 

Note: One outlier facility, whose costs were an order of magnitude higher than the “average” facility, was represented in this 

evaluation as having “average” costs in order to be representative of most facilities. 

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Table 4-10. Subpart L – F-Gas Typical Facility: Capital and O&M Costs (2006$) 

Activity 

Cost Categories 

Total Reporting Cost per 

Unit/Facility 

Capital Cost 

Equipment 

Lifetime 

(years) 

Annualized 

Capital 

Cost 

(per year) 

O&M 

Costs 

(per year) First Year Subseq. Year 

Equipment (selection, purchase, 

installation) 

$8,580$4,200 $010 $0294 $0 $8,580 294 $294

Performance testing $12,000061 $010 $0845 $0 $12,000 845 $0 845

Recordkeeping and Reporting $0 $0 $0 $0 $0 $0 

Travel $0 $0 $0 $0 $0 $0 

Sampling costs $0 $0 $0 $0 $0 $2,560 $1,006

Total $20,580$16,261 $0 $01,139 $0 $20,580 $1,139 $2,560 123

Note: All costs are in constant 2006$s. Annualization uses 7% interest rate. 

4.5 Cost Analysis for Subpart DD—Electric Power Systems 

4.5.1 Model Facility Development 

The model facility for electric power systems is an electric utility that operates an average 

amount (nameplate capacity) of SF6-containing transmission equipment. Costs are not expected 

to vary widely among utilities because all utilities would track the same set of quantities (SF6

stored, acquired, and disbursed; equipment installed and retired), 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 SF6 using a mass-balance formula. To use the formula, facilities 

must track their SF6 inventory in cylinders, SF6 acquisitions, and SF6 disbursements, as well as 

their equipment commissioning and decommissioning. These data are already tracked by 

utilities, but not necessarily as closely and comprehensively as required to develop all utility 

level mass-balance inputs. Thus, as discussed below, the model facility is assumed to incur some 

costs for tracking and reporting SF6 emissions. 

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4.5.2 Determine Cost Elements 

The total costs associated with the proposed rulemaking for electric power systems were 

estimated using labor hours from an Information Collection Request (ICR) performed for EPA’s 

SF6 Emission Reduction Partnership.19 The 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 annual 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 in place 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 

SF6 throughout the system. Since SF6 is often handled and stored at the substation level, 

collecting information is usually a bottom-up process that is the most labor-intensive activity in 

the reporting process.

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 record of the emissions 

inventory and documentation. 

4.5.3 Proportion of Facilities in Different Model Facility Levels 

There is only one model facility for electric power systems. 

4.5.4 Assigning Costs to Cost Elements 

4.5.5 Determine 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 the compliance, monitoring, reporting, and 

 

19 EPA. (2000). Supporting statement for EPA Information Collection Request number 1933.01 “Information 

collection activities associated with EPA’s SF6 Emission Reduction Partnership for Electric Power Systems.” 

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recordkeeping activities, but also to determine who will perform each task. For this analysis, 

three labor categories were used as shown in Table 4-9. 

Table 4-11. 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 massbalance inputs. Performs emission 

calculations on reporting form 

$55.20/hour 

Clerical Assists with documentation and 

recording information 

$29.65/hour 

Allocate Responsibilities and Estimate Labor Hours

Labor hours for all cost elements were estimated based on consultation between EPA and 

SF6 Emission Reduction Partners conducted for the 2000 Partnership ICR. Table 4-10 

summarizes the allocation of hours and responsibilities by labor category. 

Table 4-12. Responsibilities for Regulation Compliance by Labor Category 

Cost Element 

Responsibilities and Hours by Labor Category 

Managerial Technical Clerical Per Facility/ 

Per 

Responsibilities Hours Responsibilities Hours Responsibilities Hours Company 

Regulation Compliance Determination Costs 

Review the 

instructions, SF6

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 Per Facility 

Monitoring Costs 

Gather information 

for the SF6 massbalance reporting 

form and associated 

materials 

Institute and 

oversee proper 

data collection 

procedures that 

account for all 

SF6 within the 

system 

4 Compile SF6

data and sort 

data into 

appropriate 

input categories 

for the massbalance formula 

17 Perform 

measurements 

and collect 

documentation 

that track SF6 gas 

movements 

11 Per Facility 

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Cost Element 

Responsibilities and Hours by Labor Category 

Managerial Technical Clerical Per Facility/ 

Per 

Responsibilities Hours Responsibilities Hours Responsibilities Hours Company 

Reporting Costs 

Complete and review 

the information 

requested by the SF6

mass-balance 

reporting form and 

associated materials 

Review 

reporting forms 

to ensure 

accuracy and 

consistency 

3.5 Calculate inputs 

for the massbalance 

reporting form. 

Perform facilitywide SF6

emission 

calculations 

3.5 Provide data and 

supporting 

documentation to 

technical and 

managerial staff 

1.5 Per Facility 

Submit the SF6

mass-balance 

reporting form and 

associated materials 

 0 0 Combine the 

mass-balance 

reporting form 

with all 

necessary 

materials and 

submit 

0.2 Per Facility 

Recordkeeping Costs 

Maintain a record of 

the emissions 

inventory and 

documentation

 0 0 File the massbalance reporting 

form and 

associated 

materials into the 

recordkeeping 

system 

0.2 Per Facility 

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 SF6 Emission Reduction Partnership ICR. 

Table 4-13. 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 

4.5.64.5.5 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, 

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consisting of postage and photocopying, were then added to the labor costs to calculate the total 

cost per facility. For calculating national costs, the total cost per facility was multiplied by 141, 

which is the number of facilities that exceed the reporting threshold. 

4.6 Cost Analysis for Subpart QQ—Imports and Exports of Fluorinated GHGs

4.6.1 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 electrical equipment containing 

SF6. This analysis does not consider the costs of CO2 and N2O contained in imported and 

exported products. Although EPA does not have data on the amount of CO2 or N2O 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 relatively low GWPs of these gases 

(compared to those of the fluorinated GHGs) imply that the CO2-equivalent quantities imported 

are likely to be small both nationally and per importer. 

There is one model entity that represents importers/exporters of products containing 

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 SF6. 

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. 

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Importers/exports of products containing fluorinated GHGs would report their imports/exports 

on the corporate level. 

Table 4-12 presents the number of affected entities that would be subject to the rule based 

on alternative emission thresholds. 

Table 4-14. Number of Representative Affected Entities Used in the Cost Analysis 

Threshold 

Number of Representative Entitiesa

All HFC Equipment All Foam Products All SF6 Equipment 

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 

a

While listed separately in the table above to illustrate the number of importers and number of exporters, importers and exporters 

are the same entities for SF6 equipment, and in some cases, the same entities for HFC equipment and foam products. As such, 

the per-facilities costs will increase—to reflect activities associated with both importing and exporting, and the overall number of 

respondents will decrease given the overlap. 

4.6.2 Determine Cost Elements 

The total costs associated with complying with the proposed rulemaking can be broken 

into 4 elements, each of which is described below. 

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. 

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4.6.3 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 4-13 indicates the number of facilities that 

fall into each model facility category. 

Table 4-15. 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 SF6-containing equipment 

8 

Exporters of SF6-containing equipment 

10 

4.6.4 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. 

Table 4-16. 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 on all 

reporting requirements. 

$71.03/hour 

Technical Conducts monitoring of emissions 

sources, checks for accuracy, 

performs measurements. 

$55.20/hour 

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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 4-17 summarizes 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). 

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Table 4-17. Responsibilities for Regulation Compliance by Labor Category 

Cost Element 

Responsibilities and Hours by Labor Category 

Managerial Technical 

Per Facility/ 

Per 

Company* 

Responsibilities Hours Responsibilities Hours 

Importer/Exporter of Fluorinated GHG-containing Product (including foams and SF6-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. 

4.6.5 Estimate per Facility Costs for Each Threshold Level 

Once the labor hours were calculated, by category, for each of the cost elements (as 

shown in Table 4-15, they were multiplied by the associated labor rates (as shown in Table 4-14) 

to estimate labor costs per facility. The unit cost per entity was multiplied by the number of 

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facilities that exceed the reporting threshold (as shown in Table 4-13), to determine the total 

national costs per year for this sector. 

4.6.64.7 Subpart SS—Electrical Equipment Manufacturing 

4.6.6.14.7.1 Model 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 SF6-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 (SF6 stored, 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 SF6 using a mass-balance formula. To use the formula, facilities 

must track their SF6 inventory in cylinders, SF6 acquisitions, and SF6 disbursements. 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, the model facility is assumed to incur some costs for tracking and reporting SF6

emissions. 

Table 4-16 presents the number of affected entities that would be subject to the rule based 

on alternative emission thresholds under subpart SS. 

Table 4-18. 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 

4.6.6.24.7.2 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) 

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performed for EPA’s SF6 Emission Reduction Partnership.20,21 The 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 annual 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 in place 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 

SF6 throughout 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 record of the emissions 

inventory and documentation. 

4.6.6.34.7.3 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. 

4.6.6.44.7.4 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 4-17. 

 

20 EPA. (2000). Supporting statement for EPA Information Collection Request number 1933.01 “Information 

collection activities associated with EPA’s SF6 Emission Reduction Partnership for Electric Power Systems” 

21 Although the ICR was focused on the costs of reporting SF6 emissions from electric utilities rather than electrical 

equipment manufacturers, the inputs required to calculate emissions and the activities involved with reporting are 

similar for both sectors. Therefore, the costs incurred for electrical equipment manufacturers are assumed to be the 

same as the costs incurred for electric power systems. 

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Table 4-19. 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 massbalance 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 estimated based on consultation between EPA and 

SF6 Emission Reduction Partners conducted for the 2000 Partnership ICR. Table 4-18 

summarizes the allocation of hours and responsibilities by labor category.

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Table 4-20. Responsibilities for Regulation Compliance by Labor Category Per Facility 

Cost Element 

Responsibilities and Hours by Labor Category 

Managerial Technical Clerical 

Responsibilities Hours Responsibilities Hours Responsibilities Hours

Regulation Compliance Determination Costs 

Review the instructions, SF6 massbalance 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 SF6 massbalance reporting form and 

associated materials 

Institute and oversee proper data collection procedures that account for all SF6 within the system 

4 Compile SF6 data and sort data 

into appropriate input categories for the mass-balance formula 

17 Perform measurements and collect 

documentation that track SF6 gas 

movements 

11 

Reporting Costs 

Complete and review the information requested by the SF6 mass-balance 

reporting form and associated materials 

Review reporting forms to ensure accuracy and consistency 

3.5 Calculate inputs for the massbalance reporting form. Perform 

facility-wide SF6 emission 

calculations 

3.5 Provide data and supporting 

documentation to technical and managerial staff 

1.5 

Submit the SF6 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 

0.2 
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4.6.74.7.5 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 SF6 Emission Reduction Partnership ICR and are 

presented in Table 4-19. 

Table 4-21. 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 

4.6.7.14.7.6 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 costs 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. 

4.74.8 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 implementation 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. 

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SECTION 5

ECONOMIC IMPACT ANALYSIS 

EPA has prepared an 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 

This analysis is based on the costs of monitoring fluorinated greenhouse gas and N2O 

emissions from electronics manufacturing facilities. Electronics manufacturing facilities were 

broken into three categories; non-semiconductor electronics (3 facilities), largest semiconductor 

(29 facilities), and non-largest semiconductor (62 facilities). Non- semiconductor electronics 

facilities include facilities that manufacture micro-electro-mechanical systems (MEMS), liquid 

crystal displays (LCDs), and photovoltaics (PV). 

In the initial proposal, EPA proposed capacity-based thresholds equivalent to 25,000 

metric tons of CO2e for manufacture of semiconductors, LCDs, and MEMS, and an emissionsbased threshold of 25,000 metric tons of CO2e for manufacture of PV. As stated in the initial 

proposal, EPA proposed to use a capacity-based threshold based on the published 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 mtCO2e for 

manufacture of semiconductors, LCD, MEMS, and PV. 

In the analysis, EPA considered emission thresholds of 1,000 metric tons CO2e, 10,000 

metric tons CO2e, 25,000 metric tons CO2e, and 100,000 metric tons CO2e per year. This 

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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. 

Table 5-11. Threshold Analysis for Subpart I – Electronics Manufacturing Industry 

Emission 

Threshold 

Level (metric 

tons CO2e/yr) 

Total 

National 

Emissions 

(metric tons 

CO2e/yr) 

Total 

Number of 

Facilities 

Emissions Covered Facilities Covered 

metric tons 

CO2e/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 26% 

EPA selected the 25,000 metric tons CO2e 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 76 

percent of semiconductor facilities and 7 percent of the non-semiconductor facilities (see Table 

5-2). At the same time, the thresholds are expected to cover nearly 96 percent of fluorinated 

GHG emissions from semiconductor facilities, and 54 percent of fluorinated GHG emissions 

from non-semiconductor facilities. 

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Table 5-22. Summary of Rule Applicability under the Proposed Emission-Based 

Thresholds for Subpart I – Electronics Manufacturing Industry 

Emission Threshold 

Level (metric tons 

CO2e/yr) 

Total 

National 

Emissions 

(metric tons 

CO2e/yr) 

Total 

Number of 

Facilities 

Emissions Covered Facilities Covered 

Total 

Emissions of 

Source (metric 

tons CO2e) 

metric 

tons 

CO2e/yr Percent Facilities Percent 

Semiconductors 25,000 175 5,741,676 5,492,066 100%96% 91 76%52%

Non-Semiconductors 25,000 41 242,786 130,504 54% 3 7% 

Combined these emissions are estimated to account for close to 94 percent of fluorinated 

GHG emissions from the electronics industry as a whole. To determine whether a manufacturer 

falls above or below the proposed 25,000 metric tons of CO2e, EPA is proposing that 

semiconductor, and non-semiconductor MEMS facilities use gas specific 2006 IPCC Tier 1 

emission factors assuming 100% manufacturing capacity to calculate annual metric tons of 

emissions in CO2 equivalents. For non-semiconductor PV facilities, EPA is proposing that they 

facilities multiply annual fluorinated GHG purchases or consumption by the gas-appropriate 

100-year GWPs, as defined in Table A-1 to Subpart A of Part 98, to calculate annual metric tons 

of emissions in CO2 equivalents. None of these calculations shall account for emission 

abatement technologies. 

For additional background information on the threshold analysis, refer to the Electronics 

Manufacturing TSD (EPA-HQ-OAR-2009-0927). 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 absence of 

control technology (e.g., thermal oxidation)

22. ).23 

 

22 Following the precedents set by other Clean Air Act regulations, EPA is using the term “uncontrolled” to describe

such emissions. Specifically, EPA is proposing to define “uncontrolled fluorinated GHG emissions” as a gas 

stream containing fluorinated GHG which has exited the process (or process condenser, where applicable), but 

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In developing the threshold, we considered multiple controlled and uncontrolled 

emissions thresholds, including 1,000, 10,000, 25,000, and 100,000 metric tons CO2e. 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 be half 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 of HFCs, 

PFCs, SF6, NF3, CFCs, and HCFCs are shown in Tables 5-3 and 5-4. 

Table 5-33. Threshold Analysis for Fluorinated GHG Emissions from Production of HFCs, 

PFCs, SF6, NF3, CFCs, and HCFCs (Uncontrolled Emissions) 

Threshold 

Level (metric 

tons CO2e/r) 

Total National 

Emissions 

(metric tons 

CO2e) 

Number of 

Facilities 

Emissions Covered Facilities Covered 

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% 

 which has not yet been introduced into an air pollution control device to reduce the mass of fluorinated GHGs in 

the stream. The term does not imply that the emissions are never controlled, but is synonymous with “precontrol emissions.” 23 Following the precedents set by other Clean Air Act regulations, EPA is using the term “uncontrolled” to describe 

such emissions. Specifically, EPA is proposing 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 reduce the mass of fluorinated GHGs in 

the stream. The term does not imply that the emissions are never controlled, but is synonymous with “precontrol emissions.” 

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Table 5-44. Threshold Analysis for Fluorinated GHG Emissions from Production of HFCs, 

PFCs, SF6, NF3, CFCs, and HCFCs (Controlled Emissions) 

Threshold 

Level (metric 

tons CO2e/r) 

Total National 

Emissions 

(metric tons 

CO2e) 

Number of 

Facilities 

Emissions Covered Facilities Covered 

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, SF6, NF3, CFC, and HCFC production 

facilities would be covered by all the thresholds considered. Although we do not have facilityspecific 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 processes of which EPA is aware generate byproducts with higher GWPs than the product. 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 costs, including unamortized first year capital expenditures, please 

refer to Economic Analysis (EA) for this rulemaking.

5.1.3 Subpart DD- Sulfur Hexafluoride from Electric Power Systems 

The model facility for electric power systems is an electric utility that operates an average

amount (nameplate capacity) of Sulfur Hexafloride (SF6)-containing transmission equipment. 

Costs are not expected to vary widely among utilities because all utilities would track the same 

set of quantities (SF6 stored, acquired, and disbursed; equipment installed and retired), and the 

costs of tracking and reporting these quantities are relatively modest. 

In the analysis, EPA considered emission thresholds of 1,000 metric tons CO2e, 10,000 

metric tons CO2e, 25,000 metric tons CO2e, and 100,000 metric tons CO2e per year. This 

analysis used IPCC Tier 1 emission factors and assumed no abatement. Table 5-5 presents the 

emissions and facilities that would be captured by the respective emissions thresholds. 

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Table 5-55. Threshold Analysis for Subpart DD – Electric Power Systems 

Emission 

Threshold 

Level (metric 

tons CO2e/yr) 

Total 

National 

Emissions

(metric tons 

CO2e/yr) 

Total 

Number of 

Facilities 

Emissions Covered Facilities Covered 

metric tons 

CO2e/yr Percent Facilities Percent 

1,000 12,400,000 1,364 12,190,000 98.31% 578 42.38% 

10,000 12,400,000 1,364 10,960,000 88.39% 183 13.42% 

25,000 12,400,000 1,364 10,320,000 83.23% 141 10.34% 

100,000 12,400,000 1,364 5,950,000 47.98% 35 2.57% 

EPA selected the 25,000 metric tons CO2e 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 10 

percent of electrical power systems transmission equipment (see Table 5-5). At the same time, 

the thresholds are expected to cover nearly 83 percent of SF6 emissions. 

5.1.4 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 in bulk, 

exceed 25,000 mtCO2e per year. This threshold is the same as that for bulk imports and exports. 

Table 5-66. Threshold Analysis for Subpart QQ–Imports of Fluorinated GHGs in PreCharged Equipment and Closed-Cell Foams 

HFC Refrigeration/AC 

Equipment SF6 Electrical Equipment Closed-cell Foams 

Threshold 

Level 

Imports 

Covered 

Importers 

Covered 

Imports 

Covered 

Importers 

Covered 

Imports 

Covered 

Importers 

Covered 

1,000 16,992,965 50 1,888,932 8 3,025,285 50 

10,000 16,992,965 50 1,888,932 8 3,025,285 50 

25,000 16,992,965 50 1,888,932 8 3,025,285 50 

100,000 16,992,965 50 1,888,932 8 0 50 

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5-7 

Table 5-77. Threshold Analysis for Subpart QQ–Exports of Fluorinated GHGs in PreCharged Equipment and Closed-Cell Foams 

HFC Refrigeration/AC 

Equipment SF6 Electrical Equipment Closed-cell Foams 

Threshold 

Level 

Exports 

Covered 

Exporters 

Covered 

Exports 

Covered 

Exporters 

Covered 

Exports 

Covered 

Exporters 

Covered 

1,000 3,061,830 25 153,323 10 1,089,177 25 

10,000 3,061,830 25 107,326 5 1,089,177 25 

25,000 3,061,830 25 0 0 1,089,177 25 

100,000 3,061,830 25 0 0 0 250

5.1.5 Subpart SS- Electrical Equipment Manufacture or Refurbishment and Manufacturing of Electrical 

Components 

EPA is proposing to require electrical equipment manufacturers to report their SF6 and 

PFC emissions if their total annual purchases of SF6 or PFCs exceed 23,061 lbs. This 

consumption-based threshold is equivalent to an emissions-based threshold of 25,000 mtCO2e, 

assuming an average manufacturer emission rate of 10%. EPA chose the consumption-based 

threshold, as it is believed to allow equipment manufacturers to quickly determine if they are 

subject to reporting requirements by referencing their SF6 purchase records. 

Table 5-88. Threshold Analysis for Subpart SS– Electrical Equipment Manufacture or 

Refurbishment and Manufacturing of Electrical Components 

Emission Threshold (Mt CO2 Eq) 1,000 10,000 25,000 100,000 

Consumption Threshold (lbs. of SF6) 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 CO2 Eq) 814,128 814,128 814,128 569,890 

Percent of Emissions Above 100% 100% 100% 70% 

5.1.6 National Emissions Covered Under Selected Thresholds 

The total national emissions covered under the selected options are 4653.4 MtCO2e 

(Table 5-9). The majority of these covered emissions are from the importers and exporters of 

fluorinated GHGs covered by Subpart QQ (26.1MtCO2e). Although the majority of cost and 

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5-8 

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 

Classification System (NAICS); the mapping allows the cost data to be used in conjunction with 

other economic census data. 

Table 5-99. Estimates of Emissions (MtCO2e) Reported in 2008 Under the Selected Option 

Subpart Emissions Coverage (MtCO2e) 

Subpart I - Electronics Industry 5.6 

Subpart L - Fluorinated Gas Production 10.6 

Subpart DD – Sulfur Hexalfuoride (SF6) from Electric Power Systems 10.3 

Subpart QQ - Imports and Exports of Fluorinated GHGs 26.1 

Subpart SS - Electrical Equipment Manufacture or Refurbishment and 

Manufacturing of Electrical Components 0.8 

Total 53.4

5.2 National Cost Estimates 

As shown in Table 5-10, the total national costs for the selected option are estimated to 

be $7.6.8 million in the first year and $7.4 24million in subsequent years ($2006). This includes 

a public sector burden estimate of $384,000 for program implementation and verification 

activities. Subparts bearing the greatest share of the ongoing private costs of the rule in the first 

year are the electronics industry (4538%) and fluorinated gas producers (3140%). 

In addition to total national costs by subpart under the selected option, we also report 

average cost per ton to support additional analysis of the greenhouse reporting programs. The 

average ongoing (subsequent year) private cost per metric ton varies by subpart; measures range 

from less than $0.01 per ton (Subpart SS) to $0.36 per ton (Subpart I). 

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5-9 

Table 5-1010. National Cost Estimates by Subpart: Selected Option

First Year Subsequent Years 

Subpart 

2007

NAICS 

Millions

2006$ $/ton Share 

Millions 

2006$ $/ton Share 

Subpart I - Electronics 

Industry 334413, 334119 $3.12.9

$0.365

2

45%38

% $5.64

$0.36

96

75%76

%

Subpart L - Fluorinated Gas 

Productiona 325120 $2.13.0

$0.202

8

31%40

% $0.32

$0.03

02 4%2%

Subpart DD – Electric 

Transmission and 

Distribution Equipment Use 221121 $0.6 

$0.190

5 8%7% $0.6 $0.05 7%8%

Subpart QQ - Imports and 

Exports of Fluorinated 

GHGs 

326140, 326150, 

333415, 335313, 

336391, 423610, 

423620, 423720, 

421730, 421740, 

443111, 443112, 

422610 $0.7 $0.03 

10%9

% $0.6 $0.02 8%9%

Subpart SS - Electrical 

Equipment Manufacture 

and Refurbishment and 

Manufacturing of Electrical 

Components 33361, 33531 $0.02 

$0.010

3 0.3% $0.02 

$0.01

03 0% 

Private Sector, Total $6.57.2 

94%95

% $7.06.8 95% 

Public Sector, Total $0.4 6%5% $0.4 5% 

Total $7.6.8 100% $7.42 100% 

a

Subpart L costs include costs for outlier facility. Columns may not sum to totals due to rounding. .

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 Overall Method of Assessing Economic Impacts

To assess the possible economic impacts associated with the rule, EPA compared perfacility program costs to facility sales for facilities of various sizes. Data on sales revenues for 

facilities of various sizes was obtained from the Census Bureau’s Statistics of U.S. Businesses 

(SUSB) database for 2002. SUSB provides establishment-level information on revenues 

enterprise size; EPA is assuming that “enterprise” corresponds to firm or company, and 

“establishment” corresponds to facility. Facility-level costs of complying with the rule are 

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5-10 

compared to sales revenues for typical facilities, and for facilities owned by companies of 

various sizes in the tables below. As noted above, the focus of our analysis is impacts to small 

entities.

5.3.15.3.2 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. 

5.3.1.15.3.2.1 Identify Affected Subparts and Entities 

The industry subparts covered by the rule were identified during the development of the 

cost analysis for the reporting rule. The SUSB data provide national information on the 

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 all entities 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. 

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 enterprise: An enterprise is 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. 

Because the SBA’s business size definitions (SBA, 2009c) 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 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. 

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5-12

Table 5-11. Number of Establishments by Affected Industry and Enterprisea Size: 2002 

SBA Size Standard 

(effective August 22, 

2008)

Total

Establishments

Owned by Enterprises with:

2007

2007

NAICS NAICS Description Subpart 

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

334413 

Semiconductor and 

Related Device 

Manufacturing I 500 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

221121 Electrical Power Systems DD < 4 Million MWh 217 39 20 29 1 NA NA326140 

Polystyrene Foam 

Product Manufacturing QQ 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 AirConditioning 

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 72
5-13

SBA Size Standard 

(effective August 22, 

2008)

Total

Establishments

Owned by Enterprises with:

2007

2007

NAICS NAICS Description Subpart 

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

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

422610 

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

33531 

Electrical Equipment 

Manufacturing SS 750 - 1,000 2,651 1,311 522 246 41 23 19

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 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. 

b The 2002 SUSB data uses 1997 NAICS codes. For this industry, the relevant code is NAICS 422610. 
5-14

Table 5-12. Receipts by Affected Industry and Enterprisea Size ($2002 Million) 

SBA Size Standard 

(effective August 22, 

2009)

Total Establishments

Owned by Enterprises with:

NAICS NAICS Description Subpart 

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

334413 

Semiconductor and Related Device Manufacturing I 500 63,779 701 1,755 3,711 775 2,593 1,434

334119 

Other Computer Peripheral Equipment Manufacturing I 500 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

221121 Electrical Power Systems DD < 4 Million MWh 13,831 74 353 406 NA NA NA326140 

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 AirConditioning 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 1,339 766
5-15

SBA Size Standard 

(effective August 22, 

2009)

Total Establishments

Owned by Enterprises with:

NAICS NAICS Description Subpart 

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

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

422610 

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

33531 

Electrical Equipment Manufacturing SS 750 - 1,000 33,211 1,330 2,912 4,096 979 1,089 406

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 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. 

b The 2002 SUSB data uses 1997 NAICS codes. For this industry, the relevant code is NAICS 422610. 
5-16 

5.3.1.25.3.2.2 Develop Small Entity Economic Impact Measures 

Because the rule covers a large number of subparts and primarily covers businesses, the 

analysis generated a set of sales tests (represented as cost-to-receipt ratios)24 for NAICS codes 

associated with the affected subparts. 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 size ranges (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 

categories25 (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 analysis. 

 

24The following metrics for other small entity economic impact measures (if applicable) would potentially include 

 Small governments (if applicable): “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 25For the one to 20 employee category, we exclude SUSB data for enterprises with zero employees. These 

enterprises did not operate the entire year. 

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Table 5-13. Establishment Sales Tests by Industry and Enterprisea Size: First Year Costs 

SBA Size 

Standard 

(effective 

August 22, 

2008)

Average 

Cost Per 

Entity 

($/entity) 

All 

Enterprises 

Owned by Enterprises with:

20072007

NAICS NAICS Description Sub-part 

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

334413 

Semiconductor and Related Device Manufacturing I (Semis) 500 $19,980 0.03% 1.16% 0.22% 0.07% 0.04% 0.01% 0.02%

334413 

Semiconductor and Related Device Manufacturing I (Non-Semis) 500 $16,046 0.02% 0.94% 0.18% 0.05% 0.04% 0.01% 0.02%

334119 

Other Computer Peripheral Equipment Manufacturing I (Non-Semis) 500 $16,046 0.06% 0.92% 0.14% 0.04% 0.02% 0.04% 0.01%

325120 Industrial Gas Manufacturing L 1,000

$151,045$

126,523

1.28%0

8%

27.68%23.19

% 0.92%77% 3.80%19% NA NA NA

221121 Electrical Power Systems DD 

< 4 Million 

MWh $2,213 0.00% 0.10% 0.01% 0.01% 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 AirConditioning Equipment and Supplies Merchant Wholesalers QQ 100 $3,364 0.07% 0.13% 0.05% 0.06% 0.10% 0.03% NA

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
5-18

SBA Size 

Standard 

(effective 

August 22, 

2008)

Average 

Cost Per 

Entity 

($/entity) 

All 

Enterprises 

Owned by Enterprises with:

20072007

NAICS NAICS Description Sub-part 

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

443112 

Radio, Television and Other Electronics Stores QQ $9 M $3,364 0.14% 0.53% 0.15% 0.23% NA NA NA

422610 

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%

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 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 relevant code is NAICS 422610. 
5-19

Table 5-14. Establishment Sales Tests by Industry and Enterprisea Size: Subsequent Years Costs 

SBA Size 

Standard 

(effective 

August 22, 

2008)

Average 

Cost Per 

Entity 

($/entity) 

All 

Enterprises 

Owned by Enterprises with:

2007 

NAICS NAICS Description Sub-part 

1 to 20 

Employeesb

20 to 99 

Employees 

100 to 499 

Employees 

500 to 749 

Employees 

750 to 999 

Employees 

1,000 to 

1,499 

Employees

334413 

Semiconductor and Related Device Manufacturing I (Semis) 500 $19,980 0.03% 1.16% 0.22% 0.07% 0.04% 0.01% 0.02%

334413 

Semiconductor and Related Device Manufacturing I (Non-Semis) 500 $16,046 0.02% 0.94% 0.18% 0.05% 0.04% 0.01% 0.02%

334119 

Other Computer Peripheral Equipment Manufacturing I (Non-Semis) 500 $16,046 0.06% 0.92% 0.14% 0.04% 0.02% 0.04% 0.01%

325120 Industrial Gas Manufacturing L 1,000

$19,109$9

,859

0.16%0

8% 3.50%1.81% 0.12%06% 0.48%25% NA NA NA

221121 Electrical Power Systems DD 

< 4 Million 

MWh $2,213 0.00% 0.10% 0.01% 0.01% 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% NA

423740 

Refrigeration Equipment and Supplies Merchant Wholesalers QQ 100 $2,933 0.08% 0.14% 0.04% 0.09% 0.07% 0.04% NA
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SBA Size 

Standard 

(effective 

August 22, 

2008)

Average 

Cost Per 

Entity 

($/entity)

All 

Enterprises

Owned by Enterprises with:

2007 

NAICS NAICS Description Sub-part

1 to 20 

Employeesb

20 to 99 

Employees

100 to 499 

Employees

500 to 749 

Employees

750 to 999 

Employees

1,000 to 

1,499 

Employees

443111 Household Appliance Stores QQ $9 M $2,933 0.21% 0.37% 0.08% 0.06% NA NA NA443112 

Radio, Television and Other Electronics Stores QQ $9 M $2,933 0.12% 0.46% 0.13% 0.20% NA NA NA

422610 

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%

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 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 relevant code is NAICS 422610. 
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5.3.1.35.3.2.3 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 the agency certifies that the rule will 

not have a significant economic impact on a substantial number of small entities. Small entities 

include small businesses, small governmental jurisdictions, and small not-for-profit enterprises. 

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, county, town, school district, or 

special district with a population of less than 50,000; or (3) a small organization that is any notfor-profit enterprise that is independently owned and operated and is not dominant in its field. 

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 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 one to 20 employees). The Industrial Gas Manufacturing industry (NAICS 

325120) has 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 the rule as 

part of the expert sub-group process. 

5.3.2.4 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 325120). Within this subpart, EPA identified 13 ultimate parent company names 

covered by the proposed rule. Using publicly available sources (e.g., Hoovers.com), we collected 

parent company sales and employment data and found that only one company could be classified 

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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 facilities 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 facilities (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 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 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, such 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.

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SECTION 6

STATUTORY AND EXECUTIVE ORDER REVIEWS 

This section describes EPA’s compliance with several applicable executive orders and 

statutes during the development of the F-GHG reporting rule, under subparts I, L, DD, QQ, and 

SS of the Mandatory Reporting Rule. 

6.1 Executive Order 12866: Regulatory Planning and Review 

Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), this action is a 

"significant regulatory action” because it may raise novel legal or policy issues arising out of 

legal mandates, the President’s priorities, or the principles set forth in the EO. Accordingly, 

EPA submitted this action to the Office of Management and Budget (OMB) for review under EO 

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 rule are reported in Section 4, and the economic 

impacts and qualitative benefits assessment are reported in Section 5. EPA’s cost analysis 

estimates that for the minimum reporting under the recommended regulatory option, the total 

annualized cost of the rule will be approximately $7.6.8 million (in $2006) during the first year 

of the program and $7.432 million in subsequent years (including $0.4 million of programmatic 

costs to the Agency). Overall, EPA has concluded that the costs of the F-GHG Reporting Rule 

are outweighed by the potential benefits of more comprehensive information about GHG 

emissions. 

6.2 Paperwork Reduction Act 

The information collection requirements in this final rule have 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]. 

EPA has identified 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. 

Formatted: body text_psg
6-2 

 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 specific 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 of 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.26

The projected cost and hour respondent burden in the ICR, averaged over the first three 

years after promulgation, is $6.709 million and 73,24676,701 hours per year. The estimated 

average burden per response is 175.7 183.9 hours; the frequency of response is annual for all 

respondents that must comply with the rule’s reporting requirements; and the estimated average 

number of likely respondents per year is 417. 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 $2.7270 million per year) a total operation and 

maintenance component (averaging $24,0009.5 thousand per year), and a labor cost component 

(averaging $3.964.15 million per year). Burden is defined at 5 CFR Part 1320.3(b). 

These cost numbers differ from those shown elsewhere in the EIA because ICR costs 

represent the average cost over the first three years of the rule, but costs are reported elsewhere 

in the EIA for 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, estimated to be $384,000.An agency may not conduct 

 

26 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 emission data that cannot be considered CBI (956 FR 7042 – 7043, 

February 21, 1991). As discussed in Section II.B 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 rule. 
6-3 

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 40 CFR Part 9. When this ICR is approved by OMB, the 

Agency will publish a technical amendment to 40 CFR partPart 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 regulatory 

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 substantial number 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, county, town, school district, or 

special district with a population of less than 50,000; or (3) a small organization that is any notfor-profit enterprise that is independently owned and operated and is not dominant in its field. 

For the F-GHG Reporting Rule, small entity is 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 employees 

at the firm fewer than 100 to number of employees fewer than 1000; one affected NAICS, 
6-4 

44311, defines small entities as those with sales below $9 million. Tables 5-11 through 5-14 

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 5-3 for 

first-year costs and in Table 5-4 for subsequent year costs. These sales tests examine the average 

establishment’s total annualized mandatory reporting costs to the average establishment receipts 

for enterprises within several employment categories27. 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. 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 final rule was generally less 

than 1%. For two NAICS, however, some size categories (especially those with 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 codes 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 CO2e threshold release 

approximately 6% of emissions. Because emissions and production levels are highly correlated, 

firms fewer than 20 employees are generally not expected to be affected by the final rule; if they 

are, their costs are likely to be lower than the overall average costs used in the screening 

analysis. Thus, EPA does not expect the final 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 

 

27For the one to 20 employee category, we exclude SUSB data for enterprises with zero employees. These 

enterprises did not operate the entire year. 

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covered by the final rule. Using publicly available sources (e.g., Hoovers.com), we collected 

parent company sales and employment data and found that only one company could be classified 

as 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 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, such as recordkeeping 

and reporting. The Agency investigated alternative thresholds and analyzed the marginal costs 

associated with requiring smaller entities with lower emissions to report. 

Through comprehensive outreach activities after proposal of the rule, EPA held meetings 

and/or conference calls with representatives of the primary audience groups. After proposal, 

EPA posted a general fact sheet for the rule, information sheets for every source category, and an 

FAQ document. We continued to meet with stakeholders and entered documentation of all 

meetings into the docket. One public hearing was held on April 12, 2010, which included three 

speakers from industry and one non-governmental environmental group. In addition, 20 outreach 

meetings were held. We considered public comments in developing the final rule. 

During rule implementation, EPA will maintain an “open door” policy for stakeholders to 

ask questions about rule or provide suggestions to EPA about the types of compliance assistance 

that would be useful to small businesses. EPA intends to develop a range of compliance 

assistance tools and materials and conduct extensive outreach for the final rule. 

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, for 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 final rule does not contain a Federal mandate that may result in expenditures of $100 

million or more for State, local, and tribal governments, in the aggregate, or the private sector in 
6-6 

any one year. Overall, EPA estimates that the total annualized costs of this final rule are 

approximately $7.6.8 million for the first year, and $7.42 million for subsequent years ($2006).

Thus, this final rule is not subject to the requirements of sections 202 or 205 of UMRA. 

This final rule is 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 final rule include manufacturers, wholesalers, and retailers. 

None of the facilities 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 have federalism implications” is defined in the executive order to include regulations that 

have “substantial direct effects on the states, on the relationship between the national government 

and the states, or on the distribution of power and responsibilities among the various levels of 

government.” 

This final rule does not have federalism implications. It will not have substantial direct 

effects on the states, on the relationship between the national government and the states, or on 

the distribution of power and responsibilities among the various levels of government, as 

specified in Executive Order 13132. 

This regulation applies to manufacturers, wholesalers, and retailers. Few government 

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 final 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 action from State and local officials. 

6.6 Executive Order 13175: Consultation and Coordination with 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 accountable 
6-7 

process to ensure “meaningful and timely input by tribal officials in the development of 

regulatory policies that have tribal implications.” 

This final rule is not expected to have tribal implications, as specified in Executive Order 

13175. This regulation applies to facilities that directly emit GHGs. We do not expect facilities 

owned by tribal governments to be affecyedaffected by this rule. Thus, Executive Order 13175 

does not apply to this final rule. 

Although Executive Order 13175 does not apply to this final 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 plan 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 final 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 final 

rulemaking. EPA specifically solicits additional comment 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 executive 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 final rule is not a “significant energy action” 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 final rule is not likely 

to have any adverse 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 energy 
6-8 

supply, distribution or use. Therefore, we conclude that this final rule is 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 

developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide 

Congress, through OMB, explanations when the Agency decides not to use available and 

applicable voluntary consensus standards. 

This rule involves technical standards. EPA will use voluntary consensus standards from 

at least four three different voluntary consensus standards bodies, including the following: 

ASTM, ASME, and International SEMATECH Manufacturing Initiative, and EPA . These 

voluntary consensus standards will help facilities monitor, report, and keep records of GHG 

emissions. No new test methods were developed for this rule. Instead, from existing rules for 

source categories and voluntary greenhouse gas programs, EPA identified existing means of 

monitoring, reporting, and keeping records of greenhouse gas emissions. The existing methods 

(voluntary consensus standards) include a broad range of measurement techniques, such as 

methods to measure gas or liquid flow and methods to identify the contents of vented or 

exhausted streams. The existing methods (voluntary consensus standards) include a broad range 

of measurement techniques, such as 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 40 CFR 98.7. 

6.10 Executive Order 12898: Federal Actions to Address Environmental Justice in 

Minority Populations and Low-Income Populations 

Executive Order 12898 (59 FR 7629, February 16, 1994) establishes federal executive 

policy on environmental justice. Its main provision directs federal agencies, to the greatest extent 

practicable and permitted by law, to make environmental justice part of their mission by 

identifying and addressing, as appropriate, disproportionately high and adverse human health or 

environmental effects of their programs, policies, and activities on minority populations and lowincome populations in the United States. 
6-9 

EPA has determined that this final rule will not have disproportionately high 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 final rule 

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. 

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7-1 

SECTION 7

CONCLUSIONS 

The supplemental proposal requires reporting 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, DD, QQ, and SS of the rule. 

7.1 Summary 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 (NF3), as well as nitrous oxide (N2O). This proposed rule would apply to electronics 

manufacturing facilities that emit equal to or greater than 25,000 metric tons of CO2e per year28

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 

cleaning and etch processes for semiconductor, LCD, MEMS, and PV manufacture and also 

methods for estimating N2O 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 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. 

 

28 As 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. 

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7-2 

Facilities that produce fluorinated gases will be required to report their fluorinated GHG 

emissions from fluorinated gas production, transformation, and destruction, as well as 

combustion-related CO2, CH4, and nitrous oxide (N2O) 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 DD: Electric Transmission and Distribution Equipment Use

The electric transmission and distribution equipment use source category includes gasinsulated substations, circuit breakers, other switchgear, and gas-insulated lines containing SF6 or 

PFCs. Equipment also includes gas containers such as pressurized cylinders, gas carts, new 

equipment owned but not yet installed, or other containers. Notwithstanding the definition of 

facility in subpart A, for purposes of this subpart, “facility” means an electric transmission and 

distribution system which is the collection of SF6- and PFC insulated equipment linked through 

electric power transmission or distribution lines and operated as an integrated unit by one electric 

power entity or several entities that have a single owner. 

Regulation of Subpart DD was proposed under the initial MRR, but was excluded after 

EPA received several comments regarding the definition of “facility” as it would be covered 

under the rule. After taking these comments under consideration, EPA has clarified the 

definition for this final rule. 

7.1.4 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 (N2O), and 

carbon dioxide (CO2) are imported into and exported from the United States. 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. 
7-3 

EPA is proposing to require reporting of these imports and exports. Importers and 

exporters of pre-charged equipment and closed-cell 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 

only be required to report if their total imports or exports exceeded the 25,000 mtCO2e 

threshold. 

7.1.5 Subpart SS – Electrical Equipment and Components Manufacturing 

Affected entities under subpart SS are defined as electrical equipment manufacturers and 

refurbishers of SF6-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 (SF6) 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 Hexafluoride (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 

SF6 and PFC emissions, including those from equipment testing, equipment manufacturing, and 

bulk SF6 and PFC handling. In addition, electrical equipment manufacturers would be required to 

submit supplemental data that includes: SF6 and PFCs with or inside equipment delivered to 

customers, SF6 and PFCs returned by customers with or inside equipment, bulk SF6 and PFC 

purchases, SF6 and PFCs sent off-site for destruction or to be recycled, SF6 and PFC returned 

from offsite after recycling, SF6 and PFCs stored in containers at the beginning and end of the 

year, SF6 and PFCs returned to suppliers. If applicable, facilities would also be required to report 

combustion-related CO2, CH4, and nitrous oxide (N2O) emissions from stationary fuel 

combustion. EPA would only require emission reporting a facility’s total annual purchases of 

SF6 and PFCs are greater than 23,000 lbs. This reporting threshold is equivalent an emissionsbased threshold of 25,000 MtCO2e, assuming an average manufacturer emission rate of 10%. 

7.2 Estimated Costs and Impacts of the GHG Reporting Program 

The total national costs for the selected option are estimated to be $7.6.8 million in the 

first year and $7.42 million in subsequent years ($2006). This includes a public sector burden 
7-4 

estimate of $384,000 for program implementation and verification activities. Subparts bearing 

the greatest share of the ongoing private costs of the rule are the electronics industry (7476%) 

and importersimports and exportersexports of fluorinated GHGs (89%). The average ongoing 

(subsequent year) private cost per metric ton varies by subpart; measures range from 

approximately than $0.0102 per ton (Subpart SS) to $0.3596 per ton (Subpart I). The national 

costs are distributed to several economic sectors and represent less than 0.01% of 2008 gross 

domestic product; overall, EPA does not believe the rule will have a significant macroeconomic 

impact on the national economy or on small entities within those sectors. 
7-5 
8-1 

SECTION 8

REFERENCES 

Burton (2007). Assessing the need for FC abatement standards, Solid State Technology, January 

2007. Available at: 

http://sst.pennnet.com/display_article/281422/5/ARTCL/none/none/1/Assessing-theneed-for-FC-abatement-standards/ 

U.S. Environmental Protection 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: 1990-2007. 

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 Business Administration (SBA). 2009c. 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/ 

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