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EO12866_CAA Part 82A 2060 AR04 NPRM_FRN_20130827

BILLING CODE 6560–50–P

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[EPA-HQ-OAR-2013-0263; FRL-9900-52-OAR]

RIN 2060-AR04

Protection of Stratospheric Ozone: Adjustments to the Allowance System for Controlling 

HCFC Production, Import and Export

AGENCY: Environmental Protection Agency [EPA].

ACTION: Notice of Proposed Rulemaking

SUMMARY: EPA is seeking comment on options for adjusting the allowance system 

controlling United States consumption and production of hydrochlorofluorocarbons (HCFCs). 

Under Title VI of the Clean Air Act, EPA is required to phase out production and import of these 

chemicals in accordance with United States obligations under the Montreal Protocol on 

Substances that Deplete the Ozone Layer (Protocol). Under the Protocol and the Clean Air Act, 

total United States HCFC production and consumption is capped, and will be completely phased 

out by 2030. Beginning January 1, 2015, United States production and consumption of all 

HCFCs must be no more than ten percent of the established cap. Existing EPA regulations 

prohibit production and consumption of HCFC-22 and HCFC-142b as of January 1, 2020. At 

that time, all other HCFC production and consumption must not exceed 0.5 percent of the cap, 

and is limited to use as a refrigerant in existing air conditioning and refrigeration equipment. 

Given these requirements, EPA is seeking comment on how best to implement the 2015 

stepdown to no more than 10 percent of the cap. Since the beginning of the HCFC phaseout 
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program, the agency has tried to ensure a smooth transition out of HCFCs into non-ozone 

depleting alternatives. Essential to a smooth transition are the recycling and emissions reductions 

requirements mandated by section 608 of the Clean Air Act. This proposal also includes a 

request for comment on potential changes to regulations promulgated under that authority, found 

in 40 CFR 82 subpart F. In addition to taking comment on the implementation of phaseout 

requirements and proposed changes to section 608 regulations, the agency is also highlighting

important Clean Air Act requirements that take effect in 2015, specifically the section 611

labeling requirements and the section 605 restrictions on HCFC use and introduction into 

interstate commerce.

DATES: Comments on this notice of proposed rulemaking must be received on or before 

[INSERT DATE 60 DAYS AFTER PUBLICATION IN FEDERAL REGISTER], unless a 

public hearing is held. If a public hearing is held, comments must be received on or before

[INSERT DATE 75 DAYS AFTER PUBLICATION IN FEDERAL REGISTER]. Any party 

requesting a public hearing must notify the contact listed below under FOR FURTHER 

INFORMATION CONTACT by 5 p.m. Eastern Daylight Time on [INSERT DATE 15 DAYS 

AFTER PUBLICATION]. If a public hearing is requested, the hearing will be held on [INSERT 

DATE 30 DAYS AFTER PUBLICATION]. If a hearing is held, it will take place at EPA 

headquarters in Washington, DC. EPA will post a notice on our website, 

www.epa.gov/ozone/strathome.html, announcing further information should a hearing take 

place.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2013-

0263, by one of the following methods: 

 www.regulations.gov: Follow the online instructions for submitting comments.
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 Email: a-and-r-docket@epa.gov

 Mail: Docket # EPA-HQ-OAR-2013-0263, Air and Radiation Docket and Information 

Center, United States Environmental Protection Agency, Mail code: 6102T, 1200 

Pennsylvania Avenue NW, Washington, DC 20460

 Hand Delivery: Docket #EPA-HQ-OAR-2013-0263 Air and Radiation Docket at EPA 

West, 1301 Constitution Avenue NW, Room B108, Mail Code 6102T, Washington, DC 

20004. Such deliveries are only accepted during the Docket’s normal hours of operation, 

and special arrangements should be made for deliveries of boxed information.

Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-2013-0263. EPA’s policy

is that all comments received will be included in the public docket without change and may be 

made available online at www.regulations.gov, including any personal information provided, 

unless the comment includes information claimed to be Confidential Business Information (CBI) 

or other information whose disclosure is restricted by statue. Do not submit information that you 

consider to be CBI or otherwise protected through www.regulations.gov or email. If you want to 

submit confidential comments, please send them to the individual listed in the FOR FURTHER 

INFORMATION CONTACT section. The www.regulations.gov website is an “anonymous 

access” system, which means EPA will not know your identity or contact information unless you 

provide it in the body of your comment. If you send an email comment directly to EPA without 

going through www.regulations.gov, your email address will be automatically captured and 

included as part of the comment that is placed in the public docket and made available on the 

Internet. If you submit an electronic comment, EPA recommends that you include your name and 

other contact information in the body of your comment and with any disk or CD-ROM you 

submit. If EPA cannot read your comment due to technical difficulties and cannot contact you 
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for clarification, EPA may not be able to consider your comment. Electronic files should avoid 

the use of special characters, any form of encryption, and be free of any defects or viruses. For 

additional information about EPA’s public docket, visit the EPA Docket Center homepage at 

www.epa.gov/epahome/dockets.htm. 

FOR FURTHER INFORMATION CONTACT: Elizabeth Whiteley by telephone at (202) 

343-9310 or by email at whiteley.elizabeth@epa.gov, or by mail at United States Environmental 

Protection Agency, Stratospheric Protection Division, Stratospheric Program Implementation 

Branch (6205J), 1200 Pennsylvania Ave, NW, Washington DC, 20460. You may also visit the 

Ozone Protection website of EPA’s Stratospheric Protection Division at 

www.epa.gov/ozone/strathome.html for further information about EPA’s Stratospheric Ozone 

Protection regulations, the science of ozone layer depletion, and related topics.

SUPPLEMENTARY INFORMATION: 

Acronyms and Abbreviations. The following acronyms and abbreviations are used in this 

document.

ANPRM – Advance Notice of Proposed Rulemaking 

CAA – Clean Air Act

CAAA – Clean Air Act Amendments of 1990

CFC – Chlorofluorocarbon

CFR – Code of Federal Regulations

EPA – Environmental Protection Agency

FR – Federal Register

HCFC – Hydrochlorofluorocarbon

HVACR – Heating, Ventilating, Air Conditioning and Refrigeration
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Montreal Protocol – Montreal Protocol on Substances that Deplete the Ozone Layer

MOP – Meeting of the Parties

MT – Metric Ton

ODP – Ozone Depletion Potential 

ODS – Ozone-Depleting Substance(s)

Party – States and regional economic integration organizations that have consented to be bound 

by the Montreal Protocol on Substances that Deplete the Ozone Layer

RACA – Request for Additional Consumption Allowances

Organization of This Document. The following outline is provided to aid in locating 

information in this preamble.

I. General Information

A. Does This Action Apply to Me?

B. What Should I Consider as I Prepare My Comments for EPA?

1. Confidential Business Information (CBI)

2. Tips for Preparing Your Comments

II. Background

A. How Does the Montreal Protocol Phase Out HCFCs?

B. How Do the Clean Air Act and EPA Regulations Phase Out HCFCs?

C. What Sections of the Clean Air Act Apply to This Rulemaking?

III. Clean Air Act Requirements that Begin in 2015

A. Labeling Requirements in Section 611(c) and (d)

B. Use and Sales Restriction in Section 605(a)

1. What Is EPA Proposing for Existing Inventory of HCFC-225ca and HCFC225cb?

2. How is EPA Planning to Update Regulations to Account for Recent Changes to

Section 605(a)?

C. Step Down to 10 Percent of Montreal Protocol Baseline 

IV. How Will EPA Determine Baselines for 2015-2019?

A. Using Existing Baselines 

B. Consideration of Establishing Revised Baselines Using More Recent Production and 

Import

Data
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V. How Is EPA Developing Allocation Levels for Each HCFC?

A. How Will EPA Determine the HCFC-22 Consumption Allocation?

1. Using a Linear Drawdown From 2014 Allocation Levels

2. Determining the Allocation by Estimating Servicing Need and then 

Accounting for Need that Can Be Met by Sources Other than New Production

3. Accounting for Existing HCFC-22 Inventory Under the Estimation Approach

B. How Will EPA Determine the HCFC-22 Production Allocation?

1. Allocate the Maximum Production Allocation Allowed Under the Cap

2. Allocate Approximately the Same Number of Production Allowances as 

Consumption Allowances

C. How Will EPA Determine the HCFC-142b Allocation?

D. How Will EPA Determine the HCFC-123 Allocation?

1. Allocate 100 Percent of HCFC-123 Consumption Baseline Through 2019

2. Allocate Less Than 100 Percent of HCFC-123 Consumption Baseline

E. How Will EPA Determine the HCFC-124 Allocation?

F. How Will EPA Determine the HCFC-225ca/cb Allocation?

G. What is EPA Proposing to Do With the HCFC-141b Exemption Program?

H. Other HCFCs that are Class II Controlled Substances

VI. What Other Adjustments to the HCFC Allowance System is EPA Considering?

A. Will EPA Consider Banning Dry-Shipped HCFC-22 Condensing Units?

B. How Will EPA Respond to Requests for Additional Consumption Allowances in 

2020 and Beyond?

C. How Might EPA Maximize Compliance With HCFC Regulations?

VII. What Modifications to Section 608 Regulations is EPA Proposing?

A. Overview of Current Reclamation Standards 

B. Benefits of Reclamation

C. Regulatory Changes that EPA is Proposing under Section 608 Authority

1. Adoption of AHRI 700-2012 Standards

2. Notification to EPA if Change in Business, Management, Location or 

Contact Information

3. Reporting and Recordkeeping Requirements

4. Technical and Process Information Required in Reclaimer Certification

Application

5. Expanded End Product Testing Requirements

VIII. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563:

Improving Regulation and Regulatory Review

B. Paperwork Reduction Act

C. Regulatory Flexibility Act (RFA)

D. Unfunded Mandates Reform Act

E. Executive Order 13132: Federalism

F. Executive Order 13175: Consultation and Coordination with Indian Tribal 

Governments
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G. Executive Order 13045: Protection of Children from Environmental Health and Safety

Risks

H. Executive Order 13211: Actions that Significantly Affect Energy Supply, Distribution, 

or Use

I. National Technology Transfer and Advancement Act

J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority

Populations and Low-Income Populations

I. General Information

A. Does This Action Apply to Me?

This rule will affect the following categories:

- Industrial Gas Manufacturing entities (NAICS code 325120), including 

fluorinated hydrocarbon gas manufacturers and reclaimers;

- Other Chemical and Allied Products Merchant Wholesalers (NAICS code 

424690), including chemical gases and compressed gases merchant 

wholesalers;

- Air-Conditioning and Warm Air Heating Equipment and Commercial and 

Industrial Refrigeration Equipment Manufacturing entities (NAICS code 

333415), including air-conditioning equipment and commercial and industrial 

refrigeration equipment manufacturers;

- Air-Conditioning Equipment and Supplies Merchant Wholesalers (NAICS 

code 423730) , including air-conditioning (condensing unit, compressors) 

merchant wholesalers;

- Electrical and Electronic Appliance, Television, and Radio Set Merchant 

Wholesalers (NAICS code 423620), including air-conditioning (room units) 

merchant wholesalers; 
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- Plumbing, Heating, and Air-Conditioning Contractors (NAICS code 238220), 

including Central air-conditioning system and commercial refrigeration 

installation, HVACR contractors; and

- Refrigerant reclaimers, manufacturers of recovery/recycling equipment and 

refrigerant recovery/recycling equipment testing organizations.

This list is not intended to be exhaustive, but rather provides a guide for readers regarding the 

types of entities that could potentially be regulated by this action. Other types of entities not 

listed in this table could also be affected. To determine whether your facility, company, business 

organization, or other entity is regulated by this action, you should carefully examine these 

regulations. If you have questions regarding the applicability of this action to a particular entity, 

consult the person listed in the “FOR FURTHER INFORMATION CONTACT” section. 

B. What Should I Consider as I Prepare My Comments for EPA?

1. Confidential Business Information (CBI)

Do not submit CBI information to EPA through www.regulations.gov or a-and-rdocket@epa.gov. Submit CBI directly to the person listed in the “FOR FURTHER 

INFORMATION CONTACT” section. Clearly mark the part or all of the information that you 

claim to be CBI. For CBI information in a disk or CD ROM that you mail to EPA, mark the 

outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD 

ROM the specific information that is claimed as CBI. In addition to one complete version of the 

comment that includes information claimed as CBI, a copy of the comment that does not contain 

the information claimed as CBI must be submitted for inclusion in the public docket. Information 

so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2.

2. Tips for Preparing Your Comments
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When submitting comments, remember to:

• Identify the rulemaking by docket number and other identifying information 

(subject heading, Federal Register date and page number).

• Follow directions - The agency may ask you to respond to specific questions or 

organize comments by referencing a Code of Federal Regulations (CFR) part or 

section number.

• Explain why you agree or disagree, suggest alternatives and substitute language 

for your requested changes.

• Describe any assumptions and provide any technical information and/or data that 

you used.

• If you estimate potential costs or burdens, explain how you arrived at your 

estimate in sufficient detail to allow for it to be reproduced.

• Provide specific examples to illustrate your concerns, and suggest alternatives.

• Explain your views as clearly as possible, avoiding the use of profanity or 

personal threats.

• Make sure to submit your comments by the comment period deadline identified.

II. Background

A. How Does the Montreal Protocol Phase Out HCFCs?

The Montreal Protocol on Substances that Deplete the Ozone Layer is the international 

agreement aimed at reducing and eventually eliminating the production and consumption of 

ozone-depleting substances (ODS). The United States was one of the original signatories to the 

1987 Montreal Protocol, and ratified the Protocol on April 12, 1988. Congress then enacted, and 

President George H.W. Bush signed into law, the Clean Air Act Amendments of 1990 (CAAA)
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to ensure that the United States could satisfy its obligations under the Montreal Protocol. Title VI

of the Act (codified as 42 U.S.C. Chapter 85, Subchapter VI) is titled Stratospheric Ozone 

Protection; it includes restrictions on production, consumption, and use of ODS that are subject 

to acceleration if “the Montreal Protocol is modified to include a schedule to control or reduce 

production, consumption, or use . . . more rapidly than the applicable schedule” prescribed by the 

statute. Both the Montreal Protocol and the Clean Air Act (CAA) define consumption as 

production plus imports minus exports.

In 1990, as part of the London Amendment to the Montreal Protocol, the Parties 

identified HCFCs as “transitional substances” to serve as temporary, lower ozone depletion 

potential (ODP) substitutes for chlorofluorocarbons (CFCs) and other ODS. EPA similarly

viewed HCFCs as “important interim substitutes that will allow for the earliest possible phaseout 

of CFCs and other class I substances1” (58 FR 65026, December 10, 1993). In 1992, through the 

Copenhagen Amendment to the Montreal Protocol, the Parties created a detailed phaseout 

schedule for HCFCs, beginning with a cap on consumption for developed countries not operating 

under Article 5 of the Montreal Protocol (non-Article 5 Parties), a schedule to which the United 

States adheres. The consumption cap for each non-Article 5 Party was set at 3.1 percent (later 

tightened to 2.8 percent) of a Party’s CFC consumption in 1989, plus a Party’s consumption of 

HCFCs in 1989 (weighted on an ODP basis). Based on this formula, the HCFC consumption cap 

for the United States was set at 15,240 ODP-weighted metric tons, effective January 1, 1996. 

This cap is the United States HCFC consumption baseline. 

The 1992 Copenhagen Amendment created a schedule with graduated reductions and

eventual phaseout of HCFC consumption (Copenhagen, 23-25 November, 1992, Decision IV/4). 

 

1 Class I refers to the controlled substances listed in appendix A to 40 CFR part 82 subpart A. Class II refers to the 

controlled substances listed in appendix B to 40 CFR part 82 subpart A; HCFCs are class II substances.
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The schedule for non-Article 5 Parties initially called for tighter consumption caps based on a 

Party’s baseline, as follows: an annual consumption cap equal to 65 percent of baseline in 2004, 

35 percent of baseline in 2010, 10 percent of baseline in 2015, and 0.5 percent of baseline in 

2020, with a complete HCFC phaseout by 2030.

The Copenhagen Amendment did not cap HCFC production. In 1999, the Parties created 

a cap on production for non-Article 5 Parties through an amendment to the Montreal Protocol 

agreed to at the Eleventh Meeting of the Parties (Beijing, 29 November – 3 December 1999, 

Decision XI/5). The cap on production was set at the average of: (a) 1989 HCFC production plus 

2.8 percent of 1989 CFC production, and (b) 1989 HCFC consumption plus 2.8 percent of 1989 

CFC consumption. Based on this formula, the HCFC production cap for the United States was 

set at 15,537 ODP- MT, effective January 1, 2004. This cap is the United States HCFC 

production baseline.

To further protect human health and the environment, the Parties to the Montreal Protocol 

adjusted the Montreal Protocol’s phaseout schedule for HCFCs at the 19th Meeting of the Parties 

in September 2007. As a result of the 2007 Montreal Adjustment (reflected in Decision XIX/6),2

the United States and other non-Article 5 parties were obligated to reduce HCFC production and 

consumption to 25 percent of baseline by 2010, rather than 35 percent as previously required. 

The other milestones remain the same. The adjustment also resulted in a phaseout schedule for 

HCFC production that parallels the consumption phaseout schedule. All production and 

consumption for non-Article 5 Parties must be phased out by 2030.

Decision XIX/6 also adjusted the provisions for Parties operating under paragraph 1 of 

Article 5, considered as developing countries under the Protocol: (1) to set HCFC production and 

 

2 The adjustment entered into force and became binding for all Parties on May 14, 2008.
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consumption baselines based on the average 2009-2010 production and consumption, 

respectively; (2) to freeze HCFC production and consumption at those baselines in 2013; and (3) 

to add stepwise reductions to 90 percent of baseline by 2015, 65 percent by 2020, 32.5 percent 

by 2025, and an average of 2.5 percent for 2030-2039. All production and consumption for 

Article 5 Parties must be phased out by 2040. 

In addition, Decision XIX/6 adjusted Article 2F to allow non-Article 5 Parties to produce 

“up to 10 percent of baseline levels” for export to Article 5 countries “in order to satisfy basic 

domestic needs” until 2020.3Paragraph 14 of Decision XIX/6 notes that no later than 2015, the 

 

3

Paragraphs 4-6 of adjusted Article 2F read as follows:

“4. Each Party shall ensure that for the twelve-month period commencing on 1 January 2010, and in each twelvemonth period thereafter, its calculated level of consumption of the controlled substances in Group I of Annex C 

does not exceed, annually, twenty-five per cent of the sum referred to in paragraph 1 of this Article. Each Party 

producing one or more of these substances shall, for the same periods, ensure that its calculated level of 

production of the controlled substances in Group I of Annex C does not exceed, annually, twenty-five per cent of 

the calculated level referred to in paragraph 2 of this Article. However, in order to satisfy the basic domestic 

needs of the Parties operating under paragraph 1 of Article 5, its calculated level of production may exceed that 

limit by up to ten per cent of its calculated level of production of the controlled substances in Group I of Annex 

C as referred to in paragraph 2. 

5. Each Party shall ensure that for the twelve-month period commencing on 1 January 2015, and in each twelvemonth period thereafter, its calculated level of consumption of the controlled substances in Group I of Annex C 

does not exceed, annually, ten per cent of the sum referred to in paragraph 1 of this Article. Each Party producing 

one or more of these substances shall, for the same periods, ensure that its calculated level of production of the 

controlled substances in Group I of Annex C does not exceed, annually, ten per cent of the calculated level 

referred to in paragraph 2 of this Article. However, in order to satisfy the basic domestic needs of the Parties 

operating under paragraph 1 of Article 5, its calculated level of production may exceed that limit by up to ten per 

cent of its calculated level of production of the controlled substances in Group I of Annex C as referred to in 

paragraph 2.

6. Each Party shall ensure that for the twelve-month period commencing on 1 January 2020, and in each twelvemonth period thereafter, its calculated level of consumption of the controlled substances in Group I of Annex C 

does not exceed zero. Each Party producing one or more of these substances shall, for the same periods, ensure 

that its calculated level of production of the controlled substances in Group I of Annex C does not exceed zero. 

However: 

a. each Party may exceed that limit on consumption by up to zero point five per cent of the sum referred to in 

paragraph 1 of this Article in any such twelve-month period ending before 1 January 2030, provided that such 

consumption shall be restricted to the servicing of refrigeration and air conditioning equipment existing on 1 

January 2020;

b. each Party may exceed that limit on production by up to zero point five per cent of the average referred to 

in paragraph 2 of this Article in any such twelve-month period ending before 1 January 2030, provided that 

such production shall be restricted to the servicing of refrigeration and air conditioning equipment existing on 1 

January 2020.”
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Parties would consider “further reduction of production for basic domestic needs” in 2020 and 

beyond. Paragraph 3 of Decision XIX/6 contains the accelerated phaseout schedule, allowing 

consumption and production up to 0.5 percent of baseline from 2020-2030 for servicing needs 

only. Under paragraph 13 of Decision XIX/6, the Parties will review in 2015 and 2025, 

respectively, the need for the “servicing tails” for Article 5 and non-Article 5 countries. The term 

“servicing tail” refers to an amount of HCFCs used to service existing equipment, such as certain 

types of air-conditioning and refrigeration appliances.

B. How Do the Clean Air Act and EPA Regulations Phase Out HCFCs?

The Clean Air Act schedules for the phase out of HCFC production and consumption, 

and for the restriction of HCFC use, appear in Section 605. The EPA has used its authority under 

Section 606 to accelerate those schedules. EPA regulations that apply to production and 

consumption of HCFCs are designed to enable the United States to meet the phaseout schedule 

under the Montreal Protocol.

The United States has chosen to implement the Montreal Protocol phaseout schedule on a 

chemical-by-chemical basis. In 1992, environmental and industry groups petitioned EPA to 

implement the required phaseout by eliminating the most ozone-depleting HCFCs first. Based on 

data available at that time, EPA believed the United States could meet, and possibly exceed, the 

required Montreal Protocol reductions through a chemical-by-chemical phaseout that employed a 

“worst-first” approach. In 1993, as authorized by section 606 of the CAA, EPA established a 

phaseout schedule that eliminated HCFC-141b first and would greatly restrict HCFC-142b and 

HCFC-22 next, followed by restrictions on all other HCFCs and ultimately a complete phaseout 

(58 FR 15014, March 18, 1993 and 58 FR 65018, December 10, 1993). 
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On January 21, 2003, EPA promulgated regulations (68 FR 2820, January 21, 2003, 2003 

Final Rule) to ensure compliance with the first reduction milestone in the HCFC phaseout: the 

requirement that by January 1, 2004, the United States reduce HCFC consumption to 65 percent 

of baseline and freeze HCFC production. In the 2003 Final Rule, EPA established chemicalspecific consumption and production baselines for HCFC-141b, HCFC-22, and HCFC-142b for 

the initial regulatory period ending December 31, 2009. Section 601(2) states that EPA may

select “a representative calendar year” to serve as the company baseline for HCFCs. In the 2003 

Final Rule, EPA concluded that because the entities eligible for allowances had differing 

production and import histories, no single year was representative for all companies. Therefore, 

EPA assigned an individual consumption baseline year to each company by selecting its highest 

ODP-weighted consumption year from 1994 through 1997. EPA assigned individual production 

baseline years in the same manner. EPA also provided for new entrants that began importing 

after the end of 1997 but before April 5, 1999, the date the advanced notice of proposed 

rulemaking was published. EPA took this action to ensure that small businesses that might not 

have been aware of the impending rulemaking would be able to continue in the HCFC market.

In the United States, an allowance is the unit of measure that controls production and 

consumption of ODS. EPA allocates calendar-year allowances equal to a percentage of the 

baseline—they are valid from January 1 to December 31 of that control period. A calendar-year 

allowance represents the privilege granted to a company to produce or import one kilogram (not 

ODP-weighted) of the specific substance. “Production allowance” and “consumption allowance” 

are defined at section 82.3. To produce an HCFC for which allowances have been allocated, an 

allowance holder must expend both production and consumption allowances. To import an 

HCFC for which allowances have been allocated, an allowance holder must expend consumption 
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allowances. An allowance holder exporting HCFCs for which it has expended consumption 

allowances may request a refund of those consumption allowances by submitting proper 

documentation and receiving approval from EPA.

The 2003 Final Rule set production and consumption baselines for the 2003-2009 

regulatory period, using each company’s highest “production year” or “consumption year”. It 

completely phased out the production and import of HCFC-141b by granting zero percent of

baseline for production and consumption in the table at 40 CFR 82.16. EPA did, however, create 

a petition process to allow applicants to request small amounts of HCFC-141b beyond the 

phaseout. The 2003 Final Rule allocated allowances for production and consumption of HCFC22 and HCFC-142b for each of the years 2003 through 2009. EPA was able to allocate 

allowances for HCFC-22 and HCFC-142b at 100 percent of baseline because, in light of the 

concurrent complete phaseout of HCFC-141b, the allocations for HCFC-22 and HCFC-142b, 

combined with projections for consumption of all other HCFCs, remained below the 2004 cap of 

65 percent of the United States baseline. 

Since EPA is implementing the phaseout on a chemical-by-chemical basis, it allocates 

and tracks production and consumption allowances on an absolute kilogram basis for each 

chemical. Upon EPA approval, an allowance holder may transfer calendar-year allowances of 

one type of HCFC for calendar-year allowances of another type of HCFC, with transactions 

weighted according to the ODP of the chemicals involved. Pursuant to section 607 of the CAA, 

EPA applies an offset to each HCFC transfer by deducting 0.1 percent from the transferor’s 

allowance balance. The offset benefits the ozone layer since it “results in greater total reductions 

in the production in each year of . . . class II substances than would occur in that year in the 

absence of such transactions” (42 U.S.C. 7671f).
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The United States remained comfortably below the aggregate HCFC cap through 2009. 

The 2003 Final Rule announced that EPA would allocate allowances for 2010-2014 in a 

subsequent action and that those allowances would be lower in aggregate than for 2003-2009, 

consistent with the next stepwise reduction for HCFCs under the Montreal Protocol. EPA 

subsequently monitored the market to estimate servicing needs and market adjustments in the use 

of HCFCs, including HCFCs for which EPA did not establish baselines in the 2003 Final Rule.

In the 2009 Final Rule (74 FR 66412, December 15, 2009), EPA issued production and import 

allowances for HCFC-22, HCFC-142b and other HCFCs not previously included in the 

allowance system, for the 2010-2014 control periods.

In the 2009 Final Rule, EPA determined both the estimated need for HCFC-22 during the 

2010-2014 regulatory period and the percentage of that estimated need for which it was 

appropriate to allocate allowances. EPA decided that the percentage of the estimated need

allocated in the form of allowances should not remain constant from year to year, but rather 

should decline on an annual basis. For 2010, EPA allocated HCFC-22 allowances equal to 80 

percent of the estimated need, concluding that reused, recycled, and reclaimed material could 

meet the remaining 20 percent. The percentage of estimated need for which there was no 

allocation, and that would therefore need to be met through recycling and reclamation, rose from 

20 percent in 2010 to 29 percent in 2014. The intent of this approach was to foster reclamation,

and to ensure that the United States could meet the 2015 stepdown under the Montreal Protocol. 

However, part of the 2009 Final Rule was vacated in an August 27, 2010 decision issued 

by the United States Court of Appeals for the District of Columbia Circuit (Court) in Arkema v. 

EPA (618 F.3d 1, D.C. Cir. 2010). Certain allowance holders affected by the 2009 Final Rule 

filed petitions for judicial review of the rule under section 307(b) of the Clean Air Act. Among 
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other arguments, the petitioners contended that the rule was impermissibly retroactive because in 

setting the baselines for the new regulatory period, EPA did not take into account certain interpollutant baseline transfers that petitioners had performed during the prior regulatory period.

Accounting for these transfers in the 2009 Final Rule and applying the same methodology would 

have resulted in different baselines and calendar-year allowances for HCFC-22 and HCFC-142b.

The Court agreed with petitioners that “the [2009] Final Rule unacceptably alters 

transactions the EPA approved under the 2003 Rule,” (Arkema v. EPA, 618 F.3d at 3). The Court 

vacated the rule in part, “insofar as it operates retroactively,” and remanded to EPA “for prompt 

resolution,” (618 F.3d at 10). EPA’s petition for rehearing was denied on January 21, 2011. EPA 

addressed the Court’s partial vacatur as it related to 2011 in an August 5, 2011 interim final rule, 

“Protection of Stratospheric Ozone: Adjustments to the Allowance System for Controlling 

HCFC Production, Import, and Export,” (76 FR 47451, August 5, 2011, 2011 Interim Final 

Rule). In that rule, EPA established new baselines that (1) credited the 2008 inter-pollutant trades 

at issue in Arkema v. EPA based on the Court’s decision, (2) reflected inter-company, singlepollutant baseline transfers that occurred since the 2009 Final Rule was signed, (3) allocated 

HCFC-22 and HCFC-142b allowances for 2011, (4) clarified EPA’s policy on all future interpollutant transfers and (5) updated company names. The HCFC-22 and HCFC-142b use 

restrictions and the allocation for other controlled HCFCs were not affected by the partial 

vacatur.

To complete its response to the court’s decision, EPA published a final rule with the same 

name on April 3, 2013, allocating HCFC-142b and HCFC-22 allowances for 2012-2014 (78 FR 

20004, 2013 Final Rule). In that rule, EPA reduced HCFC-22 allowances in 2012-2014 by
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almost 30 percent relative to the 2009 Final Rule in order to incentivize proper handling and 

recovery of HCFC-22 and encourage transition to non-ODS alternatives.

EPA has not yet allocated any HCFC allowances for year 2015 or beyond. The 

regulations at 40 CFR section 82.15(a) and (b) prohibit the production and import of HCFCs for 

which EPA has apportioned baseline allowances without calendar-year (or “annual”) allowances.

As a result, production and import of HCFC-22 and HCFC-142b, as well as HCFC-123, HCFC124 and HCFC-225ca/cb is prohibited in 2015 and beyond under current regulations, pending the 

allocation of allowances. This proposed rule initiates the rulemaking process for setting the 

2015-2019 HCFC allocations.

For more information on the history of the HCFC phaseout and applicable rulemakings, 

see: http://www.epa.gov/ozone/title6/phaseout/classtwo.html.

C. What Sections of the Clean Air Act Apply to This Rulemaking?

Several sections of the CAA apply to this rulemaking. Section 602 states that EPA shall 

publish an initial list of class II substances, which is to include the HCFCs specified in the statute 

as well as their isomers. EPA’s listing of class II substances appears at appendix B to 40 CFR 

part 82, subpart A.

Section 605 of the CAA phases out production and consumption and restricts the use of 

HCFCs in accordance with the schedule set forth in that section. As discussed in the 2009 Final 

Rule (74 FR 66416), section 606 provides EPA authority to set a more stringent phaseout 

schedule than the schedule in section 605 based on an EPA determination regarding current 

scientific information or the availability of substitutes, or to conform to any acceleration under 

the Montreal Protocol. EPA previously set a more stringent schedule than the section 605 

schedule through a rule published December 10, 1993 (58 FR 65018). Through the 2009 Final 
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Rule, EPA made a further adjustment to the section 605 schedule based on the acceleration under 

the Montreal Protocol as agreed to at the Meeting of the Parties in September 2007. The more 

stringent schedule established in that rule is still in effect. 

Section 606 provides authority for EPA to promulgate regulations that establish a 

schedule for production and consumption that is more stringent than what is set forth in section 

605 if: “(1) based on an assessment of credible current scientific information (including any 

assessment under the Montreal Protocol) regarding harmful effects on the stratospheric ozone 

layer associated with a class I or class II substance, the Administrator determines that such more 

stringent schedule may be necessary to protect human health and the environment against such 

effects, (2) based on the availability of substitutes for listed substances, the Administrator 

determines that such more stringent schedule is practicable, taking into account technological 

achievability, safety, and other relevant factors, or (3) the Montreal Protocol is modified to 

include a schedule to control or reduce production, consumption, or use of any substance more 

rapidly than the applicable schedule under this title.” It is only necessary to meet one of the three 

criteria. In the 2009 Final Rule, EPA determined that all three criteria had been met with respect 

to the schedule for phasing out production and consumption of HCFC-22 and HCFC-142b4.

Section 608 of the CAA, titled National Recycling and Emission Reduction Program, 

requires EPA to establish standards and requirements for the use and disposal of class I and II 

substances. Those requirements must reduce the use and emissions of controlled substances to 

the lowest achievable level, as well as maximize their recapture and recycling. Additionally, 

section 608(c) prohibits any person maintaining, servicing, repairing or disposing of an appliance

that contains refrigerant from knowingly venting, releasing, or disposing of that substance to the 

 

4 The phaseout schedule for HCFC-22 and HCFC-142b was unaffected by the decision in Arkema v. EPA.
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environment, regardless of whether the refrigerant is an ODS or a substitute. Substitutes are 

exempted from this prohibition only if EPA has determined that venting, releasing, or disposing 

of the substitute does not pose a threat to the environment.

Section 611 of the CAA requires EPA to establish and implement labeling requirements 

for containers of, and products containing or manufactured with class I or class II ODS. While 

containers of class II substances (i.e. HCFCs) already are subject to labeling requirements, 

products containing or manufactured with class II substances must be labeled beginning January

1, 2015. The specific requirements and existing regulation implementing those requirements are 

discussed in the following section.

Finally, Section 614 of the CAA describes the relationship of Title VI to the Montreal 

Protocol. Section 614(b) states: “In the case of conflict between any provision of this title and 

any provision of the Montreal Protocol, the more stringent provision shall govern.” Section 614 

ensures that EPA regulations are in accordance with United States obligations under the 

Montreal Protocol. 

III. Clean Air Act Requirements that Begin in 2015

A. Labeling Requirements in Section 611(c) and (d)

Section 611 of the CAA requires EPA to establish and implement labeling requirements 

for containers of, and products containing or manufactured with class I or class II ODS. In 1993, 

EPA published regulations on these labeling requirements (58 FR 8136, February 11, 1993),

codified at 40 CFR part 82 subpart E. Currently, these requirements only apply to containers 

containing class I or II ODS and products containing or manufactured with class I ODS. Products 

containing or manufactured with class II substances will be subject to these requirements

beginning on January 1, 2015. As a result, in 2015, containers containing, products containing, 
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and products manufactured with a class I or class II substance must bear a product label stating: 

“Warning: Contains [or Manufactured with, if applicable] [insert name of class I or II substance], 

a substance which harms public health and environment by destroying ozone in the upper 

atmosphere” (40 CFR 82.106).

EPA defines a “product containing” a class II substance as a “product including, but not 

limited to, containers, vessels, or pieces of equipment, that physically holds a controlled 

substance at the point of sale to the ultimate consumer which remains within the product,” (40 

CFR 82.104). Two examples of a “product containing” a class II substance that would require a 

label are (1) portable fire extinguishers containing an HCFC and (2) appliances that incorporate 

closed-cell foam blown with an HCFC. Foams are plastics (such as polyurethane or polystyrene) 

that are manufactured using blowing agents to create bubbles or cells in the material's structure. 

Closed-cell foam physically holds blowing agent within the cells. While HCFCs are no longer 

used as blowing agents in the United States, they are used in other countries from which the 

United States may import products. In the case of portable fire extinguishers, the fire suppression 

agent is contained in a reservoir within the extinguisher and released by the user when needed.

On the other hand, the definition of a product “manufactured with” a class II substance is 

a product for which the manufacturer used a class II substance directly in that product’s 

manufacturing, but where the product itself does not contain more than trace quantities of the 

ODS at the point of introduction into interstate commerce. A product “manufactured with” a 

class II substance would include electronics cleaned with HCFC solvent and open cell foam 

blown with an HCFC. Open cell foam is different from closed cell foam in that it was 

manufactured with a blowing agent, but no longer contains the blowing agent because the cells 

or bubbles in open cell foam are open to the surrounding environment. Since HCFCs are no 
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longer used as foam blowing agents in the United States, and the Nonessential Products Ban 

prohibits the sale or distribution of open cell plastic foam products made with HCFCs (40 CFR 

82.70(c)), EPA expects the requirement for a “manufactured with” label should not be relevant to 

most open cell foam products. The agency welcomes comment on which open or closed cell 

foam products are currently being imported, and whether those products are likely blown with an 

HCFC. EPA would like this information so it can communicate with and offer guidance to 

companies that must determine whether the HCFC labeling requirements apply to their products. 

Final products that incorporate another product that was “manufactured with” a class I or class II 

ODS do not have to bear a label so long as the manufacturer of the final product is distinct from 

the manufacturer of the product “manufactured with” the ODS (40 CFR 82.116). By contrast, 

final products that incorporate “products containing” a class I or II ODS will require a warning 

label, even if the final product manufacturer purchases the “product containing” the ODS from 

another manufacturer or supplier (40 CFR 82.114). For a discussion of the labeling pass-through 

requirements, see the February 11, 1993 final rule that implemented the statutory labeling 

requirements (58 FR 8136).

EPA has created a preliminary list of products that might be affected by these 

requirements beginning in 2015. This list, along with guidance for manufacturers and importers 

of potentially affected products, is titled Summary of HCFC Product Labeling Requirements & 

Potentially Affected Products (Labeling Memo) and can be found in the docket for this 

rulemaking. EPA is seeking comment on whether this list is accurate and complete, and would 

like to know where products made with or containing HCFCs are manufactured. This 

information will help the agency better inform manufacturers in the United States and abroad 

about the labeling requirement taking effect in 2015. 
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The agency is also interested in comments on which products have mainly switched to 

non-ODS alternatives so it can assist companies in determining whether the labeling 

requirements are likely to apply to their products. For products that no longer are manufactured 

with or contain HCFCs, the agency would like to know if that change applies globally, or only to 

manufacture in the United States. The agency also welcomes comment on whether any 

clarification to the regulations at 40 CFR subpart E (82.100-82.124) is needed in order to 

implement the existing labeling requirement for products containing or manufactured with class 

II substances. More background on the labeling requirements can be found in the 1993 Final 

Rule (58 FR 8136), which is also included in the docket to this rulemaking. 

EPA is not proposing any substantive changes to the regulations at 40 CFR subpart E; 

however, the agency is proposing three very minor modifications to clarify the intent of the 

regulatory language with respect to class II substances. The first two proposed clarifications are 

to replace “class I substance” with “controlled substance.” While the emphasis in 1993 was on

class I substances, EPA is now proposing to remove any ambiguity with respect to class II 

substances by reconciling inconsistent terminology, specifically at 82.110(c) and 82.112(d). The 

Combined statement for multiple class I substances at 82.110(c) states, “If a container containing 

or a product contains or is manufactured with, more than one class I or class II substance, the 

warning statement may include the names of all of the substances in a single warning statement, 

provided that the combined statement clearly distinguishes which substances the container or 

product contains and which were used in the manufacturing process.” This paragraph clearly 

applies to both class I and class II products, as stated in the operative text. EPA is proposing to 

modify the title of this paragraph to be Combined statement for multiple controlled substances, 

consistent with the operative text. Similarly, 82.112(d), which is titled: Manufacturers, 
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distributors, wholesalers, retailers that sell spare parts manufactured with controlled substances 

solely for repair, includes the more general term “controlled substances” in the title, but not the 

operative text. The operative text that follows the title reads: “Manufacturers, distributors, 

wholesalers, and retailers that purchase spare parts manufactured with a class I substance from

another manufacturer or supplier, and sell such spare parts for the sole purpose of repair, are not 

required to pass through an applicable warning label if such products are removed from the 

original packaging provided by the manufacturer from whom the products are purchased...” 

EPA is proposing to replace “class I substance” with “controlled substance” in order to clarify

that this narrow exemption to the labeling requirements also applies to class II products in the 

same way it applied to class I products.

The final minor change that EPA is proposing is at 82.122, Certification, recordkeeping, 

and notice requirements. The first sentence at (a)(1) refers to persons claiming the exemption for 

certain methyl chloroform users provided for in 82.106(b)(2); however, this exemption is 

actually provided for in 82.106(b)(4). EPA is proposing to revise the current text to reference the 

correct paragraph, which is 82.106(b)(4) not (b)(2). EPA also notes that this exemption ended 

May 15, 1994 and that the agency is proposing this minor change solely to avoid confusion.

B. Use and Sales Restriction in Section 605(a)

Starting January 1, 2015, section 605(a) of the Clean Air Act prohibits the use or 

introduction into interstate commerce of any class II substance that does not meet one of four 

exceptions. Specifically, use or introduction into interstate commerce is allowed only if (1) the 

substance has been used, recovered and recycled; (2) it is entirely transformed, except for trace 

quantities, in the production of other chemicals; (3) it is used as a refrigerant in appliances 

manufactured prior to 2020; or (4) it is listed as acceptable for use as a nonresidential fire 
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suppression agent in accordance with CAA section 612(c).5Section 612 is the statutory authority

for EPA’s Significant New Alternatives Policy program, under which the agency reviews 

potential substitutes for class I and class II substances in certain end uses and lists those potential

substitutes as acceptable, acceptable subject to use conditions, acceptable subject to narrowed 

use limits, or unacceptable (see 40 CFR subpart G). 

In the 2009 Final Rule (74 FR 66412), EPA used its authority under section 606 to 

accelerate the section 605(a) restrictions on use and introduction into interstate commerce for 

HCFC-22 and HCFC-142b, applying them to HCFC-22 and HCFC-142b6as of January 1, 2010, 

five years earlier than the date specified in section 605(a). Effective January 1, 2010, EPA 

prohibited the use of virgin HCFC-22 and HCFC-142b to manufacture or service new airconditioning and refrigeration appliances. In a separate rule, under the authority provided in 

section 615 of the CAA, EPA also prohibited the sale and distribution of appliances and 

appliance components pre-charged with virgin or used, recovered and recycled HCFC-22 and 

HCFC-142b (74 FR 66450). For all other HCFCs, including those for which EPA has not 

historically issued allowances, the section 605(a) prohibitions and exceptions apply as of January

1, 2015. All HCFCs other than HCFC-22 and HCFC-142b may continue to be used and sold as 

refrigerants, but only for use in appliances manufactured before 2020.

EPA believes the term “use” is ambiguous in the context of section 605(a) with respect to 

potential categories of use that Congress did not directly address. Historically, in the context of 

section 605, EPA has focused on use of refrigerants to manufacture and service appliances and 

 

5 The fourth exception in this list is a recent change to the Clean Air Act, which was included in the National 

Defense Authorization Act for Fiscal Year 2012 [112th Congress, H.R. 1540, Title III, Section 320, Fire 

Suppression Agents]. EPA is proposing to incorporate this change into the regulations at 40 CFR 82.15(g)(4) and 

82.16(d). See Section III.B.2. of this preamble for further discussion. 

6 EPA also accelerated the restrictions on use and introduction into interstate commerce for HCFC-141b in the same 

rulemaking; however, HCFC-141b is not discussed further in this section because it is not used for refrigeration 

purposes.
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the section 605(a)(3) exception for servicing existing equipment. In 1993, EPA took the section 

605(a) use restrictions into account in establishing the HCFC chemical-by-chemical phaseout. 

The 1993 Notice of Proposed Rulemaking (58 FR 15014) discusses the acceleration of the use 

restriction for HCFC-22 and HCFC-142b from the standpoint of when it would be 

technologically feasible to cease using these two chemicals in new refrigeration and airconditioning equipment. In that rulemaking, EPA did not explore how to interpret or apply the 

term “use” in other circumstances. EPA considered various interpretations of that term in 

developing the 2009 Final Rule but again focused on refrigerants. In the 2008 Notice of 

Proposed Rulemaking (73 FR 78680, December 23, 2008), EPA noted that the three statutory 

exceptions that existed at that time “inform EPA’s understanding of the term ‘use’” (73 FR 

78698). The preamble to the 2009 Final Rule states: “With regard to HCFCs used as refrigerants, 

EPA interprets the term ‘use’ to mean initially charging as well as maintaining and servicing 

refrigeration equipment” (74 FR 66437). In regard to non-refrigerant uses, EPA addressed two 

manufacturing uses of HCFC-22 (manufacture of sterilant blends for medical equipment and 

manufacture of thermostatic expansion valves); EPA also concluded that section 605(a) would 

ban the primary pre-2010 use of HCFC-142b (foam-blowing). At that time, however, EPA was 

not yet implementing section 605(a) with respect to other HCFCs and did not fully explore what 

“use” might mean in the context of non-refrigerants.

In the development of the 2009 Final Rule, EPA did consider whether section 605(a) 

applies to the operation of products containing HCFCs. With regard to refrigeration equipment, 

EPA concluded: “the section 605(a) ‘use’ ban does not apply to a consumer’s operation of 

equipment containing HCFCs” (74 FR 66438). The agency’s conclusion was partially based on 

the third exemption to 605(a), for class II substances that are used as refrigerants in appliances 
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manufactured before a specified date. This exemption indicated “that Congress intended to 

permit the continued use of previously manufactured appliances.” EPA also stated that for 

“products containing HCFCs for non-refrigerant uses . . . . EPA interprets the term ‘use’ as 

relating to the manufacture (and where applicable, the service) of those products, not the 

utilization of those products in the hands of the end user” (74 FR 66437).

EPA is not revisiting its interpretation of section 605(a) with respect to how it interprets 

“use” for products containing HCFCs. For purposes of implementing the 2015 use restriction in 

section 605(a), “use” of a controlled substance would include manufacture of products that 

contain or are made with HCFCs; however, it would not include use of existing products

containing HCFCs (i.e., for substances other than HCFC-22 and HCFC-142b, products 

manufactured before January 1, 2015). The reasons for this conclusion are explained in the 

preamble to the 2009 Final Rule. As made clear in that notice, EPA interprets section 605(a) as 

prohibiting the use of substances, not the use of products. The statutory language does not 

directly address whether use of a product containing controlled substances might constitute a 

prohibited use of the substance. However, consistent with its earlier statements, EPA does not 

intend to treat use of a product containing HCFCs as use of the HCFC. The agency has a long 

history of distinguishing between products and substances in its ODS phaseout regulations.

Controlled substances are defined in 40 CFR part 82 subpart A as listed substances “whether 

existing alone or in a mixture, but excluding any such substance or mixture that is in a 

manufactured product other than a container used for the transportation or storage of the 

substance or mixture.” EPA distinguishes between bulk containers of HCFCs and products 

containing HCFCs. The subpart A definition of controlled substance clarifies that if a substance 

needs to be transferred from a bulk container to a piece of equipment or another container to 
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realize its intended use, it will be treated as a “substance.” Examples of bulk containers include 

jugs, drums, and cylinders.

EPA refers readers to the preamble of the 2009 Final Rule for two other clarifications on 

how EPA interprets the term “use” in the context of section 605(a). First, the agency provided 

the following clarification on how the Nonessential Products Ban (CAA section 610) and the 

HCFC use restriction (CAA section 605(a)) should be interpreted together: “By prohibiting use 

and introduction into interstate commerce of HCFCs as bulk substances, section 605(a) 

effectively prohibits the continued manufacture of any products containing HCFCs (which 

qualifies as a type of ‘use’) unless specifically exempted in that section.” EPA explained that 

while the section 610(a) Nonessential Products Ban exempts certain products, these exempted 

products may not be manufactured after 2014 due to the HCFC use restrictions in section 605(a). 

EPA clarified that “such products are prohibited from continued manufacture, unless 

manufactured with recovered HCFCs” (74 FR 66439). Second, in the preamble to the 2009 Final 

Rule the agency clarified that “EPA does not interpret ‘use’ [in the context of section 605] to 

include destruction, recovery for disposal, discharge consistent with all other regulatory

requirements, or other similar actions where the substance is part of a disposal chain” (74 FR 

66439). 

Because the use prohibition will apply to a variety of sectors and circumstances 

beginning in 2015, EPA believes it may be helpful to define “use” in the phaseout regulations 

(40 CFR part 82 subpart A). There is currently a definition of “use” in the regulations for the 

Significant New Alternatives Policy (SNAP) Program (40 CFR part 82 subpart G), which reads 

as follows: “Use means any use of a substitute for a Class I or Class II ozone-depleting 

compound, including but not limited to use in a manufacturing process or product, in 
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consumption by the end user, or in intermediate uses, such as formulation or packaging for other 

subsequent uses” (40 CFR 82.172). In this rulemaking, the agency is proposing a related, but

somewhat different definition for purposes of the section 605(a) use prohibition, which is 

implemented at 40 CFR 82.15: “Use of a class II controlled substance, for the purposes of 

section 82.15 of this subpart, includes but is not limited to use in a manufacturing process, use in 

manufacturing a product, intermediate uses such as formulation or packaging for other 

subsequent uses, and use in maintaining, servicing, or repairing an appliance or other piece of 

equipment. Use of a class II controlled substance also includes use of that controlled substance

when it is removed from a container used for the transportation or storage of the substance but

does not include use of a manufactured product containing a controlled substance.” The primary

difference between this proposed definition under section 605(a) and the SNAP definition is that 

the SNAP definition includes use by the consumer of a product containing ODS. This difference 

reflects EPA’s interpretation of the section 605(a) use restriction as set forth in the preamble to 

the 2009 Final Rule.

EPA welcomes comment on its proposed section 605(a) definition of “use” of a class II 

controlled substance, particularly with regard to how such a definition can help clarify the 

distinction between use of a controlled substance and use of a product. Please note that the 

language regarding that distinction in the last line of the proposed definition is based on the 

existing definition of controlled substance in 40 CFR 82.3. If finalized, the definition of use of a 

class II controlled substance would appear at 40 CFR 82.3, which is the Definitions section of 

subpart A.

The section 605(a) restrictions on use and introduction into interstate commerce apply to 

all class II controlled substances. As explained in section V.H. of this preamble, the agency is 
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proposing to revise the list of class II controlled substances in 40 CFR part 82 subpart A, 

appendix B to include all isomers of listed substances, consistent with section 602 of the CAA 

and the Montreal Protocol listing of HCFCs (found in Group I to Annex C of the Protocol).

1. What Is EPA Proposing for Existing Inventory of HCFC-225ca and HCFC-225cb? 

Numerous stakeholders have asked what they will be able to do with inventory of HCFC225ca/cb that exists as of January 1, 2015. To EPA’s knowledge, HCFC-225ca, HCFC-225cb 

and mixtures thereof are only used as solvents, primarily for precision cleaning in the aerospace 

and electronics industries. As explained above, the section 605(a) use ban does not apply to the 

use of products that contain class II controlled substances. However, some substances, including 

HCFC-225ca/cb, may be used directly in cleaning equipment or in manufacturing a product

without first being put into a manufactured product themselves. For example, a person may take 

HCFC-225ca/cb from a bulk container and either add it to a vapor degreaser or pour it on a hand 

wipe to clean a piece of equipment or component. In those circumstances, the substance itself—

not a product containing the substance—is being used. (This differs from use of products that 

contain HCFC-225ca/cb, such as aerosol cans or pre-soaked wipes). In general, EPA is 

proposing to interpret the section 605(a) use ban to apply to use when the substance is removed 

from a container used for transportation or storage.

However, EPA believes the use of HCFC-225ca/cb entered into inventory prior to 

January 1, 2015 by persons that use these substances as solvents may fairly be considered to be 

de minimis. Thus, for reasons discussed below, the agency is proposing a de minimis exemption 

to the use prohibition in 605(a), which would allow any person with HCFC-225ca/cb in 
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inventory prior to January 1, 2015 to use that material as a solvent for as long as needed7. 

“Person” is defined in 40 CFR 82.3 to include corporations and federal agencies, among other 

entities. EPA is not proposing an exemption to the prohibition on introduction into interstate 

commerce, nor is it proposing to change the existing regulatory phaseout date for production and 

import of HCFC-225ca/cb. The person holding the HCFC-225ca/cb in inventory would not be 

able to transfer or sell it to another person, nor would EPA issue any allowances to produce or 

import new HCFC-225ca/cb. Additionally, neither companies that manufacture products for their 

own use, nor companies that manufacture products for sale to others would be allowed to 

manufacture products containing virgin HCFC-225ca/cb, as that would constitute a prohibited 

use of the substance; however, a person would be able to sell any products containing HCFC225ca/cb that had been manufactured and entered into initial inventory prior to January 1, 2015,

since at that point they would be “products” and not “class II controlled substances.” A product 

is considered to be a part of “initial inventory” at the point where the original product has 

completed its manufacturing process and is ready for sale by the product manufacturer. For more 

discussion of EPA’s interpretation of the term “initial inventory,” see the 1993 Nonessential 

Products Ban at 58 FR 69661. Also, for purposes of section 605(a), manufacturers may continue 

to use HCFC-225ca/cb to make both products “manufactured with” and products “containing” 

HCFC-225ca/cb as of January 1, 2015, so long as the HCFC-225ca/cb has been used, recovered 

and recycled. Labeling requirements for these products manufactured with either virgin or used, 

recovered and recycled HCFC-225ca/cb would apply beginning January 1, 2015 (see section 

 

7

Since the section 605(a) Clean Air Act prohibition only limits the use of virgin or unused HCFC-225ca/cb solvent,

used, recovered and recycled solvent can still be used for precision cleaning and manufacturing products after 

January 1, 2015 regardless of EPA’s decision on the proposed exemption.
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III.A. of this preamble). Manufacturers should also ensure that they are in compliance with the 

Nonessential Products Ban and with SNAP regulations.

EPA believes it has implied authority to propose a de minimis exemption from the 

section 605(a) use restriction. The United States Court of Appeals for the District of Columbia 

Circuit has recognized that “[u]nless Congress has been extraordinarily rigid, there is likely a 

basis for an implication of de minimis authority to provide exemption when the burdens of 

regulation yield a gain of trivial or no value.” Alabama Power Co. v. Costle, 636 F.2d 323, 360-

61 (D.C. Cir. 1980). In Alabama Power, the Court held that “[c]ategorical exemptions from 

statutory commands may...be permissible as an exercise of agency power, inherent in most 

statutory schemes, to overlook circumstances that in context may fairly be considered de 

minimis. It is commonplace, of course, that the law does not concern itself with trifling matters, 

and this principle has often found application in the administrative context. Courts should be 

reluctant to apply the literal terms of a statute to mandate pointless expenditures of effort.” Id.

(internal citations omitted).

In an earlier case cited by the court in Alabama Power, the court described the doctrine as 

follows: “The ' de minimis ' doctrine that was developed to prevent trivial items from draining 

the time of the courts has room for sound application to administration by the Government of its 

regulatory programs. . . . The ability, which we describe here, to exempt de minimis situations 

from a statutory command is not an ability to depart from the statute, but rather a tool to be used 

in implementing the legislative design.” District of Columbia v. Orleans, 406 F.2d 957, 959 

(1968).

In this respect, the Alabama Power opinion observed in a footnote that the de minimis

principle "is a cousin of the doctrine that, notwithstanding the 'plain meaning' of a statute, a court 
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must look beyond the words to the purpose of the act where its literal terms lead to 'absurd or 

futile results.' " Id. at 360 n. 89 (citations omitted). To apply an exclusion based on the de 

minimis doctrine, "the agency will bear the burden of making the required showing" that a matter 

is truly de minimis which naturally will turn on the assessment of particular circumstances. Id.

The Alabama Power opinion concluded that "most regulatory statutes, including the CAA, 

permit such agency showings in appropriate cases." Id.

A notable limitation on the de minimis doctrine is that it does not authorize the agency to 

exclude something on the basis of a cost-benefit analysis. As the court explained, this "implied 

authority is not available for a situation where the regulatory function does provide benefits, in 

the sense of furthering the regulatory objectives, but the agency concludes that the acknowledged 

benefits are exceeded by the costs." Id. The court held that any "implied authority to make costbenefit decisions must be based not on a general doctrine but on a fair reading of the specific 

statute, its aims and legislative history." Id.

Since Chevron, several courts have recognized de minimis exceptions (1) so long as they 

are not contrary to the express terms of the statute8and (2) the agency's interpretation of the 

exception is a permissible reading of the statute. See e.g., Ober v. Whitman, 243 F.3d 1190 (9th 

Cir. 2001); see also Ohio v. EPA, 997 F.2d 1520 (D.C. Cir. 1993).

EPA believes a de minimis exemption is permissible in this situation for several reasons.

First, section 605(a) is not extraordinarily rigid. Second, the use prohibition in section 605(a) is 

ambiguous with respect to potential categories of use that Congress did not directly address.

 

8

In Sierra Club v. EPA, 705 F.3d 458 (D.C. Cir. 2013), the D.C. Circuit held that EPA had no de 

minimis authority to create an exemption from the preconstruction monitoring requirement in § 

165(e)(2) of the CAA. “Whether we call preconstruction monitoring a ‘plain requirement’ or a 

requirement mandated by an ‘extraordinarily rigid’ statute, the result is the same: the EPA has no 

de minimis authority to exempt the requirement.” Id. at 468.
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Third, banning the use of HCFC solvent inventory held by the end user would not advance the 

statutory purpose. These arguments are discussed in more detail in the following paragraphs.

The purpose of Title VI of the Clean Air Act is, as its title suggests, “Stratospheric Ozone 

Protection.” Title VI can be summarized into three principal areas: the phaseout of production 

and import of ozone depleting substances (section 602-607); reduction in emissions of these 

substances via various means such as required servicing practices, restrictions on sale and 

distribution of products, and consumer education (section 608-611); and the transition to 

alternatives that do not harm the stratospheric ozone layer and that reduce overall risk to human 

health and the environment (section 612). Section 605 specifically addresses the “Phase-out of 

production and consumption of class II controlled substances.” Section 604 applies to the 

“Phase-out of production and consumption of class I substances.” There are notable differences 

between the two phaseouts. The phaseout under section 604 operates much quicker than the 

phaseout under section 605. In addition, the section 604 phaseout operates much earlier than the 

section 605 phaseout. Section 604 required the first reductions in class I substances in 1992, 

followed by a series of stepdowns culminating in the complete phaseout of nearly all class I 

substances by 2000. For class II substances, section 605 freezes production and consumption in 

2015, with the complete phaseout not occurring until 2030.9Two principal factors drive the 

distinction in phaseout schedules; class I substances have much higher ODPs relative to class II 

substances,10 and class II substances were recognized as important transitional chemicals, 

beneficial in phasing out class I substances as quickly as possible. During the development of the 

1990 Clean Air Act Amendments, Congress heard testimony on the need to phase out HCFCs as 

 

9 Through rulemakings, EPA accelerated the statutory deadlines in section 604 and 605, in accordance with the 

requirements in section 606. See 57 FR 3354 and 58 FR 65013. 

10 For example, all CFCs have an ODP of 0.6 or greater, with most having an ODP of1.0, whereas the HCFC with 

the highest ODP is HCFC-141b, which has an ODP of 0.11. 
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well as class I substances. Senator Chaffee acknowledged that “one difficulty, however, is the 

fact that achieving the goal of eliminating the potent long-lived CFCs as rapidly as possible is, to 

some extent, dependent on the continued availability of HCFCs as intermediate substitutes 

pending development of other, safe, non-ozone depleting substances or processes.” (A 

Legislative History of the Clean Air Act Amendments of 1990, volume 1, p. 5210 (Senate 

debate)). 

It is clear that Congress’ intent was to phase out production and import of class I

substances “as rapidly as possible,” and certainly more rapidly than class II substances given the 

difference in the start and duration of the two phaseout schedules; however, nowhere in section 

604 does Congress restrict the use of class I substances. Instead, Congress phases out the 

production and import for domestic use, and allows for certain exemptions to the phaseout for 

specific uses (see, e.g., section 604 (f) and (g).) Given the comparable titles of sections 604 and 

605 and the overarching goal of phasing out both class I and class II ODS11, Congress likely 

intended that the “use” restriction, which is unique to section 605, should be interpreted in a 

manner that furthers the phaseout of production and import of HCFCs while recognizing the role 

of HCFCs as transitional substances.

Congress’ overall approach to the class II phaseout is generally less rigid than its 

approach to the class I phaseout, given the longer timeframes and the presence of only one 

intermediate reduction step (see section 605(b)). Given this context, EPA is not inclined to view 

section 605(a) as “extraordinarily rigid.” In addition, section 605(a) provides an explicit 

exception for class II substances that have been “used, recovered, and recycled.” Thus, Congress 

 

11 “The centerpiece of the stratospheric ozone protection program established by this title is the phaseout of 

production and consumption of all ozone depleting substances.” Clean Air Act Amendments—Conference Report 

(Senate - October 27, 1990) (136 Cong. Rec. S16946).
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clearly did not envision that all HCFC use in applications not specifically exempted come to a 

halt by 2015. Indeed, end users of HCFC-225ca/cb could avail themselves of this exception by

putting their entire existing inventory of HCFC-225ca/cb into their equipment before January 1, 

2015. For example, an end user could use its entire inventory of virgin HCFC-225ca/cb in its 

vapor degreaser, recover the HCFC-225ca/cb from the degreaser, and then recycle it for reuse in 

2015 and beyond. In other instances, an end user could take virgin HCFC-225ca/cb, apply it to a 

surface via the typical application method such that the surface is cleaned as intended, at which 

point any recovered HCFC-225ca/cb would be rendered “used”. EPA does not wish to encourage 

this approach to meeting §605(a) requirements, which would do nothing to advance the statutory

purpose. Rather than insist on an inflexible reading of the statute that may create “absurd or 

futile results,” EPA believes the better option is to allow end users to continue to use virgin 

inventory that they hold prior to 2015.

EPA views Section 605(a) as ambiguous with respect to potential categories of use that 

Congress did not explicitly address. Section 605(a) explicitly addresses refrigerant uses of 

HCFCs but is silent with respect to solvents. At the time the 1990 Clean Air Act Amendments 

were written, HCFCs were used predominantly as refrigerants and much consideration was given 

to this use in the legislative history. HCFC solvent uses, on the other hand, were not considered 

by Congress in the context of the class II phaseout, because they did not exist. At that time, two 

class I substances, CFC-113 and methyl chloroform, were used as solvents. Far from expecting 

an early transition, Congress allowed production and import of methyl chloroform until 2002, 

two years after the phaseout date for most class I substances. In addition, in 604(d)(1), Congress 

specifically allowed for limited exemptions to the production and import phaseout for methyl

chloroform for “use in essential applications.” It was not until 1995 that HCFC-225ca/cb was 
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listed under SNAP as acceptable subject to use conditions in electronics cleaning and precision 

cleaning (see 60 FR 31092, June 13, 1995). HCFC-225ca/cb was listed as acceptable in metals 

cleaning as recently as 2002 (see 67 FR 77927, December 20, 2002). In all three of these end 

uses, HCFC-225ca/cb, which has an ODP of 0.025/0.033, is a substitute for CFC-113 and methyl

chloroform, which have ODPs of 0.8 and 0.1, respectively. While HCFC-225ca/cb solvents have 

acted since 1995 as transitional substances between class I ODS and non-ODS substitutes for 

certain niche needs, there is no evidence that Congress anticipated in 1990 that any HCFCs 

would be used as solvents. Thus, Congress did not have the opportunity to consider whether to 

apply the section 605(a) use restriction to HCFC-225ca/cb solvents. 

EPA does not believe that prohibiting persons that use HCFC-225ca/cb as a solvent to 

clean their equipment or to clean components of products they manufacture–resulting in products

“manufactured with” these HCFCs–from using their existing inventory of HCFC-225ca/cb 

would advance the goals of Title VI. As discussed above, any person could avoid such a 

prohibition by rendering all their inventory “used” in advance of the effective date. From the 

perspective of potential ozone destruction, there is little or no difference in this instance whether 

the person uses such de minimis quantities already on site at the end of 2014 or after January 1, 

2015. 

EPA believes a de minimis exemption is appropriate for the reasons provided, and also 

because the quantities involved are extremely limited. This is a small niche use and EPA is only

proposing to exempt HCFC-225ca/cb held in inventory by persons that use these substances as a 

solvent. The quantities produced or imported using allowances act as a ceiling on the quantities 

that can comprise pre-2015 inventory, and the annual allocation of allowances for HCFC225ca/cb from 2010-2014 is only 20.7 ODP-weighted MT. Recent HCFC-225ca/cb consumption 
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has been substantially less than the allocation, further decreasing the absolute maximum amount

that could remain in inventories as of 2015. 

EPA also considered its past use of de minimis authority under Title VI of the Clean Air 

Act; in fact, the agency is modeling this proposed exemption to 605(a) on the de minimis 

exemption to the nonessential products ban for class II substances (CAA section 610(c) and (d)). 

In the 1993 Nonessential Products Rule, EPA proposed and finalized an exemption to the ban on 

sale and distribution in interstate commerce of products manufactured with or containing 

HCFCs. The ban applied to products that were placed in initial inventory by December 27, 

1993—90 days after the proposed rule published and four days prior to the statutory ban on sale 

and distribution (58 FR 50464, September 27, 1993 and 58 FR 69638, December 30, 1993). EPA 

finalized this narrow “grandfather” exception for existing inventories based on the de minimis 

rationale: “The crux of EPA’s reasoning for providing any exemption for existing inventories 

was that emissions from products already in existence were de minimis” (58 FR 69660). EPA 

believes that emissions from existing inventories of HCFC-225ca/cb would also be de minimis.

As discussed, EPA believes it has sufficient authority to propose a de minimis exemption 

to the section 605(a) use prohibition for use of HCFC-225ca/cb held in inventory by persons 

using these substances as solvents. In addition to evaluating its legal authority, EPA has also 

considered policy aspects of proposing an exemption. In the 1993 Nonessential Products Rule, 

EPA identified various policy reasons for exempting existing inventory. One policy goal was to 

relieve a potentially onerous burden on small businesses because, absent a sell through provision,

existing inventories would otherwise have to be liquidated (or in the case of the section 605(a) 

use restriction, intentionally used, recovered and recycled prior to the effective date of the 

prohibition). EPA recognizes the potential inefficiency of a company rendering all of their 
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HCFC-225ca/cb inventory used in advance of 2015. The agency welcomes comment from end 

users of HCFC-225ca/cb, with specifics on their continued HCFC-225ca/cb needs, whether they

are planning to transition to an alternative solvent prior to 2015, the time required to transition to 

alternatives for specific uses of HCFC-225ca/cb, and what hardships they would face with or 

without an exemption to the 605(a) use prohibition.

If EPA does not finalize an exemption for inventories of virgin HCFC-225ca/cb, use of 

all virgin HCFC-225ca/cb would be prohibited as of January 1, 2015 under the current 

regulations. EPA urges destruction of virgin ODS for which use is prohibited as the appropriate 

method for disposal. There are seven EPA-approved destruction technologies for ODS (see 40 

CFR 82.3). EPA recognizes, however, that use of these technologies does have a cost. Further, 

the agency is concerned that some persons might dispose of their supplies of HCFC-225ca/cb in 

a manner allowing release into the environment if they are not allowed to use the substance for 

its intended purpose of cleaning. This could result in as much or more harm to the environment 

as the use of existing inventory as a solvent.

An important policy consideration is that the nature of precision cleaning is such that the 

group of affected entities is small, but their needs are very specific. Those needs often include 

minimal to zero flammability as well as excellent solvency properties, and if those needs are not 

met, human safety can be jeopardized (for example, in the case of future space vehicle launches). 

The agency believes that manufacturers of products containing HCFC-225ca/cb have sufficient 

lead time to use their remaining HCFC-225ca/cb inventory to manufacture products and place 

them into initial inventory, or alternatively, to sell virgin bulk HCFC-225ca/cb to users of these 

solvents prior to 2015. However, EPA has heard from several entities that use HCFC-225ca/cb 

directly as solvents for cleaning existing equipment or for cleaning surfaces that are part of a 
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newly-produced product who still have not found a suitable alternative to HCFC-225ca/cb. In 

some instances, entities need more time to test alternatives in order to ensure that the chosen 

replacement has acceptable solvency, flammability and usability characteristics. Also, in some 

areas of the United States, a number of federal, state and local regulations affect the choice of 

solvents. In particular, areas that are not meeting the national ambient air quality standard for 

ground-level ozone may regulate solvents that are volatile organic compounds (VOC) to reduce 

emissions that contribute to the formation of smog. HCFC-225ca and HCFC-225cb are exempt 

from the definition of VOC under CAA regulations (see 40 CFR 51.100(s)) addressing the 

development of State Implementation Plans (SIPs) to attain and maintain the national ambient air 

quality standards. This exemption allows greater flexibility in the use of HCFC-225ca/cb than is 

allowed for cleaning solvents that are regulated as VOCs. Only some SNAP-listed alternatives to 

HCFC-225ca/cb are exempt from the definition of VOC (e.g., trans-1-chloro-3,3,3-trifluoroprop1-ene).

Given these legal and policy considerations, EPA is proposing a de minimis exemption to 

the use restriction in CAA section 605(a) for entities that use HCFC-225ca/cb as solvents and 

that have HCFC-225ca/cb in their inventory prior to January 1, 2015. The exemption would 

appear at 40 CFR 82.15(g). This exemption would not pertain to manufacturers of products 

containing HCFC-225ca/cb, such as technical aerosol solvents, or to producers and importers of 

HCFC-225ca/cb. Any aerosol solvent product manufactured prior to January 1, 2015, could be 

sold and used after that date, since an aerosol can is a product, not a controlled substance; 

however, manufacture of the product or HCFC blends used in those products would be

considered use of a controlled substance, and would be prohibited after January 1, 2015, unless 

the HCFC were used, recovered and recycled. The agency invites comment on the proposed 
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exemption, particularly on the need for continued use of HCFC-225ca/cb after 2014. The agency

is also seeking comment on whether there are other small niche uses of HCFCs that Congress 

may not have contemplated in the 1990 CAA Amendments for which a prohibition on use of 

inventory would yield trivial or no benefits in light of the statutory purpose. The agency may

consider extending the proposed exemption to other such niche uses in the final rule.

2. How is EPA Planning to Update Regulations to Account for Recent Changes to Section 

605(a)?

In the National Defense Authorization Act for fiscal year 2012, Congress amended 

section 605(a) of the Clean Air Act to allow for continued use and introduction into interstate 

commerce of a class II substance that “is listed as acceptable for use as a fire suppression agent 

for nonresidential applications in accordance with section 612(c).” Section 612 of the Clean Air 

Act requires EPA to develop a program for evaluating alternatives to ozone-depleting 

substances. EPA refers to this program as the Significant New Alternatives Policy (SNAP) 

program. Section 612(c) requires EPA to publish a list of the substitutes unacceptable for 

specific uses and to publish a corresponding list of acceptable alternatives for specific uses. The 

list of acceptable substitutes is found at www.epa.gov/ozone/snap/lists/index.html, and the lists 

of “unacceptable,” “acceptable subject to use conditions,” and “acceptable subject to narrowed 

use limits” substitutes are found in the appendices to subpart G of 40 CFR part 82. HCFC-123, 

HCFC-124, and several blends containing an HCFC are currently listed as acceptable and 

acceptable subject to narrowed use limits, where the only use limit restricts use to nonresidential

fire suppression. EPA assumes that Congress intended the statutory phrase “listed as acceptable 

for use” to include HCFCs listed as acceptable and acceptable subject to narrowed use limits. In

light of this statutory revision, EPA is proposing to update its regulations for use and 
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introduction into interstate commerce of HCFCs (82.15(g)), as well as the regulations governing 

production and import (82.16). Specifically, the agency intends to add the following language to 

82.15(g)(4) allowing for use and introduction into interstate commerce of any class II controlled 

substance not governed by the acceleration of the use prohibition to 2010, when used “as a fire 

suppression streaming agent listed as acceptable for use or acceptable subject to narrowed use 

limits for nonresidential applications in accordance with the regulations at subpart G of [part 

82].” EPA believes this addition is necessary and appropriate, given Congress’ addition to 

section 605(a).

Though section (a) pertains only to use and introduction into interstate commerce, EPA 

believes that allowing for continued HCFC production and import for nonresidential fire 

suppression uses is a natural follow-on, and is in accordance with Congressional intent. Section 

605 does not establish a production phaseout date for any specific HCFC. EPA has used its 

discretion to establish a regulatory phaseout date, which the agency is proposing to modify in 

this action. This change has minimal impact on the overall allocation since the primary HCFC 

used for fire suppression, HCFC-123, has a low ODP, and the quantities used for fire suppression 

are small relative to the other uses of HCFCs.

In large part, the regulatory phaseout date for HCFCs used in fire suppression was driven 

by the section 605(a) limitations on use and introduction into interstate commerce of class II 

controlled substances, to which Congress has now created an exception. Therefore, EPA is also 

proposing to amend 82.16(d), by allowing for HCFC production and import in the 2015-2019 

regulatory period for use in nonresidential streaming fire suppression applications. Accordingly, 

EPA is proposing to add the following text to 82.16(d), allowing for both production and import 

of class II controlled substances “for use as a fire suppression streaming agent listed as 
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acceptable for use or acceptable subject to narrowed use limits for nonresidential applications in 

accordance with the regulations at subpart G of [part 82].” To give practical effect to this

proposed change, EPA is proposing to allocate consumption allowances for HCFC-123, not just 

for use as a refrigerant, but for use as a fire suppression agent as well. As discussed in section 

V.D.1., EPA is proposing to allocate the maximum allowed amount of HCFC-123 consumption 

allowances under section 605(b) (i.e., 100 percent of HCFC-123 baseline), which is still less than 

three percent of United States consumption allowed under the Montreal Protocol cap for 2015-

2019. EPA is proposing to allow production and import for fire suppression purposes for the 

2015-2019 regulatory period only. Beginning January 1, 2020, Article 2F of the Montreal 

Protocol limits United States production and import of HCFCs to use in servicing and repair of 

existing refrigeration equipment. Under section 614(b), where either the Montreal Protocol or 

Title VI is more stringent, the more stringent provision governs. To reflect this Montreal 

Protocol time limitation, EPA is proposing to add language to 82.16(e) indicating the purposes 

for which production and import may continue in 2020 and beyond: the proposed list does not 

include fire suppression purposes. The agency welcomes comment on any aspect of these 

proposed regulatory additions. 

C. Step Down to 10 Percent of Montreal Protocol Baseline

As discussed in section II.A. of this preamble, the United States has agreed under the 

Montreal Protocol to limit consumption and production of HCFCs by January 1, 2015 to no more 

than 10 percent of its Montreal Protocol baseline. Starting in 2015, the United States cap on 

consumption will be 1,524 ODP-weighted MT and the cap on production will be 1,553.7 ODPweighted MT. By January 1, 2020, the United States is required to limit consumption and 

production of HCFCs to 0.5 percent of baseline. As required under sections 606(a) and 614(b) of 
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the Clean Air Act, the EPA phaseout regulations reflect the Montreal Protocol schedule for 

phasing out HCFCs, including the 2015 and 2020 stepdowns. In developing the proposed HCFC 

allocation schedule for 2015-2019, the agency bore in mind that as of January 1, 2020, the 

consumption and production caps will be approximately 76 and 77.5 ODP-weighted MT, 

respectively. Also, as of January 1, 2020, Article 2F of the Protocol limits United States

production and consumption of HCFCs to servicing needs for refrigeration and air conditioning 

equipment. In addition, CAA section 605(a) limits the use of virgin HCFCs as of January 1, 

2015, to use as a refrigerant in equipment manufactured prior to 2020, and use as a 

nonresidential fire suppressant. EPA regulations also prohibit the production and import of virgin 

HCFC-22 or HCFC-142b for refrigeration uses as of January 1, 2020 (see 40 CFR 82.16(e)). In 

determining the proposed allocation options in this rule, EPA took into account the 2015 and 

2020 milestones in the Montreal Protocol and the Clean Air Act.

IV. How Will EPA Determine Baselines for 2015-2019?

The current structure of the HCFC allowance program was first established in the 2003 

Final Rule (68 FR 2820), in which EPA decided to allocate HCFC allowances using a baseline 

system for the 2003-2009 regulatory period. Specifically, calendar-year allowances for 

production and consumption of HCFCs would be issued as a percentage of each company’s 

baseline. A company’s baseline would be calculated from historic levels of production and

import. Since 2003, the program has changed very little, using the same baseline system to issue 

consumption and production allowances on an annual basis.

In the 2003 Final Rule, EPA prohibited production and consumption of HCFCs subject to 

the allowance system without the appropriate allowances (40 CFR 82.15(a),(b)). The agency sets

the maximum production and consumption of each HCFC by issuing allowances that are valid 
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for a single calendar year, equal to a certain percentage of each company’s baseline.

12 The 

agency determines the percentage of baseline for each year by taking into account limits set 

under the Montreal Protocol, estimated need for a particular HCFC, and restrictions under the 

Clean Air Act. 2015 is a significant milestone in the domestic phaseout of HCFCs, since United 

States production and consumption of all HCFCs must be at or below 10 percent of baseline 

levels by January 1, 2015, and use of those HCFCs must comply with restrictions in section 605 

of the Clean Air Act.

A. Using Existing Baselines 

In the 2003 Final Rule, EPA decided that each company producing or importing HCFC22 or HCFC-142b between 1994 and 1997 would receive baseline allowances equal to its highest 

annual production and import level from those four years, with a limited extension for small 

businesses that began importing before April 5, 1999—the date EPA published the HCFC 

Allocation System ANPRM for the 2003-2009 regulatory period. In the 2009 Final Rule (74 FR 

66412), EPA continued this approach for HCFC-22 and HCFC-142b. EPA also applied the same 

general approach to allocating allowances for HCFC-123, HCFC-124 and HCFC-225ca/cb, using 

2005-2007 as the baseline years for those substances. The portion of the 2009 Final Rule

governing baselines and allocations of HCFC-22 and HCFC-142b allowances was vacated by the 

Court in Arkema v. EPA. However, the rest of the rule, including the baselines for four other 

HCFCs and the use restrictions on HCFC-22 and HCFC-142b, remains in effect. HCFC-22 and 

 

12 The process works as follows for each HCFC: First, all the company-specific consumption baselines (listed in the 

table at 40 CFR 82.19) are added to determine the aggregate amount of consumption baseline. Second, EPA 

determines how many allowances to allocate in a given year and divides that amount by the aggregate amount of 

baseline allowances. The resulting percentage listed in the table at section 82.16 becomes what each company is 

allowed to consume in a given control period. For example, a company with 100,000 kg of HCFC-22 baseline 

consumption allowances would multiply that number by the percentage allowed (for example, 14.2 percent in 2014) 

to determine its calendar-year consumption allocation of 14,200 kg. Until the 2013 Final Rule, the percentage listed 

in 82.16 applied to production allocations as well. However, now that EPA has decoupled baseline percentages, 

there are two tables at 82.16 and the process of calculating baseline percentages applies to production as well.
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HCFC-142b baselines and allowances were re-established for 2011 in the 2011 Interim Final 

Rule (76 FR 47451) and for 2012-2014 in the 2013 Final Rule (78 FR 20004).

In this rulemaking, EPA is proposing to keep the post-Arkema historical baselines as 

reflected in the 2013 Final Rule (as adjusted to reflect subsequent name changes and intercompany baseline allowance transfers) for the 2015-2019 regulatory period. The baselines for 

production and consumption of the seven HCFCs for which EPA has allocated allowances can be 

found at 40 CFR 82.17 and 82.19, respectively. The agency believes there is benefit to the 

regulated community in continuing with the established system, with updates to reflect name 

changes and inter-company baseline allowance transfers. In the past, some stakeholders have 

acknowledged the certainty and stability of continuing with established baselines. Others have 

pointed out that the established baselines do not reflect current market conditions. Because of 

this concern, the agency considered an option to update baselines, which in the case of HCFC-22 

and HCFC-142b were derived from 1994-1997 data. However, EPA’s preferred approach is to 

keep the current baselines in place. EPA has several reasons for maintaining historic baselines. 

EPA determines the total amount of allowances to be allocated independent from the baseline 

amounts. Re-establishing each company’s baseline would alter the distribution of allowances, 

but would not affect the total allocation. EPA sets the baseline percentage such that once every

company receives its allowances, the number of allowances issued equals the total allocation for 

that year. Therefore, EPA does not see an environmental rationale to updating baselines, since

changing individual company baselines would not affect the total amount of HCFC-22 that could 

be produced or imported in a given year. Further, choosing and implementing changed baseline 

years would change existing market expectations, and thus potentially may detract from the 

certainty that allows stakeholders, all of whom are already familiar with the existing system ( in 
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place since 2003), to plan for an orderly transition to alternatives. Such a change may not be 

justified given that there are only five remaining years for HCFC allocation (excluding the 0.5 

percent of baseline for servicing needs). Under EPA’s preferred approach of maintaining current 

baselines, baseline allocations would be the same as those shown in the proposed regulatory text 

at 40 CFR 82.17 and 82.19. 

EPA invites comment on the advantages and disadvantages of maintaining the 

established baseline system. 

B. Consideration of Establishing Revised Baselines Using More Recent Production and 

Import Data

Current production and consumption baselines were established using data from 1994-

1997 and 2005-2007. EPA’s preferred option is to keep the current baselines. However, EPA

considered a second option: re-establishing baselines using more recent production and import 

data. Updating baselines would result in fewer allowances for companies that have fully or 

partially left the HCFC market and a greater number of allowances for companies that have more 

recently used calendar-year allowances. 

In the 2012 Proposed Rule (77 FR 237, January 4, 2012), the agency provided advance 

notice that for the 2015-2019 regulatory period, it would consider using more recent production 

and import data than the 1994-1997 data used to set baselines for the first time in the 2003 Final 

Rule. EPA was particularly interested in stakeholders' views on whether there would be an 

environmental benefit to updating baselines. In response to the proposed rule, the agency

received several comments, both for and against updating baselines, but did not receive any 

comments indicating there was an environmental benefit to changing baselines. In the 2013 Final 

Rule, EPA stated that it would continue to assess the merits of using a more recent set of years to 
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determine HCFC-22 and HCFC-142b baselines, but pointed out that it still had not heard an 

environmental rationale for making such a change. 

Further, the program’s market-based orientation encouraged EPA to consider ways to 

promote an orderly phaseout – one in which stakeholders are offered advance planning certainty 

in their efforts to replace controlled chemicals. Thus, in completing the 2013 Final Rule we 

concluded that the certainty that facilitates orderly market transition to new, safer alternatives 

could be best promoted by maintaining expectations. Given the current state of the phaseout –

within 5 years of virtual completion – the market may be best served by predictability and by the 

confirmation of long-established policy approaches. 

In developing this proposed rule, the agency evaluated whether to update baselines for 

the 2015-2019 regulatory period. First, consistent with its earlier statements, EPA considered 

whether there would be an environmental benefit to doing so. Second, EPA considered how it 

would pick “a representative calendar year” or years to serve as the baseline, as required by CAA 

section 601. Third, EPA also considered whether the agency would credit only actual production 

and import, or if a company would receive credit for allowances held as the result of a transfer. 

Fourth, EPA considered the length of time the baselines have already been used, as well as the 

length of time remaining before the HCFC-22 and HCFC-142b phaseout.

Based on these considerations, EPA has decided not to propose to use a more recent set 

of years to establish company baselines. First, the agency does not see an environment benefit to 

using a more recent set of years: it is the percentage of baseline issued—not the aggregate 

baseline itself—that determines the allowed amount of production and import in a given year. A 

shift to different baselines would simply rearrange companies’ shares of allowances. EPA has 

not made a practice of updating company baselines to reflect changes in the market. Rather, 
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private entities may use the allowance transfer provisions in Part 82 to sell or acquire baseline 

allowances as appropriate. Second, it is unlikely that there is a more recent year or range of years 

that the majority of stakeholders could accept as representative. Third, while it would be 

important for the agency to consider whether to credit only actual production and import, or also 

allowances held as the result of a transfer, such consideration would introduce uncertainty into 

the process. Fourth, the use of production and import data from 1994-97 for HCFC-22 and 

HCFC-142b baselines began in the 2003 Final Rule and has continued through the present. 

These substances will be phased out in 2020. The current baselines are well understood by all 

affected entities and a change that would apply only to the last few years before the phaseout 

might simply cause confusion, in addition to affecting any longer-term business plans that 

companies may have based on the current baselines. Confusion resulting from resetting existing 

baselines would be counter to the Agency’s goal of promoting a smooth transition to alternatives.

For these reasons, the agency is not proposing to update the baselines for the 2015-2019 

regulatory period.

V. How Is EPA Developing Allocation Levels for Each HCFC?

In developing proposed allocation levels, EPA considered what uses of HCFCs will be 

permitted in 2015 through 2019. Section 605(a) of the Clean Air Act limits the use of newlyproduced (i.e. virgin) HCFCs beginning January 1, 2015. Under the statute, virgin HCFCs may

be used as a refrigerant in appliances13 manufactured prior to 2020 (EPA accelerated this 

manufacturing date to 2010 for HCFC-22 and HCFC-142b)14 and also as a nonresidential fire 

 

13 The Clean Air Act defines appliance as “any device which contains and uses a class I or class II substance as a 

refrigerant and which is used for household or commercial purposes, including any air conditioner, refrigerator, 

chiller or freezer.” 

14 EPA accelerated the 605(a) use restrictions for HCFC-22 and HCFC-142b in the 2009 Final Rule. Consequently, 

HCFC-22, HCFC-142b and blends containing either can only be used as a refrigerant in appliances manufactured 

before January 1, 2010, not 2020. Additionally, the Clean Air Act allows use and introduction into interstate 
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suppressant, if listed as acceptable under SNAP for this end use. HCFC-22 and HCFC-123 are 

both used as refrigerants, and thus EPA is proposing to issue allowances for these chemicals.

HCFC-22 has many refrigeration applications, and accounts for over 90 percent of all HCFC use; 

HCFC-123, on the other hand, accounts for a much smaller portion of refrigerant use, 

predominantly in large chillers. HCFC-123 and HCFC-123 blends are also listed as acceptable or 

acceptable subject to narrowed use limits for nonresidential fire suppression uses. EPA is 

proposing to issue allowances for both HCFC-22 and HCFC-123; however, since refrigeration 

represents a larger market than fire suppression, nearly all consumption and production 

allowances proposed for 2015-2019 will be for HCFC-22. EPA is also proposing to issue 

consumption and production allowances for HCFC-142b and HCFC-124, since both are listed as 

acceptable for certain refrigerant end uses and there continues to be small, albeit decreasing, 

demand for refrigerant blends containing these HCFCs. In addition, HCFC-124 is listed as 

acceptable in certain fire suppression blends. The proposed allocation options for HCFC-142b 

and HCFC-124 are presented in section V.C. and V.E., respectively. EPA is not proposing to

issue allowances for HCFC-225ca or HCFC-225cb because neither is used as a refrigerant nor as 

a fire suppressant. Use of HCFC-141b was banned effective January 1, 2010 under existing 

regulations (see 82.15(g)(1),(3)), with limited exceptions. In addition, the exemption from the 

production and import phaseout that allows for HCFC-141b exemption allowances does not 

continue beyond 2014 (see 40 CFR 82.16(b),(d)). Since the exemption does not exist beyond 

2014, EPA is proposing, effective January 1, 2015, to remove 40 CFR 82.16(h), which describes 

the petition requirements for receiving HCFC-141b exemption allowances. However, in 

accordance with 40 CFR 82.18(a)(2) and (3), each company with an HCFC production baseline 

 

commerce of virgin HCFCs for use in transformation, but since this use does not require consumption or production 

allowances, it will not be discussed in this section. 
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will receive Article 5 allowances15 in 2015 through 2019 equal to 10 percent of its baseline for 

that HCFC, even if EPA does not issue consumption, production or exemption allowances for 

that substance.

The proposed allocations in the following sections are based on EPA’s Vintaging Model 

demand projections, recent market research on current HCFC uses and trends, and the expected 

availability of recovered and reused material. In the case of HCFC-22 and HCFC-142b, EPA 

also considered the fact that under longstanding regulations, these two HCFCs will be phased out 

as of January 1, 2020. Thus, EPA will cease issuing HCFC-22 and HCFC-142b consumption and 

production allowances by 2020 at the latest. The agency has compiled Vintaging Model 

projections and other data supporting its proposed allocations for 2015-2019 in the 2013

Servicing Tail Report on HCFC market needs, found in the docket to this rulemaking. EPA 

welcomes comment on all aspects of the report, including but not limited to the underlying 

assumptions and sensitivity analyses. Since the data in the report will be used to support the final 

allocations for 2015-2019, EPA requests any relevant data and market information that would 

improve the accuracy of the agency’s projections. If commenters wish to submit confidential 

business information to support their comments on this proposal, please contact the person 

identified in the “FOR FURTHER INFORMATION CONTACT” section and review section 

I.B.1. of this notice.

A. How Will EPA Determine the HCFC-22 Consumption Allocation?

EPA is considering three options for determining the HCFC-22 consumption allocation.

Each would involve a declining allocation from year to year. Under the linear drawdown (Option 

1), which is EPA’s preferred approach, the agency is proposing to decrease the allocation by the 

 

15 Article 5 allowances allow a company with an HCFC baseline to produce that HCFC only for export to Article 5 

Parties under the Montreal Protocol. See 40 CFR 82.18(a).
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same amount each year, such that there is a linear decrease in allowances from 2015 through 

2019, ending at zero in 2020. Under Option 2, EPA is proposing a three year version of the linear 

drawdown, where consumption is phased out in 2018 instead of 2020. Under the estimation 

approach (Option 3), EPA is proposing to estimate servicing need using the Vintaging Model, 

and then make adjustments to account for estimated recovery and reuse, and inventory, much 

like it did in the 2009 and 2013 Final Rules. Regardless of the option chosen, once the final rule 

is issued EPA does not intend to revise the 2015-2019 allocation. Leaving the possibility of 

additional EPA action to increase or decrease the allocation could create unnecessary uncertainty 

and undermine business planning and a smooth phaseout.

In 2009, EPA published the 2009 Servicing Tail Report (available in the docket), which 

estimated HCFC-22 servicing need through 2020 using the Vintaging Model and several rounds 

of industry feedback. Through 2011 and early 2012, market factors and feedback from industry

indicated there was an over-supply of HCFC-22, which was discouraging use of recycled 

refrigerant and slowing transition to ozone-safe alternatives. EPA developed Analysis of HCFC22 Servicing Needs in the U.S. Air Conditioning and Refrigeration Sector: Additional 

Considerations for Estimating Virgin Demand (Adjustment Memo, available in the docket) to 

accompany the proposed rule for 2012-2014, which contained new proposed allocations in the 

wake of the Court’s decision in Arkema. The Adjustment Memo examined updated projections

from EPA’s Vintaging Model, and then took into account recent market conditions. The 

Adjustment Memo considered reductions in the allocation based on increased reclaimer capacity, 

existing HCFC-22 inventory, and recovery and reuse by supermarkets. After reviewing public 

comment and stakeholder feedback, EPA finalized HCFC-22 allowances for 2012, 2013 and 

2014 in the 2013 Final Rule (78 FR 20004).
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As presented in the revised 2013 Servicing Tail Report included in the docket, EPA’s 

Vintaging Model estimates that HCFC-22 servicing need in 2015 will be 46,165 MT, or 2,539

ODP-weighted MT. In 2015, the Montreal Protocol cap for all HCFC consumption is 1,524

ODP-weighted MT, which means that even if EPA allocated only HCFC-22 allowances, it still 

could not provide enough allowances to account for all projected HCFC-22 need. The gap in 

2015 between projected servicing need and the Montreal Protocol cap is why EPA has 

continually emphasized the need for recovery, reuse and reclamation of HCFC-22, in addition to 

transition to non-ODS alternatives. Recovery, reuse and reclamation will become even more 

important in 2020, when HCFC-22 may no longer be produced or imported, but the projected 

servicing need is 22,572 MT.

EPA also uses the Vintaging Model to project the amount of recoverable HCFC-22 each 

year. This projection is based on the modeled retirement of HCFC-22 equipment and modeled

recovery rates specific to each equipment type. For example, for residential air conditioning, the 

Vintaging Model assumes each system being retired in a given year has a full charge at 

decommissioning, and that an average of 35 percent of the refrigerant in each retiring system is 

recovered. For other end uses, particularly those with very large charge sizes, the modeled 

recovery rate is much higher. In the Vintaging Model, the overall, industry-wide recovery rate is

approximately 50 percent, though the exact number fluctuates each year based on the amount of 

equipment modeled as retiring in each end use. See Appendix A of the 2013 Servicing Tail 

Report for modeled recovery rates specific to each equipment type.

In the 2013 Servicing Tail Report, EPA has also included several sensitivity analyses to 

gauge how changes in several key assumptions affect estimated servicing need in 2015-2019. 

The assumptions EPA looked at include system charge size, average annual equipment leak rates 
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(i.e., loss rates), and the expected length of time a system is in operation (i.e., equipment 

lifetime). All of these factors were examined as a result of information provided by industry

representatives concerned that the agency’s assessment of servicing need in the Vintaging Model 

could be too high. In addition to the sensitivity analyses, EPA has also updated its assessment of 

HCFC-22 inventory and is providing more discussion of other factors affecting the HCFC-22 

phaseout. The agency welcomes comment on all aspects of the 2013 Servicing Tail Report. This 

information will support the allocation option chosen in the final rule. 

1. Using a Linear Drawdown From 2014 Allocation Levels

In 2020, the United States must be at 0.5 percent of its HCFC baseline, and under EPA 

regulations none of the HCFC production or import at that time may be for HCFC-22 or HCFC142b. Given the agency’s goal of ensuring a smooth transition away from HCFC-22 and into 

non-ODS alternatives, EPA is proposing a linear decrease in HCFC-22 allowances from 2015-

2019. That is, allowances would decrease by the same amount each year, such that a decrease by

that same amount from 2019 to 2020 would bring the HCFC-22 allocation to zero. Under the 

linear drawdown approach, EPA is proposing to use the lowest proposed 2014 allocation level as 

its starting point (approximately 16,500 MT). Under this approach, the 2015 allocation would be 

approximately 13,700 MT with an annual decrease of approximately 2,700 MT. In 2019 the 

allocation would be 2,700 MT and in 2020 the allocation would be zero, with a total allocation of 

approximately 41,100 MT over the five year period. This linear drawdown—from the lowest 

proposed allocation in 2014 to zero in 2020—is EPA’s preferred approach. Since the market for 

virgin HCFC-22 is solely for servicing air-conditioning and refrigeration equipment that was 

installed prior to 2010 (with limited exceptions through the end of 2011), EPA believes that 

decreasing the allocation by the same amount each year will drive the necessary changes in the 
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service market to prepare for the 2020 phaseout, without unnecessarily forcing transition or 

retrofits out of HCFC-22 for equipment that is still within its expected lifetime. Several industry

representatives have also suggested a 2015 allocation very close to EPA’s preferred 2015

allocation of approximately 13,700 MT; their support for such an allocation stems from the 

belief that the allocation for 2013 and 2014 was higher than needed, resulting in an over-supply 

of HCFC-22 and an increase in inventory levels. 

EPA believes its preferred 2015 allocation is sufficient based on how the market 

responded in 2012 and early 2013 to the allowed amount of consumption under the No Action 

Assurance (i.e., non-enforcement) letters. The 2015 proposed allocation is only about 20 percent 

lower than the allowed consumption at the start of 2013 (17,902 MT). At that time, there was 

minimal concern that allowed consumption levels were too low; certain industry practices were 

changing and significant inventory was available to meet servicing need (summarized below). 

EPA obtained this information through numerous conversations with stakeholders, all of which 

are noted in the memo in the docket titled Relevant Meetings with External Stakeholders. 

First, channel inventory (i.e., existing material available for sale and distribution) likely

helped meet servicing needs. Some industry feedback indicates a significant amount of inventory

was consumed in 2012 to meet servicing needs. Industry feedback continues to indicate that 

despite this drawdown there remains a significant amount of inventory that can help meet 

servicing need in 2015 and later years.

Second, servicing practices likely changed with the lower allocation to help meet 

servicing needs. With the price of HCFC-22 increasing, industry feedback indicates service 

technicians may have been more careful with the refrigerant, resulting in lower loss rates and 

higher recovery rates than those estimated in the Vintaging Model. 
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Third, industry feedback indicates the demand for dry-shipped HCFC-22 condensing 

units continued to decrease. This suggests that the service contractor or the consumer's 

repair/replace decision may be affected by the price and availability of HCFC-22.

Fourth, as the price of HCFC-22 increased and as equipment reached the end of its useful 

life, retrofits and system replacements occurred more rapidly than modeled. This is particularly

apparent in the retail food segment. For example, feedback from numerous contacts in the supply

chain indicate supermarkets used the seven- to 10-year remodel cycle to not only update display

cases, but to also switch to new refrigerants (either through retrofits or system replacements). 

These retrofits result in significant amounts of used refrigerant that can be reclaimed, or 

recovered and reused. Feedback from several sources indicates HCFC-22 sales to supermarkets 

dropped off significantly in the past few years, especially in 2012 and early 2013, with the 

reduction in allocation. Information from recovery companies also shows that supermarkets were 

holding onto their recovered HCFC-22 from decommissioned or retrofitted stores for use in other 

equipment under the same ownership. This practice will likely accelerate as the phaseout 

progresses.

Other evidence indicates that service technicians also became more aware of and 

comfortable using non-ODS retrofit refrigerants. Feedback from numerous points in the supply

chain indicates sales of HCFC-22 retrofit refrigerants (e.g., R-407C, R-421A, R-422B, R-422D, 

R-438A, and numerous other non-ODS alternatives) have increased dramatically since 2011. 

This is also supported by data received recently from producers and distributors of HCFCs. As 

the phaseout progresses, the percentage of HCFC-22 demand met by retrofit refrigerants is 

expected to rise, thereby further reducing the need for HCFC-22 and adding to the potential 

inventory of reclaimed refrigerant.
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While EPA encourages equipment owners to retrofit when it makes sense, the agency

also encourages equipment owners to look at the lowest GWP refrigerant that meets their needs 

and to consider the capacity and efficiency tradeoffs associated with a retrofit out of HCFC-22.

HCFC-22 is typically the most efficient refrigerant to use in a piece of equipment designed to use 

HCFC-22—an important consideration when servicing an existing system. When changing the 

type of refrigerant used in a system, technicians and contractors may only use substitutes listed 

as an acceptable retrofit refrigerant for that end use under the SNAP program. If replacing the 

equipment, new systems may only use refrigerants listed under the SNAP program as acceptable 

for new equipment for that end use. A complete list of acceptable substitutes by end use is

available at www.epa.gov/ozone/snap/refrigerants/. In addition to being illegal, failure to use an 

acceptable substitute may be unsafe. For example, equipment that is not designed for flammable 

refrigerants should not be retrofitted for use with hydrocarbons or other flammable substitutes

Fifth, as HCFC-22’s price increased and its perceived availability decreased, reclamation 

increased by about 13 percent in 2012 from 8.3 million lbs to 9.4 million lbs. While the increase 

between 2011 and 2012 is only one year of data, the higher price of HCFC-22 was likely a factor 

since reclaimers started offering a higher buyback price for used material. Since the higher price 

of virgin refrigerant also encouraged retrofits, HCFC-22 from retiring systems was available for 

recovery and reclamation.

EPA has attempted to quantify the possible effects on servicing need from many of these 

trends in the 2013 Servicing Tail Report. Coupled with the fact that an additional two years of 

retrofits and system retirements will have occurred by 2015, the agency's analysis and feedback 

from industry affirm that the preferred allocation option can meet servicing needs without 

causing shortages. EPA seeks comment on its assessment of market trends and the agency’s 
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preferred allocation of 13,700 MT of HCFC consumption allowances in 2015, with an annual 

decrease in allocation of 2,700 MT. 

EPA also notes that there appears to be a significant amount of HCFC-22 in inventory. 

As discussed in EPA’s 2013 Servicing Tail Report, EPA has revised its estimate of HCFC-22 

inventory. In the last rulemaking, EPA estimated HCFC-22 inventory at 22,700-45,400 MT. 

Based on information received recently, inventory is above that range.

18 While excess HCFC-22

may provide the market more flexibility in its transition timeline, it may also discourage

recovery and recycling of existing HCFCs. Since EPA has attempted to encourage recovery and 

reclamation throughout the HCFC phaseout, as well as a smooth transition, the agency is also

seeking comment on whether a lower 2015 allocation is preferable. Specifically, EPA is 

proposing as an alternative a more aggressive linear drawdown starting at 10,000 MT in 2015 

and dropping by 2,000 MT per year before reaching zero in 2020. Over the five year period, it 

would result in approximately 11,000 MT fewer HCFC-22 allowances than under the agency’s 

preferred approach.

Though all evidence received to date suggests that a 2015 allocation of 13,700 MT is 

sufficient to meet market needs, EPA is also proposing as an alternative a less aggressive version 

of the linear drawdown starting from the 2014 pre-recoupment19 allocation of 20,100 MT and 

ending at zero in 2020. Under this less aggressive linear drawdown, the allocation would start at 

about 16,700 MT in 2015 and would decrease by about 3,350 MT each year over the five year 

 

18 This revised assessment is based on inventory data from a limited number of companies as of December 31, 2012, 

as well as other information received by the agency during the development of this proposed rule.

19 Recoupment allowances refer to the additional HCFC-22 and HCFC-142b allowances that EPA allocated for 2013 

and 2014, which were in addition to the aggregate allocations determined by the established percentage of baseline. 

EPA issued recoupment allowances to address the Court’s decision in Arkema with respect to allowances for 2010. 

For a discussion of the agency’s decision to provide recoupment, see the 2013 Final Rule at 78 FR 20015.
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period; over five years EPA would allocate 9,200 MT more than under the preferred linear 

drawdown approach.

As discussed in the preceding paragraphs, EPA is proposing both a more aggressive and less aggressive 

alternative to its preferred approach for the linear drawdown. However, some stakeholders have encouraged 

EPA to go to zero and cease allocating allowances for HCFC-22 in 2015 instead of in 2020. 

They base this recommendation on the availability of alternatives, the capacity for reclamation, 

and the presence of a significant amount of inventory. While this approach could offer

environmental benefits, the agency believes going to zero too quickly could have unintended 

consequences for end users that have been making equipment retrofit and replacement plans 

based on EPA’s long-standing 2020 deadline for phasing out HCFC-22.

EPA believes the linear drawdown approaches discussed in this section have several 

advantages. First, a linear drawdown provides the market with a clear signal that features 

consistent annual decreases that will drive transition to alternatives in advance of the 2020 

phaseout. The agency believes, and past commenters agree, that gradually decreasing the 

allocation provides the appropriate and necessary signal to encourage equipment owners and 

service technicians to transition when it makes sense for their individual circumstances. The 

linear drawdown allows the industry to establish plans in advance and develop the infrastructure 

to transition without significant market disruptions. Without a gradual transition, large quantities 

of system owners could wait until the last possible moment to transition, which could pose 

significant financial hardship and lead to widespread market disruptions in the 2019 to 2020 

timeframe as end users scramble to find solutions to the HCFC-22 phaseout. While the 

estimation approach (Option 3) also decreases year-by-year, the 2015 allocation is significantly 

higher than under the preferred linear drawdown approach. 
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Additionally, the change from 2019 to 2020 is substantially higher under the estimation 

approach than under any of the linear drawdown options, which could prompt system owners to 

stay in old HCFC-22 equipment longer, potentially contributing to market disruption. Regardless 

of the option chosen, a lower allocation could result in economic advantages for companies 

investing in reclamation and alternative refrigerants and equipment if it encourages consumers to 

use reclaimed refrigerant or an alternative sooner.

The linear drawdown is also simple and easy to explain. This aspect is important for 

service technicians, since they are the ones directly interacting with home and business owners. 

It is often their job to explain what the HCFC phaseout means and how it works. Providing 

technicians with an easier-to-explain transition should improve consumers’ understanding of the 

phaseout and the options available to them.

Finally, this linear drawdown approach is preferred because it does not primarily rely on 

EPA’s ability to predict annual servicing need, which becomes increasingly difficult as HCFC22 is phased out. While the Vintaging Model is updated frequently to reflect changes in the 

marketplace, it doesn’t model how the allocation in recent years affects servicing need in future 

years. For example, the final 2013-2014 allocations will affect how HCFC-22 is bought, sold and 

stockpiled in each year. While there are limitations of the model, the sensitivity analyses in the 

2013 Servicing Tail Report indicate the proposed linear drawdown approach is reasonable and 

can meet servicing need without shortages if servicing practices improve, and recycling and 

transition occur. The linear drawdown approach also takes into account how the market 

responded in 2012 and 2013 under the agency’s No Action Assurance, which indicates the linear 

allocation approach may even more accurately reflect servicing need.
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The agency is also proposing a linear drawdown option that would use fewer steps and 

less time to arrive at an HCFC-22 allocation of zero. Option 2 in Table 1 shows a linear 

drawdown over three years instead of five, resulting in a consumption allocation of zero in 2018 

instead of 2020. One possible benefit of decreasing the HCFC-22 allocation to zero sooner 

would be increased incentive to recover and recycle HCFC-22, and increased incentive to 

transition to alternatives and replace older, less energy efficient equipment. The three year linear 

drawdown provides environmental benefits as compared to the five year linear drawdown

because it issues fewer HCFC-22 consumption allowances over the five year period. As under 

the five year linear drawdown (Option 1), EPA is proposing to use the lowest proposed 

allocation in 2014 as a starting point. The 2015 allocation would therefore be approximately

12,400 MT, with an annual decrease of about 4,100 MT such that 2017 would be the final year 

of HCFC-22 consumption allowances (Option 2 in Table 1). In total, Option 2 would result in 

approximately 24,800 MT of allowances, which is 16,200 MT fewer than under EPA’s preferred 

five year linear drawdown approach. EPA is also proposing a variant to this three year linear 

drawdown under which the agency would start from the pre-recoupment 2014 allocation of 

20,100 MT. EPA seeks comment on its alternative proposal to base the allocation on a three year 

linear drawdown instead of five years, and on whether, in this case, the 2015 allocation should be 

determined from the lowest proposed amount in 2014 or the actual 2014 allocation prior to the 

addition of recoupment allowances. Regardless of which variant of the three year linear 

drawdown is chosen, it would provide the largest environmental benefit of the options presented 

in this rule, since it results in the fewest allowances overall.

In summary, EPA believes a linear drawdown helps ensure a smooth, simpler transition 

out of HCFC-22. This method of decreasing allowances does not rely directly on EPA’s estimate 
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of HCFC-22 servicing needs or changes in demand for refrigerant, though the 2013 Servicing 

Tail Report does confirm that a linear drawdown of allowances would still enable projected 

servicing need to be met under plausible recovery and reuse scenarios and changes in servicing 

practices. As a result, the agency believes making simple and consistent reductions in allowances 

each year could provide the certainty the market needs to transition smoothly from HCFC-22 to 

non-ODS alternatives.

The agency welcomes comment on the benefits or drawbacks to a linear allocation 

schedule, as well as comments on both linear drawdown options (Options 1 and 2 in Table 1) and 

the proposed variants of Option 1 and Option 2, which are discussed in this section but not 

shown in Table 1. 

2. Determining the Allocation by Estimating Servicing Need and then Accounting for 

Need that Can Be Met by Sources Other than New Production

While not its preferred approach, EPA is also proposing to take the modeled servicing 

need for 2015-2019 as estimated in the 2013 Servicing Tail Report, subtract the amount of 

expected recovery and reuse, and then issue consumption allowances to account for the 

remaining HCFC-22 need. This is the estimation approach, shown as Option 3 in Table 1. In the 

2009 Final Rule covering 2010-2014, comments on the 2009 Servicing Tail Report prompted 

EPA to account for 12,500 MT of recovery and reuse in each year. That is, the allowances issued 

each year were 12,500 MT lower than the modeled servicing need for HCFC-22. This same 

methodology was used in the 2013 Final Rule covering 2012-2014, except the 2013 Final Rule 

also accounted for existing inventory, which could be used to meet servicing need as well. When 

EPA addressed existing inventory in the 2013 Final Rule, it did not necessarily intend to address 

inventory in subsequent rules or make it part of the ongoing allocation methodology. However, 
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recent data received by EPA indicates there still is a significant inventory of HCFC-22. The 

proposal to account for existing inventory when setting the final HCFC-22 allocation under this 

option is discussed in section V.A.3.

In 2015, the amount of projected servicing need, minus the amount of expected 

recovery20 and reuse, is actually higher than the 2014 allocation of 23,100 MT. The agency does 

not see any reason to increase the allocation from 2014 to 2015 because allowing the allocation 

to increase from 2014 to 2015 could reduce incentives for recovery and transition. In addition, 

EPA has received feedback from stakeholders that the final allocations for 2013 and 2014 were 

higher than the market was expecting. Thus, under this approach, the agency is proposing to 

issue the same amount of allowances in 2015 as in 2014, instead of allowing the allocation to 

increase in 2015. EPA would then apply the methodology presented earlier in this section to 

years 2016 through 2019. EPA is proposing to use the currently modeled average recovery and 

reuse rate of approximately 50 percent. The resulting allocation schedule would start at 23,100 

MT in 2015 and end at 6,200 MT in 2019 before going to zero in 2020, shown as Option 3 in 

Table 1 of this section. EPA welcomes comment on using the estimation approach to allocate 

allowances, in addition to comments on model parameters, such as the recovery rates used in the 

model for each end use and the installed equipment base (see 2013 Servicing Tail Report and 

appendices). The agency is especially interested in comment on modeled equipment 

characteristics, like expected lifetime, charge size and leak rate, since assumptions about 

equipment characteristics affect the projected servicing needs for each end use.

 

20 The expected recovery rate is approximately 50 percent industry-wide and is listed as the baseline recovery rate in 

the 2013 Servicing Tail Report available in the docket.
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Table 1: Proposed Options for HCFC-22 Consumption Allocation in 2015-2019 (metric 

tons)

HCFC-22 Proposed Consumption 

Allocation Options 2015 2016 2017 2018 2019 2020

Option 1: Linear drawdown over 5 years 13,700 10,900 8,200 5,500 2,700 0

Option 2: Linear drawdown over 3 years 12,400 8,300 4,100 0 0 0

Option 3: Estimation Approach 23,100 20,900 15,100 11,500 6,200 0

3. Accounting for Existing HCFC-22 Inventory 

As stated earlier in this section, EPA did not commit itself to account for existing HCFC22 inventory when setting the allocations for 2015-2019; however, EPA is proposing to account 

for existing inventory for two primary reasons. The first is that EPA has heard from stakeholders 

that industry-wide inventory is still very large. In addition, many feel that the final 2013 and 

2014 allocations were higher than the market needs, and will therefore lead to a buildup of 

additional HCFC-22 stocks going in to 2015. The second reason EPA is proposing to account for 

existing inventory is based on the agency’s fall 2011 market analysis supporting its proposal to 

reduce allowances, as compared to the 2009 Final Rule (see Adjustment Memo, included in the 

docket to this rulemaking). That analysis assumed there was a surplus inventory between 22,700 

and 45,400 MT at the beginning of 2012. Given expectations about the transition away from 

HCFCs, as well as the 2015 and 2020 HCFC phaseout milestones, EPA estimated that the 

complete drawdown could take somewhere between four to eight years. Based on its estimates of 

existing inventory, EPA proposed and finalized a 6,000 MT reduction in allowances for 2012-

2014. Given that a 6,000 MT reduction over 2012-2014 is only 18,000 MT total, the agency

believes there still is ample existing supply of HCFC-22. Recent data from stakeholders confirms 

that the inventory level is above the high end or above EPA’s previous estimate. As such, EPA is 
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proposing to account for up to 10,000 MT of inventory each year in 2015-2019 under the 

estimation approach. EPA is also proposing to make larger annual reductions in the earlier years 

and smaller annual reductions in the later years under this approach. Such a tapered approach to 

accounting for existing inventory would be consistent with the recent feedback and comments 

that EPA has received. Many stakeholders have noted that sending strong market signals early in 

the control period is fundamental to preparing the market for the complete phaseout of virgin 

HCFC-22 production and import by 2020.

For this modified estimation approach, as well as the linear drawdown approaches, the 

agency will consider inventory data in choosing its final allocation methodology and welcomes 

comment on its approach.

B. How Will EPA Determine the HCFC-22 Production Allocation?

Since the start of the HCFC phaseout program in 2003, the agency has determined the 

HCFC-22 production allocation in one of two ways. Under either method, EPA first determines 

the aggregate consumption allocation needed and assigns the consumption baseline percentage 

accordingly. The process for assigning consumption baseline percentages works as follows: first, 

all the company-specific baselines listed in the tables at 40 CFR 82.19 are added to determine the 

aggregate consumption baseline. Second, EPA determines how many consumption allowances to 

allocate for a given year and divides that amount by the aggregate baseline. The resulting 

percentage listed in the table at section 82.16 becomes what each company is allowed to 

consume in a given control period. For example, a company with 100,000 kg of HCFC-22 

consumption baseline allowances would multiply that number by the percentage allowed in a 

given year (for example, 25 percent) to determine its calendar-year consumption allowance is 

25,000 kg. 
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In the 2003 Final Rule covering 2003-2009, and again in the 2009 Final Rule covering 

2010-2014, EPA allocated the same percentage of baseline allowances for production as it did 

for consumption. A company with a production baseline at 40 CFR 82.17 would simply multiply

its baseline by the percentage listed at 82.16 to determine its calendar-year production allocation. 

However, in the 2013 Final Rule covering 2012-2014, EPA provided a larger percentage of 

baseline and more HCFC-22 production allowances than it did for consumption. That is, section 

82.16 was amended to include two tables, one listing the baseline percentage for consumption 

and the other listing the percentage for production. As discussed in the 2013 Final Rule, the 

reason for this change was to allow United States manufacturers to produce at the same level as 

under the 2009 Final Rule and continue to compete globally, and to potentially reduce the need 

for less efficient production abroad (see 78 FR 20020). 

For the 2015-2019 regulatory period, EPA is considering two options for the HCFC-22 

production allocation: 1) issue production allowances at the highest allowable level under the 

Montreal Protocol to continue to allow United States producers to compete globally much like it 

did in the 2013 Final Rule covering 2012-2014, which is the agency’s preferred approach or 2) 

provide approximately the same number of production allowances as consumption allowances.

1. Allocate the Maximum Production Allocation Allowed Under the Cap

In the 2013 Final Rule, EPA determined that it has the authority to issue calendar-year 

consumption and production allowances using different percentages of baseline, as long as the 

agency complies with the overall schedule set by the Montreal Protocol and Congress, as 

accelerated under section 606. Therefore, the agency has the ability to set baseline percentages 

such that the aggregate production allocation is larger than the consumption allocation. See the 
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2013 Final Rule (78 FR 20018) for a discussion of EPA’s ability to decouple production and 

consumption baselines.

As stated in the 2013 Final Rule, EPA believes that allocating more production 

allowances than consumption allowances cannot lead to an increase in United States

consumption, would not result in a global increase in production or consumption of HCFC-22,

but could result in more United States production for export relative to the scenario in which 

production allowances are at approximately the same level as consumption allowances. This may

have economic benefits for the United States and potentially environmental benefits to the extent 

that production might otherwise occur in plants that lack HFC-23 byproduct destruction 

technologies. EPA’s preferred approach is to allocate more production allowances than 

consumption allowances, up to the maximum allowed under the Montreal Protocol cap.

Allocating more production allowances than consumption allowances would not provide

United States producers the opportunity to produce more HCFCs for domestic consumption than 

the amount allowed by the consumption allocation. Production of one kilogram of an HCFC still 

requires both a production allowance and a consumption allowance (82.15(a)(1), (2)). Allocating 

more production than consumption would provide United States producers the opportunity to 

continue production for export subject to existing regulatory constraints. A company must 

submit documentation to verify the export of an HCFC for which consumption allowances were 

expended in order to request a reimbursement of spent consumption allowances. The agency

reviews the documentation and issues a notice to either deny or grant the request. Therefore, a 

company would not be able to produce more HCFC-22 unless it had exported an equal amount of 

material and been granted a refund of spent consumption allowances.
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As mentioned previously, EPA also believes that allocating more production allowances 

than consumption allowances could have environmental benefits if United States production

displaces production at facilities that do not control byproduct emissions of hydrofluorocarbon 

(HFC)-23, which has a global warming potential of 14,800.

21 In the 2013 Final Rule, EPA 

responded to comments that cited the growth of HFC-23 emissions globally and indicated that 

facilities in Article 5 countries do not control HFC-23 emissions to the same degree as 

companies operating in the United States. EPA has worked with industry through its HFC-23 

Emission Reduction Partnership to encourage companies to reduce HFC-23 byproduct emissions 

from the manufacture of HCFC-22. Production of HCFC-22 in the United States may provide 

environmental benefits in reduced HFC-23 emissions to the extent United States production 

supplants the Article 5 production in those specific plants that do not have HFC-23 byproduct 

destruction technologies installed. For further discussion of HFC-23 byproduct emissions in 

Article 5 countries, see the 2013 Final Rule at 78 FR 20021.

EPA also determined in the 2013 Final Rule that allowing United States production to 

remain at the levels finalized in the 2009 Final Rule would not result in increased global 

consumption. Providing more production than consumption allowances could allow companies 

to continue exporting to non-Article 5 countries, which have the same overall Montreal Protocol 

phaseout schedule as the United States but may not use the United States’ chemical-by-chemical 

approach to phasing out HCFCs. Also, consumption of HCFCs in Article 5 countries was capped 

starting in 2013, which further limits global HCFC-22 demand (see Montreal Protocol Art. 5, 

para. 8 ter.). And finally, at least one company holding production allowances does not produce 

HCFC-22 in the United States, so it is unlikely that every production allowance issued will be 

 

21GWP of HFC-23 presented in the Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report: 

Climate Change 2007 (AR4)
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used. EPA is concerned that the alternative approach—issuing production allowances at the same 

level as consumption, instead of at the maximum level allowed under the cap—could deprive 

United States manufacturers of existing global business. 

Therefore, EPA is proposing to issue the maximum number of HCFC-22 production 

allowances allowed under the Montreal Protocol cap, after accounting for production allocations 

of any other HCFCs. Starting in 2015, the United States production cap under the Montreal 

Protocol is 1,553.7 ODP-weighted MT; when converted entirely to HCFC-22, the production cap 

is 28,249 MT of HCFC-22. To put the 2015 cap in perspective, EPA issued 41,200 MT of 

HCFC-22 production allowances in 2013 and 36,000 MT in 2014. Allocating the maximum 

allowed under the cap would still be a significant decrease from 2013 and 2014 production 

allocations. EPA is proposing to take the cap of 1,553.7 ODP-weighted MT, subtract the final 

production allocation for any other HCFCs, and then issue the remaining amount for HCFC-22 

production. Under the agency’s preferred options for all other production allocations, the 

resulting HCFC-22 allocation in 2015-2019 would be approximately 28,000 MT, or 21.7% 

percent of baseline. EPA welcomes comment on this approach. 

2. Allocate Approximately the Same Number of Production Allowances as Consumption 

Allowances

A second option for determining the HCFC-22 production allocation is to issue 

approximately the same number of production allowances as consumption allowances. Under 

this approach, the production allocation would be significantly lower than in 2013 and 2014. The 

highest proposed consumption allocation in this rulemaking is 23,100 MT in 2015, which is 

close to half as much as the 2013 production allocation and about two-thirds as much as the 2014 

production allocation. This approach could result in less United States production for export, 
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with economic disadvantages for the United States and potentially environmental disbenefits to 

the extent that more production might occur in plants that lack HFC-23 byproduct destruction 

technologies.

Under this approach, EPA would determine the desired aggregate consumption allocation 

in each year and set the percentage of consumption baseline accordingly. The percentage of 

production baseline issued would be whatever percentage results in an aggregate production 

allocation that is approximately equal to the aggregate consumption allocation. EPA welcomes 

comment on the merits of this option.

C. How Will EPA Determine the HCFC-142b Allocation?

In the 2009 Final Rule for 2010-2014, EPA allocated 100 MT of HCFC-142b 

consumption allowances for each of those years (74 FR 66412). When EPA re-established

HCFC-22 and HCFC-142b baselines in the 2011 Interim Final Rule and 2013 Final Rule, the 

HCFC-142b consumption allocation remained at 100 MT. However, since the HCFC-142b 

production baseline was significantly higher than the consumption baseline, and the same 

percentage of baseline was used for both consumption and production, the production allocation 

became 463 MT (not including recoupment) in 2011-2014. 

As discussed briefly in the 2013 Servicing Tail Report, the Vintaging Model does not 

model demand for HCFC-142b uses after 2014. However, several HCFC manufacturers 

anticipate continued, albeit decreasing, sales of refrigerant blends containing HCFC-142b in 

2015 and later. HCFC-142b is predominantly used in refrigerant blends that have historically 

served as replacements for CFC-12 and R-500 in medium- and large-sized refrigeration 

equipment. It is important to note that some of these blends containing HCFC-142b, namely R409A, are in use today but are not modeled in the Vintaging Model; thus, the model is not an 
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accurate reflection of the niche refrigeration needs for HCFC-142b. Given that the agency knows 

there is some R-409A equipment in use based on refrigerant sales data collected by the 

California Air Resources Board (see Preliminary 2011 and 2012 Sales and Distribution Data 

from the California Air Resources Board’s Refrigerant Management Program in the docket) and 

industry feedback, the agency is proposing to allocate 35 MT in 2015 with a decrease of 5 MT 

each year. EPA believes an allocation of 35 MT in 2015 is an appropriate balance between the 

2010-2014 allocation of 100 MT, the actual consumption of HCFC-142b in recent years, and the 

fact that while R-409A is still needed, it is used mainly in CFC retrofitted equipment (i.e.,

equipment that is at or is nearing its expected retirement). With an annual decrease of 5 MT, the 

HCFC-142b allocation would be 15 MT in 2019. The agency thinks that a decreasing allocation 

sends a stronger market signal that production and import of HCFC-142b are ending, as 

compared to a constant allocation in all five years. Such a signal should help encourage 

equipment owners to transition to more energy efficient equipment that uses non-ODS 

refrigerants. EPA will consider issuing up to 100 MT of HCFC-142b consumption allowances, 

but would need substantial data supporting such an allocation. Specifically, EPA would need to 

know for which blends, in what quantity and for what end use(s) the HCFC-142b is needed.

EPA is proposing to issue HCFC-142b production allowances at the same level as 

consumption, not the same percentage of baseline. Given historic exports of HCFC-142b, EPA 

does not believe the same rationale for allowing production to be higher than consumption 

applies to HCFC-142b as it applies to HCFC-22. In the 2013 Final Rule, HCFC-142b production 

was higher than consumption due to the different changes in production and consumption 

baselines, not due to any concerns about HCFC-142b export (as was the case for HCFC-22 

production). The agency would consider issuing up to 100 MT of production, even if the final 
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consumption allocation is lower, if there is documented need for United States-produced HCFC142b in other non-Article 5 countries. The agency is not proposing to issue any more than 100 

MT of HCFC-142b production allowances. EPA requests comments on its proposal, as well as 

data on current and future needs of HCFC-142b. 

D. How Will EPA Determine the HCFC-123 Allocation?

HCFC-123 is currently used as a refrigerant and as a fire suppression agent, which are the 

two consumptive uses of virgin HCFCs permitted by section 605(a) of the CAA as of January 1, 

2015. The agency is proposing to issue consumption allowances to allow import for these two 

uses. For the 2010-2014 regulatory period, EPA issued approximately 2,500 MT of HCFC-123 

consumption allowances each year, which is 125% of the HCFC-123 consumption baseline. EPA 

has never established a production baseline for HCFC-123, and the agency has no record of

domestic production of HCFC-123 for consumptive uses during the baseline years (2005-2007). 

Section 605(b) of the Clean Air Act restricts production of any class II substance to 100% of 

baseline levels or less beginning on January 1, 2015. Section 605(c) requires that consumption of 

class II substances be phased out on the same schedule as production. The agency’s reading of 

605(b) and 605(c) together is that as of January 1, 2015, EPA may allocate no more than 100 

percent of baseline for production or consumption of each class II substance. This milestone is 

part of the phaseout schedule contained in the CAA. EPA has accelerated the section 605 

phaseout schedule under the authority of section 606. Nevertheless, the 2015 milestone in section 

605(b) is still relevant because it applies to each class II substance individually. This is in 

contrast to the basket approach contained in the Montreal Protocol. Under section 614(b), where 

there is a conflict between Title VI of the CAA and the Montreal Protocol, “the more stringent 

provision shall govern.” With respect to individual substances, section 605 is more stringent.
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Thus, for the 2015 control period and beyond, EPA may not allocate more than 100 percent of 

baseline for any class II substance. EPA did determine in the 2013 Final Rule that the percent of 

production and consumption baseline allocated as calendar-year allowances may be different, but 

only so long as the phaseout of a substance continues on the same overall schedule presented in 

the CAA and the Protocol (78 FR 20004). See the 2013 Final Rule and the accompanying 

Response to Comments for a complete discussion of the agency’s authority to decouple 

production and consumption percentages. 

In considering allocation options, EPA has looked at the projected need for virgin HCFC123 for refrigeration and nonresidential fire suppression uses. EPA’s modeled need for each of 

these uses is presented in the 2013 Servicing Tail Report, included in the docket to this 

rulemaking. EPA is taking comment on the remaining refrigerant and fire suppression uses of 

HCFC-123, how much is needed, and why non-ODS alternatives could not meet this need. 

Commenters should clarify the quantity of their specific needs, in addition to any broader 

comments on industry demand for HCFC-123. 

Under the current phaseout regulations, beginning in 2015, production and import of 

HCFC-123 is limited to servicing of existing refrigeration and air conditioning equipment only. 

EPA is proposing to revise section 82.16(d) to allow production and import of HCFC-123 for fire 

suppression purposes to complement section 605(a)(4) of the CAA. This exemption would 

sunset on December 31, 2019 because, as discussed in more detail in Section II.A. of this 

preamble, beginning in 2020, Article 2F of the Montreal Protocol restricts production and import 

of HCFCs to servicing of existing refrigeration and air conditioning equipment.22 Under section 

614 of the CAA, where either the Montreal Protocol or the CAA is more stringent, the more 

 

22 Use of HCFC-123 that was imported prior to 2020, or that is used, recovered and recycled, is 

still allowed beyond January 1, 2020.
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stringent provision governs. While virgin HCFCs could continue to be used in fire suppression 

applications, EPA does not intend to issue consumption allowances for fire suppression after 

2019. In addition, beginning in 2020, section 605(a) of the CAA prohibits the use of virgin class 

II substances in the installation and/or manufacture of new AC and refrigeration systems. Any

HCFC-123 consumption allowances issued after 2019 would only allow HCFC-123 import for 

use as a refrigerant for servicing existing HCFC-123 systems.

EPA’s understanding is that much of the HCFC-123 refrigerant in use today is to service 

and manufacture low pressure chillers, which have relatively long expected lifetimes; the 

Vintaging Model assumes a 27-year average lifetime, and the United States tax code uses a 39-

year depreciation schedule for a category of equipment that includes HCFC-123 chillers (26 

USC §168). Given the expectation that these chillers will last for well over 20 years, EPA seeks

comment on whether it should provide a static amount of HCFC-123 allowances through 2019, 

or whether it should begin to gradually reduce HCFC-123 allowances now to foster transition.

The two proposed options for issuing HCFC-123 consumption allowances are outlined below, 

though EPA’s preferred option is to issue 100 percent of the HCFC-123 baseline. Commenters 

should explain why they prefer either option in as much detail, and with as much quantitative 

reasoning, as possible.

1. Allocate 100 Percent of HCFC-123 Consumption Baseline Through 2019

EPA is proposing to issue approximately 2,000 MT of HCFC-123 consumption 

allowances for each year from 2015-2019, which is the maximum allocation allowed under the 

CAA because it is equal to 100 percent of the consumption baseline. The agency believes this 

amount would be sufficient to meet the refrigeration and nonresidential fire suppression needs, 

even though projected need is 2,200 MT in 2015-2018 and 2,300 MT in 2019. EPA expects 
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2,000 MT of HCFC-123 allowances will be sufficient to meet modeled need because the

Vintaging Model projects that at least 330 MT of HCFC-123 will be available for recovery and 

reuse in 2015, and even more should be available in later years, mainly because HCFC-123 

chillers have high (90 percent) expected recovery rates due to their large charge size. So while 

this proposed option does not incorporate specific reductions for recovery and reuse, it does 

assume that some demand for HCFC-123 can be met with recovered material. EPA prefers this 

approach because 1) the allocation is still below modeled need; 2) HCFC-123 may be produced 

and imported for use as a refrigerant until 2030; and 3) there are no commercially available 

alternatives to HCFC-123 in low-pressure chillers as of mid-2013. EPA welcomes comment on 

its preferred proposal to issue 2,000 MT in each year, and again notes that it cannot issue more 

than 100 percent of the HCFC-123 baseline.

2. Allocate Less Than 100 Percent of HCFC-123 Consumption Baseline

EPA is proposing in the alternative to issue only enough HCFC-123 allowances to meet 

anticipated need, after specifically accounting for recovery and reuse. Under this option, EPA 

would allocate 1,900 MT of consumption allowances in 2015-2017, and 1,400 MT of allowances 

in 2018 and 2019. The objective of this approach is to foster recovery and reuse, and to 

recognize that while virgin production of HCFC-123 could occur through 2029, HCFC-123 

equipment can only be manufactured through 2019. As shown in Table 4-12 of the 2013

Servicing Tail Report, the total servicing demand plus the demand for charging new refrigeration 

and fire suppression equipment is 2,200 MT in 2015-2018 and 2,300 MT in 2019. After 

subtracting the amount of that total demand that EPA estimates can be met by recovered and 

reused material, the remaining need that would be met by virgin production is equal to the 

proposed allocation in each year. For 2015-2017 the proposed allocation is 1,900 MT, dropping 
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to 1,400 MT in 2018 and 2019, as discussed in the 2013 Servicing Tail Report. The agency is 

seeking comment on this approach, especially the HCFC-123 need estimates presented in the 

2013 Servicing Tail Report, to what extent need could reasonably be met with recovered material 

and to what extent commenters believe the HCFC-123 allocation will affect transition to 

alternatives.

E. How Will EPA Determine the HCFC-124 Allocation?

Though HCFC-124 has both refrigeration and fire suppression applications that are listed 

as acceptable under the Significant New Alternatives Policy (SNAP) program, its primary use 

today is in sterilant blends. Beginning January 1, 2015, CAA section 605(a) prohibits the use of

virgin HCFCs as sterilants, since sterilant use is not one of the four statutory exceptions. As 

discussed earlier in section III.B. of this preamble, 605(a) restricts the use of bulk class II 

substances, not products containing class II substances. However, manufacture of a product is 

considered “use” of a bulk substance and therefore is prohibited beginning January 1, 2015,

unless the manufacturer is using recovered and recycled HCFC-124. EPA’s understanding is that 

most of the sterilant industry is on target to transition to non-ODS alternatives prior to January 1, 

2015, but welcomes comment on the transition out of HCFC-124 sterilants, particularly the 

status of sterilant users’ transition to alternatives.

While most HCFC-124 use is as a sterilant, there are, in fact, several refrigerant blends 

with HCFC-124 that are listed as acceptable by the SNAP program. These blends include: R401A, R-401B, R-409A, R-414A, R-414B and R-416A. Similarly, EPA has also listed as 

acceptable certain fire suppression alternatives that contain HCFC-124. For total flooding 

applications, EPA has listed neat HCFC-124 and HCFC Blend A (NAFS-III) as acceptable 

alternatives to Halon 1301. For streaming applications, the agency has listed neat HCFC-124 and 
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HCFC Blend C (NAF P-III) as acceptable alternatives to Halon 1211. However, the agency is 

not aware of any HCFC-124 fire suppression uses in the United States.

Given the small projected need for HCFC-124 beyond 2014 and the continued use of 

certain refrigerant blends containing HCFC-124, the agency is proposing to issue some HCFC124 allowances in 2015-2019, consistent with the most recent Vintaging Model projections of

HCFC-124 servicing need and recent feedback from industry stakeholders. Due to the very small 

projected need, HCFC-124 is only discussed briefly in the 2013 Servicing Tail Report; the 

remainder of the HCFC-124 discussion is included here. The estimated need in the Vintaging 

Model decreases from 4.5 MT in 2015 to 3.1 MT in 2019, with just over half of the need 

modeled for use in Industrial Process Refrigeration and the other half for Medium Retail Food.

EPA could propose to allocate just 4 MT in each year, but the agency recognizes that the 

Vintaging Model may not capture all current uses of HCFC-124 refrigeration equipment, as is 

the case with HCFC-142b equipment. Based on Vintaging Model estimates, along with industry

feedback on the needs and uses of HCFC-124, and the use of HCFC-124 allowances in recent 

years, EPA is proposing to allocate 200 MT of HCFC-124. For reference, the 2010-2014 

consumption and production allocations are roughly 3,000 MT and 5,000 MT, respectively, 

though reported consumption and production has been substantially less in recent years. EPA’s

goal is to ensure that servicing needs can be met, while also encouraging recovery and reuse or 

transition to non-ODS refrigerant blends. An allocation of 200 MT supports this goal because it 

accounts for allowed end uses of HCFC-124 that may not be captured by the Vintaging Model

(e.g. use of niche refrigerant blends containing HCFC-124), but also recognizes that the primary

use of HCFC-124 will no longer be allowed as of January 1, 2015.
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Unlike HCFC-123, companies do have HCFC-124 production baselines and so EPA is 

proposing to allocate consumption and production at the same level. EPA’s preferred approach is 

to allocate 200MT of production and consumption allowances to allow for limited manufacture 

of niche refrigerant blends; however, the agency is proposing in the alternative to issue as few as 

4 MT of HCFC-124 consumption and/or production allowances, consistent with the Vintaging 

Model projections. This is not EPA’s preferred allocation, but the agency is open to comments in

support of this lower proposed option if commenters can provide evidence suggesting that the 

allocation should be as low as 4 MT. Similarly, EPA is also requesting data from commenters in 

support of allocating up to 400 MT of HCFC-124 allowances and is proposing to issue up to 400 

MT if comments and data warrant an increase. The agency seeks comment on the transition or 

retrofit plans of equipment owners, and for how long they expect to need virgin HCFC-124.

F. How Will EPA Determine the HCFC-225ca/cb Allocation?

According to the 2009 Servicing Tail Report, more recent updates to EPA’s Vintaging 

Model and conversations with stakeholders,HCFC-225ca and HCFC-225cb are used only as 

solvents, usually in precision cleaning of electronics, optical equipment or liquid oxygen 

systems. In the 2009 Final Rule, the agency used HCFC-225ca/cb as an example of the future 

effects of the section 605(a) use restriction, stating that “HCFC-225ca and HCFC-225cb are 

generally used as solvents, but as of January 1, 2015, under section 605(a), HCFCs may not be 

used as solvents” (74 FR 66433). This restriction is reflected in the regulations at section 

82.15(g). However, as discussed in section III.B, EPA is proposing a limited exemption to allow 

entities that have HCFC-225ca/cb in their inventory prior to January 1, 2015 to continue to use 

their HCFC-225ca/cb as a solvent beyond that date.
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The proposed exemption would apply only to use of HCFC-225ca/cb as a solvent by

persons who hold that HCFC-225ca/cb in their inventory as of January 1, 2015; EPA is not 

proposing an exemption from the restriction on introduction into interstate commerce of HCFCs 

for solvent purposes. Accordingly, the agency is not proposing to issue any allowances for the 

production or consumption of HCFC-225ca/cb. Combined with the continued use of products 

containing HCFC-225ca/cb, EPA’s understanding from stakeholders is that an exemption to the 

use prohibition to allow for continued use of virgin HCFC-225ca/cb as a solvent by persons with 

HCFC-225ca/cb in their inventory would be sufficient to meet the anticipated solvent needs for 

specialized, niche applications that are not able to transition to alternatives prior to 2015. EPA is 

proposing such an exemption in section III.B.1. of this preamble.

G. What is EPA Proposing to Do With the HCFC-141b Exemption Program?

The HCFC-141b exemption program has been in place since the start of the HCFC 

allowance program in 2003. In the preamble to the 2009 Final Rule, EPA stated that the petition 

process for HCFC-141b exemption allowances at section 82.16(h) would end in 2015, since 

HCFC-141b is not used as a refrigerant and thus does not meet the criteria established by section 

605(a) for continued use. HCFC-141b similarly is not used as a fire suppression agent. EPA is 

proposing to revise 40 CFR 82.16, which is the section of subpart A that addresses the phaseout 

schedule of class II controlled substances. The date limitation on the HCFC-141b petition 

process can already be seen by comparing section 82.16(b), which lists “HCFC-141b exemption 

needs” as one of the exceptions to the HCFC-141b phaseout, with section 82.16(d), which does 

not include HCFC-141b exemption needs in the list of exceptions that continue beyond January

1, 2015. However, the HCFC-141b petition process in 82.16(h) does not specify an end date.

EPA is proposing to remove the HCFC-141b petition process from the regulations effective 
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January 1, 2015. Removing the text will clarify that EPA will not grant petitions, whether new or 

existing, for HCFC-141b exemption allowances in 2015 or beyond.

In recent years the amount of HCFC-141b imported or produced has been decreasing 

significantly. The agency does not anticipate there will be any remaining need for HCFC-141b 

import or production starting in 2015. Excluding transhipments, heels or used material, the 

regulations at 40 CFR 82.15(g)(3) limit the use or introduction into interstate commerce of 

HCFC-141b to export to Article 5 countries and use in transformation or destruction processes, 

beginning January 1, 2015. Despite the strict limits on HCFC-141b use in 82.15(g)(3), EPA 

appreciates that some current users of HCFC-141b may face a similar situation as users of 

HCFC-225ca/cb. That is, there may be users with HCFC-141b inventory that will not be allowed 

to use any remaining HCFC-141b after 2014. The agency has not heard from any HCFC-141b 

users, and thus does not anticipate the need for any exemption to the use restrictions for HCFC141b; however, EPA welcomes comment on whether there are remaining niche uses of HCFC141b. Commenters should explain the use and the quantity of HCFC-141b needed, why 

alternatives or used HCFC-141b cannot meet this need and the plan for transitioning to 

alternatives.

H. Other HCFCs that are Class II Controlled Substances

To date, EPA has not established baselines or issued allowances for the production or 

import of HCFCs that are not included in the tables at 40 CFR 82.16(a). The prohibitions in 40 

CFR 82.15(a) and (b) on production and import without allowances do not apply to such HCFCs. 

However, the phaseout schedule in 40 CFR 82.16 applies to all class II substances, whether or 

not they are governed by the allowance system. Similarly, all class II substances are subject to 

the restrictions on introduction into interstate commerce and use contained in 40 CFR 82.15(g). 
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HCFCs that EPA has listed as class II controlled substances are identified in appendix B to 

subpart A. 

Beginning January 1, 2015, the use of all class II substances is banned, unless specifically

exempted (see section III.B. of this preamble for more details). EPA is seeking comment on 

whether any of the HCFCs not governed by the allowance system qualify for the nonresidential

fire suppression and/or refrigeration servicing exemptions and what quantity the market will 

need going forward for these purposes. Should the need for any of these chemicals grow or 

potentially put the United States in danger of not meeting its commitments under the Montreal 

Protocol, EPA would consider establishing baselines and allocating calendar-year allowances via 

a separate rulemaking.

As mentioned earlier in section III.B. of this preamble, EPA is proposing to amend the 

list of class II controlled substances in appendix B of subpart A to better match the Clean Air Act 

section 602 and the Montreal Protocol HCFC lists (found in Group I to Annex C of the Protocol). 

Currently, both the Protocol and CAA section 602 include all isomers of listed substances, but 40 

CFR part 82 subpart A, appendix B does not include all isomers, only those that are specifically 

named (e.g., HCFC-141b is listed as such, but there are other isomers of HCFC-141 that are not 

included in appendix B). CAA section 602 states that EPA “shall publish” a list of class II 

substances that shall include the specified HCFCs and “shall also include the isomers” of those 

substances. EPA’s intent was to list all isomers in appendix B, as indicated by the footnote 

explaining that when a range of ODPs is listed for a chemical, the range applies to an isomeric 

group. The proposed change would correct this omission. Specifically, EPA is proposing to 

reconcile the statutory and Montreal Protocol lists with the list in the regulations, and to add a 
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statement that appendix B of the regulations includes all isomers of a listed chemical, even if the 

isomer itself is not listed on its own.

VI. What Other Adjustments to the HCFC Allocation System is EPA Considering?

A. Will EPA Consider Banning Dry-Shipped HCFC-22 Condensing Units?

Condensing units are a type of component in split system air conditioners. Under current 

regulations, the sale or distribution of a condensing unit pre-charged with HCFC-22 is prohibited

(40 CFR 82 subpart I); however, a dry-shipped unit may be sold and used to repair an existing 

system that uses HCFC-22 as the refrigerant. In February 2011, the Carrier Corporation sent a 

letter to EPA, asking the agency to ban this particular type of repair. In the proposed rule 

providing 2012-2014 HCFC-22 allocations (77 FR 237), EPA took comment on whether repairs 

using dry-shipped condensing units affect the phaseout of HCFC-22. The agency received 

numerous comments, and responded to them in the 2013 Final Rule (78 FR 20004). While many

comments discussed dry-shipped condensing units, very few provided EPA any additional data 

or information to indicate that repairs using condensing units affect the HCFC phaseout. The 

agency is again seeking quantifiable information on the number of dry-shipped condensing units 

being shipped, whether they are being used as a repair in lieu of a compressor or motor 

replacement, and whether and to what extent condensing unit replacements extend the life of an 

existing system; however, all evidence received to date suggest that condensing units sales are 

decreasing and should not affect the agency’s ability to phase out HCFC-22. As a result, EPA is 

not proposing to ban dry shipped condensing units at this time. If the agency receives data

indicating that the agency’s ability to phase out HCFC-22 is jeopardized, EPA would potentially

propose a ban via a separate rulemaking process. 
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B. How Will EPA Respond to Requests for Additional Consumption Allowances In 2020 and 

Beyond?

Currently, the regulations at 82.20(a) allow a person to obtain consumption allowances 

equivalent to the quantity of class II controlled substances that the person exported during the 

control period, provided that the substances were originally produced or imported with 

consumption allowances. The exporter must submit certain information to EPA which the 

agency reviews before issuing a notice either denying the request, or granting the additional 

consumption allowances. A person may submit this request (known as a Request for Additional 

Consumption Allowances, or RACA) upon export of any HCFC for which consumption 

allowances were originally expended, regardless of what control period the production or import 

took place. As the phaseout deadline approaches for certain HCFCs, the agency believes it makes 

sense to restrict RACAs accordingly. For example, 1,000 kg of HCFC-22 could be produced in 

2019 using consumption and production allowances. In 2020, or some later year, that material 

could be exported—and under the current regulations the exporter would be eligible to request 

1,000 additional HCFC-22 consumption allowances; however, there will not be any consumption 

allowances for HCFC-22 in 2020 or subsequent years.

The agency believes that issuing additional consumption allowances past the phaseout 

date for an HCFC—thereby allowing for continued import—would be contrary to the goals of a

program that has purposefully set phaseout dates based on a worst-first approach. Continuing to 

issue RACAs beyond the phaseout date for a substance would also be contrary to past EPA 

actions for class I substances. For class I substances, the option to obtain consumption 

allowances equivalent to the level of class I controlled substances that the person exported was 

available for most class I substances only until January 1, 1996, which was the phaseout date for 
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CFCs and most other class I substances, and until January 1, 2005 for class I group VI 

substances (i.e. methyl bromide), which was the phaseout date for that substance. Therefore, 

EPA is proposing to add the following sentence to paragraph 82.20(a): “Both the export of the 

class II controlled substance and the request for additional consumption allowances must occur 

during a calendar year in which consumption allowances were issued for that class II controlled 

substance.” EPA welcomes comment on its proposed addition to 82.20, and on its proposal to 

treat class II RACAs the same as it treated the request for additional consumption allowances for 

class I substances.

C. How Might EPA Maximize Compliance With HCFC Regulations?

EPA is interested in comments and suggestions for ensuring compliance with HCFC 

regulations. EPA recognizes that the 2015 stepdown and the approaching complete phaseout of 

HCFC-22 may affect prices, which could have the effect of increasing the incentives for illegal 

activity, particularly illegal imports of HCFCs or HCFC blends. On the other hand, the agency

believes that reduced allocations and market changes increasing the value of the material will 

encourage proper recovery and decrease motivation to vent HCFCs, especially HCFC-22. EPA 

seeks comment on how it could alter existing regulations to encourage compliance with the 

HCFC phaseout requirements and section 608 refrigerant regulations. In addition, the agency is 

interested in ways it could increase awareness and ensure compliance with the section 605(a) use 

restrictions and the section 611 labeling requirements that will begin in 2015.

VII. What Modifications to Section 608 Regulations is EPA Proposing?

The portion of the stratospheric ozone regulations titled Recycling and Emissions 

Reduction (40 CFR 82 subpart F) contains requirements promulgated under CAA section 608. 

The section 608 requirements are intended to: “reduce emissions of class I and class II 
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refrigerants and their substitutes to the lowest achievable level,” by designing standards for the 

use of “refrigerants during the service, maintenance, repair, and disposal of appliances” (40 CFR 

82.150). To support this goal, EPA is proposing to update its reclamation standards.

A. Overview of Current Reclamation Standards 

Recovered refrigerant often contains contaminants, including air, water, particulates, 

acids, chlorides, high boiling residues, and other impurities. Reclamation is the re-processing and 

upgrading of a recovered controlled substance through such mechanisms as filtering, drying, 

distillation, and chemical treatment in order to restore the substance to a specified standard of 

performance. EPA regulations at 40 CFR 82.152 define reclaim as “. . . .to reprocess refrigerant 

to all of the specifications in appendix A to 40 CFR part 82, subpart F (based on ARI Standard 

700-1995, Specification for Fluorocarbons and Other Refrigerants) that are applicable to that 

refrigerant and to verify that the refrigerant meets these specifications using the analytical 

methodology prescribed in Section 5 of appendix A of 40 CFR part 82, subpart F.” Before a used 

refrigerant may re-enter the market place, it must be reclaimed to the purity level specified by the 

regulations, and its purity must be verified (40 CFR 82.154(g)).

B. Benefits of Reclamation

EPA believes that proper recovery, recycling or reclamation, and reuse of HCFC-22 and 

other ODS refrigerants is an essential component of stratospheric protection. Refrigerant reuse is 

preferable to venting or destruction. Recovery and reuse reduces emissions of HCFCs to the 

atmosphere. Reuse also reduces the amount of virgin material that needs to be produced. Section 

608 of the CAA prohibits knowingly venting HCFCs due to the adverse effects on stratospheric 

ozone, and EPA regulations require that HCFCs be recovered during service or disposal of 

appliances and then be either recycled, reclaimed, or destroyed. 
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Recovery and reuse is becoming increasingly important as the United States continues its 

progress in the phaseout of ODS. As discussed earlier in this preamble, in 2015 the United States

consumption cap for HCFCs will decrease from 3,810 ODP-weighted metric tons to 1,524 ODPweighted metric tons (i.e. 10 percent of baseline). 

C. Regulatory Changes that EPA is Proposing Under Section 608 Authority 

1. Adoption of AHRI 700-2012 Standards

On July 24, 2003 (68 FR 43786), EPA adopted the requirements of ARI Standard 700-

1995 into its regulation as appendix A of 40 CFR 82 subpart F. EPA has not updated its use of 

this standard since then. The current version of the ARI (now AHRI) Standard 700 is 700-2012, 

including addenda added in August 2008 and August 2012 (AHRI 700C-2008: Appendix C to 

AHRI Standard 700-Analytical Procedures for AHRI Standard 700-06 and AHRI 700D-2012: 

Appendix D Gas Chromatograms for AHRI Standard 700-2012-Informative, all three of which 

are included in the docket). Appendix A to subpart F has not kept pace with these revisions. It 

lacks the most up-to-date listing of refrigerants, purity requirements and changes to analytical 

methodologies. EPA’s intent is for reclaimers to use the most recent AHRI standards as 

reclamation technology changes, and the agency would like its regulations to reflect the best 

technical information and industry practices. For that reason EPA is proposing to revise appendix

A to reflect the most recent set of AHRI standards, thereby keeping abreast of advances in the 

reclamation industry. Under this option, EPA would replace Appendix A’s current text with the 

text in AHRI 700-2012 and its appendices. EPA also intends to revise the definition of “reclaim” 

to reflect this update to appendix A.

Alternatively, rather than continue its practice of modifying the language of appendix A 

to accommodate revisions to AHRI Standard 700 (in this case, to AHRI Standard 700-2012), 
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EPA is proposing to cross-reference AHRI Standard 700-2012 directly, eliminating the need for

reproducing the entire standard in appendix A. Such an approach, known as incorporation by 

reference, allows a Federal agency to comply with the requirement to publish rules in the Federal 

Register by referring to materials already published elsewhere. The legal effect of incorporation 

by reference is that the material is treated as if it were published in the Federal Register. When 

EPA incorporates material by reference, it references a specific version of the material instead of 

providing a “generic” reference. Here, EPA is proposing to refer specifically to AHRI Standard 

700-2012 Specification for Fluorocarbon Refrigerants and not to “AHRI Standard 700” or “the 

most recent version of AHRI Standard 700.” The proposed regulatory text incorporates by 

reference AHRI Standard 700-2012 at appendix A to subpart F, and changes the definition of 

reclaim to the updated standard incorporated by reference at appendix A.

EPA believes incorporating AHRI Standard 700-2012 by reference, and deleting the text 

in appendix A, has several advantages. AHRI standards are published standards, they are widely 

known to and used by the persons affected by this regulation, and they are available free of 

charge at www.ahrinet.org/standards.aspx. Referencing the AHRI standard, in lieu of duplicating 

it in appendix A, would reduce any potential confusion about the relationship between the two 

sets of requirements. It would also substantially reduce the amount of material published in the 

Federal Register and Code of Federal Regulations. On the other hand, EPA recognizes that there 

is an advantage to including the requirements of the standard in an appendix to its own 

regulation, avoiding the need to search for the 2012 version of the technical standard and 

providing certainty that compliance with appendix A (although possibly outdated) constitutes 

compliance with EPA regulations. EPA seeks comment on incorporation by reference of a 

specific version of the AHRI 700 standard, as compared to revising appendix A to reflect a 
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specific version. EPA also seeks comment on whether the definition of “reclaim” should contain 

other aspects that are not reflected in the AHRI standard, or conversely, whether there are 

aspects of the AHRI standard that are not appropriate to include in the regulatory definition. 

2. Notification to EPA if Change in Business Management, Location or Contact 

Information

Reclaimer certification does not transfer when there is a change in ownership. Section 40 

CFR 82.164(f) requires the new owner of the reclamation company to certify with EPA within 

thirty days of the change of ownership; however, there are no provisions that a reclamation 

company must notify EPA of changes in business management, location or contact information. 

EPA believes that notification of changes in business information would improve accountability

and benefit reclaimers in the long run. Without accurate information, EPA may not be able to 

communicate with a reclaimer in a timely manner, potentially causing unnecessary burden to the 

reclaimer. For example, if EPA does not receive an annual report from a reclaimer, the agency

wants to be able to contact the reclaimer by phone or mail to follow up. If there is no response 

from the company, EPA sends a certification revocation letter. Prior to revoking a reclaimer 

certification, EPA would prefer to contact the company to find out what happened to their annual 

reclaim report. Additionally, as a benefit to the public, the agency wants to ensure that the 

website listing certified reclaimers and their contact information is up-to-date. EPA is seeking 

comment on its proposal to require notification from the reclaimer when there is a change in 

business management, location or contact information (i.e., for the refrigerant manager who 

communicates with EPA).

3. Reporting and Recordkeeping Requirements
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EPA’s ability to verify whether reclaimers are complying with section 608 regulations is 

limited. Currently, 40 CFR 82.166(h) requires that reclaimers, on an annual basis, report how 

much material was received, how much they reclaimed, and the amount of waste product 

generated as a result of reclamation activities. Under paragraph 82.166(g) refrigerant reclaimers 

must also maintain records of the names and addresses of persons sending them material for 

reclamation and the quantity of material (combined mass of refrigerant and contaminant) sent to 

them for reclamation on a transactional basis. However, the regulations do not clearly state that 

information must be broken down by refrigerant type. Some reclaimers do submit information 

broken down by refrigerant, and EPA typically asks for refrigerant-specific information when it 

is not provided. This information is used as part of an overall review of refrigerant supply to help 

ensure the continued smooth transition out of ODS refrigerants. The agency believes it is 

essential for EPA and the public to have accurate information concerning the amounts of specific 

types of refrigerants that are available from reclaimers for reuse, and is therefore proposing to

clarify the regulations to require disaggregated information for all reclaimed refrigerants as part 

of the annual reporting. The agency is proposing to revise paragraph 82.166(h) to read:

“Reclaimers must maintain records of the quantity of material (the combined mass of refrigerant 

and contaminants) sent to them for reclamation, the mass of each refrigerant reclaimed, and the 

mass of waste products. Reclaimers must report this information to the Administrator annually

within 30 days of the end of the calendar year.” This information is typically maintained by 

reclaimers and in current practice is either included in the initial report to EPA or transmitted in

response to a specific request; therefore the agency does not believe this proposed option 

increases reporting burden. The agency hopes that this proposed change will clarify what 

information it needs from reclaimers up front, and will alleviate the need for additional back-
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and-forth between EPA and reclamation companies that in the past were not submitting 

refrigerant-specific data, thereby potentially reducing reporting burden.

EPA also believes that in the future it may be beneficial to have an accountability system 

that tracks refrigerant material at reclaimer facilities on a longer time scale. 40 CFR 82.164(c) 

mandates that no more than 1.5 percent of total refrigerant reclaimed shall be released during the 

reclamation process. However, emissions can occur from leaks in tubing, valves and other loss 

pathways and may not be recorded or tracked. To increase accountability and awareness of any

leaks or losses, in the future EPA could require reclaimers to regularly report, by refrigerant type, 

how much is in inventory, including storage, regardless of when material was received. Based on 

information available to the agency (Stratus, 2010), EPA believes that reclaimers generally could 

support these modest changes. EPA believes that inventory information is routinely maintained 

by reclaimers in the course of normal business activity, and that the burden of reporting it to EPA 

would be minimal. 

EPA is seeking input on future possible reporting and recordkeeping changes that would 

help minimize emissions and facilitate a smooth transition away from ODS. Commenters should 

consider what evidence, if any, reclaimers should submit to verify their product is meeting 

AHRI-700 standards, what format results should be reported in, and whether summary results 

would be acceptable. EPA is taking comment on the benefits of requiring reporting of testing 

sample results, and the mechanisms that exist for EPA to validate that samples are representative 

samples of reclaimer product. Additionally, the agency is seeking information on the various 

mechanisms for material loss during the reclamation process, and whether the losses can be 

quantified.

4. Technical and Process Information Required in Reclaimer Certification Application
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The reclamation regulations at 40 CFR 82.164(e)(2) include a general requirement to 

submit “a list of equipment used to reprocess and analyze the refrigerant.” This requirement, 

dating to the May 14, 1993 final rule, titled “Protection of Stratospheric Ozone; Refrigerant 

Recyling,” (58 FR 28660), was included to help EPA ensure that an applicant would own and 

use equipment that achieves AHRI 700 standards. Given the general language of this 

requirement, submissions are often incomplete or vague, forcing EPA to request additional 

information from the applicant. As the reclamation industry has matured, EPA has developed a 

more precise understanding of technical information, which, if submitted with a certification, 

would enable the agency to more reliably assess a reclaimer’s ability to achieve AHRI standards 

and minimize emissions. 

While EPA is not proposing changes to this requirement in this rulemaking, EPA seeks 

comment on whether developing a more robust reclaimer certification process that requires more 

specific information would clarify EPA’s expectations for submitted certification information

and minimize refrigerant leaks. The agency believes that reclaimers maintain this information as 

part of good business practice, and that the burden of providing it to EPA as part of a 

certification application would be small. Specifically, the agency is seeking comment on the 

importance for EPA to collect the following information and the burden that would be imposed 

by requiring it to be submitted: (1) Detailed description of technology applied to achieve the 

applicable AHRI Standard 700 requirements. If home-engineered, the certification would include 

a schematic. If off-the-shelf, the applicant would provide (1) the make, manufacturer, and serial 

number; (2) Batch capacity; (3) Types of refrigerant to be reclaimed by reclaimer and standard 

operating procedures for reclaiming those refrigerants; (4) Information on the instrumentation 

and methodology that meets AHRI 700 requirements for determination of acidity, determination 
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of moisture, determination of chloride, determination of non-condensable, determination of 

impurities, including other refrigerants, or, for reclaimers that send refrigerant to an outside lab 

for analysis, a certified letter from the outside lab identifying the methodology that meets the 

AHRI 700 standards. In addition, the agency is considering adding a provision to the regulations 

that clarifies what information is necessary in order for EPA to approve certification. The agency

is also considering a new requirement that reclaimers submit a partial recertification if they plan 

to accept refrigerants that are not addressed in its current certification or if the reclaimer decides 

to use a different type of reclamation equipment, thereby ensuring the agency can assess whether

they have the capability to properly process all refrigerants they receive. EPA welcomes 

comment on other triggers for requiring recertification, for example, a significant change in the 

type of reclamation equipment.

5. Expanded End Product Testing Requirements

EPA is interested in potentially expanding the requirements for sampling and testing of 

reclaimed refrigerant in a future agency rulemaking. Currently, the definition of “reclaim” says 

that reclaimers are required to verify that reclaimed refrigerant meets the AHRI Standard 

specifications using the analytical methodology in Section 5 of appendix A of subpart F. Section 

5 contains requirements for sampling, test methods, and maximum permissible contaminant 

levels of reclaimed refrigerant. However, the regulations do not specify how often, or on what 

basis, reclaimers must use the Section 5 methodology. EPA’s concern is that it does not have 

current knowledge on the quality of reclaimer product, and the agency is therefore interested in 

ways to verify that reclaimed refrigerant is of acceptable quality. It is possible that some 

reclaimed refrigerant entering the market does not meet the AHRI standard and is being illegally 

vented due to the high cost associated with disposition or destruction of the material.
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Section 5 of appendix A, as well as AHRI 700-2012, contains test methods but does not 

specify testing frequency or requirements for reporting test results. EPA is seeking information 

on what specific criteria end product testing and reporting could be based on in order to help 

validate that reclaimed product is meeting AHRI 700 standards. Specifically, the agency is 

interested in: sampling procedures and specific testing protocols beyond what is currently in 

section 5; how frequently testing should be required; how a batch of refrigerant would be defined 

and whether testing should be on a per batch basis, or if multiple tests should be required and on 

what time frame. Additionally, EPA is interested in how it could ensure product quality, for 

example, by requiring third party certification for all reclaimers, and the advantages and 

disadvantages to such an approach. The agency notes that technicians must be certified by a third 

party in order to service equipment containing ODS, and is interested in how a third party 

certification for reclaimers could be similar or different.

VIII. Statutory and Executive Order Reviews 

A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: 

Improving Regulation and Regulatory Review

Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), this action is a 

"significant regulatory action” since it raises “novel legal or policy issues.” Accordingly, EPA 

submitted this action to the Office of Management and Budget (OMB) for review under 

Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011) and any changes made in 

response to OMB recommendations have been documented in the docket for this action.

EPA did not conduct a specific analysis of the benefits and costs associated with this 

action. Many previous analyses provide a wealth of information on the costs and benefits of the 

United States HCFC phaseout including:
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 The 1993 Addendum to the 1992 Phaseout Regulatory Impact Analysis: Accelerating the 

Phaseout of CFCs, Halons, Methyl Chloroform, Carbon Tetrachloride, and HCFCs.

 The 1999 Report Costs and Benefits of the HCFC Allowance Allocation System.

 The 2000 Memorandum Cost/Benefit Comparison of the HCFC Allowance Allocation 

System. 

 The 2005 Memorandum Recommended Scenarios for HCFC Phaseout Costs Estimation. 

 The 2006 ICR Reporting and Recordkeeping Requirements of the HCFC Allowance 

System.

 The 2007 Memorandum Preliminary Estimates of the Incremental Cost of the HCFC 

Phaseout in Article 5 Countries.

 The 2007 Memorandum Revised Ozone and Climate Benefits Associated with the 2010 

HCFC Production and Consumption Stepwise Reductions and a Ban on HCFC Precharged Imports.

A memorandum summarizing these analyses is available in the docket.

B. Paperwork Reduction Act

The Office of Management and Budget (OMB) has previously approved the information 

collection requirements contained in the existing regulations at 40 CFR part 82, subpart A under 

the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB 

control number 2060-0498. The OMB control numbers for EPA's regulations in 40 CFR are 

listed in 40 CFR part 9.

However, EPA is proposing modifying the regulations covering recordkeeping and 

reporting contained in the existing regulations at 40 CFR part 82, subpart F, which were 

approved by OMB under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. 
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under OMB control number 2060-0256. The two modifications, (1) requiring reclaimers to 

provide updated contact information and (2) requiring reclaimers to provide the amount of each 

refrigerant reclaimed in their annual reporting, are already customary business practices and 

therefore do not affect information collection burden. In both of these cases, EPA is modifying 

the regulations so they align with current practices. 

C. Regulatory Flexibility Act (RFA)

The Regulatory Flexibility Act (RFA) generally requires an agency to prepare a 

regulatory flexibility analysis of any rule subject to notice and comment rulemaking 

requirements under the Administrative Procedure Act or any other statute, unless the agency

certifies that the rule will not have a significant economic impact on a substantial number of 

small entities. Small entities include small businesses, small organizations, and small 

governmental jurisdictions. For purposes of assessing the impacts of this rule on small entities, a 

small entity is defined as: (1) a small business as defined by the Small Business Administration’s 

(SBA) regulations at 13 CFR 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;

and (3) a small organization that is any not-for-profit enterprise which is independently owned 

and operated and is not dominant in its field. 

This action will affect the following categories:

- Industrial Gas Manufacturing entities (NAICS code 325120), including 

fluorinated hydrocarbon gas manufacturers and reclaimers;

- Other Chemical and Allied Products Merchant Wholesalers (NAICS code 

424690), including chemical gases and compressed gases merchant 

wholesalers;
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- Air-Conditioning and Warm Air Heating Equipment and Commercial and 

Industrial Refrigeration Equipment Manufacturing entities (NAICS code 

333415), including air-conditioning equipment and commercial and industrial 

refrigeration equipment manufacturers;

- Air-Conditioning Equipment and Supplies Merchant Wholesalers (NAICS 

code 423730) , including air-conditioning (condensing unit, compressors)

merchant wholesalers;

- Electrical and Electronic Appliance, Television, and Radio Set Merchant 

Wholesalers (NAICS code 423620), including air-conditioning (room units) 

merchant wholesalers; 

- Plumbing, Heating, and Air-Conditioning Contractors (NAICS code 238220), 

including Central air-conditioning system and commercial refrigeration 

installation, HVACR contractors; and

- Refrigerant reclaimers, manufacturers of recovery/recycling equipment, and 

refrigerant recovery/recycling equipment testing organizations.

After considering the economic impacts of today’s proposed rule on small entities, I

certify that this action will not have a significant economic impact on a substantial number of 

small entities. In determining whether a rule has a significant economic impact on a substantial 

number of small entities, the impact of concern is any significant adverse economic impact on 

small entities, since the primary purpose of the regulatory flexibility analyses is to identify and 

address regulatory alternatives “which minimize any significant economic impact of the rule on 

small entities.” 5 USC 603 and 604. Thus, an agency may certify that a rule will not have a 

significant economic impact on a substantial number of small entities if the rule relieves 
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regulatory burden, or otherwise has a positive economic effect on all of the small entities subject 

to the rule. 

Without allowances for the 2015-2019 regulatory period, existing regulations would 

prohibit production and import of HCFCs, thus the proposal to issue allowances is not a potential 

burden to small business. EPA’s HCFC Phaseout Benefits and Costs Memo, included in the

docket for this rulemaking, provides a summary of previous small business analyses. Also, under 

section 608 of the CAA and 40 CFR subpart F, EPA is proposing some minor modifications to

recordkeeping and reporting provisions; however, these proposed changes are to lessen burden 

on small reclamation businesses by ensuring that businesses that have already reported do not 

have to spend additional time responding to follow-up requests from EPA, and so that EPA can 

reach businesses in a timely manner with any necessary information. We have therefore 

concluded that today’s proposed rule will relieve regulatory burden for all affected small entities. 

We continue to be interested in the potential impacts of the proposed rule on small entities and 

welcome comments on issues related to such impacts.

D. Unfunded Mandates Reform Act

This action contains no Federal mandates under the provisions of Title II of the Unfunded 

Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1538 for State, local, or tribal 

governments or the private sector. UMRA does not apply to rules that are necessary for the 

national security or the ratification or implementation of international treaty obligations. This 

rule implements the 2010 milestone for the phase-out of HCFCs under the Montreal Protocol. 

Therefore, this action is not subject to the requirements of sections 202 or 205 of the UMRA.

This action 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 
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governments. This action apportions production and consumption allowances and establishes 

baselines for private entities, not small governments. 

E. Executive Order 13132: Federalism

This action does not have federalism implications. It does 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 action is expected to primarily affect producers, 

importers, and exporters of HCFCs. Thus, Executive Order 13132 does not apply to this action. 

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.

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

This action does not have tribal implications, as specified in Executive Order 13175 (65 

FR 67249, November 9, 2000). This action does not significantly or uniquely affect the 

communities of Indian tribal governments. It does not impose any enforceable duties on 

communities of Indian tribal governments. Thus, Executive Order 13175 does not apply to this 

action. EPA specifically solicits additional comment on this proposed action from tribal officials.

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

Risks

This action is not subject to EO 13045 (62 F.R. 19885, April 23, 1997) because it is not 

economically significant as defined in EO 12866. The Agency nonetheless has reason to believe 

that the environmental health or safety risk addressed by this action may have a disproportionate 

effect on children. Depletion of stratospheric ozone results in greater transmission of the sun’s 
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Page 99 of 114

ultraviolet (UV) radiation to the earth’s surface. The following studies describe the effects of 

excessive exposure to UV radiation on children: (1) Westerdahl J, Olsson H, Ingvar C. “At what 

age do sunburn episodes play a crucial role for the development of malignant melanoma,” Eur J 

Cancer 1994: 30A: 1647-54; (2) Elwood JM Japson J. “Melanoma and sun exposure: an 

overview of published studies,” Int J Cancer 1997; 73:198-203; (3) Armstrong BK, “Melanoma: 

childhood or lifelong sun exposure,” In: Grobb JJ, Stern RS Mackie RM, Weinstock WA, eds. 

“Epidemiology, causes and prevention of skin diseases,” 1st ed. London, England: Blackwell 

Science, 1997: 63-6; (4) Whiteman D., Green A. “Melanoma and Sunburn,” Cancer Causes 

Control, 1994: 5:564-72; (5) Heenan, PJ. “Does intermittent sun exposure cause basal cell 

carcinoma? A case control study in Western Australia,” Int J Cancer 1995; 60: 489-94; (6) 

Gallagher, RP, Hill, GB, Bajdik, CD, et. al. “Sunlight exposure, pigmentary factors, and risk of 

nonmelanocytic skin cancer I, Basal cell carcinoma,” Arch Dermatol 1995; 131: 157-63; (7) 

Armstrong, DK. “How sun exposure causes skin cancer: an epidemiological perspective,” 

Prevention of Skin Cancer. 2004. 89-116. 

This action implements the United States commitment to reduce the total basket of 

HCFCs produced and imported to a level that is 90 percent below the respective baselines. While 

on an ODP-weighted basis, this is not as large a step as previous actions, such as the 1996 class I 

phaseout, it is one of the most significant remaining actions the United States can take to 

complete the overall phaseout of ODS and further decrease impacts on children’s health from 

stratospheric ozone depletion. 

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

Use
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This action 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. The rule issues allowances for the production and 

consumption of HCFCs.

I. National Technology Transfer and Advancement Act

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 

("NTTAA"), Public Law No. 104-113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary

consensus standards in its regulatory activities unless to do so would be inconsistent with 

applicable law or otherwise impractical. Voluntary consensus standards are technical standards 

(e.g., materials specifications, test methods, sampling procedures, and business practices) that are 

developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to 

provide Congress, through OMB, explanations when the Agency decides not to use available and 

applicable voluntary consensus standards. This proposed rule involves technical standards. 

Through this action, EPA is proposing to incorporate by reference AHRI Standard 700-2012 

Specification for Fluorocarbons and Other Refrigerants and its appendices, which is available in 

the docket for this rulemaking and online at http://www.ahrinet.org/search+standards.aspx. This 

industry standard for refrigerant reclamation is an updated version of the standard contained in 

the current regulations.

EPA welcomes comments on this aspect of the proposed rulemaking and, specifically, 

invites the public to identify potentially-applicable voluntary consensus standards and to explain 

why such standards should be used in this regulation.

J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority 

Populations and Low-Income Populations
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Executive Order (EO) 12898 (59 FR 7629, Feb. 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.

EPA has determined that this action will not have disproportionately high and adverse 

human health or environmental effects on minority or low-income populations because the 2015

phaseout step increases the level of environmental protection for all affected populations without 

having any disproportionately high and adverse human health or environmental effects on any

population, including any minority or low-income population. This action continues the 

implementation of the United States commitment to reduce the total basket of HCFCs produced 

and imported to a level that is 90 percent below the respective baselines. While on an ODPweighted basis, this is not as large a step as previous actions, such as the 1996 class I phaseout, it 

is one of the most significant remaining actions the United States can take to complete the 

overall phaseout of ODS and further lessen the adverse human health effects for the entire 

population. 

List of Subjects in 40 CFR Part 82

Environmental protection, Administrative practice and procedure, Air pollution control, 

Chemicals, Exports, Hydrochlorofluorocarbons, Imports, Incorporation by reference

Protection of Stratospheric Ozone: Adjustments to the Allowance System for 

Controlling HCFC Production, Import, and Export (Page 100 of 112)
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DATED: ___________________________

___________________________________

Gina McCarthy, 

Administrator.

40 CFR part 82 is proposed to be amended to read as follows:

PART 82-PROTECTION OF STRATOSPHERIC OZONE

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

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

Subpart A—Production and Consumption Controls

2. Amend § 82.3 by adding the definition of “Use of a class II controlled substance” to read 

as follows:

§ 82.3 Definitions for class I and class II controlled substances.

* * * * *

Use of a class II controlled substance, for the purposes of 82.15 of this subpart, includes but is 

not limited to use in a manufacturing process, use in manufacturing a product, intermediate uses 

such as formulation or packaging for other subsequent uses, and use in maintaining, servicing, or 

repairing an appliance or other piece of equipment. Use of a class II controlled substance also 

includes use of that controlled substance when it is removed from a container used for the 

transportation or storage of the substance but does not include use of a manufactured product 

containing a controlled substance.
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* * * * * 

3. Amend § 82.15 by revising paragraph (g)(4) to become (g)(4)(i), and revise the newly 

designed paragraph (g)(i), adding paragraph (g)(4)(ii) to read as follows:

§ 82.15 Prohibitions for class II controlled substances.

(g)(1) * * * (4)(i) Effective January 1, 2015, no person may introduce into interstate commerce 

or use any class II controlled substance not governed by paragraphs (g)(1) through (3) of this 

section (unless used, recovered and recycled) for any purpose other than for use in a process 

resulting in its transformation or its destruction; for use as a refrigerant in equipment 

manufactured before January 1, 2020; for use as a fire suppression streaming agent listed as 

acceptable for use or acceptable subject to narrowed use limits for nonresidential applications in 

accordance with the regulations at subpart G of this part; for export to Article 5 Parties under §

82.18(a); as a transshipment or heel; for exemptions permitted under paragraph (f) of this 

section; or for exemptions permitted under paragraph (g)(4)(ii) of this section.

(ii) Effective January 1, 2015, use of HCFC-225ca or HCFC-225cb as a solvent (excluding 

use in manufacturing a product containing HCFC-225ca or HCFC-225cb) is not subject to the 

use prohibition in paragraph (g)(4)(i) of this section if the person using the HCFC-225ca or 

HCFC-225cb placed the controlled substance into inventory before January 1, 2015. This 

paragraph does not create an exemption to the prohibition on introduction into interstate 

commerce in paragraph (g)(4)(i) of this section.

* * * * * 

4. Amend § 82.16 by revising paragraphs (a), (d) and (e) and removing and reserving 

paragraph (h) to read as follows:

§ 82.16 Phaseout schedule of class II controlled substances.
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(a) Calendar-year Allowances. (1) In each control period as indicated in the following tables, 

each person is granted the specified percentage of baseline production allowances and baseline 

consumption allowances for the specified class II controlled substances apportioned under § § 

82.17 and § 82.19:

Calendar-year HCFC Production Allowances

Control 

Period

Percent of 

HCFC141b

Percent of 

HCFC-22

Percent of 

HCFC142b

Percent of 

HCFC-123

Percent of 

HCFC-124

Percent of 

HCFC225ca

Percent of 

HCFC225cb

2003 0 100 100 -- -- -- --

2004 0 100 100 -- -- -- --

2005 0 100 100 -- -- -- --

2006 0 100 100 -- -- -- --

2007 0 100 100 -- -- -- --

2008 0 100 100 -- -- -- --

2009 0 100 100 -- -- -- --

2010 0 41.9 0.47 0 125 125 125

2011 0 32.0 4.9 0 125 125 125

2012 0 17.7 4.9 0 125 125 125

2013 0 30.1 4.9 0 125 125 125

2014 0 26.1 4.9 0 125 125 125

2015 0 21.7 0.37 0 5.0 0 0

2016 0 21.7 0.32 0 5.0 0 0

2017 0 21.7 0.26 0 5.0 0 0

2018 0 21.7 0.21 0 5.0 0 0

2019 0 21.7 0.16 0 5.0 0 0

Calendar-year HCFC Consumption Allowances

Control 

Period

Percent of 

HCFC141b

Percent of 

HCFC-22

Percent of 

HCFC142b

Percent of 

HCFC-123

Percent of 

HCFC-124

Percent of 

HCFC225ca

Percent of 

HCFC225cb

2003 0 100 100 -- -- -- --

2004 0 100 100 -- -- -- --

2005 0 100 100 -- -- -- --

2006 0 100 100 -- -- -- --
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2007 0 100 100 -- -- -- --

2008 0 100 100 -- -- -- --

2009 0 100 100 -- -- -- --

2010 0 41.9 0.47 125 125 125 125

2011 0 32.0 4.9 125 125 125 125

2012 0 17.7 4.9 125 125 125 125

2013 0 18.0 4.9 125 125 125 125

2014 0 14.2 4.9 125 125 125 125

2015 0 9.6 1.7 100 8.3 0 0

2016 0 7.7 1.5 100 8.3 0 0

2017 0 5.8 1.2 100 8.3 0 0

2018 0 3.9 1.0 100 8.3 0 0

2019 0 1.9 0.7 100 8.3 0 0

* * * * *

(d) Effective January 1, 2015, no person may produce class II controlled substances not 

previously controlled for any purpose other than for use in a process resulting in their 

transformation or their destruction, for use as a refrigerant in equipment manufactured before 

January 1, 2020, for use as a fire suppression streaming agent listed as acceptable for use or 

acceptable subject to narrowed use limits for nonresidential applications in accordance with the 

regulations at subpart G of this part;, for export under § 82.18(b) using unexpended Article 5 

allowances, or for export under § 82.18(a) using unexpended export production allowances, or 

for exemption permitted in § 82.15(f). Effective January 1, 2015, no person may import class II 

controlled substances not subject to the requirements of paragraph (b) or (c) of this section (other 

than transhipments, heels or used class II controlled substances) for any purpose other than for 

use in a process resulting in their transformation or their destruction, for exemption permitted in 

§ 82.15(f), for use as a refrigerant in equipment manufactured prior to January 1, 2020, or for use 
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as a fire suppression streaming agent for nonresidential applications in accordance with the 

regulations at subpart G of this part.

* * * * *

(e)(1) Effective January 1, 2020, no person may produce HCFC-22 or HCFC-142b for any

purpose other than for use in a process resulting in their transformation or their destruction, for 

export under § 82.18(a) using unexpended Article 5 allowances, or for export under § 82.18(b) 

using unexpended export production allowances, or for exemptions permitted in § 82.15(f). 

Effective January 1, 2020, no person may import HCFC-22 or HCFC-142b for any purpose other 

than for use in a process resulting in their transformation or their destruction, or for exemptions 

permitted in § 82.15(f). 

(2) Effective January 1, 2020, no person may produce HCFC-123 for any purpose other than 

for use in a process resulting in its transformation or its destruction, for use as a refrigerant in 

equipment manufactured before January 1, 2020, for export under § 82.18(a) using unexpended 

Article 5 allowances, or for export under § 82.18(b) using unexpended export production 

allowances, or for exemptions permitted in § 82.15(f). Effective January 1, 2020, no person may

import HCFC-123 for any purpose other than for use in a process resulting in its transformation 

or its destruction, for use as a refrigerant in equipment manufactured before January 1, 2020 or 

for exemptions permitted in § 82.15(f).

* * * * *

(h) [Reserved].

* * * * * 

5. Amend § 82.17 to read as follows:
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§ 82.17 Apportionment of baseline production allowances for class II controlled 

substances.

The following persons are apportioned baseline production allowances for HCFC-22, HCFC141b, HCFC-142b, HCFC-123, HCFC-124, HCFC-225ca and HCFC-225cb, as set forth in the 

following table:

Person Controlled Substance Allowances (kg)

AGC Chemicals Americas

HCFC-225ca 266,608

HCFC-225cb 373,952

Arkema

HCFC-22 46,692,336

HCFC-141b 24,647,925

HCFC-142b 484,369

DuPont

HCFC-22 42,638,049

HCFC-124 2,269,210

Honeywell

HCFC-22 37,378,252

HCFC-141b 28,705,200

HCFC-142b 2,417,534

HCFC-124 1,759,681

MDA Manufacturing HCFC-22 2,383,835

Solvay Specialty Polymers USA, LLC HCFC-142b 6,541,764

* * * * * 

6. Amend § 82.19 to read as follows:

§ 82.19 Apportionment of baseline consumption allowances for class II controlled 

substances.

The following persons are apportioned baseline consumption allowances for HCFC-22, HCFC142b, HCFC-123, HCFC-124, HCFC-225ca and HCFC-225cb, as set forth in the following 

table:

Person Controlled Substance Allowances (kg)
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ABCO Refrigeration Supply HCFC-22 279,366

AGC Chemicals Americas

HCFC-225ca 285,328

HCFC-225cb 286,832

Altair Partners HCFC-22 302,011

Arkema

HCFC-22 48,637,642

HCFC-141b 25,405,570

HCFC-142b 483,827

HCFC-124 3,719

Carrier HCFC-22 54,088

Continental Industrial Group HCFC-141b 20,315

Coolgas, Inc. HCFC-141b 16,097,869

Combes Investment Property

HCFC-22 1,040,458

HCFC-123 19,980

HCFC-124 3,742

Discount Refrigerants HCFC-141b 994

DuPont

HCFC-22 38,814,862

HCFC-141b 9,049

HCFC-142b 52,797

HCFC-123 1,877,042

HCFC-124 743,312

H.G. Refrigeration Supply HCFC-22 40,068

Honeywell

HCFC-22 35,392,492

HCFC-141b 20,749,489

HCFC-142b 1,315,819

HCFC-124 1,284,265

ICC Chemical Corp. HCFC-141b 81,225

ICOR HCFC-124 81,220

Mexichem Fluor Inc. HCFC-22 2,546,305

Kivlan & Company HCFC-22 2,081,018

MDA Manufacturing HCFC-22 2,541,545

Mondy Global HCFC-22 281,824

National Refrigerants

HCFC-22 5,528,316

HCFC-123 72,600

HCFC-124 50,380

Perfect Technology Center, LP HCFC-123 9,100

Refricenter of Miami HCFC-22 381,293

Refricentro HCFC-22 45,979

R-Lines HCFC-22 63,172

Saez Distributors HCFC-22 37,936
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Solvay Fluorides, LLC

HCFC-22 3,781,691

HCFC-141b 3,940,115

Solvay Specialty Polymers USA, LLC HCFC-142b 194,536

Tulstar Products

HCFC-141b 89,913

HCFC-123 34,800

HCFC-124 229,582

USA Refrigerants HCFC-22 14,865

* * * * * 

7. Amend § 82.20 by revising paragraph (a) introductory text to read as follows:

§ 82.20 Availability of consumption allowances in addition to baseline consumption 

allowances for class II controlled substances.

(a) A person may obtain at any time during the control period, in accordance with the 

provisions of this section, consumption allowances equivalent to the quantity of class II 

controlled substances that the person exported from the United States and its territories to a 

foreign state in accordance with this section, when that quantity of class II controlled substance 

was produced in the U.S. or imported into the United States with expended consumption 

allowances. Both the export of the class II controlled substance and the request for additional 

consumption allowances must occur during a calendar year in which consumption allowances 

were issued for that class II controlled substance.

* * * * * 

8. Amend appendix B to subpart A and insert footnote B following footnote A, to read as 

follows:

Appendix B to Subpart A of Part 82—Class II Controlled SubstancesA,B

Controlled Substance ODP

1. HCFC-21 (CHFCl2) Dichlorofluoromethane 0.04

2. HCFC-22 (CHF2Cl) Monochlorodifluoromethane 0.055
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3. HCFC-31 (CH2FCl) Monochlorofluoromethane 0.02

4. HCFC-121 (C2HFCl4) Tetrachlorofluoroethane 0.01- 0.04

5. HCFC-122 (C2HF2Cl3) Trichlorodifluoroethane 0.02 - 0.08

6. HCFC-123 (C2HF3Cl2) Dichlorotrifluoroethane 0.02

7. HCFC-124 (C2HF4Cl) Monochlorotetrafluoroethane 0.022

8. HCFC-131 (C2H2FCl3) Trichlorofluoroethane 0.007-0.05

9. HCFC-132 (C2H2F2Cl2) Dichlorodifluoroethane 0.008-0.05

10. HCFC-133 (C2H2F3Cl) Monochlorotrifluoroethane 0.02-0.06

11. HCFC-141 (C2H3FCl2) Dichlorofluoroethane 0.005-0.07 

12. HCFC-141b (CH3CFCl2) Dichlorofluoroethane 0.11

13. HCFC-142 (C2H3F2Cl) chlorodifluoroethane 0.008-0.07 

14. HCFC-142b (CH3CF2Cl) Monochlorodifluoroethane 0.065

15. HCFC-151 (C2H4FCl) Chlorofluoroethane 0.003-0.005

16. HCFC-221 (C3HFCl6) Hexachlorofluoropropane 0.015 - 0.07

17. HCFC-222 (C3HF2Cl5) Pentachlorodifluoropropane 0.01 - 0.09

18. HCFC-223 (C3HF3Cl4) Tetrachlorotrifluoropropane 0.01 - 0.08

19. HCFC-224 (C3HF4Cl3) Trichlorotetrafluoropropane 0.01 - 0.09

20. HCFC-225 (C3HF5Cl2) Dichloropentafluoropropane 0.02-0.07 

21.

HCFC-225ca (CF3CF2CHCl2) 

Dichloropentafluoropropane 0.025

22.

HCFC-225cb (CF2ClCF2CHClF) 

Dichloropentafluoropropane 0.033

23. HCFC-226 (C3HF6Cl) Monochlorohexafluoropropane 0.02-0.1

24. HCFC-231 (C3H2FCl5) Pentachlorofluoropropane 0.05-0.09

25. HCFC-232 (C3H2F2Cl4) Tetrachlorodifluoropropane 0.008-0.1

26. HCFC-233 (C3H2F3Cl3) Trichlorotrifluoropropane 0.007-0.23

27. HCFC-234 (C3H2F4Cl2) Dichlorotetrafluoropropane 0.01-0.28

28. HCFC-235 (C3H2F5Cl) Monochloropentafluoropropane 0.03-0.52

29. HCFC-241 (C3H3FCl4) Tetrachlorofluoropropane 0.004-0.09

30. HCFC-242 (C3H3F2Cl3) Trichlorodifluoropropane 0.005-0.13

31. HCFC-243 (C3H3F3Cl2) Dichlorotrifluoropropane 0.007-0.12

31. HCFC-244 (C3H3F4Cl) Monochlorotetrafluoropropane 0.009-0.14

33. HCFC-251 (C3H4FCl3) Monochlorotetrafluoropropane 0.001-0.01

34. HCFC-252 (C3H4F2Cl2) Dichlorodifluoropropane 0.005-0.04

35. HCFC-253 (C3H4F3Cl) Monochlorotrifluoropropane 0.003-0.03

36. HCFC-261 (C3H5FCl2) Dichlorofluoropropane 0.002-0.02

37. HCFC-262 (C3H5F2Cl) Monochlorodifluoropropane 0.002-0.02

38. HCFC-271 (C3H6FCl) Monochlorofluoropropane 0.001-0.03

a* * * b This table includes all isomers of the substances above, regardless of whether the isomer 

is explicitly listed on its own.
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* * * * * 

Subpart E—The Labeling of Products Using Ozone-Depleting Substances

9. Amend § 82.110 by revising paragraph (c) title to read as follows:

§ 82.110 Form of label bearing warning statement.

* * * * *

(c) Combined statement for multiple controlled substances * * *

* * * * * 

10. Amend § 82.112 by revising paragraph (d) to read as follows:

§ 82.112 Removal of label bearing warning statement.

(c) * * * (d) Manufacturers, distributors, wholesalers, retailers that sell spare parts 

manufactured with controlled substances solely for repair Manufacturers, distributors, 

wholesalers, and retailers that purchase spare parts manufactured with a class I or class II 

substance from another manufacturer or supplier, and sell such spare parts for the sole purpose of 

repair, are not required to pass through an applicable warning label if such products are removed 

from the original packaging provided by the manufacturer from whom the products are 

purchased. * * *

* * * * * 

11. Amend § 82.122 by revising paragraph (a)(1) to read as follows:

§ 82.122 Certification, recordkeeping, and notice requirements.

(a) * * * (1) Persons claiming the exemption provided in § 82.106(b)(4) must submit a written 

certification to the following address: Labeling Program Manager, Stratospheric Protection 

Division, Office of Atmospheric Programs, 6205-J, 1200 Pennsylvania Ave., NW, Washington 

DC 20460.
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* * * * * 

Subpart F—Recycling and Emissions Reductions

12. Amend § 82.152 by revising the definition “Reclaim” to read as follows:

§ 82.152 Definitions.

* * * * * 

Reclaim refrigerant means to reprocess refrigerant to all of the specifications in AHRI Standard 

700-2012 Specification for Fluorocarbon Refrigerants (incorporated by reference at appendix A 

to 40 CFR part 82 subpart F) that are applicable to that refrigerant and to verify that the 

refrigerant meet these specifications using the analytical methodology prescribed therein. 

* * * * * 

13. Amend § 82.164 by revising paragraph (f) to read as follows: 

§ 82.164 Reclaimer certification.

* * * * * 

(f) Certificates are not transferrable. In the event of a change in ownership of an entity which 

reclaims refrigerant, the new owner of the entity shall certify within 30 days of the change of 

ownership pursuant to this section. In the event of a change in business management, location or 

contact information, the owner of an entity shall notify EPA within 30 days of the change. 

* * * * * 

14. Amend § 82.166 by revising paragraph (h) to read as follows:

§ 82.166 Reporting and recordkeeping requirements.

* * * * * 

(h) Reclaimers must maintain records of the quantity of material (the combined mass of 

refrigerant and contaminants) sent to them for reclamation, the mass of each refrigerant 
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reclaimed, and the mass of waste products. Reclaimers must report this information to the 

Administrator annually within 30 days of the end of the calendar year.

* * * * * 

15. Revise all text in appendix A to subpart F of Part 82-Specifications for Fluorocarbon and 

Other Refrigerants to read as follows:

Appendix A to Subpart F of Part 82—Specifications for Fluorocarbon and Other 

Refrigerants

AHRI Standard 700-2012: Specifications for Fluorocarbon Refrigerants specifies 

acceptable levels of contaminants (purity requirements) for fluorocarbon refrigerants and lists 

acceptable test methods. This appendix incorporates by reference AHRI Standard 700-2012: 

Specifications for Fluorocarbon Refrigerants (2012 edition, Air-Conditioning, Heating, and 

Refrigeration Institute). The entire standard, including Appendices A and B, are made part of the 

regulations in part 82 subpart F. Accordance with the specifications in AHRI Standard 700-2012 

is required by the relevant regulations of this subpart. 

The Director of the Federal Register approves this incorporation by reference in 

accordance with 5 U.S.C. 552(a) and 1 CFR part 51. You may obtain a copy from AHRI online 

at: http://www.ahrinet.org or by contacting AHRI by phone: (+1) 703-524-8800 or by fax: (+1) 

703-562-1942. You may also obtain a copy in person or by mail at Air-Conditioning, Heating, 

and Refrigeration Institute (AHRI) 2111 Wilson Blvd, Suite 500 Arlington, VA 22201, USA.

AHRI Standard 700-2012 is also available online at http://www.regulations.gov/ by

searching for docket number: EPA-HQ-OAR-2013-0263. You may also inspect a copy at the 

United States EPA’s Air Docket; EPA West Building, Room 3334; 1301 Constitution Ave., 

NW.; Washington, DC or at the National Archives and Records Administration (NARA). For 
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questions regarding access to these standards, the telephone number of EPA’s Air Docket is 

202–566–1742. For information on the availability of this material at NARA, call 202–741–

6030, or go to: http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_ 

locations.html.

* * * * *