Vol. 78 Tuesday, 

No. 247 December 24, 2013 

Part VI 

Environmental Protection Agency 

40 CFR Part 82 

Protection of Stratospheric Ozone: Adjustments to the Allowance System 

for Controlling HCFC Production, Import and Export; Proposed Rule 


sroberts on DSK5SPTVN1PROD with PROPOSALS
78072 Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 

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 

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 part 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 February 24, 2014, unless 

a public hearing is held. If a public 

hearing is held, comments must be 

received on or before March 10, 2014. 

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 January 8, 2014. If a public 

hearing is requested, the hearing will be 

held on January 23, 2014. If a hearing 

is held, it will take place at EPA 

headquarters in Washington, DC. EPA 

will post a notice on our Web site, 

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. 

• 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 Web site 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 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 Web site 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 

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 


sroberts on DSK5SPTVN1PROD with PROPOSALS
Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 78073 

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 HCFC– 

225cb? 

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 

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 

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 

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 airconditioning equipment and 

commercial and industrial 

refrigeration equipment 

manufacturers; 

—Air-Conditioning Equipment and 

Supplies Merchant Wholesalers 

(NAICS code 423730), including airconditioning (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 AirConditioning Contractors (NAICS 

code 238220), including Central airconditioning 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 

When submitting comments, 

remember to: 

• Identify the rulemaking by docket 

number and other identifying 

information (subject heading, Federal 

Register date and page number). 


sroberts on DSK5SPTVN1PROD with PROPOSALS
78074 Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 

1Class 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. 

2The adjustment entered into force and became 

binding for all Parties on May 14, 2008. 

3Paragraphs 4–6 of adjusted Article 2F read as 

follows: 

‘‘4. Each Party shall ensure that for the twelvemonth period commencing on 1 January 2010, and 

in each twelve-month 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 twelvemonth period commencing on 1 January 2015, and 

in each twelve-month 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 twelvemonth period commencing on 1 January 2020, and 

• 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 ozonedepleting 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) 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 substances 1’’ 

(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). 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 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 2020.3 Paragraph 14 of 


sroberts on DSK5SPTVN1PROD with PROPOSALS
Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 78075 

in each twelve-month 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.’’ 

Decision XIX/6 notes that no later than 

2015, the 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 nonArticle 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-bychemical 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-bychemical 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). 

On January 21, 2003, EPA 

promulgated regulations (68 FR 2820, 

January 21, 2003, subsequently referred 

to in this document as the 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 chemical-specific 

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 ODPweighted 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 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 HCFC– 

22 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 calendaryear 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). 

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 


sroberts on DSK5SPTVN1PROD with PROPOSALS
78076 Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 

4The phaseout schedule for HCFC–22 and HCFC– 

142b was unaffected by the decision in Arkema v. 

EPA. 

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 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 

inter-pollutant 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 intercompany, single-pollutant 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 inter-pollutant 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 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 82.15(a) and (b) 

prohibit the production and import of 

HCFCs for which EPA has apportioned 

baseline allowances without calendaryear (or ‘‘annual’’) allowances. As a 

result, production and import of HCFC– 

22 and HCFC–142b, as well as HCFC– 

123, HCFC–124 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 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–142b.4

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 environment, 

regardless of whether the refrigerant is 

an ODS or a substitute. Substitutes are 


sroberts on DSK5SPTVN1PROD with PROPOSALS
Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 78077 

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, 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 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. 

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 


sroberts on DSK5SPTVN1PROD with PROPOSALS
78078 Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 

5The 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. 

6EPA 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. 

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, 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 suppression agent in 

accordance with CAA section 612(c).5

Section 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–142b 6 as 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 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 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 


sroberts on DSK5SPTVN1PROD with PROPOSALS
Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 78079 

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 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 ozonedepleting compound, including but not 

limited to use in a manufacturing 

process or product, in 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 

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 HCFC–225ca/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 inventory prior 

to January 1, 2015 to use that material 


sroberts on DSK5SPTVN1PROD with PROPOSALS
78080 Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 

7Since 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. 

8 In Sierra Club v. EPA, 705 F.3d 458 (D.C. Cir. 

2013), the DC 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. 

as a solvent for as long as needed.7

‘‘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 HCFC–225ca/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 

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 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 cost-benefit 

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 statute 8 and (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. 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 


sroberts on DSK5SPTVN1PROD with PROPOSALS
Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 78081 

9Through 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. 

10For 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. 

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). 

class II substances, section 605 freezes 

production and consumption in 2015, 

with the complete phaseout not 

occurring until 2030.9 Two 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 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 ODS 11, 

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 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 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 

HCFC–225ca/cb from 2010–2014 is only 

20.7 ODP-weighted MT. Recent HCFC– 

225ca/cb consumption 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 


sroberts on DSK5SPTVN1PROD with PROPOSALS
78082 Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 

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 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 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 groundlevel 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-trifluoroprop-1- 

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 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 ozonedepleting 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 


sroberts on DSK5SPTVN1PROD with PROPOSALS
Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 78083 

12The 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. 

of this statutory revision, EPA is 

proposing to update its regulations for 

use and 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 

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 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 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. 


sroberts on DSK5SPTVN1PROD with PROPOSALS
78084 Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 

A. Using Existing Baselines 

In the 2003 Final Rule, EPA decided 

that each company producing or 

importing HCFC–22 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 HCFC–142b 

baselines and allowances were reestablished 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 inter-company 

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 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 calendaryear 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 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, 

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 


sroberts on DSK5SPTVN1PROD with PROPOSALS
Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 78085 

13The 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.’’ 

14EPA 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 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. 

15Article 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). 

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 appliances 13

manufactured prior to 2020 (EPA 

accelerated this manufacturing date to 

2010 for HCFC–22 and HCFC–142b) 14

and also as a nonresidential fire 

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 will receive Article 5 

allowances 15 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 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 

HCFC–22 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 


sroberts on DSK5SPTVN1PROD with PROPOSALS
78086 Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 

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). 

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, industrywide 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 (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 HCFC–142b. 

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 

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. 

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 sevento 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 


sroberts on DSK5SPTVN1PROD with PROPOSALS
Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 78087 

16This 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. 

17Recoupment 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. 

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. 

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 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.16 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 lower 

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 and could encourage 

better refrigerant management practices 

and more recycling and reclamation. 

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 linear drawdown starting from the 

2014 pre-recoupment 17 allocation of 

20,100 MT and ending at zero in 2020. 

Under this alternative 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 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 higher 

and lower alternatives 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 longstanding 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 yearby-year, the 2015 allocation is 

significantly higher than under the 

preferred linear drawdown approach. 

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, 


sroberts on DSK5SPTVN1PROD with PROPOSALS
78088 Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 

18The 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. 

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-toexplain 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 HCFC– 

22 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. 

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 prerecoupment 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 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, 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 recovery 18 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 


sroberts on DSK5SPTVN1PROD with PROPOSALS
Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 78089 

expected lifetime, charge size and leak 

rate, since assumptions about 

equipment characteristics affect the 

projected servicing needs for each end 

use. 

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 HCFC–22 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 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. 

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 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 


sroberts on DSK5SPTVN1PROD with PROPOSALS
78090 Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 

19 GWP of HFC–23 presented in the 

Intergovernmental Panel on Climate Change (IPCC) 

Fourth Assessment Report: Climate Change 2007 

(AR4). 

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. 

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 14,800.19

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 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 ODPweighted 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 twothirds as much as the 2014 production 

allocation. This approach could result 

in less United States production for 

export, 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 


sroberts on DSK5SPTVN1PROD with PROPOSALS
Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 78091 

20Use of HCFC–123 that was imported prior to 

2020, or that is used, recovered and recycled, is still 

allowed beyond January 1, 2020. 

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 R–409A, are in use today 

but are not modeled in the Vintaging 

Model; thus, the model is not an 

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 consumption allocation is lower, if 

there is documented need for United 

States-produced HCFC–142b 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. 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 HCFC–123 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.20 Under section 614 of the 

CAA, where either the Montreal 

Protocol or the CAA is more stringent, 

the more 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 U.S.C. 168). 


sroberts on DSK5SPTVN1PROD with PROPOSALS
78092 Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 

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 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 lowpressure 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 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: R– 

401A, 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 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 

HCFC–124 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 nonODS 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. 

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 200 MT 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 


sroberts on DSK5SPTVN1PROD with PROPOSALS
Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 78093 

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. 

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 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 HCFC–141b; however, 

EPA welcomes comment on whether 

there are remaining niche uses of 

HCFC–141b. 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). 

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 


sroberts on DSK5SPTVN1PROD with PROPOSALS
78094 Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 

omission. Specifically, EPA is proposing 

to reconcile the statutory and Montreal 

Protocol lists with the list in the 

regulations, and to add a 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 dryshipped 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 dryshipped 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. 

The agency continues to assess whether 

or not dry-shipped units jeopardize the 

agency’s ability to phase out and ensure 

a smooth transition from HCFC–22. If 

the agency believes its ability to phase 

out HCFC–22 smoothly is jeopardized, 

EPA would consider proposing a ban 

via a separate rulemaking process. 

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 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 

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 reenter 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)). 


sroberts on DSK5SPTVN1PROD with PROPOSALS
Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 78095 

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. 

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 ODP-weighted 

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 part 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), 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 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 Web site 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 

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 


sroberts on DSK5SPTVN1PROD with PROPOSALS
78096 Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 

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-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 

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 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 


sroberts on DSK5SPTVN1PROD with PROPOSALS
Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 78097 

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. 

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: 

• 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 Pre-charged 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. 

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 rulemaking 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-forprofit 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; 

—Air-Conditioning and Warm Air 

Heating Equipment and Commercial 

and Industrial Refrigeration 

Equipment Manufacturing entities 

(NAICS code 333415), including airconditioning equipment and 

commercial and industrial 

refrigeration equipment 

manufacturers; 

—Air-Conditioning Equipment and 

Supplies Merchant Wholesalers 

(NAICS code 423730), including airconditioning (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 AirConditioning Contractors (NAICS 

code 238220), including Central airconditioning 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 this 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 


sroberts on DSK5SPTVN1PROD with PROPOSALS
78098 Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 

significant economic impact of the rule 

on small entities.’’ 5 U.S.C. 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 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 this 

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 

proposed rule would implement the 

2015 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 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 FR 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 

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 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 decrease 

impacts on children’s health from 

stratospheric ozone depletion. 

H. Executive Order 13211: Actions that 

Significantly Affect Energy Supply, 

Distribution, or Use 

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. This 

proposed rule would issue 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 

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 


sroberts on DSK5SPTVN1PROD with PROPOSALS
Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 78099 

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 

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 low-income 

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. 

Dated: December 5, 2013. 

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. 

* * * * * 

■ 3. Amend § 82.15 by revising 

paragraph (g)(4) to read as follows: 

§ 82.15 Prohibitions for class II controlled 

substances. 

* * * * * 

(g) * * * 

(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. 

(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 

HCFC–141b 

Percent of 

HCFC–22 

Percent of 

HCFC–142b 

Percent of 

HCFC–123 

Percent of 

HCFC–124 

Percent of 

HCFC–225ca 

Percent of 

HCFC–225cb 

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 ........................ .......................... ........................ ........................


sroberts on DSK5SPTVN1PROD with PROPOSALS
78100 Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 

CALENDAR-YEAR HCFC PRODUCTION ALLOWANCES—Continued 

Control period Percent of 

HCFC–141b 

Percent of 

HCFC–22 

Percent of 

HCFC–142b 

Percent of 

HCFC–123 

Percent of 

HCFC–124 

Percent of 

HCFC–225ca 

Percent of 

HCFC–225cb 

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 

HCFC–141b 

Percent of 

HCFC–22 

Percent of 

HCFC–142b 

Percent of 

HCFC–123 

Percent of 

HCFC–124 

Percent of 

HCFC–225ca 

Percent of 

HCFC–225cb 

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 .47 125 125 125 125 

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 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 by revising the table 

to read as follows: 

§ 82.17 Apportionment of baseline 

production allowances for class II 

controlled substances. 

The following persons are 

apportioned baseline production 

allowances for HCFC–22, HCFC–141b, 

HCFC–142b, HCFC–123, HCFC–124, 

HCFC–225ca and HCFC–225cb, as set 

forth in the following table: 


sroberts on DSK5SPTVN1PROD with PROPOSALS
Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 78101 

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 by revising the table 

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, HCFC–142b, 

HCFC–123, HCFC–124, HCFC–225ca 

and HCFC–225cb, as set forth in the 

following table: 

Person Controlled substance Allowances 

(kg) 

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 

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 


sroberts on DSK5SPTVN1PROD with PROPOSALS
78102 Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 

■ 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 by 

inserting footnote B following footnote 

A, to read as follows: 

APPENDIX B TO SUBPART A OF PART 82—CLASS II CONTROLLED SUBSTANCES A B

Controlled Substance ODP 

1. HCFC–21 (CHFCl2) Dichlorofluoromethane ............................................................................................................................... 0.04 

2. HCFC–22 (CHF2Cl) Monochlorodifluoromethane ....................................................................................................................... 0.055 

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 * * * 

bThis table includes all isomers of the substances above, regardless of whether the isomer is explicitly listed on its own. 

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. 

* * * * * 

(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 


sroberts on DSK5SPTVN1PROD with PROPOSALS
Federal Register / Vol. 78, No. 247 / Tuesday, December 24, 2013 / Proposed Rules 78103 

Division, Office of Atmospheric 

Programs, 6205–J, 1200 Pennsylvania 

Ave. NW., Washington, DC 20460. 

* * * * * 

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 

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, AirConditioning, 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 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. 

* * * * * 

[FR Doc. 2013–29817 Filed 12–23–13; 8:45 am] 

BILLING CODE 6560–50–P 


sroberts on DSK5SPTVN1PROD with PROPOSALS